F-22 Aircraft: Progress of the Engineering and Manufacturing Development
Program (Testimony, 03/25/98, GAO/T-NSIAD-98-137).

GAO discussed the F-22 program, focusing on the extent to which it is
meeting planned cost, schedule, and performance goals.

GAO noted that: (1) the Air Force's cost estimate supporting the fiscal
year (FY) 1999 budget request indicates that the F-22 engineering and
manufacturing development (EMD) program can be completed within the
adjusted statutory costs; (2) however, the F-22 EMD program has been
hindered in achieving schedule goals by several technical and
manufacturing problems, which caused the delay of the first flight and
projected late deliveries of other flight test aircraft; (3) the Air
Force is studying the potential impact of schedule delays to determine
if the cost estimate includes sufficient amounts to complete the EMD
program; (4) the Air Force expects that the F-22 will meet or exceed all
of its established performance requirements; (5) however, the amount of
flight testing planned in May 1997 has not been achieved; (6) the Air
Force plans to enter production having completed significantly fewer
flight test hours than they had planned to have done; (7) the Department
of Defense has previously indicated that if major problems exist, they
usually occur within the first 10 to 20 percent of flight testing; and
(8) if the Air Force awards the contract for the first two F-22
production aircraft in December 1998, it will have accomplished only 183
flight test hours, or 4 percent of the total flight test hours planned,
instead of 601 flight test hours, or 14 percent of the total flight test
hours planned in May 1997.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-NSIAD-98-137
     TITLE:  F-22 Aircraft: Progress of the Engineering and 
             Manufacturing Development Program
      DATE:  03/25/98
   SUBJECT:  Fighter aircraft
             Defense capabilities
             Defense cost control
             Delivery terms
             Contract costs
             Military budgets
             Concurrency
             Advanced weapons systems
             Air Force procurement
IDENTIFIER:  F-22 Aircraft
             
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Cover
================================================================ COVER


Before the Subcommittee on AirLand Forces, Committee on Armed
Services, U.S.  Senate

For Release on Delivery
Expected at
10:00 a.m., EST
Wednesday,
March 25, 1998

F-22 AIRCRAFT - PROGRESS OF THE
ENGINEERING AND MANUFACTURING
DEVELOPMENT PROGRAM

Statement of Louis J.  Rodrigues, Director, Defense Acquisition
Issues, National Security and International Affairs Division

GAO/T-NSIAD-98-137

GAO/NSIAD-98-13T


(707338)


Abbreviations
=============================================================== ABBREV

  DOD - Department of Defense
  EMD - engineering and manufacturing development

============================================================ Chapter 0

Mr.  Chairman and Members of the Subcommittee: 

I am pleased to be here today to discuss the progress of the Air
Force's F-22 engineering and manufacturing development (EMD) program. 
The National Defense Authorization Act for Fiscal Year 1998
(P.L.  105-85) requires us to review the F-22 program and report on
the extent to which it is meeting planned cost, schedule, and
performance goals.  We issued a report in response to that
requirement earlier this month.\1 My testimony today discusses the
challenges that the EMD program is encountering in achieving cost,
schedule, and performance goals as well as the impact of program
schedule slippages on the Department of Defense's (DOD) request to
buy the first two F-22 production aircraft in fiscal year 1999. 


--------------------
\1 F-22 Aircraft:  Progress in Achieving Engineering and
Manufacturing Development Goals (GAO/NSIAD-98-67, Mar.  10, 1998). 


   BACKGROUND
---------------------------------------------------------- Chapter 0:1

The F-22 EMD program began in 1991.  The objectives of the program
are to (1) design, fabricate, test, and deliver ground and flight
test vehicles; (2) design, fabricate, integrate, and test the
avionics suite; and (3) design, develop, and test the support and
training systems.  The F-22 has two prime contractors:  Lockheed
Martin Aeronautical Systems is responsible for the aircraft, and
United Technologies Corporation (Pratt & Whitney) is responsible for
the engines. 

Because of concerns about potential cost growth in the F-22 program,
the Assistant Secretary of the Air Force for Acquisition established
the Joint Estimating Team in June 1996 to estimate the most probable
cost of the F-22 program and to identify realistic initiatives that
could be implemented to lower program costs.  The team consisted of
personnel from the Air Force, DOD, and private industry.  In January
1997, the team estimated that F-22 program costs would increase by
about $1.5 billion over previous estimates and that additional time
would be required to complete the EMD program.  The team made several
recommendations to restructure the program, which the Air Force and
DOD adopted.\2

The National Defense Authorization Act for Fiscal Year 1998, enacted
in November 1997, imposed cost limitations of $18.688 billion on the
F-22 EMD program and $43.4 billion on the production program.  The
limitation on production cost did not specify a quantity of aircraft
to be procured.  The act instructed the Secretary of the Air Force to
adjust the cost limitations for the amounts of increases or decreases
in costs attributable to (1) economic inflation after September 30,
1997, and (2) compliance with changes in federal, state, or local
laws enacted after September 30, 1997.  Since the law's enactment,
the Air Force adjusted the EMD and production cost limitations once
and plans to further adjust them to $18.939 billion and $40.940
billion, respectively. 


--------------------
\2 For more information on these recommendations, see Tactical
Aircraft:  Restructuring of the Air Force F-22 Fighter Program
(GAO/NSIAD-97-156, June 4, 1997). 


   RESULTS IN BRIEF
---------------------------------------------------------- Chapter 0:2

The Air Force's cost estimate supporting the fiscal year 1999 budget
request indicates that the EMD program can be completed within the
adjusted statutory cost.  However, the F-22 EMD program has been
hindered in achieving schedule goals by several technical and
manufacturing problems, which caused the delay of the first flight
and projected late deliveries of other flight test aircraft.  The Air
Force is studying the potential impact of schedule delays to
determine if the cost estimate includes sufficient amounts to
complete the EMD program.  The Air Force expects that the F-22 will
meet or exceed all of its established performance requirements. 
However, the amount of flight testing planned in May 1997 has not
been achieved. 

The Air Force plans to enter production having completed
significantly fewer flight test hours than they had planned to have
done.  DOD has previously indicated that if major problems exist,
they usually occur within the first 10 to 20 percent of flight
testing.  If the Air Force awards the contract for the first two F-22
production aircraft in December 1998, it will have accomplished only
183 flight test hours, or 4 percent of the total flight test hours
planned, instead of 601 flight test hours, or 14 percent of the total
flight test hours planned in May 1997. 


   EXTENT TO WHICH COST GOALS ARE
   BEING MET
---------------------------------------------------------- Chapter 0:3

In the fiscal year 1999 President's budget, the Air Force's estimate
to complete the F-22 EMD program was $18.9 billion.  The estimate
includes the $16 billion negotiated price of the major prime
contracts with Lockheed Martin and Pratt & Whitney and $1.5 billion
in planned contract modifications as of February 1998.  The estimate
also includes other government costs and a margin to accommodate
future cost growth. 
Table 1 shows the Air Force's program cost estimate. 



                                Table 1
                
                 Air Force's Estimated Cost of the F-22
                              EMD program

                         (Dollars in billions)

Cost element                                                    Amount
--------------------------------------------------  ------------------
Lockheed Martin and Pratt & Whitney contracts                    $16.0
Planned modifications to contracts                                 1.5
Other government costs                                             1.2
Margin for cost growth                                             0.2
======================================================================
Total cost                                                       $18.9
----------------------------------------------------------------------
Because the F-22 contracts with Lockheed Martin and Pratt & Whitney
were modified in August and September 1997, there is limited
information on the extent to which contractors are completing
scheduled work at the planned costs.  When the contracts were
modified, the contractors rebaselined the systems that measure cost
and schedule progress and calculate how actual costs and schedules
vary from contract goals.  Before modifying the contracts, Lockheed
Martin and Pratt & Whitney reported cost growth at completion of EMD
totaling about $1.2 billion. 

Lockheed Martin and Pratt & Whitney report monthly to the Air Force
concerning their progress in relation to contract costs and
schedules.  These reports define the cost and schedule variances from
the contract plans.  In January 1998, Pratt & Whitney and Lockheed
Martin reported variances of less than 1 percent from the negotiated
contract cost and planned schedule.  The most significant variance
identified in the reports was a $70-million unfavorable schedule
variance for Lockheed Martin.  The contractors' reports showed that
the negotiated costs included about $194 million for management
reserves; that is, funds set aside in case of cost increases due to
unplanned efforts or cost growth in planned efforts. 

Lockheed Martin and Pratt & Whitney also reported in January 1998
that they planned to complete the contract efforts within the
negotiated costs.  However, the impact of delays in the delivery of
wing and aft fuselage assemblies and the flight test program were not
reflected in those reports.  Lockheed Martin advised the Air Force
that it could execute the revised schedule caused by the delays at no
increased cost to the EMD contract.  At the time of our review, the
Air Force was assessing whether changes due to these delays could be
accomplished with no cost increase to the EMD contract.  The Air
Force was also assessing the impact that late software development
may have on the estimated cost of the EMD program. 


   EXTENT TO WHICH SCHEDULE GOALS
   ARE BEING MET
---------------------------------------------------------- Chapter 0:4

In January 1998, the F-22 program was not meeting its schedule goals. 
The first flight of the first F-22 EMD aircraft occurred about 3
months late.  Furthermore, the flight test program was suspended
after two flights, and its resumption is not expected until late
April 1998 to correct a problem discovered in the horizontal tail of
the aircraft.  Also, the late delivery of the aft fuselage and wing
assemblies is expected to delay the delivery of other EMD aircraft
and the progress of the flight test program.  The Air Force has
revised its schedule to reflect the late first flight.  However, it
had not determined how the late deliveries of aft fuselage assemblies
and wing assemblies will impact the overall F-22 EMD schedule.  The
Air Force planned to complete its evaluation of the schedule impact
of these manufacturing problems in March 1998.  In addition, Air
Force officials are planning to revise software schedules by May
1998. 


      FIRST F-22 FLIGHT WAS
      DELAYED
-------------------------------------------------------- Chapter 0:4.1

Because of a number of technical problems with the first F-22 EMD
aircraft, the first flight was delayed over 3 months, from late May
to early September 1997.  Among the problems causing the late first
flight were a fuel tank leak, a software defect, failure of an
auxiliary power unit, and damage from debris being ingested into the
engine.  Furthermore, the aircraft flight test program was suspended
after two flights to accomplish planned ground tests and make minor
structural additions to the airframe.  The flight test program will
not resume until at least late April 1998 because materials in the
horizontal tail of the aircraft became disbonded, or separated.  Air
Force officials said that the identified solution to this problem
will not impact other EMD aircraft schedules. 


      WINGS AND AFT FUSELAGES ARE
      EXPECTED TO BE DELIVERED
      LATE
-------------------------------------------------------- Chapter 0:4.2

F-22 wing deliveries are behind schedule because of problems in
developing and manufacturing the large titanium wing castings, which
are the foundation for building the wing.  As of January 1998, the
contractor, Boeing (the subcontractor for the wing assemblies), and
the Air Force were still working to resolve these problems.  The
wings for the third through the sixth flight test aircraft and two
ground test articles are expected to be delivered about 2 weeks to
over 4 months late to Lockheed Martin. 

Delivery of the F-22 aft fuselage--the rear aircraft body section--is
also expected to be late for the third through the sixth flight test
aircraft and the two ground test articles because of the late
delivery of parts and difficulties with welding the many pieces of
the fuselage together due to the close tolerances required.  An Air
Force and contractor team is currently evaluating potential cost,
schedule, testing, and production impacts associated with this
problem.  The team planned to complete its assessment by March 1998. 

As a result of the late deliveries of the wings and aft fuselages,
the first flights of the third (aircraft 4003) through the sixth
(aircraft 4006) flight test aircraft will be delayed by about 2 weeks
to over 5 months.  Table 2 shows the scheduled and expected first
flights of EMD aircraft. 



                                Table 2
                
                   Comparison of Schedules for First
                        Flights of EMD Aircraft

                           Scheduled      Expected
                           first flight   first flight
EMD                        as of May      as of               Delay in
aircraft number            1997           February 1998         months
-------------------------  -------------  -------------  -------------
4001                       May 29, 1997   September 7,             3.3
                                          1997\a

4002                       July 9, 1998   July 9, 1998               0

4003                       June 16, 1999  November 22,             5.2
                                          1999

4004                       August 17,     February 3,              5.6
                           1999           2000

4005                       January 11,    March 31,                2.7
                           2000           2000

4006                       May 18, 2000   May 30, 2000             0.4

4007                       September 25,  September 25,              0
                           2000           2000

4008                       February 2,    February 2,                0
                           2001           2001

4009                       June 1, 2001   June 1, 2001               0
----------------------------------------------------------------------
\a The first flight occurred on this date. 


      PROGRESS IN COMPLETING
      SOFTWARE DEVELOPMENT IS
      CONCERN
-------------------------------------------------------- Chapter 0:4.3

Since completing the audit work for the report we issued earlier this
month, we learned that the schedule for developing F-22 avionics is a
potential concern.  In 1993, DOD's Defense Science Board rated the
integrated avionics as the highest technical risk in the F-22 program
and therefore indicated the need for a long period of evolutionary
software development.  The Air Force is concerned that the writing
and testing of avionics software may not be progressing sufficiently
to provide software deliveries on schedule.  The Air Force is
assessing the progress of the avionics software development effort to
determine a revised schedule and the estimated impact on cost.  The
Air Force expects to complete this assessment by May 1998. 


      IMPACT OF LATE AIRCRAFT
      DELIVERIES ON FLIGHT TEST
      PLANS FOR FISCAL YEARS
      1998-99
-------------------------------------------------------- Chapter 0:4.4

The delay in first flight and expected delays in delivery of the
third through sixth EMD flight test aircraft have affected the number
of flight test hours planned for fiscal years 1998 and 1999.  About
55 percent of the flight test hours planned for fiscal year 1998 (120
of 217) and about 11 percent of the flight test hours planned for
fiscal year 1999 (51 of 449 hours) have been deferred until later in
the test program.  As a result, only about one-third of the flight
test hours that were planned as of May 1997 (183 of 601) will be
completed before the scheduled award date of the contract for the
first two production aircraft in December 1998.  The planned number
of flight test hours before production contract award has declined
since November 1994, as shown in table 3. 



                                Table 3
                
                  Comparison of F-22 Flight Test Hours
                                Planned

                                                            Percent of
                                            Flight test    flight test
                                          hours planned  hours planned
                            Total flight         before         before
Flight test schedule as       test hours     production     production
of                               planned          award          award
-------------------------  -------------  -------------  -------------
November 1994                      5,191          1,400             27
May 1997                           4,337            601             14
February 1998                      4,337            183              4
----------------------------------------------------------------------
The Air Force acknowledges that fewer flight test hours than planned
will be completed before production contract award than were planned
by the Joint Estimating Team in May 1997.  In response to our 1995
report on the F-22 program,\3

DOD cited a Defense Science Board report that denoted that when major
program problems occur, it is usually within the first 10 to 20
percent of flight testing.  The Board stated that if the F-22 could
complete 1,000 flight test hours before the first production contract
award, it would be equivalent to 10 to 20 percent of the total number
of flight test hours planned for the F-22 program.  Although the 601
flight test hours that the Air Force had previously planned in May
1997 was 14 percent of the total flight test program, the 183 flight
test hours planned as of February 1998 represent only 4 percent of
the total program.  Accordingly, the Air Force plans to enter
production having completed significantly fewer flight test hours
than the amount that would likely identify any major problems. 

The Air Force maintains that the confidence gained in the aircraft's
design from the first 200 hours of flight testing will be
proportionately greater than the later 400 hours.  The officials
stated that the later 400 hours will provide only minimal increased
confidence and should not be the basis for accepting higher program
costs from delaying the fiscal year 1999 contract award.  The Air
Force believes that maintaining the planned schedule and awarding the
full production contract for two aircraft in December 1998 is the
most cost-effective strategy. 


--------------------
\3 Tactical Aircraft:  Concurrency in Development and Production of
F-22 Aircraft Should Be Reduced (GAO/NSIAD-95-59, Apr.  19, 1995). 


   EXTENT TO WHICH PERFORMANCE
   GOALS ARE BEING MET
---------------------------------------------------------- Chapter 0:5

As of January 1998, the Air Force estimated that, at the end of the
EMD program, the F-22's performance will meet or exceed the goals for
all of its 10 established parameters.  The 10 parameters are radar
cross section from the front sector of the aircraft, supercruise,
acceleration, maneuverability, payload, combat radius, radar
detection range, airlift support, sortie generation rate, and mean
time between maintenance.  Performance estimates are engineering
judgments based on computer and other models, ground and limited
flight testing, and analyses.  The goal for each parameter is based
on the EMD contract specifications. 

We identified and reviewed two additional features--situational
awareness and low observability--that are integral to the F-22's
being able to operate as intended.  Although these additional
features are not official performance parameters, the Air Force
considers them to be critical system characteristics, which it
describes as generic characteristics that do not lend themselves well
to measurement and reporting. 

The F-22 sensors, advanced aircraft electronics, and cockpit display
screens are required to provide the pilot with improved situational
awareness of potential enemy threats and targets.  This increased
awareness is to improve pilot response time to the threats, thus
increasing the lethality and survivability of the aircraft.  The
F-22's low observable, or stealthy, features allow it to evade
detection by enemy aircraft and surface-to-air missiles.  As of
January 1998, the Air Force estimated that the F-22 would meet the
performance requirements of these two additional features. 


-------------------------------------------------------- Chapter 0:5.1

Mr Chairman, this concludes my prepared statement.  I would be happy
to respond to any questions you or other members of the Subcommittee
may have. 

*** End of document. ***