Defense Acquisition: Progress of the F-22 and F/A-18E/F Engineering and
Manufacturing Development Programs (Testimony, 03/17/99,
GAO/T-NSIAD-99-113).

The Air Force estimates that it can complete the F-22 engineering and
manufacturing development program within the nearly $19-billion cost cap
set by law. During much of 1998, however, the F-22's contractor cost and
schedule plans, as defined in 1997, were not fully accomplished. Program
costs were over budget and often behind schedule. The Air Force views
the potential for further cost growth as a threat to completing the
program within the cost limitation. Although the Air Force has devised
ways to avoid and reduce costs, GAO questions whether the program, as
planned, can be completed within the cost limitation. This testimony
summarized GAO's March 1999 report, GAO/NSIAD-99-55.

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

 REPORTNUM:  T-NSIAD-99-113
     TITLE:  Defense Acquisition: Progress of the F-22 and F/A-18E/F 
             Engineering and Manufacturing Development Programs
      DATE:  03/17/99
   SUBJECT:  Concurrency
             Naval procurement
             Air Force procurement
             Weapons systems
             Military budgets
             Military cost control
             Fighter aircraft
             Defense capabilities
             Operational testing
             Avionics
IDENTIFIER:  F-22 Aircraft
             F/A-18E/F Aircraft
             C-130J Aircraft
             Air Force F-22 Engineering and Manufacturing Development 
             Program
             Navy F/A-18E/F Engineering and Manufacturing Development 
             Program
             
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Ns99113t GAO

United States General Accounting Office

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

For Release of Delivery Expected at 1:30 p.m., EST Wednesday,
March 17, 1999

DEFENSE ACQUISITIONS Progress of the F-22 and F/A-18E/F
Engineering and Manufacturing Development Programs

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

GAO/T-NSIAD-99-113

Page 1 GAO/T-NSIAD-99-113

Mr. Chairman and Members of the Subcommittee: I am pleased to be
here today to discuss the Air Force's F-22 and the Navy's F/A-
18E/F engineering and manufacturing development (EMD) programs.
Related GAO reports are listed in appendix I. The National Defense
Authorization Acts for Fiscal Years 1998 and 1999 require us to
review and report annually on these programs. My testimony is
based on our work in response to these mandates.

Summary The F-22 and F/A-18E/F programs are approaching critical
investment decision points, and each faces significant challenges.
The F-22 is

approaching a decision for undertaking production activities and
the E/F is getting ready to enter the Operational Test and
Evaluation (OPEVAL) phase. Regarding the F-22 program, although
the Air Force estimates it can complete the F-22 EMD program
within the nearly $19-billion cost limit established by the
National Defense Authorization Act for Fiscal Year 1998, in 1998,
F-22 costs exceeded budgets, and work was not always completed as
scheduled. The Air Force is exploring ways to keep EMD costs
within the congressional limit, but there are several obstacles.
For example:

 The Air Force and F-22 contractors have identified potential cost
increases totaling $667 million. If not addressed, F-22 EMD costs
will rise above the cost limit. Plans are being developed to
address the increase but have not been finalized. According to the
Air Force, some planned EMD activities will be deferred, reduced,
or eliminated.  The contractor notified the Air Force that F-22
program costs may

increase further if sales of C-130J aircraft, which are
manufactured in the same plant as the F-22, are lower than
anticipated because the F-22 program will have to absorb a higher
share of the plant's overhead costs.  First flights of the next
four test aircraft are expected to be late,

reducing the time available to accomplish flight tests before EMD
is completed. If the Air Force is not able to effectively revise
its test schedule, some planned EMD activities will need to be
deferred, reduced, or eliminated.  Development of the F-22's
integrated avionics systems has been delayed,

and the schedule for completing avionics development appears
unrealistic. If EMD completion must be delayed for avionics
development, additional costs will be incurred.

The Air Force plans to start F-22 production activities later this
year by awarding contracts to procure the first 6 low-rate initial
production aircraft

Page 2 GAO/T-NSIAD-99-113

and initiate advance procurement of the next 10 aircraft. However,
because of delays in the EMD program, the Air Force has
substantially reduced or delayed the testing it had planned to
accomplish before awarding the contracts. In 1994, the Air Force
planned to have 1,400 flight test hours completed before starting
production activities. Now, the Air Force plans to complete 511
flight test hours. Progress of the flight test program so far
indicates that achieving 511 hours will be difficult. In addition,
completing static and fatigue tests on the airframe structures has
now been delayed until after contract award. Likewise, early
flight testing of an F-22 equipped with its integrated avionics
will not be accomplished, as previously planned, before contract
award.

In terms of the F/A-18E/F program, we do not agree with the Navy's
assessment that the program is meeting all performance
requirements and is on schedule and on cost. The Navy based its
assessment on the E model's performance and assumed some
improvements to the aircraft that have not yet been demonstrated.
Without that assumption, the F model, which makes up over half of
the E/F planned buy, is not meeting the interdiction range
requirementa primary justification for the program. Department of
Defense (DOD), Navy, and contractor personnel have reported that
even if the E/F meets all performance specifications, it might
fail the next phase of operational testing, known as OPEVAL.
Regarding the program's schedule, although completion of the
development effort has slipped from November 1998 to April 1999,
the Navy intends to maintain its original schedule to start OPEVAL
in May 1999. Consequently, the contractor has insufficient time to
correct some critical deficiencies in the aircraft that, according
to Navy criteria, should be corrected prior to OPEVAL. Conducting
OPEVAL with these unresolved deficiencies could invalidate OPEVAL
results.

Corrections of some deficiencies have been shifted to later in the
program. This will help the Navy stay within the congressionally
mandated developmental cost cap; however, correcting these
deficiencies will increase the procurement costs of the aircraft.
And finally, the correction of some deficiencies could result in
design changes to the aircraft. This increases the risk associated
with Congress approving the Navy's multiyear procurement request
for the E/F program at this time.

I would now like to discuss the basis for our conclusions on each
of these programs.

Page 3 GAO/T-NSIAD-99-113

F-22 Program Concerned about growing costs on the F-22 program,
the Assistant Secretary of the Air Force for Acquisition, in June
1996, established the

Joint Estimating Team (JET) to estimate the most probable costs of
the F-22 EMD and production programs. The JET concluded in 1997
that additional time would be required to complete EMD and
estimated that EMD costs would increase by $1.45 billion to
$18.688 billion. The JET recommended slowing manufacturing for a
more efficient transition from development to low-rate initial
production and adding 12 months to complete avionics development.
The JET also estimated that the production costs for 438 F-22s
would increase by $13.1 billion to about $61.2 billion. The JET
identified initiatives that it expected would offset the
production cost increase. The Air Force and Under Secretary of
Defense for Acquisition and Technology generally adopted the JET's
recommendations. 1

The National Defense Authorization Act for Fiscal Year 1998
established a cost limit of $18.688 billion (an amount that
mirrored the JET estimate) for the F-22 EMD program and $43.4
billion for the production of 339 F-22s. 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
economic inflation and compliance with changes in federal, state,
and local laws. Since then, the Air Force has adjusted the EMD
cost limit to $18.880 billion and the production limit to $39.759
billion to account for changes in inflation and to move costs
associated with out-of-production parts from production to EMD.

F-22 EMD Costs Have Increased

Contractor cost experience and studies in 1998 indicate that cost
growth threatens the Air Force's ability to complete EMD within
the congressional cost limit. During 1998, because costs were
exceeding budgets and work was behind schedule, Lockheed Martin
and the Air Force studied the EMD program and identified potential
cost increases of $667 million. 2 The increases are attributed
primarily to (1) problems in manufacturing the aft

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

2 In February 1999, the Air Force stated that additional costs
would be incurred because of problems manufacturing wings. The Air
Force estimated that another $22 million would have to be added to
the increase of $667 million identified in 1998. As a result, the
Air Force will be required to identify offsets to remain within
the cost limitation.

Page 4 GAO/T-NSIAD-99-113

fuselage, horizontal tails, engine air inlets, and castings that
attach the wing to the aircraft's body and (2) problems developing
the aircraft's integrated avionics systems.

Plans to Address Potential Cost Growth

Because the increases would cause the EMD program to exceed the
cost limit, the Air Force is exploring ways to defer, reduce, and
eliminate activities. Actions and potential cost reductions
include

 deferring testing to certify that the F-22 can effectively carry
external weapons ($140 million),  reassessing testing associated
with a helmet targeting system and the

AIM-9X missile ($110 million),  reducing contractor laboratory
costs for the test program ($100 million),  reducing government
costs for special studies ($50 million),  implementing Lockheed
Martin cost reduction plans ($80 million), and  applying
contractor management reserves ($185 million).

Potential Impact of C-130J Sales on Program

The $667-million increase does not include the effects that lower-
than- anticipated sales of C-130J cargo aircraft may have on F-22
costs. Lockheed Martin, which produces the C-130J and the F-22 in
its Marietta, Georgia plant, notified the Air Force that the F-22
EMD program would have to absorb a higher share of the plant's
overhead if fewer C-130Js are sold than expected. According to the
Defense Contract Management Command at Marietta, the added cost to
the F-22 program would be about $150 million to $160 million per
year if C-130J production were to cease.

According to DOD officials, increased costs would have to be
absorbed only partially by the F-22 EMD program because other
business may develop. They indicated that Lockheed Martin was
negotiating potential sales of C-130Js with several foreign
governments. DOD had not, however, determined how these actions
would impact the F-22 program. In our report issued earlier this
week, we recommended that the Secretary of Defense evaluate how
decisions regarding C-130J production are likely to impact the F-
22 EMD program and assess the Air Force's ability to negate
additional overhead costs that may be allocated to the F-22.

Page 5 GAO/T-NSIAD-99-113

F-22 Is Experiencing Delays

Schedules for EMD aircraft and avionics development had not been
met through December 1998. As a result, test aircraft are expected
to be delivered late and ground and flight test activities cannot
be completed as planned.

Problems Have Caused Late Deliveries and Reduced Flight and Ground
Testing Time

The first two F-22 EMD aircraft were flight tested through most of
December 1998. Flight testing began about 3 months later than
planned for the first aircraft and began on time for the second
aircraft. However, because of manufacturing problems, the Air
Force estimates that the next four flight test aircraft will be
delivered late. Flight testing for these four aircraft is
scheduled to begin 2 weeks to over 5 months late. As a result, the
Air Force has 16.9 fewer flight test months available to complete
flight testing. The Air Force is studying ways to reduce the
flight test hours required. Also, the two ground test aircraft are
expected to start testing 6 to 8 months late. If the Air Force
cannot effectively revise its test schedule, additional deferments
or deletions will be needed to remain within the cost limit.

Table 1 compares the 1997 scheduled first flight dates with the
expected first flight dates as of January 1999.

Table 1: Schedules for First Flights of EMD Aircraft

a Actual date of first flight.

EMD aircraft 1997 schedule January 1999 schedule Delay

(in months)

4001 May 29, 1997 September 7, 1997 a 3.3 4002 July 9, 1998 June
29, 1998 a -0. 3 4003 June 16, 1999 November 22, 1999 5. 2 4004
August 17, 1999 February 3, 2000 5. 6 4005 January 11, 2000 March
31, 2000 2. 7 4006 May 18, 2000 May 30, 2000 0. 4 4007 September
25, 2000 September 25, 2000 0 4008 February 2, 2001 February 2,
2001 0 4009 June 1, 2001 June 1, 2001 0

Total 16. 9

Page 6 GAO/T-NSIAD-99-113

The first flight delays were caused by (1) problems developing and
manufacturing large titanium castings that attach the wing to the
aircraft's body and (2) late deliveries of the aft fuselagethe
rear aircraft body section. Air Force officials believe they have
solved the problems causing late deliveries of the aft fuselage
but are continuing to seek solutions to the wing problem. Air
Force officials told us in February 1999 that continuing problems
with late wing deliveries will further delay first flights for the
third through the sixth test aircraft by another 2 to 6 weeks. Air
Force officials are seeking ways to avoid these further delays.

Avionics Development Behind Schedule

Avionics development and integration is a challenge for the F-22.
The JET review in 1997 recommended that avionics development be
extended 12 months. The Air Force, however, did not adopt the
recommendation. The Air Force has experienced software, hardware,
and integration problems with the F-22's communication,
navigation, and identification and electronic warfare avionics
systems. Because of these problems, the Air Force developed a
revised avionics schedule in August 1998, allocating more time to
complete the first two avionics segments, known as blocks 1 and 2.
3

The August 1998 schedule, while extending completion dates for
blocks 1 and 2, did not change the completion dates for subsequent
blocks 3 and 3.1, 4 even though the majority of initial software
development tasks related to these last two segments have been
delayed from 1 to 18 months. In fact, the Air Force estimates that
blocks 3 and 3.1 can be completed 5 months earlier than what the
JET considered realistic. If it takes longer to complete blocks 3
and 3.1, additional costs will be incurred.

Issues About Starting Production Activities

Later this year, the Air Force plans to award contracts to procure
the first 6 low-rate initial production aircraft and initiate
advance procurement of the next 10 aircraft. However, because of
delays in the EMD program, the Air Force has reduced or delayed
much of the testing it had planned to accomplish before awarding
the contracts. For example, in 1994, the Air

3 Blocks 1, 2, 3S, 3, and 3.1 are all designed to have increased
capability over the previous block. The last phase of development
for each block begins when it is placed on the aircraft for
testing.

4 The revised schedule also adds block 3S between blocks 2 and 3.
In adding this block, the Air Force moved some block 3 activities
ahead for earlier evaluation. This did not change the planned
completion date for block 3 activities, however, which is
scheduled later.

Page 7 GAO/T-NSIAD-99-113

Force planned to complete 1,400 flight test hours before starting
production activities. Now, the Air Force is planning to have 511
flight test hours completed. The slow progress of the flight test
program so far this year indicates that achieving 511 hours will
be difficult. In addition, completing static and fatigue tests on
the airframe structures has now been delayed until after contract
award. And there will be no flight testing of an F-22 equipped
with its integrated avionics as originally planned before contract
award.

Limited Flight Testing Completed

Through December 1998, the Air Force accumulated about 200 flight
test hours. When the contract is awarded in December 1999 for 6
low-rate initial production aircraft and advance procurement for
the next 10 aircraft, the Air Force plans to have 511 flight test
hours completed, considerably fewer hours than previously planned.
Table 2 shows that the amount of flight testing planned to be
completed before production has been reduced significantly in
recent years.

Table 2: F- 22 Flight Test Hours

To accomplish 1999 flight testing, the Air Force plans to complete
173 flights and 311 test hours. While Air Force plans call for
completing 13 flights and 23.4 hours through March 1999, the Air
Force is likely to complete only 2 flights and 3.9 test hours.

The Air Force has two aircraft, 4001 and 4002, available for
testing in 1999. However, Air Force officials said that 4001 is
not scheduled to resume flight testing until May 10 and 4002 is
not scheduled to resume flight testing until March 31.

Table 3 shows that completing 311 flight test hours in 1999 will
require a more demanding flight test program than the Air Force
planned.

Flight test schedule as of Hours planned before

production award Percent planned before production award

November 1994 1, 400 27 May 1997 601 14 January 1999 511 12

Page 8 GAO/T-NSIAD-99-113

Table 3: Planned Flight Testing for 1999

In 1998, the F-22 completed 200 hours (averaging 13.8 flights and
31.6 hours per month), which was enabled by deferring ground tests
and maintenance and providing dedicated refueling support and
priority to test center assets. According to the Director for
Operational Test and Evaluation, this kind of support may not be
available for the remainder of EMD test operations. If the Air
Force is not successful in completing the planned flight testing
by the time the contract is awarded, it will have fewer than 511
flight test hours and less flight performance data upon which to
base its production decision.

Delayed Testing of Ground Test Articles

Structural testing of the airframe was to be completed by December
1999. However, static testingdesigned to ensure the airframe will
withstand stresses expected throughout the F-22 flight
envelopewill not be completed until February 2000. And fatigue
testsdesigned to ensure the airframe will withstand stresses
expected during prolonged operational usewill not be completed
until September 2000. Table 4 shows the completion dates for these
tests according to the JET schedule and the Air Force's current
plan.

Table 4: Completion Dates for Static and Fatigue Tests

Failure to complete these tests before contract award increases
risk. For example, when the C-17 static test aircraft was
undergoing a stress test, both wings on the aircraft buckled
before they reached the ultimate design limits. Serious damage
occurred inside the wing where the ribs and strengtheners were
fractured. If the test aircraft were flying and encountered this
type of a failure, it would have caused the aircraft to crash.

Flight test Average flights per month Average flight test

hours per month

Plan for 1999 14. 4 25. 9 Required to achieve 1999 plan 19. 2 34.
5

Type of test JET schedule Current plan

Static October 1999 February 2000 Fatigue December 1999 September
2000

Page 9 GAO/T-NSIAD-99-113

No Avionics Flight Testing The Air Force intended to flight test
an F-22 equipped with its integrated avionics package in August
1999. However, that is not expected to occur

now until February 2000, after contract award. Integrated avionics
is one of the critical features of the F-22 and is expected to
provide pilots previously unmatched awareness of potential threats
and targets.

Mr. Chairman, I will now turn to the F/A-18E/F program.

F/A-18E/F Program Extent to Which F/A-18E/F Is Meeting Performance
Requirements

The F/A-18E/F is nearing completion of its development program.
The development flight test program began in February 1996 and is
scheduled to be completed in April 1999. During this phase of the
program, the Navy has conducted both developmental and some
limited operational testing using the aircraft produced under the
EMD phase of the program. Based on the results of that testing,
the Navy reports that the E/F is meeting all performance
parameters.

Our review showed that the Navy's statements about the performance
of the E/F reflect the performance of the E model aircraft, not
the less capable F model. Also, the statements reflect the
projected aircraft performance, not the actual performance being
demonstrated in flight tests. Specifically, the Navy's performance
values include anticipated, but not yet demonstrated, range
improvements. If these values are not included in the performance
estimates, the F model aircraft will be 33 nautical miles short of
meeting its interdiction range requirement. This is significant
because (1) the F model, which was originally planned to be used
as a trainer aircraft and therefore made up only about 20 percent
of the total buy, now comprises about 56 percent of the total buy
and (2) increased range over the current C/D aircraft was critical
to justifying the decision to buy the F/A-18E/F. The Navy formally
reports that the F/A-18E/F will have over 40 percent more range
than F/A-18Cs. However, initial E/F range predictions have
declined as actual flight data is gathered and incorporated into
range prediction models. Test data currently projects that the E
model will have a range of 434 nautical miles, or about 15 percent
greater than the 376 nautical miles demonstrated by current F/A-
18Cs. If the anticipated but not yet demonstrated range
improvements are not included in the range estimates, the F/A-18E
interdiction range drops to 405 nautical miles, or about 8 percent
greater range than an F/A-18C.

Page 10 GAO/T-NSIAD-99-113

Another qualification I would offer is that the Navy's assessment
of the E/F's performance does not consider the potential
degradation of performance as a result of modifications to correct
unresolved deficiencies identified during the developmental and
operational flight test programs. These deficiencies and their
potential negative impacts relative to the areas cited by the Navy
when it justified the E/F program are as follows.

Combat Range

Early in 1996, a condition described as wing drop was observed
during F/A-18E/F development tests. The phenomenon was described
as an unacceptable, uncommanded abrupt lateral roll that randomly
occurred at the altitude and speed at which air-to-air combat
maneuvers are expected to occur. In October 1998, the anticipated
fix to the problem, replacing solid wing fold fairings with porous
fairings, was flown and significantly reduced, but did not totally
eliminate, the frequency and severity of wing drop. However, the
porous wing fold fairing has caused buffeting of the aircraft. The
magnitude of the buffeting was described as severe enough to
affect the pilots' voices and could also mask an aircraft
malfunction, particularly for aircrews not accustomed to the
sensation. Buffeting reduces aircraft range; however, the actual
range decrease is not yet known because resolution of the problem
is still being worked on. According to program officials, the
final production fixes to wing drop may involve something other
than the porous wing fold fairing.

Other range-related issues are associated with the Navy's attempts
to resolve design problems that were resulting in bombs colliding
with each other or with the aircraft. To correct this problem, the
Navy toed, or slanted, the inner wing pylons. However, that fix
increased the drag on the aircraft and has resulted in air loads
on the pylons where the 480-gallon tanks would be carried that
significantly exceed the load limit designed into the E/F wings in
this area. If uncorrected, this deficiency would preclude the E/F
from carrying the two 480-gallon external fuel tanks on each of
the two inner wing stations specified for the interdiction mission
and would prevent the aircraft from meeting its required range
specification. The Navy is studying options for redesigning the
pylons and their attachment to the aircraft to correct this
problem.

Aircraft range will also be affected by the extent of afterburner
use to compensate for deficiencies in the E/F's climb, turn, and
acceleration rates. Using afterburner to overcome these
deficiencies will significantly increase fuel consumption and
reduce mission range.

Page 11 GAO/T-NSIAD-99-113

Payload and Bringback

The F/A-18E/F is reported to have a 22-percent increase in payload
over existing F/A-18s. This increased payload is the result of the
two additional wing stations that the E/F has. However,
development flight tests have revealed that the E/F is
experiencing noise and vibration at the wing tips that could
damage air-to-air missiles carried by the aircraft. The Navy is
determining whether a redesign of the missiles will be necessary
for them to be carried on the E/F. Additionally, the excessive
loads on the inner wing pylons have been caused by the closeness
of these pylons to the aircraft fuselage and to the toeing of the
pylons. Current plans are to restrict what can be carried on these
pylons during OPEVAL until a fix is designed and tested. The
restrictions would prohibit the E/F from carrying dual MK-83
(1,000 pound) bombs on these pylons during OPEVAL, which reduces
the payload capacity for the interdiction mission. We were told
that the underwing pylon loads problem could also result in a
problem returning to the carrier with unused weapons (bringback)
because carrier landings would exert significant stress on these
pylons. The Navy is still studying this issue and has not yet
identified a final fix.

Survivability

The Navy planned to improve F/A-18E/F survivability relative to
existing F/A-18s by reducing its susceptibility to detection and,
if detected, the probability of being destroyed. Initial
operational tests cite concerns about E/F survivability systems.
While the specifics on E/F survivability are classified, the
unclassified portions of the test reports identify concerns with
the ALE-50 towed decoy and the ALR-67 radar warning receiver. The
ALE-50 towed decoy is designed to improve F/A-18E/F survivability
by attracting enemy missiles to the decoy and away from the
aircraft. The line that tows the decoy has been burning off when
it crosses the heat path of the engine when the engine is in
afterburner. The problems relative to the ALR-67 radar warning
receiver have to do with the receiver's ability to provide
accurate information on the direction of arrival of enemy threats.
E/F survivability issues comprised the majority of challenges that
the Procurement Executive Officer for Tactical Aircraft identified
as the major challenges facing the E/F program.

Growth Space

In justifying the need for the F/A-18E/F, the Navy stated that it
needed more space than was available on existing F/A-18s to
accommodate additional

Page 12 GAO/T-NSIAD-99-113

new systems without having to remove existing capability. The Navy
reported early in the F/A-18E/F program that the aircraft would
have 21 cubic feet of growth space. This was revised, and it is
now reported that the F/A-18E/F will have 17 cubic feet of growth
space. However, program documents show that only 5.46 cubic feet
of the 17 cubic feet will be usable growth space. We reported in
1996 that growth space was available within the C/D. The Navy's
F/A-18 upgrade roadmap shows that most of the upgrades planned for
the E/F will also be installed on C/Ds, which demonstrates that
the C/Ds have growth capability.

The performance issues I have been discussing relate to the E/F's
performance during the developmental and initial operational test
phases of the program. I will now discuss the next phase of the
program OPEVAL.

Test Schedule and Unresolved Deficiencies Cause Risks to
Successful

OPEVAL

The testing to be done during OPEVAL will use production
representative aircraft that are being produced under the first
low-rate initial production contract. The objective of OPEVAL is
to field test the E/F under realistic combat conditions to
determine the operational effectiveness and suitability of the
aircraft for use in combat by typical military users. The OPEVAL
results will be used to determine whether to proceed into full-
rate production of the F/A-18E/F. Accordingly, the primary
questions facing the E/F program are whether the aircraft is ready
to advance into OPEVAL and whether successful completion of that
evaluation is highly probable. We believe the Navy faces
significant challenges regarding each of those questions.

F/A-18E/F development was scheduled to be completed by November
1998, with OPEVAL scheduled to begin in May 1999. This would
provide time to correct deficiencies in the aircraft that would be
used for OPEVAL. However, additional test requirements, caused by
the need to test corrections of deficiencies such as wing drop,
have caused the completion of the development flight test program
to slip to April 1999. As a result of the development program
delay, and the Navy's plan to retain the May 1999 OPEVAL schedule,
the Navy will not have time to correct aircraft deficiencies
before OPEVAL, which according to the Navy's criteria, should be
fixed. In that regard, the OPEVAL Preparedness Team, which
comprises DOD, Navy, and contractor personnel, meets periodically
to determine whether the E/F is ready for OPEVAL. On February 25,
1999, the team held its final meeting before the scheduled start
of OPEVAL. At that meeting, the team concluded that 71 E/F
deficiencies would not be corrected until

Page 13 GAO/T-NSIAD-99-113

after OPEVAL. The Navy's criteria indicate that 23 of those
deficiencies should be corrected prior to OPEVAL. These
deficiencies consist of the problems associated with the ALE-50
towed decoy, the ALR-67 radar warning receiver, and the wing pylon
loads. In addition, they include such things as bomb-to-bomb
collisions, delamination of the composite surface layers of the
horizontal tail, and problems with the nose landing gear tires and
wheels during catapult testing.

Notwithstanding these unresolved deficiencies, the Navy plans to
begin OPEVAL as originally scheduled in May 1999. Consequently,
during OPEVAL the Navy plans to use modeling or tests of other
systems before they are incorporated into the E/F as the basis for
making some OPEVAL assessments. The Navy also plans to impose some
flight restrictions on the aircraft during OPEVAL as a result of
the wing pylons load problem.

The E/F operational test team has completed two operational
assessments, using aircraft produced during the EMD phase of the
program, that relate to the potential for a successful OPEVAL.
Those assessments, referred to as OT-IIA and OT-IIB, were
conducted in November 1997 and in June and August 1998,
respectively. Based on the test results, the operational testers
assigned a level of risk relative to a successful OPEVAL to each
critical operational issue tested. Table 5, which we extracted
from the operational test reports, shows that the testers
identified two operational issues with significant risk (air-to-
air weapons, and survivability) and six with moderate risk.

Table 5: Critical Operational Issues

The operational testers' assessment of the E/F identified 29 major
deficiencies with the aircraft. The deficiencies related to such
things as

Critical operational issues OT- IIA risk OT- IIB risk

Air- to- air weapons Not assessed Significant Survivability
Significant Significant Fighter escort Moderate Moderate Combat
air patrol Little or no risk Moderate Air combat maneuvering Not
assessed Moderate Air- to- ground sensor performance Moderate
Moderate Air- to- ground weapons Moderate Moderate Air- to- air
sensor performance Moderate Moderate

Page 14 GAO/T-NSIAD-99-113

the E/F's ability to accelerate, turn, climb, and roll.
Essentially, the E/F does not do as well in these areas as the
F/A-18C aircraft. Additionally, the testers identified buffeting
and lateral instability, or drift, as flying quality deficiencies.
They also listed problems with the ALE-50 towed decoy and the
radar warning receiver's problems with indicating the direction of
oncoming threats as major concerns. Some of the specific
deficiencies identified by the operational testers are as follows:

 poor climb performance above 30,000 feet,  low acceleration,
insufficient transonic and supersonic acceleration,  high angle of
attack agility and controllability,  slow response to control
inputs,  tactically ineffective sustained turn rate,  excessive
speed loss during air combat maneuvering,  incapability to safely
deliver the Rockeye bomb when carrying the

Tactical Forward Looking Infrared Radar,  insufficient cooling
capacity for seekers on air-to-air weapons,  damage to AIM-9
missile assemblies caused by wing tip environment,  limited life
of AIM-7 missile flown on under wing stations,  improper
indication of direction of arrival of oncoming threat systems,
ALE-50 tow line burn-off in afterburner,  inconsistent brake
effectiveness, and  imprecise and difficult trimability.

The operational testers recommended that the E/F continue to be
developed. They stated, however, that their recommendation was
based on continued improvements in the E/F's current maneuvering
performance and the development of follow-on systems that they
considered essential to be able to get the operational
effectiveness projected for the E/F. These improvements include
such things as the Active Electronic Scanned Array radar, the
Joint Helmet Mounted Cueing System, the AIM-9X missile, and the
Integrated Defensive Electronic Countermeasure system.

In addition to the risks to OPEVAL identified by the operational
testers and the OPEVAL Preparedness Team, the Program Risk
Advisory Board, comprising Navy and contractor personnel, in its
January 1999 assessment, stated that there is a medium risk that
OPEVAL might find the E/F not operationally effective and/or
suitable, even if all performance requirements are met. The Board
stated that the consequence of this type of conclusion from OPEVAL
could result in a delay or postponement of the

Page 15 GAO/T-NSIAD-99-113

full production decision and the need to conduct additional
operational testing.

To summarize, many obstacles affect the E/F's ability to undergo
OPEVAL, and there is risk that the program might not successfully
complete OPEVAL.

I will now discuss the cost of the E/F aircraft and the Navy's
pending request for multiyear funding for the program.

F/A-18E/F Costs and Request for Multiyear Funding

The Navy reports that the F/A-18E/F development effort will be
completed within the $4.88 billion (in fiscal year 1990 dollars)
development cost ceiling established by Congress. However, as of
the end of February 1999, 71 identified deficiencies will not be
corrected during the development effort. Correction of these
deficiencies will be accounted for as procurement, not
development, costs. The Navy said that estimates for correcting
these 71 deficiencies are not available. In addition, Boeing has
identified 105 deficiencies in the aircraft that it believes it is
not required to correct under the development contract. Estimates
for correcting these deficiencies are also not available.

Also, the Navy's unit procurement cost estimate for the E/F
assumes $1.3 billion of savings that is contingent upon Congress'
approval of multiyear funding as part of the fiscal year 2000
authorization and appropriation process.

Regarding the Navy's request for multiyear authority, such
approval has historically depended on the ability to obtain
significant savings, a stable system design, an adequately
validated requirement, and a commitment to stable funding over the
life of the contract. The concerns raised within DOD about the
uncertainty that the E/F will successfully complete OPEVAL as well
as the number of unresolved issues, like the final solution to
wing drop and buffeting and the inner wing pylon load concerns
that could require design changes to the aircraft, increase the
risk associated with Congress approving the E/F multiyear funding
request.

In summary, Mr. Chairman, we believe it is unlikely that the Air
Force will be able to keep the F-22 EMD program, as planned,
within the cost limit established by Congress. In addition, we are
concerned about the significant reduction the Air Force has made
in the tests planned to be

Page 16 GAO/T-NSIAD-99-113

completed before awarding contracts to initiate advance
procurement to accelerate F-22 production.

With regard to the E/F, the OPEVAL test plan has not yet been
approved by the Director, Operational Test and Evaluation. We plan
to monitor the OPEVAL effort as part of our next effort under the
congressional mandate for annual reviews of the program. During
that effort, we plan to determine whether extensive modeling and
simulation, and any other test restrictions, could invalidate
OPEVAL results.

Mr. Chairman, that concludes my statement. I will be happy to
respond to any questions you or other Members of the Subcommittee
might have.

Page 17 GAO/T-NSIAD-99-113

Page 18 GAO/T-NSIAD-99-113

Page 19 GAO/T-NSIAD-99-113

Page 20 GAO/T-NSIAD-99-113

Related GAO Products

Appendi x I

F-22 Program F-22 Aircraft: Issues in Achieving Engineering and
Manufacturing Goals (GAO/NSIAD-99-55, Mar. 15, 1999).

F-22 Aircraft: Progress of the Engineering and Manufacturing
Program (GAO/T-NSIAD-98-137, Mar. 25, 1998).

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

Tactical Aircraft: Restructuring of the Air Force F-22 Fighter
Program (GAO/NSIAD-97-156, June 4, 1997).

Defense Aircraft Investments: Major Program Commitments Based on
Optimistic Budget Projections (GAO/T-NSIAD-97-103, Mar. 5, 1997).

F-22 Restructuring (GAO/NSIAD-97-100BR, Feb. 28, 1997). Tactical
Aircraft: Concurrency in Development and Production of F-22
Aircraft Should Be Reduced (GAO/NSIAD-95-59, Apr. 19, 1995).

Air Force Embedded Computers (GAO/AIMD-94-177R, Sept. 20, 1994).
Tactical Aircraft: F-15 Replacement Issues (GAO/T-NSIAD-94-176,
May 5, 1994).

Tactical Aircraft: F-15 Replacement Is Premature as Currently
Planned (GAO/NSIAD-94-118, Mar. 25, 1994).

F/A-18E/F Program Navy Aviation: F/A-18E/F Development and
Production Issues (GAO/NSIAD-98-61, Mar. 13, 1998).

F/A-18E/F Production Decision Should Be Delayed (GAO/NSIAD-97-
106R, Mar. 4, 1997).

Navy Aviation: F/A-18E/F Will Provide Marginal Improvement at High
Cost (GAO/NSIAD-96-98, June 18, 1996).

(707406) Let t er

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