oversight

Adverse Effects of Producing the AN/SQS-26 Surface Ship Sonar System for Service Use Before Completion of Development and Testing

Published by the Government Accountability Office on 1971-03-09.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                                        l?
REPORT TO THE CONGRESS
                                      llllilllllllllilllllllllllll~
                                             LM095696




Adverse Effects Of Producing
The AN/SQS-26
Surface Ship Sonar System
For Service Use Before Comp letion
Of Development And Testing l                B- 160877




Department   of the Navy
                           &mmo   t




BY THE COMPTROLLER GENERAL                              ’
OF THE UNITED STATES
              COMPTROLLER     GENERAL     OF      THE    UNITED   STATES
                            WASHINGTON,    D.C.     20548




B-160877




To the President   of the Senate and the                                     Qd’
Speaker  of the House of Representatives                          @ do@

       This  is our report      on the adverse   effects  of producing
the AN/SQS-26       surface   ship sonar system for service       use
before   completion     of development    and testing.   Our review
was made pursuant        to the Budget and Accounting       Act, 1921
(31 U.S.C. 53), and the Accounting        and Auditing   Act of 1950
(31 U.S.C. 67).

       Copies of this report    are being sent to the Director,
Office  of Management     and Budget; the Secretary   of Defense;
and the Secretary    of the Navy.




                                                  Comptroller              General
                                                  of the United            States




                    50TH ANNIVERSARY                    1921- 1971
COMPTROLLERGENERAL'S                         ADVERSE EFFECTS OF PRODUCING THE
REPORTTO THE CONGRESS                        AWSQS-26 SURFACE SHIP SONAR SYSTEM
                                             FOR SERVICE USE BEFORE COMPLETION OF
                                             DEVELOPMENTAND TESTING
                                             Department of the Navy B-160877


DIGEST
_-----

WHYTHE REVIEWWASMADE                                       c-l
      In accordance with a                                Sidnev R. Yates, the
      General Accounting    0                            Navy's development    and
      acquisition  of selected  antisubmarine    warfare  systems.   The report which
      summarized the results   of GAO work on one of these--the      AN/SQS-26 sur-
      face ship sonar system--was     made public by Congressman Yates.

       In that form         the report  did not contain comments from the Navy or the
       manufacturers          of the sonar system.   In its present form the report   in-
       cludes their         comments and related   GAO views.   GAO's basic findings,   how-
       ever, remain         unchanged.


FINDINGS AND CONCLUSIONS
       Through June 30, 1969,          the Navy spent over $429 million       for the devel-
       opment and acquisition          of the AN/SQS-26 sonar system.        (See p. 15.)

       The Navy expected that the AN/SQS-26 sonar could be made to work and
       desired to provide the fleet    with the most up-to-date  equipment.    Conse-
       quently,   it began procurement  of the sonar for fleet  use before initial
       development and testing    were completed.   (See pp. 9 and 10.)

       Before this system was approved for service   use in November 1968, four
       different  models, totaling 87 units, had been contracted    for and two of
       those four had already undergone major modification.      (See pp. 9 and 10.)

       Throughout     its     history   the sonar system has undergone continued      redesign
       and modification          in order to correct   numerous equipment deficiencies       and
       to incorporate         features    to improve performance.   (See p. 13.)

       The system      has provided the Navy with certain         antisubmarine   warfare
       capabilities      that it previously did not have;         however:

             --With the possible  exception  of the most current  models, performance
                of the system has been below expectations.    (See p. 13.)
             --The system's    development cost, which was estimated  in May 1960 to be
                about $12 million,    increased to an estimated $101 million, as shown

Tear Sheet
               in the data supporting  the fiscal                year 1970 budget estimate.          Produc-.       i
               tion unit costs also increased.                  (See p0 14.1                                        I
            --Delivery       of the individual     sonar systems          often     has been later   than       i
               originally      scheduled.      (See p. 15.)                                                     I
         GAO believes      that the difficulties      experienced  in this sonar program                        I
         resulted,    in large part,      from the Navy's ordering    the system into                           ;
         production     before it had been developed and tested and, to some extent,                            ;
         from the Navy"s failure        to recognize,    early in the sonar program9 the                        I
         severity   of the technical        problems to be encountered.    (See ps 8.)                          ;
                                                                                                                I
         The practice  of concurrently     developing   and producing  weapon systems                           I
         was a matter of concern     to the Blue Ribbon Defense Panel appointed       by                        1
         the President   and the Secretary     of Defense a'n July 1969 to study the
         organization,   structure9    and operation   of the Department of Defense.
         In its report   of July 1% 9970, the Panel recommended that:

                "A new development        policy   for weapon systems and other hard-
                ware should be formulated          and promulgated      to cause the re-
                ductjon     of technical     risks through demonstrated        hardware
                before full-scale        development,      and to provide   the needed
                flexibility      in acquisition      strategies."
                                                                                                                I
         The Panel's        report   stated   that       the new policy    should     provide:

                "A general   rule against   concurrent       development and production,
                with the production    decision     deferred    until  successful demon-
                stration   of developmental     prototypes."       (See p. 24.)

                                                                                                                I
    RECOMM&'NDATIONSOR SUGGESTIOKS                                                                              I
                                                                                                                I
                                                                                                                I
                                                                                                                I
         The concurrent  development   and production   of major weapon systems by                              1
         the Navy and recommendations    on this practice    are discussed   in GAO's                           ;
         report to the Congress entitled    "Adverse Effects    Of Large-Scale   Produc-                        ;
         tion Of Major Weapons Before Completion      Of Development And Testing,                               I
         Department Of The Navy" (B-163058,     November 19, 1970).

         In that report     GAO recommended that the Navy revise its instruction
         relating    to concurrent    development     and production     to provide   for the
         submission    of meaningful      data to the Assistant      Secretaries    who make
         concurrency    decisions.      In addition,    GAO recommended that the Naval
         Audit Service    give consideration        to making regularly      scheduled audits
         of the practice      of concurrent    development    and production.       In general,
         the Navy agreed with these recommendations.              GAO is not making further
i        recommendations      at this time.


    AGENCY ACTIONS AND VNRESOLlrED ISSUES
                                                                                                                I
         The Navy and the manufacturers   of the sonar system                     provided GAO with             ,
         comments on the matters discussed   in this report.                      The Navy acknowledged         ;
                                                                                                                I

                                                     2
I                  that the sonar program had experienced              each of the problems        cited      in
I        .         the report.   (See pp. 19 and 22.)

                   Principal   among the comments of the Navy and the sonar manufacturers
                   were the views that the current   model of the sonar was meeting all cost,
                   performance , and delivery  goals and that the Navy had no reasonable  al-
                   ternative  to select from when it elected  to produce the AN/SQS-26 sonar
                   system before development had been completed.     (See pp. 19, 22 and 23.)

                   In its review GAO found, and the Navy acknowledged,                  that the problems
                   cited above had been experienced          with the first       three models of this
                   sonar system.       GAO did not evaluate      the extent to which the latest
                   sonar models attained       specific   goals because, in GAO's opinion,             at the
                   time it performed       its review there was not sufficient             information     avail-
                   able on the performance        of these models to permit such an evaluation                 to
                   be made.     (See p. 19.)
                                                              -I
                   The degree to which the Navy had a reasonable               alternative       other than
                   concurrent    development     and production     of the AN/SQS-26 sonar is, of
                   course,    a matter of judgment.       On the basis of Navy records made avail-
                   able to GAO, however, it appears that the substitution                    of an existing
                   sonar system in new ships was technically             feasible     and, on the basis
                   of fleet    experience,    would have been operationally           desirable.
                   (See p. 20.)

             MATTERSFOR CONSIDERATION
                                    BY THE CONGRESS
                   Several committees and many members of the Congress have expressed a
                   strong interest   in major weapon systems and in the means by which their
                   development and procurement     can be improved.    In a prior report   to the
                   Congress, "Need For Management Improvement In Expediting        Development Of
                   Major Weapon Systems Satisfactory     For Combat Use" (B-163058,     November.17,
    I              1969), GAO suggested that,    to enable the Congress to exercise      appropri-
                   ate legislative   controls  over the funding of major defense systems,        the
                   Congress may wish to require     that the Secretary   of Defense:

                          --Determine,    prior  to authorizing      production of a new system            or major
    I                        modification    of an existing     system, that all its significant              compo-
                             nents have satisfactorily       met all prescribed   developmental            tests.

                          --Notify     the appropriate   congressional     committees    in any case where
                             the Secretary     considers  that authorization       of production   is essen-
                             tial,   even though not all developmental        tests have been satisfacto-
                             rily   completed:     Such notification   should include the reasons for
                             authorizing     concurrent  development and production        and the status
                             of development of each significant        component.       (See p. 25.)

                    GAO believes   that the Navy's         experience with the AN/SQS-26 sonar further
    I
    I               illustrates  the need for the          Congress to be provided with information
    I               showing when the practice    of        concurrent development  and production   is
    I
    I
                    employed by the Department of           Defense to acquire major defense systems.
    I
    I        Tear Sheet
    I
    I
    I
    I
    I
    I
    I
     I
     I
                         Contents
                                                            Page

DIGEST                                                        1

CHAPTER

  1        INTRODUCTION                                       4
               Origin -of.the   AN/SQS-26 sonar ;system '     4
                                                 .'
  2        CONCURRENT     DEVELOPMENTAND PRODUCTION'OFTHE
           AN/S@-26 SONAR                                     8
               Initiation    of the AN/SQS-26 sonar sys-
                  tem program                                 8
               Subsequent procurement of AN/S@-26
                  sonars                                     9

  3        TEST-AND-EVALUATIONPROGRAM                       11

  4        EFFECT OF CONCURRENT   DEVELOPMENT
                                            AND PRO-
           DUCTION OF THE AN/SQS-26 SONARSYSTEM              13
               Performance                                   13
               costs                                         14
               Delivery                                      15
               Complexity of equipment                       17
               Logistic  support                             17
               Training  programs                            18

  5        DEPARTMENTOF THE NAVY COMMENTS                    19

  6        COMMENTS
                  OF AN/SQS-26 CONTRACTORS                   22
  7        GAO VIEWS ON CONCURRENT   DEVELOPMENTAND
           PRODUCTION                                        24
               Matters for consideration  by the Congress    25
  8        SCOPEOF THE REVIEW                                26
APPENDIX

      I    Letter dated July 28, 1970, from the As-
              sistant Secretary of the Navy (Financial
             Management)
                   v                                         29
APPENDIX                                                      Page
   II      Letter   dated July 1, 1970, from the Gen-
             eral   Electric  Company                          32
 III       Letter dated July   10, 1970, from the Edo
             Corporation                                      35
  IV    Principal     officials     of the Department of
           Defense responsible        for administration of
           activities      discussed in this report           38
    COMPTROLLERGENERAL'S                      ADVERSE EFFECTS OF PRODUCING THE
.   REPORT TO THE CONGRESS                    AN/SQS-26 SURFACE SHIP SONAR SYSTEM
                                              FOR SERVICE USE BEFORE COMPLETION OF
                                              DEVELOPMENTAND TESTING
                                              Department of the Navy B-160877


    DIGEST
    ------

    WHY THE REVIEW WAS MADE

         In accordance with a request from Congressman Sidney R. Yates, the
         General Accounting    Office   (GAO) reviewed the Navy's development    and
         acquisition  of selected     antisubmarine   warfare systems. The report which
         summarized the results      of GAO work on one of these--the  AN/SQS-26 sur-
         face ship sonar system--was       made public by Congressman Yates.

         In that form        the report  did not contain   comments from the Navy or the
         manufacturers         of the sonar system.   In its present form the report   in-
         cludes their        comments and related   GAO views.   GAO's basic findings,   how-
         ever, remain        unchanged.


    FINDINGS AND CONCLUSIONS

         Through June'30,    1969,      the Navy spent over $429 million       for the devel-
         opment and acquisition         of the AN/SQS-26 sonar system.        (See p. 15.)

         The Navy expected that the AN/SQS-26 sonar could be made to work and
         desired  to provide    the fleet  with the most up-to-date  equipment.    Conse-
         quently,   it began procurement    of the sonar for fleet  use before initial
         development   and testing    were completed.   (See pp. 9 and 10.)

         Before this system was approved for,service       use in November 1968, four
         different  models, totaling     87 units, had been contracted    for and two of
         those four had already     undergone major modification.      (See pp. 9 and 10.)

         Throughout    its     history   the sonar system has undergone continued      redesign
         and modification         in order to correct   numerous equipment deficiencies       and
         to incorporate        features    to improve performance.   (See p. 13,)

         The system      has provided  the Navy with certain       antisubmarine   warfare
         capabilities      that it previously  did not have;       however:

             --With   the possible exception of the most current   models, performance
                of the system has been below expectations.     (See p. 13.)

             --The system's    development    cost, which was estimated  in May 1960 to be
                about $12 million,    increased    to an estimated $101 million, as shown
          in the data supporting  the fiscal                year 1970 budget       estimate.    Produc-
          tion unit costs also increased.                  (See p. 14.)

       --Delivery       of the individual     sonar systems          often     has been later   than
          originally      scheduled.      (See p. 15.)

     GAO believes      that the difficulties      experienced in this sonar program
     resulted,    in large part, from the Navy's ordering the system into
     production     before it had been developed and tested and, to some extent,
     from the Navy's failure        to recognize,    early in the sonar program, the
     severity   of the technical       problems to be encountered.     (See p. 8.)

     The practice  of concurrently     developing   and producing  weapon systems
     was a matter of concern to the Blue Ribbon Defense Panel appointed           by
     the President  and the Secretary      of Defense in July 1969 to study the
     organization,   structure,    and operation   of the Department of Defense.
     In its report of July 1, 1970, the Panel recommended that:
           "A new development        policy   for weapon systems and other hard-
           ware should be formulated          and promulgated      to cause the re-
           duction     of technical     risks   through demonstrated      hardware
           before full-scale        development,      and to provide   the needed
           flexibility      in acquisition      strategies."

     The Panel's       report   stated   that       the new policy    should     provide:

           "A general rule against    concurrent      development   and production,
           with the production   decision    deferred    until  successful  demon-
           stration  of developmental    prototypes."       (See p. 24.)


RECOMMENDATIONSOR SUGGESTIONS

     The concurrent   development   and production   of major weapon systems by
     the Navy and recommendations     on this practice     are discussed   in GAO's
     report  to the Congress entitled     "Adverse Effects    Of Large-Scale   Produc-
     tion Of Major Weapons Before Completion       Of Development And Testing,
     Department   Of The Navy" (B-163058,    November 19, 1970).

    In that report GAO recommended that the Navy revise its instruction
    relating    to concurrent    development    and production     to provide    for the
    submission    of meaningful    data to the Assistant       Secretaries    who make
    concurrency    decisions.     In addition,    GAO recommended that the Naval
    Audit Service    give consideration       to making regularly      scheduled audits
    of the practice     of concurrent    development    and production.        In general,
    the Navy agreed with these recommendations.             GAO is not making further
    recommendations      at this time.


AGENCY ACTIONS AND VNRESOLVEDISSUES

    The Navy and the manufacturers      of the sonar system                  provided GAO with
    comments on the matters   discussed    in this report.                   The Navy acknowledged


                                                2
    that the sonar program had experienced            each of the problems        cited   in
    the report.   (See pp. 79 and 22.)

    Principal    among the comments of the Navy and the sonar manufacturers
    were the views that the current     model of the sonar was meeting all cost-
    performance,    and delivery goals and that the Navy had no reasonable   al-
    ternative    to select from when it elected  to produce the AN/SQS-26 sonar
    system before development had been completed.       (See pp. 19, 22 and 23.)

    In its review GAO found, and the Navy acknowledged,                that the problems
    cited above had been experienced        with the first       three models of this
    sonar system.       GAO did not evaluate    the extent to which the latest
    sonar models attained       specific  goals because, in GAO's opinion,            at the
    time it performed its review there was not sufficient                 information     avail-
    able on the performance       of these models to permit such an evaluation                to
    be made.     (See p. 19.)
                                             _a
    The degree to which the Navy had a reasonable             alternative       other than
    concurrent    development and production       of the AN/SQS-26 sonar is, of
    course,    a matter of judgment.      On the basis of Navy records made avail-
    able to GAO, however, it appears that the substitution                  of an existing
    sonar system in new ships was technically           feasible     and, on the basis
    of fleet    experience,    would have been operationally         desirable.
    (See p. 20.)

MATTERS FOR CONSIDERATION BY THE CONGRESS
     Several committees      and many members of the Congress have expressed a
     strong interest     in major weapon systems and in the means by which their
     development and procurement       can be improved.    In a prior report   to the
     Congress,     "Need For Management Improvement In Expediting      Development Of
     Major Weapon Systems Satisfactory       For Combat Use" (B-163058,     November 17,
     1969), GAO suggested that,      to enable the Congress to exercise      appropri-
     ate legislative     controls  over the funding of major defense systems,        the
     Congress may wish to require       that the Secretary   of Defense:

       --Determine,    prior  to authorizing      production     of a new system      or major
          modification    of an existing     system,   that  all   its significant       compo-
          nents have satisfactorily      met all prescribed        developmental      tests.

       --Notify     the appropriate   congressional     committees    in any case where
          the Secretary     considers  that authorization       of production   is essen-
          tial,   even though not all developmental        tests have been satisfacto-
          rily   completed:     Such notification   should include the reasons for
          authorizing     concurrent  development and production        and the status
          of development of each significant        component.       (See p. 25.)

     GAO believes   that the Navy's       experience with the AN/SQS-26 sonar further
     illustrates  the need for the        Congress to be provided with information
     showing when the practice    of      concurrent development and production    is
     employed by the Department of         Defense to acquire major defense systems.
                                CHAPTER1

                              INTRODUCTION

       We have reviewed the Navyis development and acquisition
of the AN/SQS-26 sonar system.       This is a hull-mounted,
surface ship sonar system designed to detect, classify,         lo-
calize,   and track submerged submarines at long range from
antisubmarine    warfare ships.  Pictures provided to us by the
Navy-- one of a sonar dome mounted on a ship's hull and an-
other of display consoles of the sonar system--are       included
on pages 6 and i', respectively.     The AN/SQS-26 sonar system
has a history    spanning about 15 years.

ORIGIN OF THE AN/SC&26 SONARSYSTEM
       Sonar systems in use prior to 1955 employed two differ-
ent detection    techniques.       One technique,       referred    to as the
passive mode,    consisted    of   operating    the   sonar    purely  as an
acoustic listening      device to pick up underwater sounds.               The
second, known as the direct-path           mode, consisted        of operat-
ing the sonar by emitting        from the ship sound signals that
were transmitted     through a relatively         shallow layer of
water.    When the sound signals touched an object in the
water, return signals       (echoes) were generated.            The echoes
were received and used by-sensitive           listening       devices on the
ship to determine the detected object's             range and depth.
Such submarine detection       systems usually had effective
ranges to about 3.4 miles.

        In the early 1950's the Navy evaluated the potential
threat that would be posed by the Soviet submarine fleet in
future years and concluded that there was a need for more
effective     antisubmarine warfare capability.     The Navy be-
lieved that fulfillment     of this need required a long-range
sensing device capable of detecting      and tracking   submarines
at greater ranges than ,previously    attained.


'The scope of our review        is discussed     on page 26.




                                      4
       At about the same time, the Navy was engaged in ex-
ploratory   research to develop means of detecting       and track-
ing submarines at long range.     This research culminated       in
the development of two new detection      techniques,    each having
long-range   capabilities.   These techniques     are the bottom-
bounce mode and the convergence-zone     mode.

        Bottom bounce results when a sound signal is directed
at a downward angle so that the signal bounces off the ocean
floor and deflects        toward the surface.     When the signal
strikes     an object,    the echo from the detected object returns
to the ship and is picked up by the sonar.            In deep water,
a downward-directed         signal travels  through several thermal
layers of water until          it reaches a layer which bends it back
to the surface,        and the return echo is picked up by the
sonar.      This technique is the convergence-zone        mode.

       In comparison with the direct-path  and passive modes,
the bottom-bounce and convergence-zone    modes were found to
provide greater range and depth detection    possibilities.
In view of this, the Navy decided to embark upon developing
a sonar system employing these modes. Thus the AN/SQS-26
sonar system program was initiated.

      The principal    officials     responsible for administration
of the activities     discussed    in this report are identified
in appendix IV.
AN/S&S-26   SONAR   DOME   XN-1   MODEL   INSTALLED   ON   U.S.S.   WILLIS   A.   LEE   (DL-4)




                                          6
                                 CHAPTER2

               CONCURRENT
                        DEVELOPMENT
                                  AND PRODUCTION

                        OF THE AN/SQS-26 SONAR

        The Navy expended over $429 million          through fiscal     year
1969 for the development and production             of the AN/SQS-26 so-
nar system.      This system has provided the Navy with certain
antisubmarine     warfare capabilities       it did not previously
have.     With the possible exception of the most current mod-
els, however , performance of the system has been below ex-
pectations.      Moreover, the system has experienced            a substan-
tial cost growth, and delivery         of the system often has been
delayed.      In our opinion,    the difficulties       experienced with
the system resulted,       in large part, from the Navy's ordering
the AN/SQS-26 sonar into production            before it had been fully
developed and tested and, to some extent,             from the Navy's
failure    to recognize early in the sonar program the severity
of the technical      problems to be encountered.

INITIATION OF THE AN/SQS-26
SONARSYSTEMPROGRAM

       The Navy awarded a contract   to Edo Corporation,    College
Point, New York, in May 1958 and another contract        to General
Electric    Company, Syracuse, New York, in June 1958, each for
an experimental    model of the AN/SQS-26 sonar.     The Edo model,
designated the XN-1, and the General Electric      model, desig-
nated the XN-2, were ordered for test-and-evaluation        pur-
poses.    These models were to operate in the same frequency
band and were to employ the four detection      modes previously
discussed--i.e.,    passive,  direct path, bottom bounce, and
convergence zone. The two models differed,       however, both
in equipment design and in operator controls      and displays.

      The XN-1 was scheduled for delivery     to the Navy in
November 1959 and the XN-2, in June 1960. It was the Navy's
plan to perform an operational     evaluation   on the sonar in
1962 to determine its acceptability      for service use.     De-
lays were experienced,  however, in the development programs
for both experimental  models.     The XN-1 was not delivered
until  August 1961, and the XN-2 was not delivered      until


                                    8
February 1962-- late delivery   of 21 and 20 months, respec-
tively.    Further, the sonar was not approved for service use
until   November 1968, more than 6 years after the last exper-
imental model was delivered.

        While the experimental   models were being developed, the
Navy embarked upon a major shipbuilding        program designed to
modernize its destroyer      escort force, a key element in the
Navy's antisubmarine     warfare operations.      The shipbuilding
plans for the new destroyer       escorts included provision       for
installing    the AN/SQS-26 sonar on these ships.

       In May 1960, before either experimental        model of the
sonar had been delivered,        the Navy awarded a contract     to
General Electric      for the production     of two operational
AN/SQS-26 sonars that were‘to be installed          on two of the new
destroyer    escorts.    At the time that the contract was
awarded to General Electric,        it was known that difficulties
were being encountered on both experimental          models of the
sonar and that there would be lengthy delays in their deliv-
ery.    General Electric    was selected to produce these two
operational     sonars primarily    because‘the   Navy believed that
the XN-2 experimental      model which General Electric       was de-
veloping    offered certain technical      advantages over the XN-1
being developed by Edo.

      In deciding to order the two AN/SQS-26 operational         sys-
tems into production    by General Electric,   the Navy recog-
nized that there were elements of technical       risk involved,
However, the Navy decided to accept the technical        risks be-
cause it expected that the AN/SQS-26 s'onar could be made to
work; and, more important,    the Navy believed that it was
necessary to begin production     as soon as possible    in order
not to delay construction    of the ships for which the sys-
tems were intended.

SUBSEQUENT
         PROCUREMENT
                   OF AN/SQS-26 SONARS

      From September 1961 through January 1968, the Navy or-
dered 85 additional   AN/SQS-26 sonar systems to meet the
needs of its new antisubmarine     warfare ships under construc-
tion.   These 85 systems--purchased     during a period when se-
rious design and performance problems were known to exist


                                  9
in the AN/SQS-26 sonar and before the Navy had completed
its test-and-evaluation   program and had approved the system
for service use --were purchased under four contracts,   three
awarded to General Electric    and one to Edo, for three dif-
ferent models of the system, as follows:
          Month of                                                                Number
          contract              Type of                                              of
            award               contract            Contractor        Model      systems
         Sept.   1961      Fixed price-
                              redeterminable    General Electric   ANISQS-26AX     12
         June    196i      Fixed price          Edo                AN/SQS-269X     18
         Oct.    1964            do.            General Electric   AN/SQS-26CX     28
         Jan.    1968            do.                 do.           AN/SQS-26CX     27

                                                                                   L=



The Navy plans to continue buying these sonar systems
through fiscal   year 1973 and expects that they will all be
identical  to the CX model to thegreatestextent   practicable.

      Each of           these models incorporated   changes over the pre-
vious models,             and many of these changes were made to over-
come numerous             system problems revealed by the Navy's test-
and-evaluation             program conducted during the years 1962-68
(discussed in             ch. 3) and by operational  experience with the
system after            it was introduced   into the fleet   (discussed in
ch. 4).

       Further,    after the Navy became aware of the problems
with the earlier       models of the system, an improvement pro-
gram was initiated.        In March and April 1965, General Elec-
tric was awarded contracts            to replace the original     two pro-
duction systems and to provide kits that would modify the
AX model to eliminate        critical     design deficiencies     and to
incorporate     various new features.          Deliveries   of the modifi-
cation kits to the Navy have been completed.                The kits, how-
ever, had not been installed            on all AX sonars aboard ships
at December 31, 1969. The modified AX model became known
as the AXR model.




                                               10
                             CHAPTER3

                  TEST-AND-EVALUATIONPROGRAM

       Navy testing of new electronic        equipment leading to
service approval usually consists          of a two-phase program.
The first   phase is a technical       evaluation   designed to deter-
mine whether the new equipment meets technical            design speci-
fications.     Following    successful   completion of the technical
evaluation,    the Navy conducts an operational         evaluation.
The operational     evaluation    determines the suitability        of the
new equipment for use under normal operating            conditions    when
it is maintained and operated by regular Navy personnel.

      The Navy selected the XN-2 experimental    model to be
the sonar system upon which the test-and-evaluation      program
would be conducted.    The XN-1 was used for certain    other
tests which were conducted,    for the most part, as support-
ing development and evaluation     to complement the test-and-
evaluation  program on the XN-2.

      In the technical evaluation  of the XN-2, a number of
tests were conducted at sea aboard the U.S.S. WILKINSON dur-
ing the period November 1962 through March 1963. These tests
were carried out under controlled   conditions    and were super-
vised by engineers and highly skilled    technicians.

      During the technical    evaluation,      XN-2 performance was
adversely affected    by considerable     downtime due to equip-
ment reliability   problems which, according to the Navy, re-
sulted from the inherently     low reliability      of components
used in this system and in the early production           models.
       In March 1963, because of serious problems with systems
performance,    the technical     evaluation  was suspended and a
special test program was undertaken to identify             and correct
system deficiencies,        Following this, the XN-2 underwent
major modification      and refurbishment    to improve system per-
formance.    In September 1963 sea tests were resumed and
continued through December of that year.           Finally,    although
additional   problems were encountered,        submarine detection
performance,    with certain     exceptions,  was demonstrated       in
all modes; and the Navy concludedthatthe           XN-2 was ready
for operational     evaluation.

                                   11
        In January 1964 the operational          evaluation   of the XN-2
began.      The evaluation     was suspended about 6 months later
because of a multitude          of deficiencies,     the most important
of which was that, because of component reliability               problems,
the bottom-bounce capability           of the XN-2 was found to be
virtually     nonexistent     in operational     application.    Further,
significant     downtime was experienced because of numerous
equipment failures         and because fleet personnel were having
considerable     difficulty      in maintaining    the equipment.

       In June 1964 a special program was initiated           to correct
 the problems encountered during the operational           evaluation,
 The XN-2 underwent additional      tests and a major retrofit
program to correct design deficiencies.           Upon completion of
 this program, the XN-2 became known as the XN-2R. After a
checkout period, a technical      evaluation     on the XN-2R began
 in July 1967.     Serious design problems and inconsistencies
were encountered again; and, during numerous sea trials,
 equipment performance varied.        The technical    evaluation
team reported that the system could detect submarines in
all four detection      modes; however3 reports on this technical
evaluation   indicate    that the system was not tested to deter-
mine its performance under a number of operating             conditions
in which the sonar system was required to operate--i.e,,              pre-
scribed ship speeds3 wind velocity,        and sea state.       Accord-
ing to the Navy, ship speed was lowered in order to compen-
sate for the high self-noise      level of the test ship.           Never-
theless,   in October 1968 the Navy reported that the XN-2R
had successfully     completed the technical      evaluation;     and,
on November 4, 1968, the AN/SQS-26 sonar system was approved
for service usec

        The Navy has informed us that, because the AN/SQS-26
sonar has already been service approved, an operational             eval-
uation will not be performed.           Instead, the Navy will con-
duct an V'operational     appraisal"'    of the AN/SQS-26 sonar.
The objective      of an operational     appraisal  is to obtain con-
trolled    test performance data, to determine whether training
and support is adequate, and to determine whether changes
are needed and retrofit       is justifiable.      This operational
appraisal     will be conducted using the CX model because the
ship on which the operational         evaluation   originally   was
being done has been decommissioned.


                                   12
                               CHAPTER4

       EFFECT OF CONCURRENT
                          DEVELOPMENT
                                    AND PRODUCTION

                   OF THE AN/SQS-26 SONARSYSTEM

        The degree to which objectives          of the AN/SQS-26 sonar
program have been achieved is difficult              to assess because
many program objectives           were not defined when the program
was initiated,         For example, detection      ranges and
reliability/maintainability           standards were not prescribed
when the program began, Also there were a number of changes
made to the objectives          and the sonar equipment after the
program had begun.          To  the extent that objectives     were
stated, however, it appears that many were not met.                In this
regard, performance of the sonar has not met the Navy's ex-
pectations,       costs of the equipment have substantially         ex-
ceeded original        estimates,    and delivery    of equipment has
often been delayed,          These and other matters related to the
management of this program are discussed below.

PERFORMANCE

       Although this sonar system has provided the Navy with
certain antisubmarine    warfare capabilities     that the Navy did
not previously    have, system performance requirements     have
not been achieved in a number of areas for early models of
the AN/SQS-26 sonar installed     on operational     ships. Infor-
mation regarding    the areas where performance has not met
requirements    is not included in this report because the Navy
informed us that this information     is classified.

        Operational    AN/SQS-26 systems also experienced frequent
periods of inoperability        due to component failures.           Inmany
instances the inoperable        periods were quite lengthy because
of material      shortages or inability    to repair the equipment.
This was especially       true in the early years of the program.
Over the years design deficiencies         were identified       and cor-
rected by modifications        to existing  models or by redesign
of succeeding models.         Some of the problems, however, still
persist    today, such as deficiencies       involving   reliability
and safety of the power supply and maintainability               of the
sonar dome.


                                     13
       The Navy has informed us that the current models of
the AN/SQS-26 sonar are meeting or exceeding operational        re-
quirements.      As discussed in chapter 5, we believe that the
available    information    on the operation of these models is
not sufficiently      conclusive  to permit us to form a judgment
on the adequacy of their performance,

COSTS

      Current funding data provide for greater quantities            of
the sonar system than were provided for in such data during
the early stages of the program.         Consequently,    comparison
of today's total program costs with earlier          cost estimates
is not meaningful.    Substantial     increases over an earlier
estimate have been experienced,       however, in system develop-
ment costs and in production      unit costs; and we believe
that, in large part, these increases reflect           the problems
encountered by the Navy in attempting        to obtain a system
that meets its original   expectations.

       The Navy's development plan for the AN/SQS-26 sonar,
dated May 1960, showed an estimated development cost of
about $12 million   for the system.      This plan, which showed
data for a 7-year period beginning in fiscal        year 1958, in-
dicated that the major portion      of development funding would
be incurred by the end of fiscal      year 1962. Development and
related funding of the system, however, have been extended
to the present time.     Expenditures    for development of the
AN/SQS-26 system through fiscal      year 1969 amounted to about
$92.6 million.

      As of January 1969 the Navy's estimate of total devel-
opment funding for the program, as shown in the supporting
data for the fiscal  year 1970 budget estimate,   was about
$101 million.   This represents  an increase in estimated de-
velopment cost of about $89 million,    a cost growth of about
740 percent over the $12 million   estimate prepared in 1960,

      The 1960 development plan also showed an estimated unit
cost of about $1.03 million     for each production    model.    Data
provided to us by the Navy indicate      that the cost for each
production  model has been substantially     higher than the 1960
estimate.   This was especially    true of the first     two produc-
tion models which had to undergo substantial        modification

                                   14
during the improvement program initiated        in 1965 (see p. 10)
to overcome deficiencies     and to incorporate    new features
deemed necessary after the test-and-evaluation         program got
under way and the fleet began obtaining       experience    in using
the sonar system.     The unit costs, including     the power sup-
ply but exclusive   of installation    costs, were as follows:

                                        Unit     costs
                        Original
                         systeln        Modifications             Total

                                        (millions)
           AN/SQS-26      $2.6                 $2.1a              $4.7
           AN/sQS-26AX     1.8                  2.1                3.9
           AN/sQS-26BX     1.9                                     1.9
           AN/sQS-269      2.3                                     2.3
                      <.*
aThe original    model was replaced       with     new systems which were
 identical    to the AXR model.

      Navy records show that a total of about $429.4 million
was expended on the AN/SQS-26 sonar from program inception
through fiscal   year 1969. These expenditures  and the pur-
poses for which they were made are shown below.

                                                  Expenditures
                                                   (millions)
           "Development                                  $ 92.6
            Purchase of production   units                290.0
            Other (test equipment,
              training  courses, etc.)                     46.8
                Total                                  $429.4
DELIVERY

       Late delivery   of AN/SQS-26 sonars and, in some in-
stances, related delays in shipbuilding        programs have been
common in the AN/SQS-26 sonar system program.          Of 75 produc-
tion units of the sonar delivered       through December 1969, 53
were delivered     from 1 to 20 months later than originally
specified   in the production   contracts.     In several instances

                                   15
the contract    delivery     schedules     were revised     to extend    the
delivery  date.

       We discussed the late delivery        of the sonars with a
Navy contracting     official   who informed us that the ship-
building   program with which the AN/SQS-26 sonars were asso-
ciated had incurred delays for a number of reasons and that
one of these reasons was late delivery          of the sonars.    In
this regard, most of the 28 CX systems procured in 1964 were
delivered    about 5 to 7 months later than required by the
original   contract   delivery   schedule.     Most of these systems
were to be installed       on new destroyer    escorts of the DE-1052
class,    According to the Navy, late delivery         of the sonars
was anticipated     at the time the initial      contracts   were
awarded for these ships.        As a result,    agreements were
reached with the shipbuilders       so that, about 6 months after
the ship contracts      were awarded, the contracts       were modified
at no cost to the Government to extend ship deliveries            by
5 months because of delayed sonars.

       Late delivery      of design information        relating     to the AN/
 SQS-26 sonars also contributed          to increased costs for the
 DE-1052 class ships.        One shipyard was given the responsibil-
 ity for developing       the shipbuilding     plans for all ships of
this class.     Delays by the sonar contractor              in providing
this shipyard with information           regarding     the configuration
of the sonar system, which was needed to develop space ar-
rangements, foundation        requirements,      and cabling require-
ments, contributed        to a major claim from the shipyard.                In
1969 the Navy and the shipbuilder            agreed to a settlement           of
over $96 million       for the shipbuilder's        claim for compensa-
tion because of Government-caused delays in the shipbuilding
program.    The Navy informed us that, although unavailability
of AN/SQS-26 sonar information           was one of the factors          in-
volved in the delays, the specific            portion     of the claim at-
tributable   to this factor could not be readily                determined.
A Navy official      informed us that additional           claims involving
the AN/SQS-26 sonar had been submitted by two other ship-
builders   and that these claims were expected to be settled
in 1970.

      Navy documents indicate  that the delivery    schedule
slippages   of the early AN/SQS-26 CX sonars produced by Gen-
eral Electric   were basically attributable   to inadequate

                                      16
engineering   effort.     In this regard, the Navy concluded that
General Electric      had spread its engineering    effort  thinly
over the three AN/SQS-26 efforts        that it was concurrently
undertaking--   design and production      of the CX'model, the AXR
model, and the XN-2R model.         When major design problems
arose in the development of the XN-2R, the contractor            had
its engineering     staff put first    priority  on the XN-2R at the
expense of work on the CX model and the AXR.

COMPLEXITYOF EQUIPMENT

      By being designed to incorporate        two detection     modes
not previously    used, as well as including      new state-of-the-
art techniques,    the AN/SQS-26 sonar became more complex than
any of its predecessor     surface'ship     sonar systems.      The Navy
records that we reviewed indicated        to us that this increased
complexity   adversely affected     fleet performance,      particu-
larly from the standpoint      of equipment operation       and main-
tenance.    This was especially     true of the earlier      models
of the AN/SQS-26 sonar system.         At the time of our review,
there had been little    fleet experience with the later models
 (AXR and CX models).

LOGISTIC SUPPORT

       Excluding the two experimental      models, there have been
five separate models of the sonar system in the fleet.
Even after the AXR retrofit       program is completed, there will
still   be three separate models--the      AXR, BX, and CX--in the
fleet.     Because of differences     in the various models, there
has been a general lack of commonality among the assemblies -
making up these models, although,        according to the Navy,
the AXR systems have a degree of commonality of assemblies
with the CX systems.       However, it has been necessary for the
Navy supply system to stock many more types of spare parts
for the AN/SQS-26 sonar system than would have been neces-
sary if there had been only one model of the system.          We
have not attempted to measure the extent of added cost and
other effects    that this condition     has had on the Navy sup-
ply system.




                                  17
TRAINING PROGRAMS

        Prior to 1964 there was no formal training           program for
sonar operators and maintenance men for the AN/SQS-26 sonar.
After training        programs were established,     it became neces-
sary to have a separate program for each model because of
the differences        in equipment configuration      which required
separate training        manuals, repair techniques,       operating  pro-
cedures, and display         interpretations.     In the early phases
of the sonar program, fleet commanders complained that oper-
ational     effectiveness     was impaired because of the shortage
of trained      sonar operators and maintenance personnel.

       We did not attempt to evaluate the effectiveness of the
training   programs or to determine the added cost of having
to train operators and maintenance personnel for each sonar
model.




                                    18
                              CHAPTER   5


                 DEPARTMENT   OF THE NAVY COMMENTS

        The Assistant    Secretary of the Navy (Financial     Manage-
ment), in commenting on a draft of this report in his let-
ter of July 28, 1970 (app. I), agreed that the AN/SQS-26
program had experienced        each of the problems cited in this
report.     He stated, however, that the report did not cite
the notable successes achieved'under         the program, with par-
ticular    emphasis on results      since 1966, and that demon-
strated performance had met or exceeded, in all respects,
the specific     operational    requirements   for the sonar.   He
stated further      that the Navy had no alternative     means of
meeting the antisubmarine        warfare threat when it accepted
the risk of concurrent       development and production    of the
AN/SQS-26 sonar.

       With respect to the Assistant     Secretary's    comment that
the notable successes achieved under the program have not
been cited in this report,     we believe that two points should
be made. First,     if successful  performance was achieved on
the sonars produced since 1966, this performance was not
available   to the fleet until mid-1969.       Prior to that time,
the fleet was operating with earlier       models of the sonar
that were not providing    the antisubmarine     warfare capability
that was expected of them.

       Secondly, the successes     in the sonar program cited by
the Navy in its comments relate only to the most recent so-
nar models--the    AXR and CX models.       There are only a few
units of these two models now in the fleet.            We reviewed re-
ports received from ships on which these models are in-
stalled.    In manyinstancesthese       reports comment favorably
on the performance of the sonars, but the reports do not
evaluate performance in relation        to established     operational
requirements,    nor do they, in our opinion,       contain suffi-
cient information    to permit such an evaluation        to be made.
Moreover, a Navy official      informed us that the Navy's view
that the current models met or exceeded operational             require-
ments was based on the technical        evaluation   test for the
XN-2R model and on factory tests.          In view of the past his-
tory of this sonar program, we question the wisdom of


                                   19
relying  upon such tests to conclude that performance of
these later models meets or exceeds operational   require-
ments.

        In this connection,     testing   under less than operational
conditions     could provide results      that differ    from perfor-
mance when the equipment is used at sea aboard antisubmarine
warfare ships,       For the current models, such tests involved
testing    (1) assemblies rather than a complete system, (2) in
the absence of expected environmental           conditions,     and (3)
controlled     by highly trained technicians        and engineers
rather than by Navy electronics          personnel who would be ex-
pected to operate the equipment.            The same types of tests
were conducted on the earlier          sonar models,and it was found
that operational      performance at sea differed        from the re-
sults of factory tests and t'he technical           evaluation.       _I
      The degree to which the Navy had a reasonable alterna-
tive of meeting the antisubmarine     warfare threat other than
by concurrent   development and production     of the AN/SQS-26
sonar is, of course, a matter of judgment.         In detailed     com-
ments accompanying the Assistant     Secretary's     letter     of
July 28, 1970, we were advised that the other options avail-
able to the Navy at the time that the concurrency decisions
were made were (1) to delay the shipbuilding        program until
the AN/SQS-26 sonar test and evaluation      programs had been
completed, or (2) to contract    for older model sonars
(AN/SQS-23) f or the new destroyer-type     ships--the      latter
being costly since it would have required eventual replace-
ment by AN/SQS-26 sonars.

      With respect to the first   of the two options, we would
not suggest that the shipbuilding    program should have been
delayed, since we recognized that such action might have
compromised fleet effectiveness.     However, with respect to
the second option-- use   of the AN/SQS-23  sonar--it    appears
that t'his might have been an acceptable    alternative.
      A Navy Underwater Sound Laboratory technical    memoran-
dum prepared in April 1958 stated that the AN/SQS-23 sonar
could be modified to include a bottom-bounce capability     and
could be delivered  in calendar year 1958.   The   memorandum
concluded that:



                                  20
           a simple modification
      ’ 1*-k*                       to the AN/SQS-23 for
     bottom bounce operation,     would appear to be worth-
     while for the cost involved.       Bottom bounce opera-
     tion should be possible     in certain areas and some
     basic information   should be obtainable    for future
     systems. "

      In April 1964, after the Navy began using AN/SQS-26
sonars on operational   ships, the Commander in Chief, Atlan-
tic Fleet, became concerned over the sonar's poor perfor-
mance and recommended that all planned procurements of the
sonar be canceled, that new construction  ships be equipped
with AN/SQS-23 sonars, and that the entire AN/SQS-26 pro-
gram be reviewed to correct deficiencies  in the sonar.    As
a result of fleet experience with the sonar at that time,
he stated:

      "It is, however, my firm conviction        that we can-
      not afford any more destroyer        types with their
      raison d'etre,    i.e.,     their sonar, in a less than
      fully operational       status.   In this regard, I ob-
      ject strongly   to premature production       of large
      numbers of complex expensive equipments which
      have not been proven operationally."

       We recognize that substituting     the AN/SQS-23 sonar, ei-
ther on a fulltime    or temporary basis, would have involved
certain additional    costs to the Navy. However, had this
substitution    been made and had the AN/SQS-26 sonar system
been fully developed and tested before it was placed into
production,    the $29 million  AXR retrofit   program would not
have been necessary.
        Moreover, on the basis of the information          available    to
the Navy early in the sonar program, it appears to us that
using the AN/SQS-23 sonar until        the AN/SQS-26 sonar was
fully    developed and tested would have been technically            fea-
sible and operationally     desirable.       As discussed above, the
Navy Underwater Sound Laboratory         found that the AN/SQS-23
sonar could be modified to include the bottom-bounce               capa-
bility,    and the Commander in Chief, Atlantic         Fleet, pre-
ferred the AN/SQS-23 sonar over the earlier           models of the
AN/SQS-26 sonar, because under actual operating             conditions
the latter     performed poorly.


                                   21
                              CHAPTER6

                COMLBJYTS
                        OF' AN/SQS-26 CONTRACTORS

      Comments on a draft of this report        were also obtained
from General Electric    Company (app. II)      and Edo Corporation
(app. III),  contractors   for development      and production
models of the AN/SQS-26 sonar.

      In its comments, General Electric         stated that the prob-
lems that are to be expected in any complex development pro-
gram involving    significant    advances in technology had been
overcome before the preproduction         phase of the AN/SQS-26CX
was completed in 1967,        In stating   this view, General Elec-
tric failed    to give recognition      to the problems encountered
by the Navy with the earlier        sonar models and to the fact
that these problems resulted        from the production    of the
sonars before development and testing had been completed.

      Moreover, although the preproduction        phase with asso-
ciated testing    of the CX model may have been completed in
1967, it appears that all problems with this sonar system
may not have been identified       and solved at that time.      In
this regard, U.S. Navy Underwater Sound Laboratory,          respon-
sible for monitoring     technical   aspects of the AN/SQS-26
program, in a report dated May 1968, stated that preproduc-
tion test data had been, for the most part, completed.             In
the report,    however, the Laboratory     stated that sea tests
being conducted with the XN-2R model had disclosed          impor-
tant deficiencies    that would have an impact on A?A/SQS-26
production   hardware if they were not corrected.        It there-
fore appears questionable      whether all the problems asso-
ciated with the AN/SQS-26 were resolved in 1967, as indi-
cated by General Electric.

       In its comments, General Electric        Company also indi-
cated that our draft report did not sufficiently           emphasize
the increase in capability      that the AN/SQS-26 sonar pro-
vides over other sonars, that the report was overly criti-
cal of the reliability      and maintainability     of AN/SQS-26
sonars, and that the report gave an erroneous tmpression
regarding    the timeliness   of delivery     of General Electric-
produced sonars.

                                  22
.
           We agree that the AN/SQS-26 sonar, if it performs as
    desired,    will represent     a significant   improvement over pre-
    AN/SQS-26 sonars in the field of submarine detection.             In
    citing   the performance of the current model of the
    AN/SQS-26 sonar as an example of high reliability            and
    maintainability,     however, General Electric       did not consider
    that its earlier     production     models of the AN/SQS-26 had to
    receive extensive     retrofit    and that one of the principal
    reasons for this was low reliability.           Had a complete and
    timely testing    program been conducted on the experimental
    models, this problem could have been disclosed           prior to
    manufacture of the production          models.

           General Electric   stated that it had generally       met or
    exceeded its AN/SQS-26 contract        delivery   schedules.   In
    many instances,   however, these delivery        schedules had been
    revised to extend the initial       delivery    dates.   Thus, al-
    though General Electric,for      the most part, might have met
    the revised dates, the Navy received the sonars later than
    was originally   required    to meet the needs of its shipbuild-
    ing program.

          Both General Electric and Edo were of the opinion that
    the decision  to approve concurrent development and produc-
    tion for the AN/SQS-26 sonar was correct.    This matter is
    discussed on pages 20 and 21.




                                     23
                             CHAPTER7

    GAO VIEWS ON CONCURRENT
    --                    DEVELOPMmTAND PRODUCTION

       As stated in this report,   we believe that the difficul-
ties experienced with the AN/SQS-24 sonar system resulted,
in large part, from the Navy's ordering      the sonars into pro-
duction before they were fully     developed and tested.    The
practice   of concurrently  developing and producing weapon
systems was a matter of concern to the Blue Ribbon Defense
Panel appointed by the President and the Secretary of Defense
in July 1969 to study the organization,      structure,  and opera-
tions of the Department of Defense.       In its report of July 1,
1970, the Panel recommended that:

     "A new development policy for weapon systems and
     other hardware should be formulated and promul-
     gated to cause the reduction-of   technical risks
     through demonstrated hardware before full-scale
     development, and to provide the needed flexibility
     in acquisition  strategies.s'

The Panel's   report   also stated   that   the new policy   should
provide:

     'IA general rule against concurrent     development and
     production,    with the production  decision deferred
     until   successful  demonstration  of developmental
     prototypes."
       In our report to the Congress, lsAdverse Effects Of
Large-Scale    Production Of Major Weapons Before Completion Of
Development And Testing,      Department of the Navyp' (B-163058,
November 19, 19701, we recommended that the Navy revise its
instruction    on concurrent   development and production     to pro-
vide for the submission of meaningful data to the Assistant
Secretaries    who make concurrency    decisions.   In addition,
we recommended that the Navy Audit Service give considera-
tion to making regularly      scheduled audits into the practice
of concurrent    development and production.      These recommenda-
tions were generally     agreed to by the Navy, and we are not
making further    recommendations at this time.



                                     24
MATTERSFOR CONSIDERATIONBY THE CONGRESS

      In a prior report to the Congress, "Need For Manage-
ment Improvement In Expediting        Development Of Major Weapon
Systems Satisfactory      For Combat Use'* (B-163058, November 17,
19691, we suggested that, to enable the Congress to exercise
appropriate   legislative    controls   over the funding of major
defense systems, the Congress may wish to require that the
Secretary of Defense:

     --Determine,   prior to authorizing     production     of a new
        system or major modification     of an existing       system,
        that all its significant     components have satisfac-
        torily  met all prescribed    developmental     tests.

      -Notify the appropriate       congressional    committees in
       any case where the'secretary         considers that authoriza-
       tion of production      is essential,     even though not all
       developmental     tests have been satisfactorily       completed.
       Such notification       should include the reasons for
       authorizing    concurrent    development and production      and
       the status of development of each significant           com-
       ponent.

     We believe that the Navy's experience with the
AN/SQS-26 sonar further   illustrates     the need for the Congress
to be provided with information       showing when the practice
of concurrent  development and production      is employed by the
Department of Defense to acquire major defense systems.




                                  25
                                   CHAPTER8

                            SCOPEOF THE REVIEW

       Our fieldwork,      completed during fiscal         year 1970, in-
cluded an examination          of technical     development plans, speci-
fic operational      requirements,       technical    reports,      contract
files,    concurrency     authorizations,       correspondence        files,     and
various other project         documents necessary for developing                 a
complete history       of the AN/SQS-26 program from inception                   to
its current status.          In performing      the review, we analyzed
pertinent    records and interviewed          responsible      officials       at
the Naval Ship Systems Command, Washington, D.C.; the Navy
Underwater Sound Laboratory,           New London, Connecticut;              and
the Navy Operational        Test and Evaluation        Force, Norfolk,
Virginia.     We also obtained cost and funding data, compared
sonar performance with established             requirements,        developed
a chronological      history     of the system, and analyzed various
problem areas.




                                        26
APPENDIXES




                  ;’ : :
             -      ‘...‘-
             ,.       .,,

                      ..:
                      1.::




27
                                                                           APPENDIX I
                                                                               Page 1

                       DEPARTMENT               OF   THE     NAVY
                         OFFICE     OF    THE    SECRETARY
                          WASHINGTON.            D. C. 20350




                                                                    28   JUL 1970

Dear Mr. Bailey:
     The Secretary of Defense has asked me to reply to your letter
of 28 May 190 which forwarded the GAO draft report on adverse effects
of producing the AN/SQS-26 surface ship sonar system before completion
of development and tests.
     I am enclosing   the Navy reply to the report.
                                                 Sincerely,

                                                               .
                                         &la




Mr. Charles M. Bailey
Director,  Defense Division
U. S. General Accounting Office
Washington, D. C. 20548
Encl:
(1) Department of the Navy Reply to GAODraft Report of 28 May 1970
      on Adverse Effects of Producing the AN/S&S-26 Surface Ship Sonar
     System Before Completion of Development and Tests (OSD Case #3120)
APPENDIX I
   Page 2
                            Department     of the Navy Reply

                                             to

                          GAO Draft      Report        of 28 May 1970

                                            on

             Adverse    Effects   of Producing           the AN/SQS-26   Surface

             Ship Sonar System Before             Completion    of Development

                        and Tests,    Department          of the Navy

                                     (OSD Case No. 3120)


I.   GAO Findings      and Conclusions.

      GAO reviewed the Navy's development           and acquisition        of selected
antisubmarine      warfare    systems at the request of Congressman Sidney R.
Yates.     This report     covers the AN/SQS-26 sonar, a hull-mounted,                 sur-
face ship sonar system designed to detect,             classify,      localize,     and
track submerged submarines at long range from ASW (Antisubmarine
warfare)    ships.     GAO states that the AN/SQS-26 sonar system has a
history    spanning about 15 years, and through June 1969, had cost the
Government over $429 million.            Sonar systems in use prior           to 1955
employed two techniques,          i.e.,  the passive mode and the direct-path
mode.    In the early      1950's the Navy evaluated        the potential       threat
that would be posed by the Soviet submarine fleet                 and concluded that a
more effective      ASW capability      was needed to detect and tracksub-
marines at long-range.          Navy research    culminated      in the development
of two new detection        techniques    having long-range       capabilities,       i.e.,
the bottom-bounce       mode and the convergence-zone         mode. To develop a
sonar system employing these modes, the Navy initiated                   the AN/SQS-26
system.

     GAO states    that the Navy began procurement          of the AN/SQS-26 sonar
for fleet    use before initial      development     and testing  were completed.
GAO found that:       (1) the system has provided        the Navy with certain
ASW capabilities      it previously     did not have; (2) performance      of the
system has been below expectations;            (3) the systems development     cost
increased    from an estimated      $12 million    in May 1960, to an estimated
$101 million     as shown in supporting       data for the FY 70 budget estimate;
and (4) delivery      of the individual      sonar systems has often been delayed.

     GAO makes no recommendations.




                                                  30
                                                                               APPENDIX I
                                                                                   Page 3

II.   Navy Position

     The AN/SQS-26 sonar program did experience              each of the problems
cited in the GAO report      during the eleven (11) year span covered.
The report    does not cite the notable        successes that the program has
achieved,    or the fact that since 1966, the AN/SQS-26 sonar program
has been characterized      by'the    firm adherence to planned delivery                sched-
ules, estimated     costs,  standardization       criteria,     successful      completion
of technical    evaluation,    service    approval,      and demonstrated       performance
equal to or exceeding       in all respects       the specific      operational       requirements.

      The Navy had no reasonable   alternative     means of meeting the ASW
threat    when it accepted the risk of pursuing       concurrent   development and
production    of the AN/SQS-26 sonar.      The requirement     for improved ASW
detection    performance  in new construction     ships forced the Navy to accept
this risk.

GAO note:         The Navy's reply included detailed      comments on
                  specific  paragraphs in the report draft.      These
                  comments were lengthy and, therefore,      are not
                  included herein.     They were, however, appro-
                  priately  considered   in the preparation   of this
                  report.




                                               31
APPENDIX II
    Page 1




                                                               July   1, 1970




Mr. C. M. Bailey,   Director
United States General Accounting         Office
Defense Division
Washington,   D. C. 20548

Dear Mr.     Bailey:

       As stated earlier   in my June 16 letter     to Mr. J. L. DiGuiseppi,   the General
Electric   Company appreciates    the opportunity     to review and comment on the draft
copy of your proposed report to the Congress on "Adverse Effects           of Producing the
ANfSQS-26 Surface Ship Sonar System Before Completion of Development and Tests by
the Department of the Navy."        I wish to thank Mr. DiGuiseppi     for his prompt
response of June 19, extending the due date of our comments to July 28, 1970. As
you can see, we have made a strong effort         to beat this deadline,   in order that
you may have sufficient      time to consider our comments on this draft report.

        We have approached our review of this draft report as objectively             as possible,
with primary attention        to its overall     content in comparison with our knowledge of
the program.      In addition,     we have carefully      reviewed the report to determine what
might appear to us to be possibly          significant      errors in fact and omission.   We are
sunnnarizing in this letter        our comments on those points which we feel are of par-
ticular    importance    for your consideration        of change.    Specific items which we feel
should be either      corrected    or amplified     are contained in "Attachment    A" to this
letttr*     [See GAO note.]
General     Comments:

       As your report indicates,           the General Electric     Company has been involved in
the AN/SQS-26 sonar program since 1958, when we received a contract                      for the experi-
mental XN-2 model.          As one might reasonably expect, any complex development program
involving    significant       advances in sophisticated       technology is bound to encounter
some problems during         its early stages.        On this program, however, problems such as
these were overcome before the preproduction                phase of the AN/S@-26 CX was completed
in 1967. Reports which we have received from operating                    personnel in the Navy
indicate    a high degree of satisfaction            with the performance at sea of both the CX
equipments and AXR models.             Additionally,     we are especially     proud that all 57
systems   delivered      through December 31, 1969, with the exception              of ten that were
only one to two months late, have been delivered                by General Electric       on or ahead
of contract     schedules.       Still   further,    all of the AXR modification       kits were
delivered    on schedule.

GAO note:      Attachment A to this letter     included detailed     comments on specific
               statements    in the report draft.    These comments expanded on the
               matters discussed in this letter       and were relatively   lengthy.
               Therefore,    these comments are not included herein, but they were
               appropriately     considered in the preparation    of this report.


                                                    32
                                                                                         APPENDIX II
                                                                                             Page 2

Mr. C. M. Bailey



   I.   Performance      Capability:

         The draft report states that, although the AN/SQS-26 provides                the fleet with
"certain    ASW capabilities     it previously    did not have", system performance require-
ments "have not been achieved in a number of areas" (unidentified).                    Actually,      the
added capabilities      which the AN/SQS-26 provides,         compared with all other available
surface ship sonars, represents         a quantum jump in terms of the effectiveness               of
the surface ship's ASW capabilities.            Pre-SQS-26 sonars are limited         to ranges of
three to four miles in the shallow surface layer of the ocean and are not capable
of detection     below that layer.      The much greater range of the AN/SQS-26 in the
surface layer, when combined.with           the below-layer     capabilities   provided by the
convergence-zone      and bottom-bounce modes of operation,           add orders-of-magnitude         to
the coverage previously       provided by individual        ships, thereby tremendously         increas-
ing their effectiveness.         Production    model AN/SQS-26 systems delivered          by General
Electric    Company have met all technical        performance specifications         contractually
called for, which, we believe,         reflect   the Navy's operational       requirements.

 II.    Delivery:

        The draft report states that AN/SQS-26 deliveries             have often been delayed
and implies     that sonar deliveries    may have had a major effect         on shipbuilders'
extra cost claims.       Statements such as "of 75 production          sonars delivered     through
December, 1969, 53 were delivered        from 1 to 20 months late" imply that significantly
late deliveries      by General Electric    existed     throughout the program.      A summary of
General Electric's      record on production      deliveries    through December 31, 1969, is
as follows:

                                  5 were 2 months \ater than contract
                                  5 were 1 month later than contract
                                 47 were on or ahead of schedule

With the exception         of one.CX training   equipment that was one month          late, all
deliveries     since December, 1963, have been on or ahead of contract                schedules,    either
as originally       issued or revised before due dates.          General Electric      has not been
informed by either         the Navy or by the shipyards,      with whom we have       separate con-
tracts     to assist     in installation   work, that CX equipment deliveries           have actually
been a limiting        item in ship deliveries.      In addition,    we have not      witnessed any
case where it appeared that the CX sonar delivery              has held up ship       delivery.

III.    Reliability/Maintainability:

        The draft report is written         in a manner that is highly critical      of the SQS-26
sonar's reliability       and maintainability.        This criticism  is undeserved,   in our
judgment, because we are particularly            proud of having exceeded much more stringent
specifications       and goals in these areas than had ever been called for or achieved
in predecessor       sonar systems.    Actually,     General Electric   CX equipment demonstrated
a mean-time-between-failures         (MTBF) of three times better than contract        require-
ments.      In addition,   fleet performance reports reaching us are excellent and highly
laudatory.
APPENDIX II
     Page 3

Mr.     C. M. Bailey




  IV.      Concurrent        Development/Production:

           In stating          that     the result       of going      ahead with         production      before      resolution
 of all      technical         problems        produced     delivery      delays       and cost growth,          the draft
 report      implies        that    there      were alternatives          available         to the Navy which           would     have
 been less        costly       and/or       more timely.         We feel     that      a discussion       of potentially
 available        alternatives            is essential        to this     type of report,            if the reader         is to
 obtain      an objective           analysis        in at least       some depth.           Since    General     Electric        does
 not have all           of the information              necessary      to perform         such an in-depth          analysis,
 we have not attempted                  to do so.         In reviewing       the facts         which   we do have,         however,
 we do not believe               that     there    was any alternative             open to the Navy at the time that
 could     have completely             met the ASW threat            to which        the AN/SQS-26        program       was
 directed.

 Summary:

            Recognizing        the importance      of this       intended       report      to the Congress,           we
 respectfully          request     that   serious    consideration          be given        to modification           and changes
 in the areas          on which      we have commented.            We believe        that     such changes         would    give
 a more balanced           picture      of the true performance             gain in sonar          capabilities          that
 resulted       from the program,           the improvement          in results        that    occurred       throughout       the
 life     of the program,          and the Navy alternatives              that     were available           when the original
 decisions        to proceed       were made.

          In any event,       WC again      wish  to express      our appreciation       for the opportunity
 to review     this    draft    report.      We hope that     our comments        will be of some positive
 benefit.      Please     be assured      that   General   Electric        will be happy to be of any
 further    assistance       desired    in discussing’or        clarifying      our comments.




                                                                                   R. H. Beaton
                                                                                   Vice President       and       General      Manager
                                                                                   Electronic     Systems         Division

 RHB:mz
 attachment




                                                                   34
                                                                          APPENDIX III
                                                                               Page 1




                                                              COLLEGE      POINT, NEW YORK 11356
                                                               CABLE   ADDRESS     “SEAFLOATS”         NEW   YORK
                                                                       TELEPHONE      212   445.6000




                                                      I                10 July          1970




Mr. C, M, Bailey, Director
United States General Accounting         Office
Defense Division
Washington D, C. 20548

Dear MrI Bailey:

                 Thank you for inviting    us to comment on your proposed
report  to the Congress on **adverse e’ffects   of producing    the AN/SQS-26
Surface Ship Sonar System before completion       of development and tests
by the Department of the Navy”.

                    We certainly     agree that there were disadvantages           to pro-
ducing the AN/SQS-26 prior        to completion     of development and test.         How-
ever, the disadvantages        must be weighed against      the advantages to be
gained in producing      “next generation”      hardware in time to meet an exist-
ing threat,     Further,    the alternatives     insofar   as operational      readiness
must be considered,        Despite our most sophisticated       tools for establish-
ing and solving complicated         math models and scenarios,       the final     decision
is still    a matter of judgment.

                   The initiation       of the AN/SQS-26 Program in the late 1950’s
was motivated    by a much more critical         consideration      than the attainment
of longer detecting       and tracking     ranges.    It was well known that even the
very best hull mounted sonar systems, available                at that time, were limited
to unacceptably     short detection       ranges in adverse water conditions,         a sit-
uation existing     in ocean areas of great interest            to the U.S. Navy.     This
limitation    was clearly    inhibiting      any real improvement       in surface ship
ASW capability,

                    The appearance of the nuclear  submarine,   with its over-
whelming improvement in speed, endurance and depth, crystallized         the
need for “reliable**    detection  independent of water conditions.     The advance-
ment of the nuclear submarine to operational      status emphasized the urgency




                                             35
APPENDIX   III
       Page 2




of developing     a system with     the potential     to cope with     this   problem,

                     Research and development tools had demonstrated                the
feasibility     of detection      by employing bottom bounce and convergent
zone techniques b So, the SQS-26 Program designed to exploit                    these
techniques,     was initiated      to achieve    a new capability      rather than to
improve an existing         one. When a major xpbuilding            program was launched,
dedicated     to improving      our ASW capability,     the SQS-26 System became a
prime candidate      for “concurrency”      consideration,        We believe    that under
the circumstances,        the correct   decision was made, Had the decision been
delayed,    the new ships would have been designed to accommodate sonars
existing    in 1958 and it would have been prohibitively               expensive,     if
even possible,     to backfit      the AN/SQS-26 System,        Further,     the growth
potential    of our surface ship ASW capability            would have been severely
limited,

                    Edo Corporation’s   involvement   in the AN/SQS-26 Program
was confined     to the XN-1 experimental     model and the BX production model.

                      The XN-1, delivered       to the Navy for installation            in
December 1960, served as a vehicle            for providing         knowledge of the en-
vironment,    refining     specification    requirements         and for demonstrating
the bottom bounce and convergent           zone techniques,           The development of
the XN-1 resulted        in an operational      transducer       (sound projector      and
echo receiver)       design of such increased         efficiency      that substantial
savings were possible        in the auxiliary       electrical       systems  of ASW vessels
using the SQS-26 e The XN-1 also pushed the state of the art in many
other aleas and remained an operational               fleet    sonar for some eight years
until  the Willis      A. Lee (DL-4) was mothballed            in July 1969.

                     The AN/SQS-26 (BX) was awarded to Edo Corporation               in
June 1962. The last of the eighteen           (18) equipments was delivered            in
December 1966, Although a relatively            short time elapsed between the
XN-I and BX award (four years),         the state of the art in solid state:
circuitry      had advanced almost a generation,         Consequently,    the BX wis
specified      and designed as a totally     solid state system as compared to
less than a 50 percent solid state content in the XN-1.                In addition,
after     award of the BX, the so called “ility”         disciplines   (reliability,
maintainability,       etc.) were introduced      and the BX was required        to
accommodate these both in design and test.              Despite these and many other




                                             36
                                                                        APPENDIX   III
                                                                               Page 3




changes from the XN-1, the first   BX was delivered               to the Navy in less
than %hree years from contract   date.

                   The Edo Corporation    takes great pride in its contribution
%o the SQS-26 Program and in the achievements        of the SQS-26 BX Sonar System.
The first    BX was installed   and checked out ready for sea in an unprecedented
six week period.      During the six week technical     evaluation     a% sea, an on-line
availability    in excess of 99 percent was demonstrated.          Fleet experience    with
%he SQS-26 (BX) has been similar       to that of the technical       evaluation  with
ships reporting    over 2000 hours of operation     with but l-5 hours of down time,
a notable achievement for so complex a system,

                      The SQS-26 (BX) has significantly    added to %he knowledge
and capability       of the fleet with sixteen systems a% sea (plus two serving
as training     units) . The so called bottom bounce and convergent         zone
teehniques     can only be proven useful and a real advantage if tested and
evaluated    on a number of ASW ships under a wide range of conditions           as
related    to ocean bottom,      depth of water and ocean areas involved,       Con-
tinued use of the SQS-26 on a number of ships will           refine  and increase
the value of these new operational         techniques,  to the detriment    of the
enemy,

                   The SQS-26 Program has been costly              but, for the moment,
provides   the only real potential   in the fleet   for           dealing with %he
sophistica%ed   nuclear submarine missile   threat.

                   Thank you again    for        the invitation    to comment,




GA/ms                                              /
                                        .A-               for W, R, Ryan
                                                          President




                                            37
APPENDIX IV
    Page 1

                  PRINCIPAL OFFICIALS OF

                 THE DEPARTMENTOF DEFENSE

       RESPONSIBLEFOR ADMINISTRATION OF ACTIVITIES

                 DISCUSSEDIN THIS REPORT


                                      Tenure of office
                                      From            -To
                   DEPARTMENTOF DEFENSE

SECRETARYOF DEFENSE:
   Melvin R. Laird                 Jan.    1969   Present
   Clark M, Clifford               Mar.    1968   Jan. 1969
   Robert S. McNamara              Jan.    1961   Feb. 1968
   Thomas S. Gates, Jr.            Dec.    1959   Jan. 1961
   Neil H. McElroy                 Oct.    1957   Dec. 1959
DEPUTY SECRETARYOF DEFENSE:
   David M. Packard                Jan.    1969   Present
   Paul H. Nitze                   July    1967   Jan. 1969
   Cyrus R. Vance                  Jan.    1964   June 1967
   Roswell L. Gilpatric            Jan.    1961   Jan. 1964
   James H. Douglas                Dec.    1959   Jan. 1961
   Thomas S. Gates, Jr.            June    1959   Dec. 1959
   Donald A. Quarles               %Y      1957   &Y      1959


                  DEPARTMENTOF THE NAVY
SECRETARYOF THE NAVY:
   John H. Chafee                  Jan.    1969   Present
   Paul R. Ignatius                Sept.   1967   Jan. 1969
   Charles F. Baird (acting)       Aug.    1967   Sept. 1967
   Robert H. B. Baldwin (acting)   July    1967   Aug. 1967
   Paul H. Nitze                   Nov.    1963   June 1967
   Fred Korth                      Jan.    1962   Nov. 1963
   John B, Connally,  Jr.          Jan.    1961   Dec. 1961
   William B. Franke               June    1959   Jan. 1961
   Thomas S. Gates, Jr.            Apr.    1957   June 1959


                             38
                                                           APPENDIX IV
                                                               Page 2

                                                Tenure of office
                                                From            -To
                           DEPARTMENTOF THE NAVY (continued)
CHIEF OF NAVAL OPERATIONS:
    Adm. Elmo R. Zumwalt, Jr.                July   1970    Present
    Adm. Thomas H. Moorer                    Aug.   1967    June 1970
    Adm. David L. McDonald                   Aug.   1963    July    1967
    Adm. George W. Anderson                  Aug.   1961    July    1963
    Adm. Arleigh A. Burke                    Aug.   1955    Aug. 1961
 CHIEF OF NAVAL MATERIAL:
     Adm. J. D. Arnold                       Oct.   1970    Present
     Adm. Ignatius   J. Galantin             Mar.   1965    June 1970
     Vice Adm. William A. Schoech            July   1963    Mar. 1965
     Vice Adm. George F. Beardsley           July   1960    June 1963

COMMANDER,  NAVAL SHIP SYSTEMSCOM-
  MAND (note a>:
    Rear Adm. Nathan Sonenshein              July   1969    Present
    Rear Adm. Edward J. Fahy                 Feb.   1966    July    1969
    Rear Adm. William A. Brockett            Apr.   1963    Feb. 1966
    Rear Adm. Ralph K. James                 Apr.   1959    Apr.    1963
aNaval Ship Systems Cownand succeeded Bureau of Ships
 May 1, 1966.




U.S.   GAO Wash.,   D.C.

                                      39