DEFENSE ACQUISITION PROGRAMS Status of Selected Programs 141695 Uuited States General Accouuthg Office Washiugton, D.C. 20548 National Security aud International Affairs Division B-226470 June 27,1QQ0 The Honorable Sam Nunn Chairman, Committee on Armed Services United States Senate Dear Mr. Chairman: This report responds to your request that we review the requirements, schedule,performance, cost, and funding support for selectedDepart- ment of Defense(DOD) weapon system acquisition programs. As agreed with your office, we selectedprograms for which DOD was scheduledto make an acquisition milestone decision1during fiscal year 1991 and therefore were possible candidates for milestone authorization. Mile- stone authorization is a concept that would authorize up to 6 years of funding to cover the entire acquisition phase for either full-scale devel- opment or full-rate production. During our review, the services revised or eliminated the scheduledmilestone decision dates for someprograms; however, we retained these programs in our review. The programs we reviewed and their next milestone decision as of March 1990 are shown by service in table 1. ‘Major defense system acquisitions typically proceed through several phases, with each phase pre ceded by a senior management review, or “milestone decision,” by the military services and/or DOD. The milestone 0 decision precedes the concept exploration phase, the milestone I decision precedes the demonstration and validation phase, the milestone II decision precedes the full-scale development phase, the n&stone IIIA decision precedes low-rate initial production, and the milestone IIIB decision precedes full-rate production. Page 1 GAO/NSIAD-90-159 Defense Acquisition Progranw B-220470 Table 1: Mileatone Decirions for Programs GAO Reviewed Next milestone Program decision Date Army Non-Line-of-Sight (NLOS) Missile a a Liaht Helicooter ILH) II Jan. 1991 Air Force Sensor Fuzed Weaoon (SFWI IllA Scot. 1991b Advanced Tactical’Fighier (IITF) II June 1991 Joint Tactical Information Distribution Class 2M-IIIAC Oct. 1991 System (JTIDS) Class 2 Terminals Class 2 and 2H-IIIB Oct. 1993 Yn the fiscal year 1991 budget request, DOD decided to continue to fund development but not procurement. bThe production contract is not expected to be awarded until December 1991 CThe milestones for the Army Class 2M terminals were rescheduled to coincide with the program schedule for the forward area air defense/command, control, and intelligence system, since the Class 2M terminal is a primary subsystem of that system. Results in Brief The current and anticipated instability in the overall defensebudget and the recent changesin Eastern Europe are forcing DOD and the military servicesto reexamine the need, priority, and annual funding levels for many weapon system acquisition programs. DOD and the serviceshave reexamined or are reexamining someof the systems we reviewed. For example, the Army had characterized the NIDS missile as a high priority, but its procurement was terminated by DOD in its fiscal year 1991 budget request. The Secretary of Defenseinitiated a review in December1989 to reexamine, among other things, the need for the ATF. In April 1990 the Secretary announcedthat he had decided to maintain the ATF force level objective at 760 aircraft but proposed delaying its initial procurement by 2 years. The Secretary also recently initiated a similar review of the LH. Other programs can expect to be reexamined. For example, the changesoccurring in Europe will likely result in a reexamination of the need for the SFW,a weapon designedto attack formations of enemy armored vehicles. Although the six programs we reviewed are being developed to satisfy a stated military requirement, DOD and the serviceshave not fully agreed that certain programs are the best or most cost-effective solution for satisfying the requirements. For example, the specific requirements for the LH have not yet been determined, and the Army doesnot know Page 2 GAO/NSIAD-99-lS9 Defense Acquisition Programs J B-220470 whether this aircraft is the most cost-effective way to accomplish the LH'S projected missions. A revised cost and operational effectiveness analysis is expected to be finalized before the LH'S next major acquisi- tion milestone decision, scheduled for January 1991. In addition, the future of the JTIDS Class 2 terminal is unclear. The Air Force, as lead service, has reduced its planned procurement of JTIDS terminals for the F-16 aircraft from 160 to only 20 units. However, DOD has given the Air Force until June 1991 to decide whether to retain the terminals for the F-16 and expand the program or terminate it and transfer the 20 termi- nals to the Navy. In addition, a variant of the Class 2 terminal is being designedand built for the Army. Each of the six systems we reviewed has experienced someschedule slippage, and cost estimates for four systems have increased.Five of the six programs have not yet demonstrated that the system being designed and/or produced can meet its requirements. Tables 2 through 6 summa- rize the results of our review, and detailed information on each of the programs is in appendixes II through IV. - Table 2: GAO’s Assessment of the Status of the Programs Reviewed Recent Future Demonstrated Stage of schedule slippage It will meet Recent cost Future cost Program development slippage indicated requirements growth growth indicated LH -- Earlv develoDment Yes Yes No No Yes ATF .-.--____-_- Early development Yes No No Yes No NLOS Full-scale Yes Yes No Yes Yes ..----- __.....___ I___----. development SFW Full-scale Yes Yes No Yes No _-.--_._---____---.- development MK-50 .--__--. Initial production Yes No Yes Yes No JTIDS Initial woduction Yes No No No No Page3 GAO/NSIAD-99.169DefenaeAcquMtionPrograma B220470 Table 3: Cobt Estimates for Programs in Early Development -Escalated dollars in millions Full-scale developZ2 development Production Total Program cost cost cost cost iii---- $921.6 $3,107.6 $41,700.0 $45,729.2 ATF $35817.6 $10.534.0 $65.082.2 $79.433.8 Table 4: Cost Estimates for Programs in Full-Scale Development Escalated dollars in millions Initial Full-rate Development production production Total Program cost cost cost cost NLOS $630.8 $O.Oa $0.0” $630.9 SFW $200.9 $762.6 $2,914.9 $3,879.0 7300 decided to delete procurement funding for the NLOS missile from the fiscal year 1991 budget and the Five Year Defense Plan. Table 5: Cost Estimates for Programs in Production Escalated dollars in millions Initial Cost for 5 Development production years of full- cost to Total Program cost cost rate production complete cost MK-;O $1,472.3 $659.1 $2,544.9 fs2i79.0 $7,255.3 JTIDS $2.032.0 $773.1 $1.0885” a 83.893.7 aFulI-rate production of JTIDS is not expected to begin until fiscal year 1994 and will be completed within 5 years. To obtain the information for this report, we reviewed relevant program Scopeand documents, such as operational requirements, selected acquisition Methodology reports, acquisition strategies, operational effectiveness analyses,pro- gram master schedules,cost estimates, cost performance reports, test reports, contract documents, and budget exhibits. We also discussed each program with responsible DOD and military service officials. We conducted our work at Headquarters, Departments of the Army, Navy, and Air Force, Washington, D.C.; DefenseIntelligence Agency, Washington, D.C.; Army Aviation SystemsCommand,St. Louis, Mis- souri; Army Missile Command, RedstoneArsenal, Alabama; Army Oper- ational Test and Evaluation Agency, Washington, D.C.;Air Force Systems Command, Aeronautical Systems Division, Wright-Patterson Air Force Base,Ohio; Electronic Systems Division, HanscomAir Force Page 4 GAO/NSIAlXKb169 Defense Acquisition Programs Base,Massachusetts;Munitions SystemsDivision, Eglin Air Force Base, Florida; and Naval SeaSystemsCommand,Arlington, Virginia. We performed our work from October 1989 to April 1990 in accordance with generally acceptedgovernment auditing standards. As requested, we did not obtain official agency comments.However, we discusseda draft of this report with DOD and service officials and incorporated their comments where appropriate. We are sending copiesof this report to the Chairmen, House Committees on Appropriations, Armed Services,and Government Operations and SenateCommittees on Appropriations and Governmental Affairs; the Secretariesof Defense,the Army, the Navy, and the Air Force; and the Director, Office of Managementand Budget. We will make copies avail- able to other interested parties. This report was prepared under the direction of Nancy R. Kingsbury, Director, Air Force Issues,who may be reached on (202) 276-4268 if you or your staff have any questions concerning this report. Other major contributors to this report are listed in appendix V. Sincerely yours, Frank C. Conahan Assistant Comptroller General Page 6 GAO/NSIAD-90-159 Defense Acquisition Programs Contents Letter 1 Appendix I 8 Milestone Authorization Appendix II 10 Army Programs Non-Line-of-Sight Missile Light Helicopter 10 16 Appendix III 23 Navy Program MK-60 Torpedo 23 Appendix IV 29 Air Force Programs SensorFuzed Weapon Advanced Tactical Fighter 29 36 Joint Tactical Information Distribution System Class 2 44 Terminal Appendix V 64 Major Contributors to This Report Tables Table 1: Milestone Decisionsfor Programs GAO Reviewed 2 Table 2: GAO’s Assessmentof the Status of the Programs 3 Reviewed Table 3: Cost Estimates for Programs in Early 4 Development Table 4: Cost Estimates for Programs in Full-Scale 4 Development Table 6: Cost Estimates for Programs in Production 4 Table II. 1: NICS Missile Program Schedules 13 Table 11.2:NI.CSMissile Cost Estimates 16 Table 11.3:LH Program Scheduleas of December1989 18 Table 11.4:LH Cost Estimates 20 Table III. 1: MK-60 Program Schedules 26 Table 111.2:MKBO Cost Estimates 28 Table IV. 1: SFW Program Schedules 32 Page 6 GAO/NSIAD-90-169 Defense Acquisition Programs I Cmtents Table IV.2: SFW Program ScheduleChangesDue to 1989 32 Restructuring Table IV.3: SFWCost Estimates 36 Table IV.4: ATF Program Schedules 41 Table IV.6 ATF Cost Estimates as of February 1990 44 Table IV.6: JTIDS Program Scheduleas of December1989 60 Table IV.7: JTIDS Cost Estimates as of February 1990 63 Figures Figure II. 1: NIB!! Missile System 11 Figure 11.2:ProposedLH Designs 17 Figure III. 1: MK-60 Torpedo 24 Figure IV.l: SFW Deployment Events 30 Figure IV.2: ATF’s Projected Role in Offensive Counterair 38 Missions Figure IV.3: JTIDS Users 47 Abbreviations ATF Advanced Tactical Fighter DOD Department of Defense FAADS Forward Area Air DefenseSystem GAO General Accounting Office JTIDS Joint Tactical Information Distribution System LH Light Helicopter NIDS Non-Line-of-Sight SFW SensorFuzed Weapon Page 7 GAO/NSIADW-169 Defense Acquisition Programa , Appendix I MilestoneAuthorization Milestone authorization is a concept that would authorize up to 6 years of funding to cover the entire acquisition phase for either full-scale development (milestone II) or full-rate production (milestone IIIB). 10 USC. 2437, enacted in October 1986, established the milestone authorization concept to enhanceprogram stability by alleviating some of the year-to-year funding uncertainties and minimizing the amount of managementreview within the Department of Defense(DOD) and the services.The concept was basedon the principle that if DOD would commit to managing a program within set cost, schedule,performance, and other requirements, the Congresswould commit to stable multiyear funding authorization. The legislation required the Secretary of Defense to (1) designate someDOD programs as “Defense Enterprise Programs” to receive streamlined managementand (2) nominate someof these pro- grams as candidates for milestone authorization. A 1987 amendment to the legislation enabled the House and SenateCommittees on Armed Ser- vices to consider defenseacquisition programs that have not been desig- nated as DefenseEnterprise Programs for milestone authorization and approve the programs for milestone authorization as appropriate. In March 1987 the Secretary of Defensedesignated 10 acquisition pro- grams as DefenseEnterprise Programs and nominated 3 for milestone authorization: the Army’s Mobile Subscriber Equipment, the Navy’s Tri- dent II D-6 Missile, and the Air Force’s Medium Launch Vehicle. The Congressapproved milestone authorization for the Army and Navy sys- tems and two others: the Navy’s T-46 Training System and the Army’s Tactical Missile System. Sincethen, neither DOD nor the Congresshas designated or nominated systems for the DefenseEnterprise Program or milestone authorization. In his July 1989 DefenseManagementreport, the Secretary of Defense stated that DOD should take better advantage of the DefenseEnterprise Program and milestone authorization. The report stated that the Under Secretary of Defensefor Acquisition, with the Service Acquisition Exec- utives, would carefully select several new DefenseEnterprise Programs from programs in the DefenseAcquisition Board’s concept approval (post-milestone I) phase, provide strong policy direction and oversight in implementing the DefenseEnterprise Program, and seek milestone authorization for such programs to enhancemanagementstability. Sincethen, a DOD task force has been preparing an implementation plan and a proposed list of candidate programs. However, DOD’S fiscal year 1991 budget request to the Congressdid not contain any candidate pro- grams. In March 1990 DOD officials informed us that candidate programs Page 8 GAO/NSJAD-90-159 Defense Acquisition Programs Amendix I Milestone Authorlmtion are still being considered,but the final decision on nominations to the program had not yet been made, primarily becauseof the current and anticipated instability of the overall defensebudget. As a result, DOD and service decisionmakershave had to cut the budgets and delay the sched- ules of many programs, including someof those that were being consid- ered for the DefenseEnterprise Program. Page 9 GAO/NSIAD-90-159 Defense Acquisition Programs Appendix II Army Programs The Non-Line-of-Sight (NIBS) Missile’ is an important part of the Army’s Non-Line-of-Sight Forward Area Air DefenseSystem (FAADS) becauseof its ability to Missile attack enemy helicopters hidden from view by the terrain. DODhas decided not to fund the NILIS missile’s procurement2becauseother pro- grams have higher priority and its position that the forward area air defensemission can be accomplishedby the Air DefenseAnti-Tank and Pedestal Mounted Stinger Systems.According to Army officials, the Army plans to appeal DOD’S decision during the fiscal year 1992 budget formulation processbecauseit believes that a requirement for the mis- sile’s capabilities still exists. Therefore, we have included this program in our report to provide information on its status and identify issues that would be relevant if the program continues. The NILISmissile program is in full-scale development, and an initial pro- duction decision was scheduled for July 1991. If DOD’s decision not to fund the missile’s procurement is sustained, current plans call for the program to be terminated after development is completed in December 1993, and the technology to be “shelved” for possible future use. According to Army testing officials, the initial operational evaluation of a prototype3 missile was successfulin demonstrating the feasibility of the NIDS concept. However, componentsto be included in the full-scale development missile-such as an infrared seeker and a more powerful propulsion system- are not scheduledto be tested until fiscal year 1991. Background The NIDS missile system is designedto protect ground troops and vehi- cles by attacking enemy helicopters hidden from view by the terrain. The NIDS missile system consistsof a fiber optic guided missile, launcher, gunner station, and communication and navigation equipment. Figure II. 1 illustrates how the NILE missile would be used in combat. ‘The missile is also referred to as the Fiber Optic Guided Missile. %OD decided to delete procurement funding for the NIL?3 missile from the fiscal year 1991 budget and the Five Year Defense Plan. 3A prototype is the first working article of a new technology or design intended to serve as the pat- tern or guide for subsequent designs that will be incorporated in a weapon system. Page 10 GAO/NSIAD-90-169 Defense Acquisition Programs . Appendix II Army prorprme Figure 11.1:NlOg Mlrrils gy8tem Chstant Altitude ’ Midcourse Page 11 GAO/NSLADgO-169 Defense Acquisition F’rogram~ The NIB missile is to be mounted on vehicles, such as the High Mobility Multi-Purpose WheeledVehicle or the Bradley Fighting Vehicle, and operate in the forward area of the battlefield in concealedpositions out of direct enemy view. The missile will receive target location informa- tion from its own sensor and from the FAADS command, control, and intelligence network, which will contain ground and aerial sensors.Once the missile is launched, it will use an on-board television camera or imaging infrared sensorto detect targets. The targets’ imageswill pass though a fiber optic line to the gunner’s monitor so the gunner can guide the missile to the target. The NILISmissile program is currently in full-scale development. The Boeing Company was awarded a cost-plus-incentive-feecontract in December1988 to develop a missile capable of operating in all types of weather and in the day or night. The missile includes a television camera, infrared seeker, and a more powerful propulsion system than the prototype missile. To reduce the risk in developing the missile, the Army built and tested a prototype missile containing only a television camera. In February 1988 the Army restructured the program, in accor- dance with congressionalguidance, to delete plans for equipping the first operational units with missiles using the television camera only. However, the information learned from developing and testing the pro- totype missile has been transferred to Boeing. Requirements In 1986 the Joint Requirements and ManagementBoard approved the concept for the overall FAADS program. The Army approved the require- ments for the NILE3 missile in October 1987, and the DefenseAcquisition Board approved full-scale development of the missile in September 1988. If DOD doesnot fund the NILS missile’s procurement, the Army will have to rely on the Air DefenseAnti-Tank and Pedestal Mounted Stinger sys- tems for forward area air defense.According to a FAADS program offi- cial, these systems are not capable of attacking targets concealedby terrain. Therefore, the Army’s stated requirement for a non-line-of-sight forward area air defensecapability will not be met. Schedule * DOD’S decision not to fund the NIQS missile’s procurement will result in the termination of the program at the end of initial operational test and evaluation in December1993. Table II. 1 comparesthe missile’s sched- ules from February 1988 through February 1990. Page 12 GAO/NSLAD-90-169 Defense Acquisition Programs , Table 11.1:NLOS Missile Program Schedules Event Feb. 1988 Dec. 1989 Feb. 1990 Full-scale development decision June 1988 Aug. i988 Aug. 1988 Complete initial operational evaluation Mar. 1989 Sept. 1989 Sept. 1989 Initial production decision Jan. 1991 July 1991 a Initial oroduction contract award Jan. 1991 Julv 1991 a First unit eauiDped Feb. 1992 Au;. 1993 a Complete initial operational testing and July 1992 Dec. 1993 Dec. 1993 evaluation Full-scale production decision Sept. 1992 Jan. 1994 a Full-scale production contract award Jan. 1993 Mar. 1994 a b b a Initial operational capability aThese events have been deleted from the schedule due to DOD’s decision not to fund the missile’s procurement. bThis information is classified Between February 1988 and December1989, the program experienced delays due to DOD and congressionalbudget reductions and technical problems. As a result, the schedulesfor first unit equipped, completion of initial operational test and evaluation, and the full-rate production decision and contract award dates slipped over 14 months. DOD eliminated all procurement funds for the ~10s missile in its fiscal year 1991 budget request. Therefore, planned procurement decisions and related tests have been deleted from the schedule.Unless DOD decidesto provide funding for the missile’s procurement, current plans provide for the termination of the program after initial operational test and evaluation are completed in December1993, and the technology will be “shelved” for future use. Performance Numerous tests of the prototype NU)Smissile have been completed since 1988. According to Army operational testing officials, the tests have been successfulin demonstrating the feasibility of attacking enemy heli- copters hidden from view by the terrain. However, full-scale develop- ment NWS missiles, which include infrared and television seekersand a more powerful propulsion system, are not scheduledto be tested until fiscal year 1991. The NWS missile acquisition strategy included early operational testing of a prototype missile and a technical risk reduction program. The pro- gram office devised a test scheduleto include initial operational evalua- tion and extended user employment tests. The initial operational Page 13 GAO/NSIAD-90-169 Defense Acquisition Programs evaluation tests have been completed, but as of February 1990, the extended user employment tests were still being conducted. The initial operational evaluation tests were conducted from November 1988 to September 1989. The tests included (1) captive flight tests to demonstrate that soldiers could detect and identify rotary wing and armor targets, (2) a force development test and experiments to investi- gate tactics, training, and crew performance, and (3) actual missile fir- ings to demonstrate capability against helicopters and armored vehicles. Although the Army considersthe tests successful,it had not finalized its evaluation reports on the results of the missile firing and the extended user employment tests as of February 1990. During the missile firing tests, 6 of the 10 missiles fired hit their intended target. Initial results from the extended user employment test showed that 3 of the 6 missiles fired hit the targets. However, according to the Army’s “OperationalTest and Evaluation Agency, the test revealed a serious navigation problem with the missile causedby software problems. Nevertheless,according to an Army official, a solu- tion to this problem has been recently identified and successfully demonstrated in the extended user employment testing phase. The NIB system engineer stated that Boeing is also addressingthe problem as a part of the full-scale development. The Army initiated a risk reduction program in 1988 to reduce technical risks in someNIDSmissile componentsand serve as a backup develop- ment effort. Technical componentsconsideredhigh risk were the infrared seeker, a variable speedmotor, and midcourse navigation. The technical risk reduction program is scheduledto end on September30, 1990, and Boeing will be responsible for eliminating additional risks. According to Boeing’s November 1989 cost performance report, tech- nical risks could affect the schedulefor completing full-scale development, cost NILE missile system cost estimates remained relatively stable until the DOD’S recent decision not to fund production. From December1988 to December1989, research and development cost estimates increased by about $74 million (in escalated dollars) due to changesin testing plans and resulting delays in the testing schedule.Between December1989 and February 1990, the research and development cost estimate changed becausea new inflation factor was used and certain tests were Page 14 GAO/NSIAD-90-169 Defense Acquisition Programs Appendix II AnnY PwP- eliminated. Table II.2 shows the changesin the cost estimates from December1988 to February 1990. Table 11.2:NLOS Mlacrile Coat Estimates Escalated dollars in millions Funding category Dec. 1988 Dec.-1989 Feb. 1990 Research and development $555.9 $629.7 $630.6 Procurement 2364.5 2334.1 0.0 Total $2920.4 $2963.8 $630.8 Recent GAO Report DODAcquisition Programs: Status of SelectedSystems(GAO/NSIAD-88-160, June 30,1988). The Light Helicopter (LH) program is intended to provide the Army with Light Helicopter a new generation of lightweight helicopters to perform attack and scout missions. Demonstration and validation of the LH concept began in November 1988 and is scheduledto end in September 1990. At that time, the contractor teams will submit their final aircraft designsand full-scale development proposals to the Army, who will evaluate the proposals and select a single contractor team for full-scale development. The full-scale development decision is scheduled for January 1991. The Army estimates that research, development, and procurement costs for 2,102 LHS-6 development prototypes and 2,096 production aircraft- will cost $46.7 billion in escalateddollars. The LH is expected to provide increasedtarget acquisition, night vision sensor, and other capabilities over the helicopters it will replace: the OH-6,OH-68 and AH-1s. However, the Army has not yet determined that the LH is the best and most economical way to perform its attack and scout missions in the future; a Cost and Operational Effectiveness Analysis will be finalized before the upcoming full-scale development decision. The successfuldevelopment and application of advanced technologies will be required to meet the LH’Ssurvivability, weight, and multiple mis- sion requirements. These technologiesinclude sophisticated target acquisition and night vision sensors,a composite (nonmetal) airframe, and very high speedintegrated circuitry. Integration of the mission equipment and sensorpackage and software are consideredto contain Page 16 GAO/NSIAD-90-169 Defense Acquisition Programa the highest degreeof risk, according to a program official. These tech- nologies will be further developed in demonstration and validation but will not be demonstrated in prototype flight testing until full-scale development. The Army plans to control cost growth by securing production and oper- ating and support cost commitments from each contractor team during the full-scale development source selection. For example, system hard- ware must be designedto a specific cost, and any changesin specifica- tions must be evaluated in terms of the impact on life cycle cost. In addition, if projected procurement funds do not becomeavailable, the estimated production rate of 216 aircraft per year may have to be reduced, which would increase LHunit costs.A program office official said that the $7.6 million (fiscal year 1988 dollars) average unit flyaway cost4goal is achievable becausecontractors can reduce or tradeoff system capabilities to meet this goal. Background The LH is intended to perform multiple missions into the 1990sand beyond, including light attack and armed reconnaissanceroles. In the light attack role, the LH will be equipped with Hellfire antitank missiles and engageenemy armored units in maneuvers against ground forces. In the armed reconnaissancerole, the LHwill fly over enemy territory and report back to ground commanderson enemy positions. The Army also intends to use the LHto conduct air-to-air combat missions against enemy helicopters and long-range attack missions into enemy territory. In November 1988 the Army awarded cost-plus-fixed-fee contracts to two contractor teams for competitive demonstration and validation of the LH airframe design and avionics. Boeing Helicopters and Sikorsky Aircraft Division of United TechnologiesCorporation comprise one team, and McDonnell Douglas Helicopter Company and Bell Helicopter Textron comprise the other. The 23-month demonstration and validation contract period is scheduledto end in September 1990. The full-scale development contract award is scheduled for January 1991. Figure II.2 shows the two contractor teams’ proposed LH designs. 4Flyaway cost includes all recurring and nonrecurring production costs that are incurred in the manu- facture of a usable end item. It includes mission equipment (basic structure, propulsion, electronics), project management, systems engineering, system test, and the allowances for engineering changes and warranties, Research and development costs, training equipment, support equipment, initial spares, technical data, and publications or contractor services are not included. Page 16 GAO/NSIAD-90-169 Defense Acquisition Program8 Figure 11.2:Proposed LH Designs Bell/McDonnell Douglas Boeing/Sikorsky The Army awarded a firm-fixed-price contract in October 1988 for development of the LH'S T800 engine to the Light Helicopter Turbine Engine Company, a company formed by Garrett Engine Division of the Allied Signal Corporation and the Allison Gas Turbine Division of Gen- eral Motors. Full-scale development of the engine is scheduled for com- pletion in April 1991. Requirements The Army’s objectives for developing the LH are to replace the current light fleet of AH-l, OH-6, and OH-58 A/C helicopters with fewer LHS and to provide a multiple mission helicopter capable of meeting future threats. Requirements for a new observation/light attack helicopter are defined in a draft Required Operational Capabilities document. According to a program official, however, even though the LH has been established to meet these projected needs,full validation is pending the completion of the LH Cost and Operational Effectiveness Analysis. The analysis will assesshow mixes of other aircraft will perform in various scenarios. Other helicopter systems, such as the Army Helicopter Improvement Program and improved Apache are still being considered.An interim report on the analysis will be completed in April 1990, and the final report will be completed in October or November 1990, before the full- scale development decision scheduled for January 1991. The Army was forced to change its original single-seatdesign to a two- seat design becausethe LH'S mission requirements were too demanding. As a result, the projected weight and cost of the LH has increased. In Page 17 GAO/NSLAD-99-169 Defense Acquisition Programs addition, when DOD determined in 1988 that the program was not afford- able, the Army reduced someof its functional requirements to lower air- craft cost and weight. In the demonstration and validation phase, scheduled for completion in September 1990, contractor teams have been proposing tradeoffs to reduce weight and cost. According to LHpro- gram officials, both contractor teams have indicated that the 7,500- pound weight goal will be achieved by the end of the demonstration and validation phase. nedule SC1 Although the LH'S schedule changedmany times in previous years, it has remained relatively stable since the June 1988 decision to begin the demonstration and validation phase. The only significant schedule delay occurred in March 1989, when the demonstration and validation con- tract was definitized at a 23-month performance period, instead of the originally planned 18-month period. This changeresulted from an imbal- ance between the funds available and work required during the first year of the demonstration and validation contract. As a result, the con- tractor source selection evaluation processwas shortened by 4 months. The LH'S current scheduleis shown in table 11.3. Table 11.3:LH Program Schedule as of December 1999 Event Date Complete demonstration and validation contracts Sept. 1990 Full-scale development decision Jan. 1991 First flight of full-scale development aircraft Aug. 1993 Low-rate initial oroduction decision Nov. 1994 Complete full-scale development Sept. 1996 Complete initial operational test and evaluation Sept. 1996 Full-rate production decision Nov. 1996 Initial ooerational cababilitv Dec. 1996 Program officials characterized LH'S schedule as low risk. However, when the program was restructured in 1988, the Army compressedthe schedule and deleted the test and evaluation of competitive prototype aircraft from the demonstration and validation phase. As a result, com- petition between the two contractor teams consists of paper studies, mock-up designs,wind tunnel tests, surrogate flight tests, and field tests of the target acquisition systems. By not building competitive proto- types, decisionmakersmay not have critical information that would have been provided during the early fabrication and testing processes. Technical performance demonstration will be reduced, and the Army Page 18 GAO/NSIAD-99-169 Defense Acquisition Programs will have to use cost estimates instead of actual costs for a longer period of time. Thus, the Army will have to select a contractor and decide whether to move to full-scale development with less information than was originally planned. In addition, the low-rate initial production decision is scheduledfor November 1994, almost 2 years before full-scale development is com- pleted in September 1996. Thus, important information from the latter part of the full-scale development phase, such as results of prototype operational testing, will not be available until after low-rate initial pro- duction has begun. Program officials believe this concurrency is man- ageableand can benefit the program by providing the impetus to complete full-scale development by a specific date and to preclude a break between the end of full-scale development and the beginning of production. Program officials emphasizedthat only 12 of 2,096 aircraft will be procured before the end of full-scale development. Moreover, achieving the schedulewill depend on successfully devel- oping and integrating the LHS advancedtechnologies while controlling aircraft cost and weight. Nevertheless,program officials believe that the schedule is achievable through the full-scale development phase and that adequate information will be available when decisionsneed to be made. Performance Even though somerequirements have been reduced to control weight and cost, the LH is still expected to be a sophisticated aircraft. The devel- opment of the LH’S avionics and mission equipment/sensors, which are similar to those to be developed for the Air Force’s Advanced Tactical Fighter, involve considerabletechnical risks. Mission equipment con- sisting of sensorsand avionics remains the most critical program ele- ment. High-speed,high-capacity integrated circuits for processing threat, flight, and other critical data and advancedthreat sensorsare examples of the LH’S required technological advancementsand applica- tions. In addition, the LH will utilize advancedtechnologies in developing an all-composite (nonmetal) airframe to reduce weight. The integration of various technologies also posesrisks. The Army has been involved in a risk reduction program on the LH for several years and the contractor teams are conducting additional efforts during the demonstration and validation phase to reduce cost and technical risks. However, even though preliminary mission equipment testing will occur Page 19 GAO/NSIAD-90-169 Defense Acquisition F’rograma Appendix II Army PmP.~ during the demonstration and validation phase, a fully integrated system will not be tested until full-scale development. The LH program also faces the challenge of keeping aircraft weight down while meeting performance requirements. Enhanced maneuverability and agility as well as reduced procurement and operation and support costs are someof the expected benefits from reduced aircraft weight. The LH’S empty weight goal remains at 7,500 pounds, although in 1987 the estimates exceededthe goal by as much as 2,300 pounds. The increased weight can be attributed to attempts to achieve performance requirements. An Army official said that the contractors are required to achieve the 7,500-pound requirement with delivery of the first aircraft from the secondproduction lot. In addition, the 5- to lo-percent weight growth that has historically occurred during aircraft development is not considered a significant problem, according to an LH program official. However, future weight growth-totaling several hundred pounds- due to the anticipated addition of the Longbow millimeter wave radar is excluded from the weight requirement. Cost According to the Army’s February 1990 estimate, the acquisition of 2,102 LHS will cost $45.7 billion6 in escalated dollars: $4.0 billion for research and development and $41.7 billion for procurement. The total program cost estimate in constant fiscal year 1990 dollars is $31,2 bil- lion Program costs reached their highest point in November 1987, after which the Army initiated program reductions, including reducing the number of LHS by 2,199 and conducting design trade-offs, which nearly halved the total cost by June 1988. Since then, the total projected cost has remained relatively stable. Table II.4 shows these changes. Table 11.4:LH Cost Estimates Fiscal year 1990 dollars in millions Feb. Nov. Mar. Feb. Cateaorv 1987 1987 1989 1990 Research and development $4,354 $5,311 $3,590 $3,649 $3,644 Procurement 47,163 55,814 28,588 28,494 27,550 Total $51,517 $61,125 $32,178 $32,143 $31,194 Quantity 4,509 4,301 2,102 2,102 2,102 Unit cost $11.4 $14.2 $15.3 $15.3 $14.8 ‘Approximately $3 billion for the Longbow millimeter wave radar program has been included in this estimate. Page 20 GAO/NSIAD-90-169 Defense Acquisition Programs Appendix II krmY ProIpame The cost increasesleading up to the November 1987 peak were a result of the demanding mission requirements established by the Army. During 1988 the Army and DODattempted to control costsby (1) eliminating competitive prototypes from the demonstration and validation phase, (2) lowering production quantities from 4,301 to 2,096 by deleting a pro- posedutility version of the LH, and (3) establishing strict aircraft cost and weight goals, including the $7.5 million unit flyaway cost goal. These changesand the resulting cost reductions are reflected in the June 1988 estimate. Costs decreasedfurther for the March 1989 estimate as a result of (1) lower mission equipment weight related to decreasedcapabilities, (2) other cost reductions, which are estimated as a percent of total costs, and (3) reduced engine production cost estimates agreed to by the engine manufacturer. The February 1990 estimate showed that the costs have been reduced again by almost $1 billion. Program officials attribute this decreaseto the continuing requirement tradeoffs and reductions to meet the cost and weight goals. Despite the significant LH program reductions undertaken by DODand the relative stability of the cost estimates since June 1988, program uncertainties remain, which may lead to increased costs.The Office of the Secretary of Defense’sCost Analysis Improvement Group reported in May 1988 that difficulties in systems integration, potential software development problems, weight growth, and avionics uncertainties are likely to increasethe LH’Scosts. Program officials agree that the cost of avionics, software, and integration are areas in which costs are uncer- tain However, the officials believe the risk reduction efforts, including the current demonstration and validation phase, have been adequate to identify the areas of uncertainty and validate the Army’s estimates. Program officials believe the $7.5 million (fiscal year 1988 dollars) unit flyaway cost goal is achievable becauseboth contractor teams have the flexibility to reduce or tradeoff system capabilities to meet the goal. For example, the triple redundant navigation system and someballistic pro- tection have been eliminated to reduce cost. Program officials also said that the reliability of cost estimates for LHis improving becausesomeestimates are being derived from engineering information rather than modeling or parametric data, which was done previously. The program office is currently revising the baseline cost estimate to prepare for the full-scale development decision, Page 21 GAO/NSIALHO-169 Defense Acquisition Programs Scheduledelays could also increase costs.For example, if either DODor the Congressdetermine that it is not possible to fund the procurement of 216 LHSper year, as the Army is planning, scheduledelays will occur. A reduction of the annual production rate would increasetotal program costs if the total procurement quantity remains at 2,096. According to program officials, the LH was the primary research and development program in the Army. Nevertheless,the program remains a target for future funding cuts due to the affordability issue raised by DODand the large investment required. Funding is considered adequate to carry out LH research and development under the revised acquisition strategy. The fiscal year 1991 budget request for continued research and development is $466.1 million. However, even with no cost growth, officials concedethat currently projected annual procurement funding levels are inadequate for the planned production rate. In addition, future funding reductions are possible as a result of possible overall defensebudget reductions. Recent GAO Reports DefenseAcquisition Programs: Status of SelectedSystems(GAO/ NSIAD-90-30,Dec. 14, 1989). Light Helicopter Program: Risks Facing the Program RaiseDoubts About the Army’s Acquisition Strategy (GAO/NSIAD-89-27,Dec. 23, 1988). Page 22 GAO/NSI.AD-90-159 Defense Acquisition Programs Appendix III Niwy Program The MK-60 is an advancedlightweight torpedo intended to counter MK-50Torpedo Soviet submarine threats. It will be launched from ships and aircraft and will provide the Navy’s fleet with enhancedperformance and lethality over the MK-46 torpedo, which has been in the Navy’s inven- tory since 1961. According to the Navy, the MK-46 torpedo needsto be replaced due to improvements in Soviet submarine capabilities. No North Atlantic Treaty Organization countries are developing alterna- tives to meet this requirement. The MK-60 program is closeto the end of its full-scale development phase and has been in limited production since March 1989. As of December31, 1989, the MK-50’s total development, procurement, and military construction cost was estimated to be almost $7.3 billion (esca- lated dollars). After an initial operational test and evaluation period identified per- formance problems, the Navy restructured the MK-50 full-scale develop- ment program in 1987 and revised its cost, schedule,and performance estimates. According to program officials, the development of the MK-50 is currently proceeding well, and only minor changesare anticipated. The Navy completed initial operational test and evaluation in November 1988. The Navy awarded limited-rate production contracts to Honey- well, Incorporated, in October 1988 and to WestinghouseCorporation in December1988. Initial torpedo deliveries are expected in the summer of 1990. The Navy plans to decide whether to enter full-rate production in April 1991. Background The MK-60 system consists of a torpedo and automatic test equipment, Figure III. 1 shows the torpedo and its major subsystems. Page 23 GAO/NSIAD-90-159 Defense Acquisition Programs Appendix III Navy Program Figure 111.1:MK-50 Torpedo Propulsion System (Stored Chemical Energy Propulsion System) Exercise Subsystem/ The MK-60 torpedo includes a command and control system for gui- dance and speedcontrol, a stored chemical energy propulsion system for power (electrical and thrust), a sonar for target search and acquisition, and either a warhead or an exercise section for testing. The exercise sec- tion includes recording instrumentation and a buoyancy system to facili- tate recovery after in-water exercises.The torpedo also includes air- launch accessories,such as a parachute. Page 24 GAO/NSIAD-99-169 Defense Acquisition Programs Appendix ill Navy Program The MK-50 is designedto be launched from ships and fixed- and rotary- wing antisubmarine warfare aircraft. The MK-50 is a fire-and-forget weapon; that is, once launched, it independently searches,locates and attacks its target. The MK-50’s concept development began in 1975. DOD approved advanced development of the torpedo in 1979, full-scale development in 1984, and limited production in March 1989. The MK-50 full-scale devel- opment contract with Honeywell is a cost-plus-incentive-feecontract with a fixed ceiling price and is structured to reduce cost risk to the government. Full-rate production will be competitive, using a leader-fol- lower acquisition strategy with WestinghouseCorporation as the follower. Requirements Improvements in Soviet submarine design and performance (speed,hull strength, maneuverability, depth, smaller acoustic target size, and lower radiated noise) and in countermeasurecapability necessitatean advanced antisubmarine warfare torpedo. According to the Navy, the MK-50 is the only conventional air- and surface-launched antisubmarine warfare weapon capable of countering the newer Soviet submarines. DOD anticipates that the MK-50 will meet or surpass North Atlantic Treaty Organization requirements for a lightweight torpedo for the 1990 and beyond time frame. In April 1974 the Navy established an operational requirement for an advanced lightweight acoustic homing torpedo capable of defeating the post-1985 Soviet submarine threat. In 1984 DOD revalidated the MK-50 requirement when it authorized full-scale development. The Defense Intelligence Agency validated the August 1987 System Threat Assess- ment Report on Antisubmarine Warfare WeaponsSystems,which included an assessmentof the MK-50, for use in threat analysis sup porting DefenseAcquisition Board milestone decisions. Schedule The Navy originally planned to complete operational test and evaluation in July 1988. However, in 1987 the schedulewas extended, and a new target date for completing operational test and evaluation was set for July 1990. In addition, the target date for ending full-scale development and beginning full-rate production was set for January 1991. The Navy cited initial test failures, hardware and software development problems, contractor managementproblems, and funding reductions as causesfor the schedule slippage. Sincethe program was restructured, the target Page 25 GAO/NSIAD-99-159 Defense Acquisition Programs Appendix Ill Navy Program date for completion of operational testing and full-scale development has again slipped and been reset for December1990. The Navy deputy project manager said that congressionalbudget reductions have caused the full-rate production decision to be delayed until April 1991. Table III.1 shows the changesin the MK-50’s schedulesince late 1985. Table 111.1:MK-50 Program Schedules Event Dec. 1985 Dec. 1987 Dec. 1989 Demonstration and validation decision July 1979 July 1979 July 1979 Full-scale development decision Jan. 1984 Jan. 1984 Jan. 1984 Critical design review June 1986 May 1988 May 1988 Complete initial operational test and evaluation Sept. 1986 Sept. 1988 Nov. 1988 Initial production decision Dec. 1986 Feb. 1989 Mar. 1969 Complete operational evaluation July 1988 July 1990 Dec. 1990 Full-rate oroduction decision Oct. 1988 Jan. 1991 Aor. 1991 The MK-50 deputy program manager assessedthe restructured pro- gram’s schedule risk as low. According to the MK-50 acquisition plan, cost-sharing provisions of the renegotiated contract provide an incentive for Honeywell to meet the current schedule.The deputy program man- ager said that only minor development tests remain. According to pro- gram officials, the major factor that could further delay completion of operational testing is the availability of Navy ships for testing. According to Navy officials, the restructured program, unlike earlier program schedules,has low to moderate risk. They stated that moderate concurrency between full-scale development and initial production exists primarily to achieve the earliest possible fleet deliveries. How- ever, only 4 months has been allotted between the end of operational testing and evaluation and the start of full-rate production to solve unexpected problems without extending the schedule. According to the Navy, the acquisition strategy controls the risks of con- currency through selectedmanagementreviews and decision points before both initial and full-rate production begin. The strategy includes a critical in-design review, the use of prototype torpedoes and fleet test equipment in development, and an operational evaluation conducted against operational submarines and in realistic scenarios.The program office informed us that all necessarychangesto the torpedo design iden- tified during the full-scale development phase will also be implemented Page 26 GAO/NSl.ADW-169 Defense Acquisition Programs Appendix III Navy Program into the production units. If production units have already been deliv- ered, then a retrofit will be ordered. The program office also stated that all test torpedoes are representative of production units. Performance The program office currently estimates that the MK-60 torpedo will achieve all technical and operational performance characteristic thresh- olds. The torpedo warhead, propulsion system, and tactical logic are consideredsignificant technical advances.For example, the torpedo employs a unique advanced stored chemical energy propulsion system with an extremely high-energy density. A pump jet propulsor drives the torpedo through the water. This design enablesthe torpedo to achieve high speedsregardlessof depth, is quieter than an open-cycleengine, and produces little wake. Technical risk is consideredlow becausemost critical technical challengeshave been proven on advanced development and prototype torpedoes. The first successfulin-water test of a full-scale development prototype torpedo occurred on July 30, 1986. The Navy originally attempted a con- current development and initial operational test phase beginning in October 1986. However, in April 1987 the initial operational test phase was suspendedbecausethe MK-50 was decertified by Navy’s program office. Development tests continued, and on August 29,1988, initial operational testing resumed and continued through November 1988. The Navy’s Operational Test and Evaluation Force concluded in December 1988 that the MK-60 torpedo was potentially operationally effective and suitable. These findings supported the Navy’s initial production decision (milestone IIIA) in March 1989. Between July 1986 and March 1990, 262 in-water full-scale development tests were made. The Navy plans to commenceoperational test and eval- uation in mid-1990; the results will be used to support the anticipated full-rate production decision scheduledfor April 1991. Page 27 GAO/NSIAD-90-159 Defense Acquisition Programs Appendix JII Navy Prosram cost Table III.2 shows the MK-SO’scost growth over the past 2 years. Table 111.2:MK-50 Coat Estimates Escalated dollars in millions Fundina cateaory Dec. 1987 Dec. 1989 Development $1,432-l $1,472.3 Procurement 5202.1 5,783.0 Militarv construction 12.3 35.9 Total 96,046.5 $7,291.2 The development cost increase resulted from Honeywell’s revised esti- mated target price of $698 million, which was about $60 million more than the 1987 target price. The revised ceiling price is now $730 million. The development cost increase was causedprimarily by problems with building the MK-60 automated testing equipment, late hardware deliv- eries, and in finalizing technical issues.The procurement cost increase was causedby scheduleslippages in the early portion of the procure- ment program, resulting in increased quantities to be procured in the later years of the program, at escalatedprices. The military construction cost increasewas largely due to the addition of an intermediate mainte- nance activity for the MK-60 at Charleston, South Carolina. Recent GAO Reports WD Acquisition Programs: Status of SelectedSystems(GAO/NSIAD- 88-160, June 30, 1988). Observationson the Advanced Lightweight Torpedo MK-60 Program Aug.30, 1984). (GAO/NSIAD-84-28, Page 28 GAO/NSIAD-90-169 Defense Acquisition Programs Appendix IV Air Force Programs Sensor Fuzed Weapon The SensorFuzed Weapon(SFW) is a cluster-type weapon designedto provide a multiple kill per aircraft pass capability and operate in the day or night and in all weather conditions. The Air Force is developing the SFWto attack enemy armored vehicle formations. The SFW program has experienced significant technical problems since full-scale development began in late 1986, including numerous test fail- ures, which resulted in scheduleslippages and cost increases.Conse- quently, the program was restructured in 1986 and in 1989. The latest restructuring causedcoststo increaseover $600 million-about one-half of which was due to the use of higher inflation indexes-and major milestones to slip by 16 to 18 months. The Air Force estimated that as of February 1990 the cost to procure 19,968 srws will be about $3.7 billion in escalateddollars. A decision on low-rate initial production is antici- pated in September 1991. Becausethe program was recently restructured, it is too early to assess whether schedulemilestones will be met. Test hardware deliveries were somewhat behind schedule, and several tests had been delayed for short periods. However, SFW development testing is expected to continue until December1990, and operational testing is scheduledto start in July 1990 and end in October 1991. Although there are no indications at this time that the srw will not meet its established performance require- ments, the Air Force cannot be certain that it will meet its requirements until more testing is performed. Background The SFW will consist of a tactical munitions dispenser containing 10 sub- munitions. Each submunition contains four individual projectiles, or warheads. The delivery aircraft will launch the dispenser once it reachesthe target area. At a preset time or altitude, the dispenser will releasethe sub- munitions. Parachutes will deploy from the submunitions to stabilize their descent.At a predetermined distance from the ground, a rocket motor fires to elevate and spin the submunition to dispensethe projec- tiles. An infrared sensorin each of the projectiles scansthe target area, and once the sensor detects the heat of a vehicle, the projectile will fire an armor-piercing penetrator into the target. Figure IV. 1 illustrates the SFW and its operational sequence. Page 29 GAO/NSLAD-90-159 Defense Acquisition Programs , Appendix Iv Ah Force Programs Figure IV-l: SFW Deployment Events Skin Opens Bays Deploy B Main Chute ,e D Target Detection and Warhead Firing Rocket Motor o$’ Ignition \’ The SFWcan be launched from several aircraft, including the F-16E, F-16, A-10, F-l 11, and several allied nations’ aircraft. It will not replace any existing weapon system. Requirements The Air Force established a requirement for a wide-area anti-armor weapon in the late 1970s.A 1978 Air Force General Operational Requirement document and a 1979 Air Force Mission Element Need Statement established requirements for the SFW. In May 1987 the Air Force Center for Studies and Analyses prepared an analysis to determine whether the SFWis a cost-effective weapon for attacking second-echelon,enemy armored formations. The analysis com- pared the SFWwith the Maverick missile, Combined Effects Munition, Page 30 GAO/NSIAMKb159 Defense Acquisition Programs Appendix IV Air Force Program and 30-millimeter gun and concluded that the SFWwould be considerably more effective against enemy armor formations. In May 1989 the Air Force approved a System Operational Require- ments document for the SFW.The document amplified and refined the basic requirements documents and explained how the proposed system will be operated. Schedule In November 1986 the Air Force awarded a fixed-price incentive fee contract for SFWfull-scale development to Textron DefenseSystems. Becauseof cost and scheduleproblems, the Air Force restructured the SFWprogram in June 1986 and established a program cost and schedule baseline. Between June 1986 and April 1989, scheduleslippages and test failures forced the Air Force to temporarily suspendcontractor testing and to begin a restructuring of the program a secondtime. In March 1989 the Air Force conveneda group of government and industrial leaders in infrared technology to assessthe SFW’S design. The group concluded that the design was sound. In April 1989 the Air Force contracting officer notified Textron that development performance was not satisfactory and that the Air Force would consider terminating the contract for default if the situation were not remedied within 60 days. Among other things, the contracting officer’s letter cited consistent test failures and consistently under- achieved schedulesas reasonsfor the Air Force’s concerns.Textron’s initial responsewas rejected by the Air Force becauseit did not provide a comprehensiveplan of actions, initiatives, and commitments neededto put the program back on track. Textron revised its plan of action to addressthe problems and, on June 19,1989, the Air Force acceptedTex- tron’s plan. The restructured SFWprogram included additional testing to define per- formance margins better and a multistage improvement program to address future changesin the threat. In addition, the testing, production start, and secondsource qualification scheduleswere changedto reflect more realistic program goals. For example, the program manager decided it was inappropriate to accept proposals for the secondsource qualification contract until after the September 1991 low-rate initial production (milestone IIIA) decision, Therefore, the secondsource quali- fication contract will not be awarded until February 1992, or 2 months after the expected award of the initial production contract. Page 31 GAO/NSIAD9O~159 Defense Acquisition Programs Appendix IV Air Force Programs The program manager stated that most operational testing will be com- pleted before the low-rate initial production decision in September 1991. He also stated that the tests added to the restructured program will be completed before the initial production decision. The restructured program was approved by the Air Force in November 1989 and approved by the Under Secretary of Defensefor Acquisition in April 1990. Table IV.1 comparesthe June 1986 scheduleto the February 1990 restructured schedule. Table IV.1: SFW Program Schedules June 1986 Feb. 1990 Delay Event schedule schedule (months) Full-scale development contract award Nov. 1985 Nov. 1985 0 Critical design review July 1987 Aug. 1989 25 Start government development tests Mar. 1988 Dec. 1988 9 Initial production decision Nov. 1988 Sept. 1991 34 Production contract award Dec. 1988 Dec. 1991 36 First delivery to inventory July 1990 Dec. 1993 41 The restructuring resulted in slipping the dates for testing and qualifica- tion of a secondsource for the production program. Table IV.2 compares someevents before and after the program restructured in 1989. Table IV.2: SFW Program Schedule Changes Due to 1989 Restructuring Schedule before Schesi: Delay Event restructuring restructuring (months) Complete Air Force development test and evaluation Aug. 1989 Dec. 1990 16 Complete initial operational test and evaluation Apr. 1990 Oct. 1991 18 ComDlete second source aualification Oct. 1992 Mar. 1994 17 We reviewed the status of the program schedule after it was restruc- tured and noted that one development test was delayed in December 1989 and two development tests were delayed in January 1990 because hardware was not available for testing. A test official from the SFWpro- gram stated, however, that he believes there is enough time to recover from these delays and the development test program can be back on schedule within 2 months. Page 32 GAO/NSLAD99-169 Defense Acquisition Programs Appendix Iv Air Force Programa As of February 1990, the SFWprogram manager’s assessedthe pro- gram’s schedule as “yellow”6 becausefunding constraints in the Presi- dent’s fiscal year 1991 budget will causethe initial operational capability date to slip 4 months. The slippage was incorporated in the baseline scheduleapproved by the Under Secretary of Defensefor Acquisition in April 1990. Performance Since the program was restructured in 1989, much of the testing has been done in a somewhat controlled environment to determine whether problems revealed in earlier testing had been corrected. The SFW pro- gram manager believes that recent development testing has been suc- cessful and that solutions to earlier technical problems have been identified, fixed, and successfully retested. Nevertheless,sufficient testing has not yet been completed to demonstrate that the SFW will meet its established performance requirements. At this time, however, there are no indications that the SFWwill not meet any of its performance parameters. Subsystemtests conducted by Textron in 1988 and early 1989 revealed a number of technical problems. For example, multiple submunition drop tests conducted during 1988 showed that the detonation of one of the SFW projectiles or warheads could causethe premature detonation of nearby warheads, a phenomenonknown as “sympathetic firing.” Tex- tron made design changesto correct the problem and successfully con- ducted additional tests using single warheads. However, a multiple submunition test in February 1989 showed that the problem was not resolved. The Air Force formed a team consisting of officials from both government and industry to conduct an independent technical review and determine the causeof the February 1989 test failure, The team concluded that the likely causeof the failure was that the projectiles’ infrared sensorsand the processorcircuit were oversensitive. Textron changedthe sensor’ssensitivity, and a repeat test was successfully con- ducted in July 1989. In addition, the first two development tests conducted by the Air Force were unsuccessful.These tests were intended to demonstrate proper separation of the tactical munitions dispenser from the aircraft and the releaseof inert submunitions from the dispenser.In two development “A “yellow” rating means that significant potential exists for a program not meeting its performance parameters, cost thresholds, or schedule milestones. Page 33 GAO/NSIAD-SO-169 Defense Acquisition Programs Appendix IV Air Force Programs tests conducted in July 1989, all 10 submunitions were successfully ejected and all parachutes deployed properly. To reduce technical risk and validate potential solutions to identified problems, the program office added four seriesof tests. For example, instrumentation was added to SFWwarheads so that more complete test data could be collected. In addition, a series of captive carry tests of the SW sensorwas added to collect more data on the sensor’sreaction to countermeasuresand various operational environments. The additional testing is to be completed in August 1990 and is expected to provide the confidence neededto proceed with the development test and evaluation effort and the initial operational test and evaluation. Since testing was resumed in July 1989, 13 development tests have been conducted, all of which were consideredsuccessful.Someproblems occurred in the testing, but according to the program manager, the tests have demonstrated that the problems that led to restructuring the pro- gram have been resolved. The Air Force plans to complete development test and evaluation of the SFWin December1990. Also, initial operational test and evaluation is not scheduledto start until July 1990. Until additional development and operational testing is performed, the Air Force cannot make an accurate assessmentof whether the SFWwill meet established performance requirements. cost The SFW’S estimated total acquisition cost increasedby about $1.6 billion (escalated dollars) since the June 1986 baseline cost estimate, primarily due to an increase of 6,874 units to be procured, from 14,084to 19,968. Between the February 1989 and February 1990 estimates, the program was restructured, and the estimated total acquisition cost increased by $668 million from about $3.2 billion to $3.9 billion. The increasewas attributed to added research and development costs due to added testing, a delayed production start, delaying procurement of weapons to later in the production cycle, and higher inflation indexes. About one- half the increase or $333 million was attributed to the higher inflation indexes. Table IV.3 shows the changesin the cost estimate. Page 34 GAO/NSLAD-90-169 Defense Acquisition Programs Appendix IV Air Force Programs Table IV.3: SFW Coat Eetimatss Escalated dollars in millions Cateaorv June 1988 Feb. 1989 Feb. 1990 DeveloDment $128 $180 $201 Procurement 2,278 3,031 3,678 Total $2,408 $3,211 $3,873 Quantity 14,084 19,900 19,958 Unit cost $0.171 $0.161 $0.194 As of February 1990, the program manager’s assessmentof cost per- formance was “yellow” becausethe prime contractor had exceededthe ceiling price of the development contract. The President’s fiscal year 1991 budget request doesnot include procurement funds for the SFW program in fiscal year 1991. The Air Force plans to make the low-rate initial production decision in September 1991 and award a production contract in December1991 if fiscal year 1992 procurement funding is approved. Recent GAO Reports DefenseAcquisition Programs: Status of SelectedSystems (GAO/ NSIAD-90-30,Dec. 14, 1989). DODAcquisition Programs: Status of SelectedSystems(GAO/NSIAD 88-160, June 30, 1988). The Advanced Tactical Fighter (ATF) is being developed to meet the Air Advanced Tactical Force’s air superiority requirements in the mid-1990s and beyond. The Fighter ATF program is in the demonstration and validation phase, and flight tests of two competing prototype aircraft are scheduledto begin in May and June 1990. Oneof the prototypes will be selectedin April 1991, and a decision whether to begin full-scale development is scheduled for June 1991, Program acquisition costs for 760 aircraft are estimated by the Air Force at $79.4 billion in escalateddollars. The ATF development plan incorporates technological advancesin design, materials, propulsion, and electronics to provide an advanced aircraft system superior to any Soviet system currently projected. The Air Force has defined broad performance goals, a cost and weight goal, and a program schedule.During the demonstration and validation phase, the program manager intends to assessthe likely benefits and Page 35 GAO/NSLAD-99-169 Defense Acquieition Programs Appendix IV Air Force Programs costs of incorporating these new technologies and plans to make the nec- essary trade-offs to maintain the cost, weight, and performance goals of the program. As of February 1990, about 70 percent of the demonstration and valida- tion phase had been completed; somecritical cost and performance trade-off decisionsand system demonstrations still need to be com- pleted. The ATF'S design and system specifications are subject to change, and the Air Force will not assessthe ATF'Sperformance capabilities for full-scale development until the required cost and trade-off studies, engineering analyses,component tests, and prototype demonstrations have been completed. Nevertheless,the Air Force has been directed by the DefenseAcquisition Board to submit the specific radar cross section, supersonic cruise, maneuver, mission radius, and integrated avionics capabilities to be achieved during full-scale development before the evaluations are completed. Background The ATF is being developed as a follow-on to the F-15 in the air superi- ority role. It is expected to have new and expanded capabilities, including the ability to cruise at supersonic speedsover long distances with greater maneuverability, longer range, lower detectability, and better reliability and maintainability than any existing fighter aircraft. The ATF is to be a single-seat,twin-engine fighter armed with AIM-120A Advanced Medium RangeAir-to-Air Missiles, AIM-9 Sidewinder missiles, and a %O-millimetergun. It is expected to be able to fight in all types of weather, in the day or night, over land or sea, and at ranges greater than current fighter aircraft. The ATF design concept includes use of stealth technology, advancedmaterials, new enginescapable of propelling the aircraft at supersonic speedswithout afterburner, and an advanced, highly integrated avionics system capable of detecting, identifying, and engagingthe enemy at ranges beyond the pilot’s vision. At the direction of the Congress,the Navy is evaluating the ATF as a possible replacement for the F-14 fighter aircraft. In June 1987 the Navy established a tentative operational requirement for a variant of the ATF that must have a stronger structure and excellent low-speed flying qualities compatible with Navy carrier operations. The Navy will participate in the Air Force’s source selection decision for full-scale development by evaluating proposed designsof a Navy variant of the ATF to be submitted by both contractor teams participating in the pro- gram. The Navy estimated that acquiring a variant of the ATF could save Page 36 GAO/NSIAWM-159 Defense Acquisition Programs Appendix N Air Force Programs $9.9 billion-$4.9 billion in development costs and $6 billion in procure- ment costs-over a separate aircraft development and procurement program. Requirements The ATF program is the Air Force’s highest priority tactical research and development program. The Air Force’s Tactical Air Command,the pri- mary user of the ATF, believes that the ATF is neededto replace the F-15, which will be near the end of its useful life by the year 2000. The F-16 is the only dedicated Air Force air superiority fighter, but more than half will be over 22 years old by the year 2000. In addition, some DODoffi- cials believe that the ATF'Spromised technological capabilities are cur- rently neededto counter the growing effectiveness of fighter and ground threat systems located in the Soviet Union and other Warsaw Pact countries and third world nations. DODinitially recognizedthe need for an ATF in November 1981 and reaf- firmed the need in an October 1986 milestone I decision, which author- ized the program to begin the demonstration and validation phase. The next major DODreview of the program is the milestone II decision, which authorizes the start of full-scale development, scheduledfor June 1991. Before the recent changesin Eastern Europe, an Air Force analysis of the threat indicated a need for an air superiority fighter with advanced technologies and superior capabilities to counter the numerical advan- tage of Soviet and other Warsaw Pact forces and the emergenceof Soviet aircraft with capabilities equivalent to current U.S. fighters. Figure IV.2 shows how the ATF is expected to be used in offensive counterair missions. Page 37 GAO/NSIAD-99-169 Defense Acquisition Programs Appendix N Air Force Pmlprune Figure IV.2: ATF’s Projected Role in Offensive Counterair Missions l Defeat Projected Air Threats ssfully Penetrate Threat Defenses Projected for the Year 2000 mproved Soviet Surface- l Increase o-Air Missiles Leverage of Main Operating Base Ground Attack SA-10 SA-13 and Dispewed Base Aircraft SA-11 SA-14 Operations SA-12 SA-15 Page 38 GAO/NSIAIMO-159 Defense Acquisition Programs Appendix Iv AlrForceRograms Air Force-sponsoredanalyses have also examined the need for air supe- riority and alternatives to achieve it, such as using ground-basedair defensesystems and/or upgrading existing fighter aircraft with many of the technologiesplanned for the ATF. The analyses not only affirmed the need for an advanced air superiority fighter but also concluded that both ground-basedand airborne systems were essential and complemen- tary in the air defensemission. The analyses showed that airborne fighters have greater mobility and flexibility to cover defensive gaps than other air defensesystems and that they augment ground-basedair defenseforces such as the Patriot and Hawk missile systems. Unlike rel- atively fixed ground-baseddefenses,airborne fighters can be deployed over large distances in short periods of time. The analyses also indicated that fighters would destroy more enemy aircraft than ground-basedair defensesystems. The Air Force also examined the effectiveness of modifying or enhancing versions of current fighter aircraft for airborne air defense as well as producing a lower cost variant of the ATF. Modifying current fighters would make them more effective, but the improvements would be marginal compared to the ATF'Sexpected capabilities. Also, their survivability would be lower than the ATF'S,thus requiring a greater number of modified fighters to ensure air superiority in the mid-1990s and beyond. Regarding a lower cost ATF variant, many of the current ATF'Sexpected capabilities were retained while other key capabilities were degraded in an effort to contain cost. According to DefenseIntelligence Agency officials, recent intelligence assessmentsof the political changesoccurring in the Warsaw Pact coun- tries indicated that even though the number of Soviet forces are decreasing,the capabilities of the remaining Soviet forces will continue to be a formidable threat. New fighter aircraft continue to enter the inventory, and other military equipment continue to be modernized. In addition, the spread of high-technology weapons to many other coun- tries presents a new and more sophisticated global threat to U.S. forces. In December 1989 the Secretary of Defenseinitiated a review of the ATF and three other major aircraft programs to reexamine the need for these aircraft. This review included an assessmentof (1) neededATF capabili- ties that current aircraft do not provide, (2) the extent to which the ATF will provide the neededcapabilities, and (3) ATF fiscal and acquisition strategy considerations, including cost, schedule,and performance. Page 39 GAO/NSlADSO-159 Defense Acquisition Programs Appendix IV Air Force Programs On April 26,1990, the Secretary announcedthat the review found that the ATF is the most effective aircraft for the air superiority mission. Therefore, the Secretary decided to maintain the ATF force level objec- tive at 760 aircraft at least until another review of the total force struc- ture is completed. However, the Secretary proposed delaying the initial procurement of ATF for 2 years to fiscal year 1996 and a lower peak annual production rate. The delay is expected to reduce the concurrency between development and production and facilitate orderly testing of the aircraft. However, the delay would also postpone the procurement of the Navy variant of the ATF by 2 years and reduce the number of aircraft from 618 to 546. Schedule The Air Force revised the ATF'S acquisition program in 1986 in response to a recommendation by President Reagan’s1986 Blue Ribbon Commis- sion on DefenseManagementthat a high priority be placed on building and testing prototype systems to demonstrate that new technology can substantially improve military capability. The revised program added the demonstration of prototypes before the selection of the ATF'S design for full-scale development. The schedule for completing demonstration and validation and the beginning of full-scale development remained basically unchanged from 1986 until January 1990. However, in January 1990 the schedule was extended by 6 months to June 1991 to reduce the risks associatedwith entering full-scale development. In addition, the first flight of prototype aircraft slipped from October 1989 through March 1990 to May through June 1990. Table IV.4 compares the ATF'S 1986 schedule with the Jan- uary 1990 schedule. Page 40 GAO/NSIAD-90-159 Defense Acquisition Programs -. Appendix IV AirForcePrqrme Change Event 1986 Schedule 1990 Schedule (months) First flight of prototypes Between Oct. 1989 Between Ma and Mar. 1990 andJune ii 0 7 Full-scale development decision Nov. 1990 June 1991 19 aircraft) (9 aircraft) 7 Start development test and evaluation with full-scale development aircraft Nov. 1992 June 1994 19 First production lot contract Nov. 1992 Jan. 1994a award (18 aircraft) (4 aircraft) 14 Low-rate initial production decision Nov. 1992 Dec. 1994 25 Second production lot contract Nov. 1993 Jan. 1995 award (36 aircraft) (8 aircraft) 14 First flight of full-scale development aircraft with full avionics June 1994 Mid-1995 About 12 Third production lot contract Nov. 1994 Jan. 1996 award (48 aircraft) (16 aircraft) 14 Start initial operational test and evaluation June 1995 After Jan. 1996 At least 7 Delivery of first production aircraft Dec. 1994 Jan. 1996 13 High-rate production decision Nov. 1995 Dec. 1997 25 aThe aircraft will be used in initial operational test and evaluation. Although the January 1990 scheduleprovides for someconcurrent development and production, it reducesthe risk associatedwith concur- rency by committing only one lot of four aircraft to production before the first flight test of a full-scale development aircraft in June 1994. In contrast, the 1986 schedule committed 18 aircraft to production at the sametime as the first full-scale development flight test. The four pro- duction aircraft are scheduledto be on contract 6 months before the first flight test. Further, even though they are funded with production funds, the aircraft will be used for initial operational test and evaluation and are not intended for the ATF operational inventory. The January 1990 schedule also lowers the risk associatedwith concur- rency by committing only 12 aircraft to production before the first flight test of a full-scale development aircraft with a complete avionics suite, whereas the 1986 schedule committed a total of 64 aircraft to produc- tion before that event. Page 41 GAO/NSIAD-99-159 Defense Acquisition Prom . Appendix IV Air Force Programa Performance As of March 1990, the approved baseline for the ATF contained only technical characteristic “goals” for the system. Specific characteristics and performance thresholds will not be established until the system specification for full-scale development is written at the end of the dem- onstration and validation phase. Only limited testing of the aircraft sys- tems has been done to date, and initial operational test and evaluation of the ATF will not begin until full-scale development. Two competing contractor teams are each fabricating two prototype air- craft, and two competing engine contractors are each fabricating and testing prototype engines.Both engineswill be flight tested by each air- frame contractor team. As of February 1990, the aircraft contractor teams were approaching final assembly and completion of structural testing of their prototype aircraft. The flying prototypes will be the initial test resource for dem- onstrating the aerodynamic performance, flying and handling qualities, supersonic cruise speed,and engine compatibility with the airframe. Through February 1990 the engine contractors have tested engine com- ponents and full-scale enginesat sea level and simulated altitude condi- tions. They have accumulated a combined total of about 2,600 hours of ground testing to prepare for flight testing in the prototype aircraft. Both contractors’ enginesare to be cleared for flight by July 1990. The primary resourcesfor testing avionics during the demonstration and validation phase are avionics ground prototypes being built by both aircraft contractor teams and avionics prototypes to be flown in com- mercial-type aircraft. The avionics system architecture, system software, integration of functions, modular packaging, cooling, built-in test, and diagnostic functions of each contractor’s design are currently being tested through a seriesof avionics ground prototype demonstra- tions scheduledto end about late August 1990. The avionics prototypes to be flown in commercial-type aircraft are to confirm the ground dem- onstrations and further test the avionics sensorsand apertures, such as the radar, infrared search and track set, and electronic countermea- sures. Only limited avionics will be available for testing in the prototype aircraft. As of February 1990, both contractors successfully accomplishedlim- ited ground prototype demonstrations of modular integration architec- ture, large portions of Ada language software, radar, infrared search Page 42 GAO/NSLAD-90-159 Defense Acquisition Program Appendix IV Air Force Programs and track, communications, navigation, and electronic warfare functions. cost As of February 1990, the ATF'Stotal acquisition cost was estimated at $79.4 billion in escalateddollars. This estimate included $14.3 billion for the research and development: $3.8 billion for early development and $10.6 billion for full-scale development. The $79.4 billion estimate also included the cost to procure 750 aircraft estimated at $66.1 billion. The $79.4 billion estimate is $12.3 billion more than the May 1989 esti- mate of $67.1 billion. An ATF program cost official attributed the increase to inflation. The official explained that the increase was caused by a combination of using higher inflation rates in the current estimate, the 6-month extension of demonstration and validation, and the reduc- tion of the number of aircraft to be produced in the earlier years of pro- duction, when inflation is lower. The estimate for the early development included the cost of the g-month extension. This estimate should not change significantly, since it is cov- ered by fixed-price contracts. No contracts have been awarded for full- scale development and production; the cost estimates for these phases were constructed using both analogousand parametric estimating meth- odologies.Both methods are appropriate to use for a program in early development, such as the ATF. However, as actual cost and engineering data becomeavailable from producing the prototype articles and the configuration becomesdefined, the Air Force anticipates that an esti- mate with a greater level of confidence will becomeavailable. The Air Force is using a $36 million (1986 base-yeardollars) unit fly- away goal to maintain cost discipline in the program. Table IV.6 shows that the most recent estimate of unit flyaway is $37.2 million (1986 base-yeardollars), $2.2 million per unit over the goal. (In then-year dol- lars, the unit flyaway cost is estimated at $67.6 million.) Reducing the estimated unit flyaway cost to attain the $36 million goal and achieving the desired ATF performance characteristics will be a challenge for the Air Force and the contractors. Page 43 GAO/NSIAD-90-159 Defense Acquisition Programs Appendix N Air Force Programs Table IV.5: ATF Cost Estimates as of February 1990 Dollars in millions Ba-@-i$; Thy;y;; Category Research and development $10,846.2 $14,351.6 Production 35809.5 65082.2 Total $46.655.7 $79.433.8 Unit flyaway cost $37.2 $67.6 Program unit Costa $61.5 $104.7 aProgram unit cost is the sum of development and production cost divided by the number of develop- ment and production aircraft. Recent GAO Reports Aircraft Development: Navy’s Participation in Air Force’s Advanced Tactical Fighter Program (GAO/NSIAD-90-64,Mar. 7, 1990). DefenseAcquisition Programs: Status of SelectedSystems(GAO/ NSIAD-90-30,Dec. 14, 1989). Aircraft Development: The Advanced Tactical Fighter’s Costs,Schedule, and Performance Goals (GAO/NSIAD-88-76,Jan. 13, 1988). DODAcquisition: CaseStudy of the Air Force Advanced Tactical Fighter Program (GAO/NSIAD-86-46S-12, Aug. 26, 1986). The Joint Tactical Information Distribution System (JTIDS) is a secure, Joint Tactical jam-resistant, digital information link for conventional forces. In 1976 Information the Office of the Secretary of Defenseassignedthe Air Force as the lead Distribution System service in developing JTIDSterminals. The Air Force, along with the Army, Navy, and Marine Corps, intended to incorporate JTIDSinto air- Class 2 Terminal borne, shipboard, and ground command and control centers, as well as fighter aircraft. However, the Air Force has changedits original plan and now expects to use JTIDSon only 20 of its F-16 fighter aircraft. DODdesignated the first generation of JTIDSas the Class 1 terminal, but the volume and weight of the terminals made them unsuitable for use in fighter aircraft and Army situations requiring mobility. Therefore, in the late 197Os,the JTIDSJoint Program Office began to develop a smaller terminal, designated Class 2, that was to satisfy the needsof all the ser- vices. As development progressed,however, two terminals emerged,the Class 2 and 2H. These terminals were essentially similar but the Class 2H has a high-power amplifier for greater range. In the mid-1980s the Page 44 GAO/NSIAD-90-159 Defense Acquisition Programs . Appendix IV Air Force Programs Army changedits requirements, resulting in the need for an even smaller, lighter terminal; this new terminal was designatedthe Class 2M. The redesign neededfor the Class 2M terminal was extensive enough to warrant a separate development track and separate production approval from the DefenseAcquisition Board. Although the Class 2 terminal is currently below its required laboratory and field reliability requirements, as measured by mean time between failures, it has achieved at least the threshold values for other perform- ance requirements established by the 1981 Secretary of DefenseDeci- sion Memorandum. Nevertheless,in October 1989 the Under Secretary of Defensefor Acquisition approved low-rate initial production for the JTIDSClass 2 and 2H terminals. However, approval of low-rate initial production for the Army Class 2M terminal is currently scheduled for October 1991. The Under Secretary has segmentedClass 2 and 2H low- rate production into three consecutive annual production lots, and the program office awarded the first Class 2 and 2H production contract in March 1990. However, the Under Secretary has identified specific cri- teria, such as reliability improvements, that must be satisfied before the secondand third production contracts can be awarded. The services and DODare sharing the $2 billion cost of developing the JTIDSClass 2 terminal. The program office estimates that development will continue through 1995. The services will purchase production ter- minals with their own funds. As of February 1990, total program costs through production are estimated at about $3.9 billion. Background Commandersat all levels require timely information to employ their forces and make real-time assessmentsduring fast-moving, complex combat operations. Combat experience gained in Southeast Asia, the Middle East, and Grenada exposeddeficiencies in the tactical communi- cation, navigation, and identification capabilities to support com- manders in their tactical decision-making. An information link that provides digital and voice transmissions for tactical use in combat, the JTIDShas the potential to connect scattered sourcesof surveillance and intelligence data, weapon controllers, weapon systems, and command elements. It is designedto be used for command and control among all equipped airborne, ground, and naval elements in the tactical theater. The Office of the Secretary of Defenseinitiated this multiservice pro- gram in 1975 and assignedthe Air Force to be the lead service. The first generation of JTIDSterminals was designated Class 1, but the volume and Page 46 GAO/NSIAD-90-169 Defense Acquisition Programs c Appendix IV Air Force Programs weight of the terminals made them unsuitable for use in fighter aircraft and Army situations requiring mobility. In the late 1970s the program office began to develop the smaller, Class 2 terminal, which was to sat- isfy the needsof all the services.As development progressed,however, two terminals emerged,the Class 2 and 2H. The Class 2H terminal is essentially the sameas the Class 2, except the Class 2H has a high- power amplifier for greater range. In the mid-1980s, the Army changedits requirements, resulting in the need for an even smaller, lighter terminal and this new iteration was designated the Class 2M. The program office initially hoped that this new terminal could be developed using the samedesign except the voice and tactical air navigation capabilities, which the Army considers unnecessary.The amount of redesign work neededfor the Class 2M was so extensive, however, that a separate development track was set up which will require its own DefenseAcquisition Board decision before production. JTIDSwill provide the serviceswith a common link for sharing data. Figure IV.3 shows which friendly air, sea,and ground forces are expected to use JTIDS.Both Air Force and Navy fighter aircraft will use Class 2 terminals, whereas Air Force, Navy, and Marine Corps command and control units will use Class 2H terminals. The Army will use its lighter, smaller Class 2M terminal for forward area air defensecom- mand and control units. Page 46 GAO/NSIAD-99-159 Defense Acquisition Programs . Appendix IV Air Force Programs Figure IV.3: JTIDS Urers United Kingdom Tornado United States E-3A U.S. Air Forct ~ I NATO E-3A Control and 7@&@&$& Reporting Center Adaptable 1 / c, ,.lann Intadann Terminal \ kitye Interface 3 \ n Terminal \ b U.S. Army Ground-Based Radar U.S. Marine Corps Area Air and Air Force Defense Ground Command Hate and Control Centers U.S. Air Force InterfaceTerminal Y Message Processing Center Page 47 GAO/NSIAD-99-169 Defense Acquisition Prorpams Appendix IV Air Force Programa It is unknown whether the Air Force will incorporate JTIDSon all F-16 fighters. Of the JTIDSterminals to be produced in fiscal year 1990, the Air Force will designateonly 20 for its F-16 aircraft, and the production units scheduledoesnot include the acquisition of additional terminals for the F-15. The Under Secretary of Defensefor Acquisition has given the Air Force until June 1991 to decide whether to include other F-16s in the JTIDSprogram or terminate its participation and transfer all JTIDS F-16 terminals to the Navy. The program office is employing the leader-follower acquisition strategy: the leader and follower will compete for each of the production contracts. PlesseyElectronic SystemsCorporation, the leader, is respon- sible for the design and development of the digital data processor and interface unit. Collins Government Avionics Division of Rockwell Inter- national, the follower, is responsible for the design and development of the receiver/transmitter and the high-power amplifier. However, Plesseyand Collins did not compete for the first production lot of the low-rate initial production contract. The Navy’s portion of the first production lot-37 Class 2 and 2H production terminals-will be produced by Plessey.The Air Force is also procuring 37 terminals in the first production lot-Plessey will produce 2 1 and Collins will produce the other 16 terminals. Competition will begin with the secondproduc- tion lot of the low-rate initial production contract and is expected to con- tinue through full-rate production. Requirements The 1981 Joint Chiefs of Staff operational requirement for JTIDSstated that existing communication systems lacked the capability to provide, in real time, the quantity and quality of accurate information necessaryto ensure adequate mission performance. As recently as 1989, the program office reported that current voice radios and data links could not pro- vide sufficient communication quality or volume. The program office also noted that existing Navy, Marine Corps, and Army tactical data links have limited capacity, are susceptible to jamming, and are not secure.In addition, the Air Force has no ground-to-air or air-to-air data links for its tactical fighter aircraft. For all services,information regarding the location of and actions among supporting and opposing forces, as well as the status of targets, must be made available to tactical operators through a single, more useful, and timely system. Individual capabilities will continue to be needed.How- ever, no single system or collection of systems available, other than Page 48 GAO/NE&ID-90-169 Defense Acquisition Programe Appendix IV Air Force Programa . JTIDS,can satisfy service requirements for tactical data and voice links, which provide coherent situation awareness,jam resistance,and secure communications. Schedule In October 1989 the Under Secretary of Defensefor Acquisition approved low-rate initial production for the JTIDSClass 2 and 2H termi- nals. The Army Class 2M terminal was not included in this milestone decision and its milestone IIIA decision is currently scheduled for October 1991. The Class 2 and 2H low-rate initial production is seg- mented into three consecutiveannual production lots, starting in fiscal year 1990. The program office awarded the contracts for the first pro- duction lot in March 1990. The Under Secretary has identified specific criteria that must be satisfied before contracts for secondand third lots can be awarded. Only the Air Force has completed Class 2 preproduction testing (on its F-16 aircraft). On the basis of the results of these tests, we found that the Class 2 terminal doesnot meet the reliability requirements estab- lished by the Secretary of Defensein 1981. Becausetesting aircraft are unavailable, the Class 2H terminal has not been extensively tested. The Army plans to conduct its Class 2M operational assessmentbetween March and June 1991. The Navy plans to begin technical and opera- tional evaluation testing in November 1992 and May 1993, respectively. The program office has scheduled a full-rate production decision for the Class 2M terminal in August 1993 and for the Class 2 and 2H terminals in October 1993. Table IV.6 highlights someimportant events in the pro- gram’s schedule. Page 49 GAO/NSIAD-99-169 Defense Acquisition Programe Appendix Iv Air Force Ptograma Table IV&: JTIDS Program Schedule aa of December 1989 Event Date Complete Class 2 (F-15) initial operational test and evaluation Apr. 1987 Complete Class 2M initial operational assessment June 1991a Low-rate initial oroduction decision Class 2 and 2H Oct. 1989 Class 2M Oct. 1991 Complete testing to support full-rate production decision Air Force Class 2 and 2H chase 2 multiblatform ocerational tests Acr. 1993 Navy Class 2 and 2H operational evaluation May 1993 Army Class 2M initial operational test and evaluation Apr. 1993 Full-rate oroduction decision Class 2 and 2H Oct. 1993 Class 2M Aug. 1993 Initial operational capability b Air Force Class 2 (F-l 5) Navy Class 2H Sept. 1993 Class 2M Oct. 1993 BThe milestones for the Army’s Class 2M terminal were rescheduled to coincide with the program schedule for the forward area air defense/command, control and intelligence system. The Class 2M terminal is a primary subsystem of that system. bBecause only 20 F-l!% will be equipped with JTIDS, initial operational capability is not considered to be relevant. Performance Although the Class 2 terminal is currently performing below required laboratory and field reliability specifications, as measured by mean time between failures, it has achieved thresholds set for the other perform- anceparameters established by the 1981 Secretary of DefenseDecision Memorandum, The performance parameters for the Class 2H and 2M are basically the same as for the Class 2, although the Army’s field relia- bility requirements are more stringent than requirements for the other services. Development test and evaluation and initial operational test and evalua- tion took place at Eglin Air Force Basein 1986 and 1987. The testing included an assessmentof the reliability and maintainability of the Class 2 terminal on an F-16. The terminal demonstrated only 17 hours between failures in the field, far less than the 102 hours set out in the 1981 memorandum. This low reliability led to a terminal redesign and the establishment of a Reliability Growth Plan to ensure that the first production terminals will meet or exceedthe user’s reliability require- ments and that no inherent design weaknesseswill go unaddressed.The Page 50 GAO/N&ID-90-159 Defense Acquisition Programs Appendix IV Ah Force Program plan describesthe reliability testing that must be successfully per- formed from December1989 through December1993. Testing actually started in December1989. The assumption behind this testing is that achieving laboratory reliability thresholds will ensure that field relia- bility thresholds will be met. The low-rate initial production contract for the first production lot includes an incentive for the Air Force F-16 terminals to achieve relia- bility beyond the required threshold. As a result of the reliability growth efforts to date, the demonstrated laboratory reliability, although still below the threshold of 400 hours, has increasedto 316 hours between failures. This was achieved in verification tests completed in August 1988. The increased operating hours and data collection that becomepossible as additional terminals are acquired are expected to move laboratory reliability toward its goal of 600 hours between failures. Before the October 1989 DefenseAcquisition Board’s low-rate initial production decision, an operational assessmentwas conducted, but quantitative improvements in field reliability could not be demonstrated due to a limited number of terminal operating hours (129 hours with 2 critical terminal failures). Therefore, the Air Force Operational Test and Evaluation Center could not make a statistically confident assessment beyond the 17 hours between failures previously reported. However, the Joint Test and Evaluation Master Plan summarizes the test results and states that terminal reliability has improved since initial operational test and evaluation, but it doesnot yet meet user requirements. Development test and evaluation and initial operational test and evalua- tion for terminals other than the Class 2 have not been completed as of March 30, 1990, since the F-15 was the only platform available for testing. However, additional development testing has recently been initi- ated. The Navy began flight testing the Class 2H on its E-2C Hawkeye in January 1990 and the Army began an informal engineering test at the contractor’s plant in March 1990. In addition, other test events are expected to support full-rate produc- tion decisions,including (1) the Navy’s operational evaluation, sched- uled for February through May 1993, (2) the Air Force’s phase 2 multiplatform operational test and evaluation, scheduled for March or April 1993, and (3) the Army’s initial operational test and evaluation of the forward area air defensecommand, control and intelligence system, Page 51 GAO/NSIAIMO-159 Defense Acquisition Programs Appendix IV Air Force Programs scheduled for November 1992 through April 1993. According to a pro- gram office official, the terminals should accrue enough operating hours during these tests to allow an accurate assessmentof terminal reliability before the full-rate production decisionsin 1993. The Army Class 2M terminal, currently under development, is scheduled to complete technical test and initial operational assessmentby July 1991. Before the low-rate initial production decision scheduled for October 1991, the terminal must demonstrate reliability thresholds of 400 hours between failures in the laboratory and 207 hours between failures in the field. The Class 2M terminal is scheduledto complete ini- tial operational test and evaluation, including the forward area air defense/command,control and intelligence system and multiservice operational testing, before the full-rate production decision scheduled for August 1993. Although the October 1989 Acquisition Decision Memorandum approved low-rate initial production, stating that “reliability growth dependson conducting low-rate initial production with automated production facili- ties,” the Under Secretary of Defensefor Acquisition approved low-rate production in three phasesand established criteria to be met and veri- fied by the Air Force and the Navy before the secondand third phases can begin. Before allowing the Lot 2 buy in fiscal year 1991, the Under Secretary is requiring the Air Force and the Navy Service Acquisition Executives to certify that the Class 2 fighter terminal has met its labora- tory reliability threshold of 400 hours between failures and that the Class 2H high-power amplifier has undergone a specified amount of lab- oratory reliability testing. The memorandum also requires the services to submit an updated program baseline for approval and requires the Navy to approve Navy production funding for the Class 2 and 2H termi- nals to be installed on F-14 and E-2C aircraft. Further, the memorandum stipulated that before the third production lot buy can be executed in fiscal year 1992, the Air Force and the Navy must certify that the Class 2H terminal has reached a laboratory relia- bility threshold of 300 hours between failures, and development, opera- tional, and multiservice testing has been completed for the F-16 and E-3 Class 2 and 2H terminals. Cost ” The program office estimates that development of JTIDSterminals will cost over $2 billion and continue through 1995. On the basis of data available at the program office, we estimated that total program costs Page 52 GAO/NSLAD-90-169 Defense Acquisition Programs . Appendix IV Air Force Programs through production are about $3.9 billion, Table IV.7 shows the JTIDS total estimated costs as of February 1990. Table IV.7: JTIDS Cost Estimates as of February 1990 Escalated dollars in millions Funding category cost Development $2,032.1 Procurement $1,861.6 Total $3,993.7 Note: These estimates were based on information from the February 1990 “Defense Acquisition Execu- tive Summary” prepared by the JTIDS Joint Program Office. As of February 1990, the estimated number of production terminals and trainers to be procured was 1,441. The total procurement cost estimate of $1.861.6 billion includes the cost of spare parts to support the 1,441 terminals. The most significant changein the JTIDSquantities to be pro- cured was the reduction of 140 terminals from the F-16 program. The Air Force now proposesto equip only 20 F-l& with JTIDSterminals, using aircraft procurement funds appropriated for fiscal years 1988 through 1990. Page 53 GAO/NSLAD-90-169 Defense Acquisition Programs Appendix V Major Contributors to This Report Norman J. Rabkin, Associate Director National Security and Robert L. Pelletier, Project Director International Affairs William R. Graveline, Project Manager Division, Washington, John J. D’Esopo,Assistant Director Raymond Dunham, Assistant Director D.C. Howard Manning, Assistant Director F. James Shafer, Assistant Director Emil C. Cracker, Senior Evaluator Paul J. O’Brien, Senior Evaluator James K. Seidlinger, Senior Evaluator Jimmy R. Rose,Regional ManagementRepresentative Atlanta Regional James H. Beard, Senior Evaluator Office Thomas L. Gordon, Staff Evaluator John W. Randall, Staff Evaluator Paul G. Williams, Regional ManagementRepresentative Boston Regional Office Thornton L. Harvey, Senior Evaluator Diana Gilman, Staff Evaluator Robert D. Murphy, Regional ManagementRepresentative Cincinnati Regional James R. Kahmann, Senior Evaluator Office Catherine L. Basl, Staff Evaluator Katrina D. Stewart, Staff Evaluator Neilson S. Wickliffe, Staff Evaluator Charles 0. Burgess,Regional ManagementRepresentative Kansas City Regional Carol E. Kutryb, Staff Evaluator Office (332540) Page 64 GAO/NSIAD-99-159 Defense Acquisition Programs Ortlt~rs must be prepaid by cash or by check or nwn~~y order made out, I.0 the Sul)t~rint.t~lidttnt. of Documtints. --.---___--, ..~-I ._-_“-_. - __- Itll,.l”..“l”,*“~“*-t-“-.~l-..l-~ lirrit~wl St:itw Jl’irsl-( ‘glass Milil (;c~trt~r’;ll Awoi11i1 ilig Of’f’iw J’os hgc~ Xr Jl’ws J’aicl Wi~sf\i~t~t ()I), I).(:. 2054H (;A() J’chrrni(. No. (; 100 Ol’l’i~ial J~S~JWSS i --.i J+t~alt.y t’or J’riv;d8t~ liscl $300
Defense Acquisition Programs: Status of Selected Programs
Published by the Government Accountability Office on 1990-06-27.
Below is a raw (and likely hideous) rendition of the original report. (PDF)