oversight

Abrams Tank: Block II Modifications Not Ready to Enter Production

Published by the Government Accountability Office on 1990-02-28.

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

                                                                    P
                  United   States   General   Accounting   Office
                  Unclassified Version of a
GAO               November 1989 Report to the
                  Chairman, Committee on
                  Armed Services,
                  House of Representatives
February   1990
                  ABRAMS TANK
                  Block II Modifications
                  Not Ready to Enter
                  Production




           *
 GAO/NSLAD9@5?
GAO
      United States
      General Accounting  Office
      Washington, D.C. 20548

      National Security and
      International  Affairs Division

      B-235418



      The Honorable Les Aspin
      Chairman, Committee on Armed Services
      House of Representatives

      Dear Mr. Chairman:

      This report is the unclassified version of the classified report we pro-
      vided you in November 1989 in response to your request that we review
      the Army’s plans to modernize the Abrams tank. We have also provided
      your staff with several briefings on the program.

      At the time of our review and initial reporting, the Army planned to
      make a production decision on the Block II modification program in
      August 199 1. It had requested procurement funds in the fiscal year
      1990 budget for long-lead and nonrecurring items. In our report, we
      made a recommendation to the Secretary of Defense that he withhold
      approval of the obligation of Block II procurement funds for the Block I
      program pending certain Army actions.

      Although the Department of Defense agreed in principle with our recom-
      mendations, it believed that requirements already placed on the Army
      would provide adequate information to make an appropriate decision at
      the milestone III production review. Our concern at that time, however,
      was that procurement funds would be obligated before further review
      by the Secretary of Defense.

      Since we issued our classified report, the Secretary of Defense has sub-
      mitted his fiscal year 1991 budget. The budget reflects significant
      changes to the Block II program. The Secretary has requested funding
      for only 62 Block II-modified Abrams tanks; subsequently he plans to
      terminate Abrams production. This number falls far short of the
      2,926 Block II-modified tanks that the Army originally planned to pro-
      cure. The per-tank cost would also be much higher than the approxi-
      mately $3 million per-tank cost estimated for the total program.

      We have not revised this report to take these new actions into considera-
      tion The information contained in the appendix reflects the program
      status as of August 1989. However, we believe that the issues we raise
      will contribute to congressional deliberations during the coming budget
      debates.



      Page 1                            GAO/NSlABSO-57 Abram Tank Block U Modifications
Page 3   GAO/NSIAD-SQ57 Ab-   Tank Block II Modifications
          Appendix I
          Unclassified Version of
          November 1989 RePWt




                                           EXECUTIVE         SUMMARY

PURPOSE
The Army requested            $166 millIon      in advanced     procurement          fundlnq   for
fiscal     year    1990 to produce         a costly    and significantly            modified
Abrams Mlhl       tank,     which    is the most recently          fielded       tank of the Ml
series.       The Army believes          that   such a tank,      which will         be called
th? “MlA2,”        1s needed as an interim          response       to future        Soviet
threats.        The tank will        be produced     in limited        quantities        until
fiscal     year    1997, when the Army plans            to begin       production       of a
dramatically        dlffecent      tank,    which may or may not be based on the
Rbrams design.
The House Committee                on Armed        Services  asked GAO to examine                        the
Army’s  justification               for the        MlA2 tank program  to evaluate

--   whether       the improved           performance    the Army expects                    of   the
     proposed        modification          package    can be realized;

--   whether       the Army’s     acquisition    strategy                  allows      for adequate
     testing       and evaluation       to be performed                   before      production
     decisions        must be made; and

--   what impact,           if   any,     the    program       will     have     on future        tank
     modernization.

BACKGROUND
-
The Army’s        current        tank upgrade            package,        called       the “Block          II
program,”       represents           the third         in a series           of block       modifications
to the Abrams tank.                  Full-scale          development          of an integrated                system
began in December              198t3, although             individual         components         have entered
full-scale        development           at different             times.       The program          will       go
directly      from development                into     full-rate         production         as the MlA2
tank in fiscal            year     1991.       The five          new components           the Army has
approved      for production               in the MlA2 tank include                     a commander’s
independent         thermal        viewer,        additional          armor,       an improved
commander’s         weapons station,               a carbon         dioxide        laser    range finder,
and a position/navigation                     system.          The Army believes              that      these
modifications          ~111 improve             the commander’s              ability      to acquire
targets,      better        protect        the crew,         increase        precision        gunnery,          and
help tank crews navigate                     on the battlefield.                   New software           will     be
required      to connect           the Block         II digital          components         together           and to
the existing          analog       components.

The Army also plans                to    incorporate      other   changes    into     the MlA2
tank.    One significant                 change,     to the fire     control     system,   will
allow  the incorporation                   of munitions      from the Army’s        Armament
Enhancement    Initiative                program.



                                                         2




            Page 5                                           GAO/NSIAWO-67 Abrams Tank Block U Modifications
              Appendix I
              Unclassified Version of
              November 1989 Report




    results until    after  the MlA2 enters                    production.           These problems    may
    prevent the   Army from    reachinq    its                performance          qoals,  and solvins
    them may lead to program       delays.

    Block      II Program   Raises
    Affordability        Concerns
    The Army’s      program    has raised    affordability        concerns    because
    proposed    costs     of the Army’s     preferred      program     are higher     than the
    ceiling    established       by the Office      of the Secretary        of Defense.        In
    addition,     the Army has recently          requested      an additional      $95 million
    to complete       development,     which adds to these          concerns.

    The estimated           costs     of the Block          II modifications              add about
    20 percent         to the price         of the current             tank.        These estimates
    appear      accurate.          However,       Block      II program          production     costs      exceed
    the currently            approved      production          cost ceiling          of S3.037 million
    per tank set by the Office                    of the Secretary               of Defense     in August
    1989.      That amount          is enough         to produce         the commander’s          independent
    thermal      viewer        and the improved            commander’s           weapons station         in a
    core configuration,               but    not    the other        three       components.        Unless
    costs     can be reduced,             additional         fundinq       will     be required       if the
    Army is to meet annual                 procurement          objectives          mandated    by the
    Office      of the Secretary             of Defense.           Further,         a tank with       fewer
    modifications            than planned         calls      into    question         the magnitude        of the
    MlA2’s      effectiveness           gains     as demonstrated               in the Army’s       cost     and
    operational          effectiveness           analysis.

    The Army       believes    that  it can reduce       the cost of                   the   currently
    produced       tank by the time the Block          II modifications                      enter
    production         in 1992 and apply   these     reductions       to               production      of the
    Block    II    tank.    However,   GAO questions        the validity                   of these cost
    reductions.

    Compressed   Acquisition
    Schedule   Is Risky

    The Block        II program            is predicated          on the Army’s            ability       to field   a
    tank in advance              of the future            Soviet     tank threat           projected       for the
    mid-1990s.          This       requires         an acquisition          strategy         that    calls    for
    committing         advanced          production         funds before          test     information        is
    available.          Although           component-level           testing        of individual
    modifications            will       have taken        place     when the Army makes                a
    production         decision,           the critical          unknown      factor       is how these
    components         will       operate       as a system.           Testing        of the fully
    developed        system        will      not be completed            when the Army makes               advanced
    procurement         decisions.              In addition,         the overall           development
    schedule,        which        allows      very little         time to identify               and correct
    problems,        may deny the Army needed                     performance           data at the time of
    the critical            production          decision.         The absence           of a period        of low-
    rate     initial        production          will    further       increase        the Department          of


                                                          4




L

               Page 7                                         GAO/NSIAD-SOS’7 Abrams Tank Block II Modifications
           Appendix1
           UnclaasifiedVe~ionof
           November 1989 Report




--   the     Army     is    able     todemonstrate     the cost-effectiveness                            of the
     system,        using      a current    assessment      of armor protection                          and
     threat     capabilities           and realistic      tactical     and tank                      crew-
     fighting      assumptions           in a new cost and operational
     effectiveness           analysis,      and

--   the Army modifies          its acquisition                     strategy     to allow       time  to
     complete    and evaluate       live-fire                    and operational        testing      and to
     take corrective        actions     before                  beginning    production         of the
     Block    II modifications.

AGENCY COMMENTS AND GAO'S                       EVALUATION
The Department             of Defense          provided           official         oral     comments        on a
draft      of this       report.         It agreed            in principle            with GAO'S
recommendations              but    believes         that       it has taken             steps      to address         the
concerns        raised       in this        report.           The Department               believes       that      the
requirement           placed      on the Army              in August         1989 by the Defense
Acquisition           Board--to         perform         further         cost-effectiveness                 analysis
before       program       approval         of several            Block      II components--is                 in
general       accord       with GAO's recommendation                         that      the Army needs to
perform       more      cost-effectiveness                   analysis.          The Department              of
Defense       has stated          its     intention           to examine           GAO's concerns             in the
context       of ongoing          analyses.             The Department               further        believes        that
sufficient          test     information           will       be available             at the Defense
Acquisition           Board's       milestone           III     production           decision         in August
 1991 to reduce            program       risks       and allow             an informed          decision         to be
made on whether              the program            should        proceed        from development                into
production.

However,        GAO's concern              is with program                decisions        made before
milestone          III      because      (1)     advanced         procurement           and long-lead          funds
may be obligated                without       further         review;        (2) potential          problems,
particularly              in software         and armor development,                      are of a magnitude
to delay         the Block          II program          and prevent            the Army from reaching
its performance                goals:      and (3) events               that     have occurred         since
GAO's review              was conducted            raise      further        questions.          For example,
the Army has recently                    requested           an additional             $95 million       in
research,          development,            test,       and evaluation              funds to finish           full-
scale      development:             preliminary            test     results        in the armor program
have not met expectations:                         and there          is some question             as to whether
the Army will               be able      to meet         its    schedule         for live-fire         testing.
Taken together,                GAO believes,             these      issues       suggest      the need for the
Office       of the Secretary                of Defense           to review          the program       well       in
advance       of the milestone                 III     production          decision.         As part       of this
review,        the Army should               demonstrate            the cost-effectiveness                 of the
proposed         tank using           current        and accurate            information.           It should
also state             its plans       to develop            and test        the tank,        evaluate       test
results,         and make appropriate                    hardware         and software          changes      before
 the Block          II tank       enters       production.



                                                            6




            Page9                                               GA0/NSIAIT90-57AbramsTankB1c~kII                   Modifications
         Appendix I
         Uncla&fied Version of
         November 1989 Report




                                     CONTENTS


LETTER

EXECUTIVE    SUMMARY                                                                           2

CHAPTER

  1            INTRODUCTION                                                                   11
                  The Army's      Tank Modernization         Program                          11
                  The Block     II Program                                                    12
                  New Diqital      Electronics      Configuration
                     Planned    to Integrate       Components                                 14
                  Additional      Modifications      Planned      for the
                     MlA2 Tank                                                                15
                  Program     Has Not Received       Production       Approval
                     by the Office        of the Secretary        of Defense                  15
                  Objectives,      Scope,      and Methodology                                17

  2            PROPOSED ARMOR PACKAGES MAY NOT IMPROVE
                 SURVIVABILITY                                                                19
                 Block      II Armor Specifications              Are
                    Understated                                                               19
                 Capability        of Proposed       Survivability
                    Enhancement         Is Unclear                                            19
                 Not All       Armor to Be Added Because             Additional
                    Weight      Further     Stresses      Tank Performance                    20
                 Conclusions                                                                  21
                 Agency Comments           and Our Evaluation                                 21

  3            ARMY-PREFERRED BLOCK II PROGRAM EXCEEDS
                 OSD CEILINGS                                                                 22
                 Army Program     Costs Appear         Accurate                               22
                 Army Has Not Fully       Addressed        OSD's
                    Affordabillty      Concerns                                               23
                 Future     Tank Savings    Identified        but Questionable                25
                 Conclusions                                                                  25
                 Agency Comments and Our Evaluation                                           25

  4            BENEFITS FROM CORE INTEGRATION NOT SUBSTANTIATED,
                 AND TEST SCHEDULE INCREASES PROGRAM RISK                                     26
                 Core Attributes         Unsubstantiated                                      27
                 High Degree      of Concurrency         Increases     Development
                    Schedule     Risk                                                         28
                 Core-Related       Systems     May Impose Additional
                    Training     Burdens
                 Technology      Bridge     Incompletely       Defined                        ;:
                 Conclusions                                                                  33
                 Agency Comments and Our Evaluation                                           33



                                               8




                                                                                                      -



         Page 11                                   GAO/NSIADM&‘I      Abrama Tank Block U Modifications
         Appendix1
         UnclassifiedVersionof
         November 1989 Report




                                              ABBREVIATIONS
                                                       .-
    BIT            built-in       test
    BITE           built-in       test     equipment
    CASTFOREM      Combined       Arms and Support              Task Force
                       Evaluation         Model
    CITV           commander's          independent         thermal        viewer
    COEA           cost     and operational            effectiveness           analysis
    CORBAN         Corps Battle           Analyzer
    csc            Conventional           Systems      Committee
    DAB            Defense      Acquisition         Board
    DOD            Department         of Defense
    FSD            full-scale         development
    GAO            General       Accounting        Office
    GDLS           General       Dynamics       Land Systems
    ICWS           improved       commander's          weapons        station
    OSD            Office      of the Secretary             0E Defense
    POS/NAV        position/navigation
    STAR           system      threat       assessment         report
    TRADOC         Training       and Doctrine           Command




                                                      10




,



          page13                                        GAO/NS~SO-67AbramsTankBlockUModifications
-
                     Appendix1
                     Unclahfled Version of
                     November 1989 Report




        decided,     but     like      the Block       II development         program,     It is made up
        of a number        of components            that   are   in various        stages    of
        development.           The next generation             tank,    unlike       the Block      II,
        however,     will       likely      contain      a number     of significant         structural
        changes.      These may include                 a new gun, a new chassis,              an autoloader
        for the main gun tank rounds,                     an external       suspension,        a new
        transverse       mounted         engine,      and a redesigned          electronic       architecture
        to control        tank systems.

        THE BLOCK II                 PROGRAM

        The Block        II tank modification                package       is designed        to meet the
        future     Soviet      tank threat          of the mid-1990s.              Definition          of this
        threat     is based on the expected                    fielding      of the Soviet           tank known
        as the     "FSTZ."         The full-scale            development        program       for    Block     II
        includes       seven components             that     are in various         stages        of
        development.           The Army has approved                  five   of these       components         for
        Block    II production.              In addition,            General   Dynamics         Land Systems
         (GDLS),     the    system      integrator,          is developing         a digital         electronic
        system     called      the    “core     tank”      to integrate         the new components                into
        the existing         MlAl     tank     configuration.              Components       to be produced
        are shown         in table      1.1.

        Table        1.1:           Block   II   Production          Components
                                                                                               Full-scale
                                                                                               development
        Component                                    Contractor                                award date

        Core                                         GDLS                                      Dec.     1988
        Commander's                                  Texas        Instruments                  Jan.     1989
          independent
           thermal    viewer
        Survivability                                Armor        packages                     Dec.     1989
           enhancements                              being        competeda                    July     1990
        Improved                                     GDLS                                      Sept.     1986
           commander's
          weapons station
        Position/                                    Smith        Industries                   Jan.     1989
           navigation
           system
        Carbon    dioxide                            GEC Avionics                              Aug.     1987
            laser           range
            finder


        acandidate             armor packages       have been submitted              by the Army's
        Materials             Technology     Laboratory,       the Ballistics          Research
        Laboratory,              and private      companies      participating         in the Defense
        Advanced             Research    Projects     Agency's      joint      armor   program.




                                                                    12




    L
                     page15                                              GAO/NSIAIXW-57AbramsTankBlock           UModiiications
         Appendix 1
         Unclassified Veraion of
         November 1989 Beport




Figure     1.1:      Planned    Block   II   Production      Improvements     to    the
Abrams    Tank




A driver’s          thermal   viewer    to improve    vision     and an inter-
vehicular         information     system   for better      communication     will         be
developed         and tested     during   PSD but will       not  be put  into
production.

NEW DIGITAL  ELECTRONICS CONFIGURATION
PLANNED TO INTEGRATE COMPONENTS

The Army believed       that      the cost of adding          each   Block  II component
on a piece-by-piece         basis       would be expensive.          As a result,    it
contracted    with General          Dynamics     to integrate      the components       into
one system.       The “core       tank,’      as it is called,       uses  a set  of common
hardware    and software       shared       by the new components.          The system
                                                14




          Page 17                                    GAO/NSLAL%SO-67Abrams Tank Block II Modifications
           Appendix I
           Unclassitied Version of
           November 1999 Report




?n December    1988, the Army                presented           its proposed             Block     II
program.    The DAB approved                 an additional               $300,000         per tank to
produce        a modified       MlA2 at a production                   rate      of 516 per year for
the S-year         planning       period      (fiscal        years       1990 to 1994).                Funds were
included        in the fiscal          year     1990/1991          budget        submission.            The DAB
also conditionally              approved        the     Block      II program           after     the Army
agreed       to perform        a cost and operational                    effectiveness            analysis,        to
identify        the costs       and quantities              associated           with     a baseline        tank
program        and various        cost and quantity                alternatives,              and to update
the test        and evaluation           master       plan.        As part         of the COEA effort,
the Army was required                to update          the    system        threat       assessment        report
 (STAR) and conduct             a fleet-level             analysis         to compare          the relative
military        values     of a tank fleet              of the current               tanks     to a tank
fleet     of MlAZs.2           This    analysis         was to be accompanied                    by a
system-level           analysis      of the cost-effectiveness                         of the MlA2 tank
itself.

The CSC met in June and July                          1989 to consider                the Army’s           analysis.
The Army presented                 the results            of its COEA, which showed all
components           except      the carbon           dioxide         laser      range finder            to be
cost-effective.                 The Army stated               that      it plans        to continue           with      the
total       program        and pursue         development             of a less costly               range finder.
The Army’s           proposed        program,         however,          exceeded        the $300,000            cost
celling         by $232,000.             The CSC provided                 further       guidance         to the Army
in lieu         of program         approval         because         the Army had not satisfied                        all
of the Office              of the Secretary               of Defense’s             (OSD) conditions.                  The
CSC restated             its    earlier        direction          that      the Army present               a program
within        the    $300,000        cost      cap.       It stated           that    the Army needed to
better        identify        various        costs       associated           with    the    tank.         It also
stated        that     the Army needed              to identify             the    incremental
effectiveness              of each component,                 if possible.              The CSC directed                the
Army      to specifically               address       the relationship                between        Block      II and
 future       tank modernization                 efforts        by addressing             the options           of
 (1)    incorporating            several         parts      from the next             generation           tank
development            program        into     the HlA2 and (2) skipping                       the Block          II
production           and using          results       from the development                   effort        to more
aggressively             pursue       the    next     generation            tank development.                 The CSC
stated        that     the Army should              compare         a fleet        of MlAls        to a fleet           of
 fewer MlA2S (because                   of the MlA2’s             higher        unit    cost).         At its        July
 1989 meeting,             the CSC reversed               its position             and recommended              that
 the program           be forwarded            to the DAB.

The DAB again      reviewed        the Block      II program       on August       31, 1989.
According     to OSD officials,             it approved      continued      full-scale
development     with    the     understanding         that   the Army would secure
moneys to cover        a small       shortfall      in research,       development,       test,
and evaluation       funding.         It also approved          a unit    production      cost
ceiling     of $3.037     million       per tank,       based on baseline          tank and


2T'he    STAR provides              an assessment            of    threat       doctrine         and systems           the
tank     is likely    to          face.

                                                           16




            Page 19                                             GAO/NSIADSO-67 Abrama Tank Block II Modifications
-
            Appendix   1
             UnclassifledVersionof
             Novemberl989Report




-

    --   testers    from the Operational  Test and Evaluation                           Agency,    the
         Test    and Evaluation  Command, the Combat   Systems                         Test Activity,
         and TRADOC's Armor and Engineering     Board:

    --   armor developers             from the           U.S. Army’s   Ballistics       Research
         Laboratory   and          the Defense            Advanced   Research     Projects     Aqency;

    --   analysts      from       the     intelligence           community:    and

    --   officials         from    OSD.

    Documents      we analyzed        include      the MlA2 COEA, the Test             and
    Evaluation       Master    Plan,      the System     Threat     Assessment      Report,      cost
    estimates,       and results        of the MlA2 preliminary             design    review.      We
    evaluated      the assumptions,           results,      and conclusions        of the Army’s
    Combined      Arms and Support           Task Force Evaluation           Model (CASTFOREM)
    and Corps Battle         Analyzer        (CORBAN) model simulations              for the Block
    II program.         We did not verify            or validate      the models'       internal
    calculations.         Our work was conducted               from  March     to August       1989 in
    accordance       with   generally        accepted    qovernment       auditing      standards.




                                                            18




             Page21                                              GAO/NSIAJXKJ-57AbramsTaskBlockU         Modifications
                 Appendix I
                 Lhclssslfled Version of
                 November 1989 Report




    Candidate         armor packages   were tested    in the summer oE 1989
    according         to a pass-fail   criteria.     The Army plans    to request                         bids
    from those          contractors  who passed.     Full-scale  development
    contracts         for armor are scheduled      to be awarded   in December                          1989
    and in July           1990.

    NOT ALL ARMOR TO BE
    ADDED BECAUSE ADDITIONAL WEIGHT
    FURTHER STRESSES TANK PERFORMANCE

    Estimates       show that       adding     the entire       Block     II package     will    brinq
    the tank’s        weight     to over 72 tons.           This     exceeds      the Army’s
    69.5-ton      weight     limit.       The tank is already             required    to use caution
    in all    bridge      crossings,        and no recovery          vehicle      is capable     of
    pulling     the tank under all             required      conditions        at its current
    weight.       In order       to keep the weight           of the tank below this
    ceiling,      the Army plans          to initially        add only portions          of the armor
    packages.         Consequently,         the program’s        survivability        objectives       may
    not be achievable.              The Army plans         to add the remaining            portions     of
    the Block       II survivability           enhancements        only     as corresponding
    weight    reductions         are achieved.

    Added    Tank      Weight        Will
    Exacerbate         Current        Problems

    The anticipated         weight     increase      of the MlA2 to 69.5      tons                may
    increase     logistical       problems      with    tank support    equipment                 and may
    cause    new problems       for the tank’s         suspension    system.

    Army analysis          concluded       that      additional        weight      will     place    further
    strains      on the Army’s         ability         to get the tank to battle                  and
    successfully         retrieve      it when damaged.                Most Army tactical              bridges,
    for example,         have a weight           limit      of 60 tons,         and fielded        tanks     are
    currently        required       to make “cautionary”                crossings.          The increased
    weight     of the MlA2 will           make these           crossings        even    more difficult
    and will       also accelerate           bridge       deterioration.             Finally,      without
    the MEII3Al tank recovery              vehicle        program,       which was required              to
    recover      70-ton      tanks,    the Army’s           tank recovery          task may be more
    difficult        and may make towing               an MlA2 more dangerous,

    According     to the Army,        it will     also need to modify        the tank
    suspension      system    to support      the added weight        of the Block      II
    package.     Testing      of a 70-ton       tank at the Army’s        Aberdeen     Proving
    Ground    has shown     that    several     suspension     components      of the
    currently    produced       tank cannot       support   a heavier     tank body.       The
    Army plans      to replace      the failing       components    and retest      the tank.

    Future        Weight      Reductions         Planned

    In April         1989,     the    At-my   implemented         a weight  reduction         program     in
    hopes of         adding      more    of   the desired         armor packages.           Major   items


                                                           20




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        Appendix I
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                                                 CHAPTER 3

            ARMY-PREFERRED             BLOCK II      PROGRAM EXCEEDS           OSD CEILINGS


The Army’s        estimated        costs     of the complete            Block     II modification
package      appear     accurate        but exceed        current       OSD-approved         cost
ceilings       for the program.              The Army estimates             that     Block     II
modifications          will    cost an additional              $532,000       per tank,        which
represents        a unit      cost    increase       over the current             tank of about
20 percent.          At its     August        1989 program         review,      the DAB established
a per-tank        cost ceiling          of $3.037       million.         It approved         this    amount
to produce        the MlAl       tank with        the CITV and the ICWS in a core
configuration,          but not the other              Block     II components.            The Army
must either         reduce     costs      or request        additional        funding      from OSD in
order     to produce        the full        Block    II package.

Throughout       OSD’s review       of this      program,       however,       the Army’s
preferred       alternative       was to accept         fewer     tanks    in order    to produce
the entire       Block      II package.        On the basis         of current     budget
projections         and the current        price    taq for      Block     II improvements,
the Army calculated            that   procuring       the fully       modified     Abrams tank
would result          in 253 fewer      tanks’     being     procured      during   the first
4 years      of the program.          The resulting          number of tanks would have
fallen      below the minimum sustaining                rate    of production        and, in
turn,     would have further          increased       unit    costs.       It appears     that   any
drop below        the OSD-directed         minimum would now require               OSD approval.

The Army       has projected       that   future    savings           are possible           in the
currently       produced     tank.      We question      the         validity   of        these
projections.

ARMY PROGRAM COSTS APPEAR ACCURATE

The Army has obtained          cost estimates      for the Block       II program      that
Army and OSD cost analysts          believe     are accurate.         These estimates
appear     reasonable,     as many of the estimated           component    costs    are
based on contract        proposals.       The ensineeriny        estimates      are based
on manufacturing       drawings,    engineering       designs,     and vendor
technologies.

Table    3.1 lists            the Army’s       per-tank     cost   estimates        for    each
proposed    Block        II      modification.




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                 Appendix I
                 Unclassified Version of
                 November 1989 Report




-

    alternative     conflguratlon                of the Block    II components         would meet                     its
    needs.      As an alternative,                 the Army has appeared       willins      to buy
    fewer MlA2s.       However,             it   is unlikely   that  OSD will        permit   this.

    The Army plans           to procure             a total      of 2,926         MlA2 tanks         between
    fiscal      years     1991 and 1997.                After      that      time,     the Army plans            a new
    tank    for production.                Under current             budget       plans,      the Army expects
    to buy the MlA2 as part                     of a 5-year          contract        for fiscal         years     1990
    to 1994.         (The MlAl         will       be produced          until      the MlA2        is cut in as a
    modification.)             Although           the Army plans             to procure         2,926     tanks,     the
    number of MlA2 tanks                 it will        actually        procure        could     depend on the
    unit    cost of the Block                 II modification             package        selected.          It
    conducted        an analysis            that     compared        the Army’s          preferred        program
    with     the OSD program            approved          in December           1988.       Table     3.2 shows
    the    number     of MlA2 tanks               the Army could             procure      based on its
    planned       funding      profile          through       fiscal      year 1994.

    Table        3.2:    Alternative        MIA2     Procurement          Quantities

                                                           Quantity    of       tanks     procured
              Fiscal     year                        S300K     program                    $532K      program

              1990                                                0                                    0
              1991                                             261                                  215
              1992                                             516                                 434
              1993                                             516                                 454
              1994                                            -516                                 -453

                 Total                                     Aw5Au
    Note:         The Army       plans     to continue            MlAl   tank     production         until      the
    middle        of fiscal        year    1991.

    The Army has determined              that  procuring      the MlA2 with      modifications
    costing      $532,000     per tank will       result    in purchasing       253 fewer      tanks
    over the first        4 years      of MlA2 production.           Although    this    analysis
    was done under         the previous       OSD cost    ceiling      of $300,000     per
    modifications        package     and the differential           might   have decreased
    under the new ceiling            of $3.037      per tank,     the resulting       cost-
    quantity      dilemma     remains.

    By   producing        fewer     tanks,    the Army would drop below the OSD-
    directed       level     and minimum sustaining               rate   of 516 tanks        per year.
    A lower      production         rate   would result         in a higher      unit     cost.        The
    Army has appeared            willing      to accept       fewer    tanks because         it believes
    that     the MlA2,       as designed,        is needed to kill          the projected            threat
    and to provide           a technology        bridge     to a new tank.           However,        OSD is
    unlikely       to allow       the Army to produce             at lower    rates.       Under the
    most recent          OSD funding       guidance,      the Army will         not be able to
    procure      the full       complement       of Block       II components        given      current
     costs.


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          Appendix     I
          Uncla.~sified Version of
          November 1989 Repurt




                                                     CHAPTER 4

                BENEFITS FROM CORE INTEGRATION NOT SUBSTANTIATED,
                     AND TEST SCHEDULE INCREASES PROGRAM RISK


The Army has stated                  that    the Block        II program        is risky       but    that   it
is willing         to accept           that    risk   in part        to field     a tank        that
contains       a digital           electronics,         or “core,”         package.        The Army
believes       that      fielding         the core tank will             provide      a number        of
combat-related             enhancements            and also provide           the experience            it
wants     for future           tank development.                However,      the core       tank     may not
perform       as promised.               Test results         are required         to determine
performance,           but OSD has raised               questions        about    the testing
associated         with      the     Army’s      hiqh   risk,       compressed       acquisition
schedule.          The compressed              schedule       further      complicates          the training
of personnel           to operate           and maintain          the tank.       Finally,          OSD has
repeatedly         stated        that     the Army needs to clearly                  assess       the value
to its      future       tank pro9cams             of producing         and fielding          the Block      II
package.

The Army believes                 that      integrating             components         of the Block          II
electronics            package        into      a new digital              electronic         configuration,            or
“core,”        will      result       in a less expensive                   MlA2 tank and provide
numerous         advantages           not     available           if each individual                component        is
separately          integrated,            or “hard-wired,”                 with     the existing           analog
electronic          system.           According          to Army presentations                    to OSD and
others,        these       advantages           are expected             to include         greater      efficiency
in the       way the         tank     systems         operate         together,        reduced
vulnerability,               ease     of maintenance                through       a built-in         diagnostic
system,        and sustained              reliability             while      adding      components.         These
justifications               for the core have not been proven                              and have,         in some
cases,       been      contradicted             by Army studies.                  Specifically,           the
efficiency          gained        by usinq           a core architecture                 to operate
subsystems           rather        than     attaching           components          in increments           has not
been measured;               the Army’s           claims        for reduced           vulnerability          have
been      discounted            by a vulnerability                   analysis:        and improvements             from
the built-in             diagnostic           system       will       be limited.

The Army’s      compressed        acquisition           schedule      further        increases       the
risk    of the Block        II program.          The Army will            commit $166.4 million
in advanced       procurement        funding        for production           long-lead        items      and
to prepare      the tank assembly             line      for production          before      development
prototype     testing       begins.        Decisions        to purchase         $39.4 million           of
long-lead     items      for production           are scheduled           for November           1989 and
July    1990.     In addition,         nonrecurring           production        start-up         costs    of
$127 million        are to be expended              throughout        fiscal      year 1990 in
preparation       for production.             However,        Army testing           of development
prototype     tanks      is not scheduled             to begin     until       early      in fiscal
year    1991 after       advanced      procurement          funds are committed                to
Block     II product ion.


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           Appendix        I
           Unclassified Versionof
           November            1989 Report




requires         significant           time and manpower              to operate.             Therefore,          the
replacement           of such equipment                by automated          built-in         diaqnostics,
called       the "BIT,"          is strongly           supported        by Army officials.
Although         the Army believes                that    the BIT/BITE          system        will      ease tank
maintenance,              the COEA was not able                 to quantify          differences           between
the current           equipment          and the BIT diagnostic                  times      because        of the
drastic        differences           in testing          philosophies          and hardware
configurations.                The capabilities               of the BIT system                in a tank are
unknown.           In its vulnerability                  analysis,        the Army’s          Ballistics
Research         Laboratory          recommended          that     testing       take place           while     the
tank     design        is still        flexible        enough      to make any necessary                   chances.
In addition,              the Ballistics            Research       Laboratory's            vulnerability
analysis,          as well       as tank        crew members,           has pointed           out     that
failure        of the BIT may make maintenance                          even    more difficult,
particularly              in a combat          environment.           The more sophisticated
systems        envisioned          for the core tank will                   be harder         to diaqnose
manually         than components               now in the tank,             and electronics              diagnosis
and repair           will     require        special      skills.

Another      drawback      is that     the BIT will        not support           all MlA2
systems.         The Ballistics        Research     Laboratory's            vulnerability
analysis       pointed     out that,      because     the MlA2         fire    control       system
will    consist      of components        of various        technological            vintages,      some
faults      in the MlAl       components      will    not be detected              by the
diagnostic        system     and will     require     existing         test    equipment.
However,       the program       manager     has decided          that     manuals      will    be used
for diagnosing          those    parts    of the MlA2         that     are not covered            by BIT
until     the diagnostic         and test      equipment        can be replaced.

Cost      Benefits             From
Core      Tank       Not       Substantiated

According      to Army officials,        the contractor     estimates    that    the
core configuration         will   save operational       and support   costs.
However,    those    estimates     have been made without         any data on the
reliability      of the core system,         which    is an important    determinant
of operational       and support      requirements.

HIGH DEGREE OF CONCURRENCY
INCREASES DEVELOPMENT SCHEDULE RISK

Due    to the       compressed         MlA2 program         schedule,        the Army will            commit
$166.4      million        in advanced         procurement         funding      for production              long-
lead items          and begin        preparing        the tank assembly            line     for
production          before      development         prototype        testing      begins.         The Army
believes        that     its     compressed,        high-risk        schedule       is technically
achievable          because       conceptual        models      of the major          Block     II
components          have     already      been developed           and are within           the state          of
the art.          However,        the task       of actually         developing         the   components
and integrating              them into       prototype        tanks     within     the compressed
development          schedule        could     be very      challenging         because       the core
electronics          systems        has not been         used in a ground             combat       vehicle.

                                                         28




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            Appendix I
            Undsssified Version of
            November 1989 Report




programs,       the Army must budget               advanced     procurement         funds for the
early     purchase      of items      that     have material         acquisition        times     of up
to 2 years.          Currently,       the Army has budgeted               $39.4 million         for
the procurement           of long-lead         items.       In addition,         the Army in
fiscal     year 1990 plans          to commit         $127 million        in nonrecurring
production        costs     to begin      preparing       for production           of the Block      II
tank.       These funds are budgeted                for pilot      tanks,      manufacturing
preparation        and tooling,         future      system    technical        support,      and
component       hardware.

Figure     4.1     shows the        program’s    development,        testing,      and
production         phases.

Figure      4.1:      Dates    of    Funding    Decisions       and Testing      for     the   MlA2




As shown in figure           4.1, advanced      procurement         decisions       are
scheduled      for November        1989 and July       1990 to buy long-lead              items
for production           and to invest     in nonrecurring          production        items.    The
November     1989 decision         is to be made about          8 months before
contractor       testing     of development       prototype       tanks     begins.       The July
1990 decision          is to be made 3 months prior             to the start          of Army
testing    in October        1990.     Consequently,        the Army plans          to make
advanced     production        commitments    before      Army testing         of prototype
vehicles     begins.


                                                  30




            Page 33                                    GAO/NSLAD-90-67     Ab-      Tank Block II Modifications
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              Uncladfied Versionof
              Novemberl989Report




r
    and location            of     soldiers         who are        trained        with     the     number       and
    location     of        tanks      to be       fielded.

    For tank crews,                  the problem            will     arise       during      rotations         from
    Europe,          where        MlAZs     will      be fielded,            to the United            States,      where
    units       will        have the older             MlAls.         MlA2       tank     maintenance          crew
    members          will       receive        additional          skill       identifiers          in conjunction
    with      their         military        occupational             specialties.              However,        the Army
    assigns          individual            soldiers         according          to their        specialties          rather
    than their              identifiers.              Therefore,          once individuals               have been
    specially             trained        for the MlA2,             the Army cannot               ensure      that     they
    will      be assigned              to the MlA2.              Similar         problems        were encountered
    with      the fielding               of the Ml Abrams tank,                      a system       that    represented
    significant               changes       over the system                it replaced.             Since
    encountering                problems,          the Army has abandoned                    the    idea of
    assigning             identifiers            for those         systems;          instead,       it provides           all
    crews with              the specialized               training         needed for the more
    sophisticated                 systems.           However,        according          to Army training
    officials,              training         the entire          tank force            may be more         costly       in
    terms       of both time and money.

    TECHNOLOGY BRIDGE                 INCOMPLETELY             DEFINED

    The Army believes                that     experience           with       a fielded          electronic            tank
    system       is needed to provide                   the lessons             critical         to developing              its
    next generation              tank.       The computer              architecture              under development
    for the next generation                     tank will          likely         be based on elements                    of
    the electronic              system      being       developed           for Block          II.       However,         Army
    engineers         believe        that     the current            data bus standard                   used as the
    basis      for the Block            II core tank may be inappropriate                                  for the next
    generation          tank.        More power than can be supplied                               by the        standard
    data bus will            be needed          to support            added capabilities.                      At the same
    time,      much less         power is needed to manage                          simple       automotive
    functions         such      as turning          on the headlights,                    and costs          dictate        that
    a less powerful              bus be used whenever                     possible.            Therefore,            the
    applicability            of lessons           learned        from       a fielded          hybrid        analoo-
    digital        tank to the all-digital                      configuration               expected         in the next
    generation          tank      is questionable.                 The Army has constructed                          a
    sophisticated            new laboratory               testing         facility          at the Tank-
    Automotive          Command, where much of the testing                                  of the new
    architecture           will      be conducted.               Such testing               is expected            to be
    relatively          easy,       and making          needed changes                is expected            to be
    inexpensive.             The Block          II changes           will       entail        small      physical         but
    radical        electronic          changes , which might                    be more        appropriately
    developed         and tested          in a laboratory                 than      on a fielded             vehicle.
    The Army's          next     generation           tank,      by contrast,               is expected            to entail
    radical        changes        in tank design             and configuration                   but     relatively
    small      changes        in electronics.                For example,                Army engineers              believe
    that     it is likely            that     the new gun being                   developed          for     the next
    generation          tank will         drive       the tank's            physical          design.



                                                                32




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         Cncla.9sitied Version of
         November 1989 Report




speclflc      user requirements.         However,     in its quidance      to the Army
throughout       this  program,      OSD has emphasized      the importance       of
defining      the linkages      between    Block   II and future      tank program
plans:     and in program       reviews    it has directed      the Army to define
those    linkages.      OSD appears      to have retreated        from its position,
since    the August      1989 DAB guidance        contained    no such direction.

Given the schedule         risk    and the potential               performance       problems     in
the Block      II program,      particularly           as they relate          to new MIAZ-
specific     software,     it appears          that    significant        program     development
remains     before     the production          decision        is scheduled       to be made.
Further,     the Army has not yet identified                     the links       between    the
Block    II and next generation              tank program,           and it is unlikely         to do
so since     OSD has dropped          its    requirement.




                                                34




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         Appendix1
         Unclassified Versionof
         November1989Report




simulations     were used to determine      the impact      that   Block      II
components     would have on forces     equipped     with    tanks   fightinq                   a
combined    arms battle   at battalion,     brigade,      and corps      levels.

On the basis   of       the CASTFOREM analysis,   the Army                   judged    the    MlA2
tank to be more         effective.    The CITV was the key                   component
responsible  for        the increase.

The CORBAN analysis                (which  used a defensive       scenario         and equipped
only     certain      units      in the force    with Block     II tanks          based on Army
fielding        plans     and tank availability)        also    indicated          an
improvement.             Again,     the CITV was the key component.                  These
results,        however,        were based on certain       assumptions           not supported
by operational            data.

EFFECTIVENESS OVERSTATED
DUE TO ASSUMPTIONS NOT SUPPORTED
BY OPERATIONAL DATA OR REASSESSED
ON THE BASIS OF UPDATED INFORMATION

The model simulations'             accuracy        in representing          the effectiveness
of tanks     in battle       depends     in large         part  on how closely         operational
procedures       in actual      combat     are     reflected      in the models'
assumptions.         Key assumptions           concerning       tank commanders'          search
capabilities       and other       responsibilities            and tank engagement            ranges
did not reflect         actual     combat      experience.          According     to Army
analysts,      if data on actual           tank commanders’            activities       were
available      to them and agreed            to by the Army community,               it could be
incorporated       into    the analysis.

MlAZ Effectiveness   Overstated   Because
the Tank Commander's   Visual   Capabilities
and Responsibilities   Were Ignored

The CASTFOREM simulation               model assumed that            MlAl    tank commanders
did not search        for targets.            In actual      field    experience,        however,
the HlAl     tank    commander        searches      and directs        his tank using         open
and protected        hatch     positions        as well     as periscopic        vision     blocks
when the hatch         is closed.          According      to Army analysts,           the
assumption      about      the MlAl      tank    commander's       role   could      have been
changed    if data had been provided                 to the modelers.            The models        also
assumed that       the MlA2 tank commander,                 with   his thermal        viewer,
would spend all          his time searching            for new targets.

Bowever,        according     to Army      tankers,        each    platoon      of four tanks        has
a platoon        leader    tank commander           and a platoon           sergeant       tank
commander        who have broader          responsibilities             within      their
operational         units.      In battle,        they     would be devoting              much of
their     time to directing         the platoon,             checking       navigation,         and
coordinating          with other    units       at critical          points.        These
responsibilities           were not considered               in the     analysis.          Again,   Army


                                                  36




          page39                                       GAO/NSIAD-90-57AbramsTankBlockn               WnWications
          Appendix I
          Unclasslfled Version of
          November 1989 Report




AGENCY COMMENTS AND OUR EVALUATION

In commenting          on a draft       of this       report,      DOD noted       that    the MIA2
COEA has been widely              praised     for its        comprehensiveness.              DOD
representatives          believe,       however,        that    a sensitivity         analysis     could
be done as part          of ongoing        COEA work to measure               the impact       on the
MlA2’s     operational        effectiveness           of changing        the assumptions          we
question      in this      report.        The Army had not done such an analysis
for the MlA2 COEA.             We believe          that    additional        analysis      should    be
performed       to determine         the impact         of current       threat      and armor
information         and to reflect         realistic         operational        assumptions       as
identified        in this     report.




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           L’nclassified Version of
           November 1989 Report




advanced     production         decisions           are made and will              not have time to
make corrections          until       after       the program           has moved from
development       to production.                 Further,        OSD has not approved                 the     test
and evaluation        master        plan.         Additional          development          may prove
necessary     after     the     tank enters             production        because        of the Army’s
lack of experience           with      a hybrid          digital-analog             electronic          system
on a ground       combat     vehicle.             These delayed            corrections           could      prove
costly     in both time and resources,                       particularly           because       there      will
be no period        of low-rate           initial         production        for the MlA2.               Any slip
 in the program       calls       into      question         the Army’s         justification             for the
Block    II program       as an interim               tank     solution,        given       that    the next
generation      tank is planned                to enter        production         in fiscal         year       1997.

The Army conducted                   a cost        and operational              effectiveness           analysis      as
directed         by OSD.          Although           the COEA found that                 the Block         II program
is generally              cost-effective,               the Army made a number of assumptions
that      are not supported                by operational                analyses        and that       may have
the     effect      of overstating                 the modified            tank’s      effectiveness.            These
include        the      assumptions            that      (1) more        new armor         than   can be
realistically              mounted        on the tank will                 be added,         (2) the armor will
be adequate             against        a new Soviet            threat,        (31 the commander               of the
MlA2      tank     will      spend all           of his time searching                   for targets          and the
commander          of the MlAl            will       spend none,           and (4) tank          battle
engagement           ranges       will     be greater            than they          have been historically.
The Army continues                   to support            the   addition         of a carbon          dioxide
laser       range       finder       despite         the COEA finding               that     it would not be
cost-effective.                 To determine               the   true      cost-effectiveness                of the
Block       II program,            the    Army needs to conduct                     an analysis          that
 includes        assumptions            based on actual                field      experience.

The Army also believes                 that   fielding      the Block      II modification
package       is required         to provide        a technological        link     to future      tank
modernization           efforts.         However,      the Army does not have analyses
supporting          such linkages.          The development          of the next        generation
tank is in the early                stages    of design,        but preliminary         engineering
indications          are that       the electronic         system    in the Block         II package
will     not be sufficient             to meet the requirements              expected       for the
next     generation         tank.      The Army is unlikely            to develop       such    an
analysis        because       OSD has dropped          its  requirement        that   it be done.

The Army        has stated         that    it recognizes           that   risks      do exist        in
SeVeral       areas of the Block              II program         but that       it is willing            to
undertake         those    risks      because       the tank represents              a necessary
stepping-stone           to meet the threat               and to future           tank programs.
However,        the   number       and variety         of unresolved          issues       surrounding
the program,          identified         in part       by OSD, raise          concerns        about      the
Army’s      ability      to field        a tank that          has been adequately               tested       and
will     perform      as promised          in the      time    frames     allotted.           These
 issues,      in turn,        raise     questions        about     the Army’s        belief       that     the
tank is needed as an interim                      solution.          If problems        develop        in the
Block     II program,           they could        prove     costly      and delay        future      tank
improvements.

                                                         40




            Page 43                                           GAO/NSIAD9@57           Abrams Tank Block II MndiIications
                                                                                                        -
          Appendix I
          Unclassiiied Version of
          November 1989 Report




results,  and make         appropriate        hardware       and software       changes      before            I
the Block   II tank        enters     production.
                                                                                                               I
Other     DOD comments      have    been   noted,        ss appropriate,        throughout       the           1
report.




                                               42




           Page 45                                  GAO/NSIADW-57          Abmms Tank Block II Modifications
                    Appendix1
                    UnclassifiedVersionof
                    Novcmber1989RePwt




           APPENDIX       I                                                                      APPENDIX    I   I

                                      MAJOR CONTRIBUTORS             TO THIS    REPORT


           NATIONAL SECURITY AND
           INTERNATIONAL  AFFAIRS DIVISION<
           WASHINGTON, D.C.

           F. James Shafer,          Assistant      Director
           Katherine    V. Schinasl,           Evaluator-in-Charge
           Jana M. McDonough,           Evaluator
           Richard    S. Felner,        Electronics         Engineer
           Alfred    S. Lilllendahl,           Operations       Research       Analyst

           DETROIT      REGIONAL OFFICE

           James R. Owczarzek,               Site    Senior
           Lawrence W. Kubiak,               Evaluator

           PHILADELPHIA         REGIONAL OFFICE

           Martin      Mortimer,      Site      Senior




           (393342)




                                                              43




(393342)              Page46                                       GAO/NSIAD90-57AbramsTankBloeknModifications
          Appendix1
          UnclassifIedVersionof
          November1989Beport




Therefore,   we recommend    that   the Secretary                         of Defense    withhold
approval   of the obligation      of advanced     or                     other  procurement      funds
for the Block    II tank program      until
--   the Army is able to demonstrate                  the cost-effectiveness                        of the
     system,      using      a current     assessment      of armor protection                      and
     threat     capabilities           and realistic     tactical     and tank                  crew-
     fighting      assumptions          in a new cost and operational
     effectiveness           analysis,     and
--   the Army modifies         its acquisition                    strategy    to allow       time to
     complete     and evaluate     live-fire                  and operational         testing     and to
     take corrective       actions     before                beginning     production        of the Block
     II modifications.

AGENCY COMMENTS AND OUR EVALUATION

The Department             of Defense         provided        official        oral    comments         on a
draft     of this        report.        It agreed         in principle            with our
recommendations              but believes          that     it has taken           steps        to address       the
concerns        raised       in this      report.         The Department             believes        that    the
requirement           placed      on the Army in August                  1989 by the Defense
Acquisition          Board-- to perform              further        cost-effectiveness               analysis
before      program        approval       of several          Block      II components--is               in
general       accord       with     our conclusions             and recommendation.                  The
Department          of Defense         has stated         its     intention        to examine          our
concerns        in the context            of ongoing          analyses.          The Department
further       believes         that    sufficient         test      information          will      be available
at the DAB's milestone                  III     production          decision       in August         1991 to
reduce      program        risks     and allow         an informed          decision          to be made on
whether       the program           should      proceed       from development                into
production.

Bowever,       our concern           is with       program       decisions       made before
milestone        III    because        (1) advanced           procurement        and long-lead           funds
may be obligated             without       further       review:        (2) potential          problems,
particularly          in software          and armor development,                  are of a magnitude
to delay       the Block          II program         and pi-event         the Army from reaching
its performance             goals:       and (3) events            that     have occurred         since     our
review       was conducted           raise     further        questions.         For example,          the
Army has recently               requested        an additional            $95 million        in research,
development,          test,       and evaluation            funds to finish           full-scale
development:          preliminary           test     results       in the armor program              have not
met expectations;               and there        is some question              as to whether         the Army
will     be able to meet its                schedule        for live-fire          testing.         Taken
together,        we be1 ieve,          these     issues       suggest       the need for the Office
of the Secretary              of Defense         to review         the program        well     in advance
of the milestone              III    production         decision.           As part     of this      review,
the Army should             demonstrate          the cost-effectiveness                 of the proposed
tank,      using     current        and accurate          information.           It should        also
state      its   plans      to develop         and test         the tank,       evaluate       test


                                                        41




           page44                                            GAO/NSIAB90-57        AbramsTank       Block 11Modification*
          Appendix1
          Uncla.ssified Version of
          November 1989 Report




                                                  CHAPTER 6

                               CONCLUSIONS AND RECOMMENDATIONS


The Army believes              that    producing        the Block          II modification               package
is necessary          to meet a future             Soviet       tank threat          and that          such
modifications           will     improve      the Abrams           tank's     survivability,
lethality,          and fightability.              The Army also believes                    that      moving
the Block         II program        into    production           is needed to test              certain        new
concepts        that    will     support      future      tank efforts.              The Office            of the
Secretary         of Defense        has raised        serious         questions        about       the
program       and has directed            the Army to consider                  alternative            tank
modernization           strategies,         including         forqoing        Block      II tank
production.           However,        OSD has recently               approved       a part      of the
program       for production            and has retreated               from its position                that    the
Army needs          to develop        a coherent        linkage         between      Block      II     and
 future     planned       tank modernization              efforts.

Improved        survivability            is one of the Army’s           top tank modernization
priorities.             However,      the Army may not meet its Block                    II
survivability            goals     until    well     into    the tank's     production.            The
capability          of the armor packages               will    not be known when production
decisions         are made; new threat               information      calls      into    question        the
adequacy        of specifications              in the armor development               program:       and
weight       constraints         prevent       the   addition      of much of the planned
armor until           future     weight      reductions        can be realized.             Therefore,
the Army’s          belief     that      the Block       II tank's    survivability           will     be
increased         may not be substantiated.

The Army's         cost estimates           for the Block           II modification               package
appear      accurate.          However,       affordatility           concerns         exist      with
respect       to individual          tank costs--the             Army's     proposed          tank
continues        to exceed        the production             cost ceiling           of $3.037 million
per tank set by OSD--and                  additional          funding      will       be required          if   the
Army is to meet its quantity                     objectives.           The Army has concluded
that     estimated       future      savings       in its baseline              tank    will      support       the
 increased       costs     of the modifications.                   Because        the    unit     cost of
tank     production        is so heavily           dependent        on quantities,              the    cost     of
 individual        MlA2 tanks        will     have to be carefully                  balanced        against
the quantities           necessary        to maintain           economic        rates     of production
 if the Army hopes to avord                   cost penalties            and to pursue             an
affordable         program.

The Army's        program       is predicated        on its       ability       to field    a tank   in
advance      of the     FST 2 threat         projected        for the mid-1990s.              Its
haste     requires      a high risk        acquisition          strategy.          Numerous
questions        have been raised          by OSD and Army studies                  as to whether
the tank will          actually     perform       as expected.            Since     the development
schedule       is compressed         and several          components,         including     the
software       needed     for the core,         are in the early              stages     of
development,         the Army will         lack     critical        test    information       before

                                                        39




           Page42                                            GAO/NSIAD90.67AbrsmsTsnk               Block II Modification:
           Appendix 1
           Unclassified Vetaim of
           November 1999 Report




analysts     believe         that     if     such   data    had been        available        to    them,     it
could    have been          used.

CASTFOREM’s          Overestimation    of Tank
Engagement          Ranges Further    Overstated
the      Effectiveness        of MlA2 Improvements

According      to Army officials,         CASTFOREM has a history                 of simulating
weapons at longer        ranges     than experienced          in field        exercises      and
tests.      This   is because     the model assumes that                any target      that    can
be seen,     according     to the tank system’s            capabilities,           will   be seen.
In reality,      many targets       are obscured         by terrain        or other
obstacles.       These longer       ranges     unfairly     favored        the MlA2 because
the CITV provides        enhanced      viewing.         The use of closer           engagement
ranges     would have provided         for a more accurate              analysis.

The Army determined         actual      engagement       ranges   in 1987, when it
conducted    an operational          assessment      of the Bradley      Fighting    Vehicle
working   with   Ml tank      units.       These were not reflected           in the
modeling.      In addition,        exercises       at the National     Training     Center
also confirm     that    shorter      engagement       ranges   are predominant.

Army’s   Estimates     of           the Effectiveness
of Armor    Enhancements               No Longer    Valid

Army    models         assumed that           the MlA2 would have a full                 complement          of
armor.         Since      the time the analysis                  was conducted,        the Army has
determined           that      all   armor      cannot       be added to the tank           because        of
weight       constraints.              The model also assumed the existence                        of
certain        Soviet       anti-armor          threat       munitions,      the effectiveness             of
which were less                than    that     currently        predicted.        Both assumptions
might      have resulted             in an overstatement                of the MlA2’s        increased
capabilities             because       the assumptions             did not take into           account        the
fact     that      the MlA2 will            most      likely     not    be protected       by all      the
armor      proposed          in the Block           II program        and that     the Soviets         will
likely       field       stronger,         more     capable      munitions      than   were predicted
when the simulation                  was conducted.

CONCLUSIONS

The Army       has     conducted           a cost
                                             and operational          effectiveness
analysis        as    required       by      The analysis
                                            OSD.                 showed      major    increases
in the combat effectiveness               of the proposed          HlA2 tank over          the
currently        fielded     MlAl   tank for the system          as a whole and for all
components         except    the carbon    dioxide     laser    range finder.             However,
the magnitude           of the increase      is questionable          because      assumptions
used in the model are not supported                   by operational           data or have
not    been    reassessed       on the basis       of events     that     have occurred         since
the analysis          was conducted.       Without      an accurate        measure      of combat
effectiveness,            the Army cannot      rely   on the COEA results             to conclude
that     the Block        II improvements      are cost-effective.


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         Appendix1
         Unclassified Version of
         November1989Report




                                               CHAPTER>

                   COST-EFFECTIVENESS   HAS NOT BEEN ESTABLISHED
                                 FOR ALL COMPONENTS


The Army had not conducted               a cost and operational              effectiveness
analysis       on tne Block     II program         when it presented           the program       to
the Defense       Acquisition        Board in December            1988.    OSD requires         such
an analysis       for all     major     system     acquisitions         to help determine
whether      the increased      effectiveness            is worth     the increased        cost.
At the DAB's direction,              the Army has since            performed      an analysis
that     compares    the combat effectiveness                of the currently          produced
MlAl tank to that           of a Block       II-modified        tank.     The Army has also
compared       the increase      in effectiveness            provided     by each of the
Block     II modifications         to the cost of making              the modification.

The analysis           showed significant           improvements        in effectiveness          for
the complete           Block     II package,      wlth    varying     degrees     of improved
effectiveness            for individual         components.         Adding     the commander's
independent          thermal       viewer    caused    the single       largest     increase      II-I
effectiveness           over the MlAl.           The Army, however,           made assumptions
in its      analysis        that     are not supported         by operational         data or have
since     been shown to be invalid.                   Certain     assumptions       about    tank
commanders'          functiOns         and tank tactics        might    have caused       the Block
II-modified          tank to appear          to outperform        the current       MlAl by too
high a margin.

COEA CONDUCTED TO DETERMINE
SYSTEM AND COST-EFFECTIVENESS

The Army's       Training         and Doctrine         Command conducted             a cost and
operational        effectiveness            analysis       that    was directed        by OSD's
Defense      Acquisition          Board.       The Army was directed               to analyze      the
effectiveness          of a tank equipped              with     Block     II components        as
compared      with      the currently          fielded       MlAl.      The analysis        included
performance        comparisons           of individual          tanks     and of different         sized
groups      of tanks       against      Soviet      forces.        The analysis        measured      the
effectiveness          of each Block           II component          as well     as the
effectiveness          of 16 component             combinations.            The Army also compared
the cost of components                 integrated        into     a new digital        electronic
core configuration              to their       cost when attached              to the tank
separately.           Finally,       the Army compared             training      for and logistics
costs     of the current           and modified          tanks.

The Army's       analysis    of Block         II   components  showed improvements    in
performance       and effectiveness             over the MlAl.     It showed all
components       except   the carbon          dioxide    laser range finder   to be cost-
effective.

To estimate       system     and force improvements,               the Army used           two
simulation       models--the     CASTFOREM and the               CORBAN.   These

                                                   35




          Page38                                        GAO/NSIAD90-57AbramsTankBlockIIModifrcations
          Appendix I
          Unclassifed Version of
          November 1969 Report




CONCLUSIONS
There have been a number                    of questions          raised      about       the performance
of the core           tank:      the schedule         for its development,                  testing,           and
production:           the training          of tank and maintenance                   crews to use and
support       the     tank:      and the value          to future        tank programs               of actually
producing         and fielding            a tank containing            the core’s           digital
electronics           system.         Some of these          questions        have been            identified
in the various              presentations          the Army has made to OSD since                           the
program       review        beqan last        December.         To date,         however,         the Army has
not    been     able to develop             an adequate         test     plan or clearly                define
the linkage           between       the digital         electronics          system       for     the Block         II
program       and future           needs.       In addition        , potential          combat-related
improvements            provided        by the core        have not been proved                   or have been
seriously         questioned          by the Army’s          own studies.             The Army’s            attempt
to quickly          field      the Block        II tank requires             a compressed
acquisition           schedule        that    further      increases         program        risks.          If
delays      in the program              do occur,       the Army’s         justification               for the
Block     II program           as an interim          tank solution           may not         be valid.

AGENCY COMMENTS AND OUR EVALUATION

In its     comments      on a draft      of this       report,      DOD recognized          the
schedule      risks    present     in the Block          II program        and noted that          the
funding     exposure       was limited       to the advanced            procurement       funds.
One action        the  Army has taken          since    our    report      was drafted        to
attempt     to reduce       schedule     risks       is to request         $14 million        in
research,       development,       test,     and evaluation           funding      to build      two
additional        MIA2 prototypes        for testing.            These prototypes          may allow
for more timely          test   and evaluation.

DOD noted      that     developing    the software     portion   of the test       and
evaluation       master     plan   is difficult    but  that   a plan   is expected
within     the   next    4 months.      The Army has requested        an additional
$18.5 million         needed for software       development     and testing      since                            our
report     was drafted.

DOD also commented              on our discussion             of the potential             shortcomings
of the core tank and its                 ties     to the next        generation         vehicle.          DOD
believes      that     design     changes       have been made to correct                   deficiencies
we identify         in our report          and that        these will        result      in reduced
system     vulnerability.            A number         of these      changes       appear      to be in
the right       direction.          Their      value,      however,     will      not   be known        until
appropriate         software      is developed           in some cases          and testing          occurs
in others.          DOD also      noted      that     a new maintenance             concept       for the
tank is under discussion                 because       of changes       brought        about     by
discontinuing           currently      used test         equipment.

In commenting         on our discussion     of the next generation           vehicle,
DOD noted       that   the Block    II core configuration          had not been
developed       to provide    a bridge    to the future:       rather,    it was the
most   cost-effective        way of using     current    technology     to meet

                                                         33




           Page 36                                            GAO/NSL4lHO-57        Abrms      Tank Block II Modifications
           Appendix1
           UnclassifiedVeraionof
           November1989Report




There will      be limited      contractor     testing,      and key mission           items
will    be untested      before     the award of contracts           for long-lead           items.
Further,     there    is to be no period         of low-rate       initial       production,
which would be used to resolve              problems     uncovered         in development.
As a result,       the Army may risk        increased      production         costs    and
schedule    delays      should    testing   uncover     performance          problems.

CORE-RELATED SYSTEMS MAY
IMPOSE ADDITIONAL TRAINING                    BURDENS

The Block       II modifications        will   require      the Army to train       tank                     and
tank maintenance          crews    to perform     new tasks.        The specialized
training      required      for the core and related             systems   may create
rotational        and reassignment       problems      that    the Army has not yet
resolved.         In addition,       the Army is not yet certain             of the
configuration         of the    new equipment        and cannot       plan for specific
training      needs.

Additional        Training
Requirements         Are Not        Developed

The Army is attempting                  to determine         what specialized                training       will
be required         to operate         and maintain           the MlA2.          Training          for
earlier      Abrams      modifications          was conducted              as new equipment              was
assigned,       but    the MlA2 will          require         specialized          training.           The
extent     of necessary          training       is difficult             to estimate           until     the
Army further          defines      the physical          design        of the tank           equipment        and
the actual        maintenance           and tank      crew      tasks      involved.           Each
component       of the Block            II program       will       require      new training,             since
most will       involve       new tasks       for the tank crew to perform.
Likewise,       maintenance          crews will         need additional              skills,         mast of
which     are associated           with    the core electronics                  system.

The primary        source      of information             to date on training                 estimates        is
the cost and operational                   effectiveness            analysis.          These estimates
were developed          by Army training               experts       and based on MlAl                 data,
simulations,         and information              provided        by the      system       contractor.
However,       Army training           officials         believe       that     existing        estimates
for MIA2 tank crew             training          are not accurate.                For example,            they
believe      that    the COEA estimates                for tank crew training                   needs are
likely     to be within          25 percent          of the actual            figures.          Estimates
for maintenance           crew     training         have varied          from     the    5 hours        stated
in the COEA to 35 hours.                     A design        review      held in September                1989
may provide        better      information           on which        training         estimates         can be
based.

Specialized      Training           May
Create     Crew-Rotation            Problems

Army     officials    believe      that   a significant               training     problem            that
will     be encountered       with    the MlA2 will                be coordinating       the          number


                                                       31




            page34                                          GAO/NSIAI%l-67AbramsTankBIockIIMcdiF~ations
               Appendix I
               Unclassified Version of
               November 1989 Report




Further,     there is a significant         overlap                                 in development,           testing,
and acquisition      schedules     over the life                                    of the proaram.             Any slip
in the development       schedule     could delay                                   the  introduction           of the
Block  II improvements        into  production.

OSD has    raised       concerns about     the adeauacy   of the Army’s         test
plans    and has not approved         the test    and evaluation      master      plan.
OSD has also recognized          that    if the program     is delayed       over a year,
the Army’s      justification      of the Block      II modifications        as an
“interim     tank solution”      may not be substantiated.

Testing             Schedule       Is    Optimistic

The Army has recognized                 that    the schedule        for developing          the
Block     II program         is optimistic          and allows      minimal      time to test        and
fix    the tank.         It believes         that    the    use of mature        technologies        and
mature      contractors        should      result      in minimal      technological          problems.
However,        the core configuration               does not fit        this    characterization.
The Block         II core has never            been    integrated      into    a ground       combat
system,        and engineers       will      have to merge the new digital                  system
with     existing       analog    components.            The resulting        hybrid     tank may
pose problems           as yet unknown.

The Army believes              that     developing          the core tank will             be low to
medium      risk,       in part     because        it will      use the military            standard
15538 data bus to transmit                     information          around      the tank.      However,
one of the major             developmental             challenges         of the core tank lies             in
developing          the new software             required.          Army     engineers      are concerned
that     the individuals            with     the     expertise        to do this        have not yet
been identified            and may not be available                     in the time frames
required.           OSD officials          have      also stated          their    concerns      about
developing          adequate       software        in the time allotted.                 Software      test
plans      do not define           how performance             will     be measured.          As currently
written,        criteria      will      be determined           as testing         takes    place.
Test         Plans         Not   Approved

The Army’s       test  and evaluation      master      plan    had not been approved               by
OSD as of August        1989.    OSD has some concerns               because      the   plan
contains     no provision     for post-production            quality        assurance,       which
is needed to establish          conformity      with     preproduction           goals.      In
addition,      OSD is concerned       that   the Army has not sufficiently
planned    live-fire      and operational       testing,       which needs to be
completed      and evaluated     before    the production            decision       is made in
August             1991.

Procurement      Funding     Required
Before   Prototype      Testinq

In     its     fiscal  year             1990     budget,         the         Army has allocated             procurement
funds         to      Block
                      the               II     program     for         the      procurement   of          long-lead
items         and production                 start-up      costs.              In    tank   acquisition

                                                             29




               Page 32                                                 GAO/NSL4D9O-57 Ab-                 Tank Block II Modifications
                  Appendix I
                  Unclassified Version of
                  November 1989 Report




    -

        Training   Issues               associated    with     the      MlA2, specifically            the   new
        core capabilities                  and maintenance           requirements,       are    not    resolved.

        The Army believes               that     fielding     a tank that           Contains       a new digital
        electronic          system      such     as the core configuration                   is critical         to
        gathering         information          needed for future             tank development.               However,
        OSD believes            that    the Army's        aggressive         campaign        to produce        the
        Block     II package           as an interim        measure        requires        further       thought.
        On several          occasions,         the Conventional            Systems       Committee         has
        directed        the Army to specifically                  identify        the    path    between
        Block      II and future            tank systems.           In June,        it directed          the Army to
        analyze       the option          of forgoing        HlA2 production             altogether         in favor
        of accelerating              the next generation              tank program.             At the time we
        received        comments on a draft               of this       report,       the linkages          were
        still      unclear.

        CORE ATTRIBUTES                 UNSUBSTANTIATED

        The Army believes          that     the core tank will              decrease         the tank's
        vulnerability        by providing          a redundant         electronic         capacity
        (allowing     one system        to perform         some functions            of another           if it is
        disabled);      decreasing        the maintenance            burden      by replacing             the
        simplified      test    equipment        used on the MlAl with                 built-in
        diagnostics:       and allowing         more     efficient,         and therefore            effective,
        tank operation.          The impact         of the core on the tank's                     vulnerability
        has not been tested.              The built-in           diagnostics         will      not support       all
        of the MlA2 systems,            and should         the built-in          diagnostics            fail,   more
        difficult     repairs      will     result     than on the MlAl.                 The assumptions
        regarding     the core's        contribution           to greater        efficiency           in tank
        operations,       with   its    consequent         impact      on combat effectiveness,                  are
        untested.

        The Army's        Ballistics        Research    Laboratory,          in support        of the MlA2
        COEA, conducted            a qualitative       vulnerability           assessment        of the core
        tank     in March 1989 that             was based on previous             test    and preliminary
        design      information.          The Army believes            that    redundant       capabilities
        and other        core characteristics           decrease         the tank's       vulnerability.
        The analysis         did not fully         support     the Army's         expectations           of the
        core's      impact      on tank vulnerability.               The vulnerability
         implications         of much of the new system                can only be proven              through
        testing.

        The analysis             also     determined    that         finding      space   for   future
        components        will          pose a considerable              problem.

        Limited   Ease        of Maintenance
        Prom Built-in          Test Equipment

        A major     improvement       expected       from the MlA2 core technology               is the
        easier    maintenance        expected      from the built-in      test/built-in            test
        equipment      (BIT/BITE)       diagnostic       system.    The MlAl's        simplified        test
        equipment's       diagnostic       package,      which   is heavy   and cumbersome,

                                                               27




L




                    Page 30                                           GAO/NSWSO-57Ab-             TankBlock        IIModiflcations
             Appendix1
             UnclassifledVersionof
             Novemher1989Re~0rt




    FUTURE TANK SAVINGS              IDENTIFIED         BUT QUESTIONABLE

    The Army believes           that   it can achieve      cost Savings     on the baseline
    tank,     which will      keep overall       tank costs    down.     It has estimated
    savings      that  it believes        can be obtained      by 1992 when the Block         II
    modifications        go into     production.       Army calculations       show that   if
     its projected       savings     can be achieved,       adding    the entire    Block  II
    package      would keep the tank price            at $3.022 million,       below the OSD
    ceiling.

    The program        manager      has estimated          future       savings        resulting         from
    new multiyear         contracts       for fiscal         years       1991 to 1995 for              the final
    drive     and transmission,           production         rate     increases          to the minimum
    sustaining       rate     above    earlier     Army production                rate     projections,          and
    changes      in the scope of special               armor programs.                 However,       the
    multiyear       contracts       have yet to be negotiated,                      and savings          in
    special      armor programs         have already            been     identified          for
    reprogramming         to cover      a $95 million             shortfall         in the Block           II
    development        program.        Further,      initiatives             such     as the weight
    reduction       program      may increase        the      tank’s       cost.       Accordingly,           we
    believe      the basis       for these      savings         to be questionable.

    CONCLUSIONS

    Army    cost     estimates        for   the    Block        II   modification       package       appear
    accurate.            However,     producing      the entire      Block     II package        will
    increase         tank    costs    by about     20 percent     and exceed           the current      OSD
    cost     ceiling       of $3.037       per tank.     The Army believes               that  producing
    the Block          II package       is necessary     despite       affordability          concerns.
    However,         unless     costs     can be reduced,       additional          funding    will    be
    required      to attain       the Army's       quantity       objectives.         Without
    additional       funds,      with   an OSD-directed           minimum annual         production
    rate,     and considering         that    future      savings       are questionable,          the
    Army is unlikely           to be able       to produce        the     full  Block    II package.
    An MlA2 with         fewer    components,         in turn,      raises     questions      about    the
    Army’s     cost-effectiveness            calculations         in which      the cost-
    effectiveness          of the tank was based on the entire                     package.

    AGENCY COMMENTS AND OUR EVALUATION

    In its comments            on a draft         of this          report,     DOD reiterated          that     the
    Army would  not          be    allowed      to procure            tanks    at uneconomical
    production        quantities,          that     is, below 516 tanks                per year.         DOD also
    noted      that    the DAB cost          goals      set      in December        1988 have      been
    SUCCessful         in convincing          the Army to maintain                  reasonable       tank
    prices.         Nevertheless,          given      current          funding    levels     and costs,         the
    Army will        not be able to procure                    the entire        Block    II package        of
    modifications          at economical            rates.           Producing      tanks    with only        some
    of the proposed            modifications            may change the tank's                operational
    effectiveness          gains       as compared          with       the MlAl     and, therefore,          may
    Call     into    question        the tank's         justification            based on cost-
    effectiveness          criteria.

                                                           25




i



              Page28                                            GAO/NSIADSO-57AbramsTank           Block UModitications
           Appendix I
           Unclassified Version of
           November 1989 Report




Table      3.1:        Production    Cost     Estimates       of   Block       II    Components

Component                                      Estimate                Basis        of   estimate

Core     tank                                   $254,000              Not-to-exceed        contract
                                                                      ceiling     price    and
                                                                      engineering       estimates

Commander’s    independent                        111,000             Not-to-exceed             contract
  thermal   viewer                                                    ceiling     price

Position/navigation                                20,000              Not-to-exceed            contract
  system                                                               ceiling     price

Carbon      dioxide        laser                   56,000              Production          opt ion in
   range      finder                                                   development          contract
Survivability                                      65,000              Engineering           estimate
   enhancements

Improved   commander’s                                                 Contractor’s    engineering
   weapons station                                 26,000              change proposal

        Total                                   %4lca!u

The Army believes              that   the extra      $254,000      associated           with
producing        each    core     tank is justified           in part     because        its cost
analysis        shows that        the core will       reduce     the tank’s           additional
procurement         cost     from $714,000        for a hard-wired             tank to $532,000
for the digital            core tank.        The analysis         assumes        that    all
components         will    be added and that          the full       program        of 2,926 tanks
will    be procured.           It did not include           5227.4     million        in development
costs      that    had already        been invested         in the core tank.                OSD agreed
with     the Army’s        finding      that   the integrated          core configuration
would be cheaper             than hard-wired         additions       if all        components     were
added.

ARMY HAS NOT FULLY ADDRESSED
OSD’S AFFORDABILITY CONCERNS

At the December            1988 DAB review,         the DAB established                  a cost
ceiling      of $300,000         for the Block        II package         and directed             the Army
to revise        its program         to keep the cost of the Block                     II program
within     the ceiling.            The DAB also authorized               a production             rate    of
516 tanks        per year.         From December        1988 to August             1989,       in
discussions         with    OSD, the Army continued              to state          that      it could
not accept         a tank with         anything   less     than    the    full       configuration.
In fact,       the Army was prepared            to accept        fewer tanks             rather      than
accept     a tank with         less     than the full        complement          of components.
However,       the Army has not revised               its program.             In all       subsequent
presentations,           it has restated        its position           that      no less expensive

                                                    23




            Page 26                                       GAO/NSL4IX?O-67 Abram8 Tank Block II Modifications
           Appendix     I
           Unclassifkd Version of
           November 1989 Beport




in the tank           being    consldered      for     weight   reduction          are     shown       in
table  2.1.

Table      2.1:       Weight    Savings     Opportunities         for    the      Abcams        Tank

                                             Weight                             Scheduled
Item                                savings    objective                    effective     date
                                          (pounds)

Ammunition        racks                          200                    Aug.       1990
Aluminum      wire
   race ring                                    h30                      act.      1992
External      SuSpenSiOn                     1,000                       Apr.      1993
Lightweight         track                    1,000                       Apr.      1993
Composite       items                        2,690                       Fiscal      year        1993/1994
Ceramic     skirt                               879                      Apr.      1993
Other    contractor
   proposals                                                             Fiscal          year    1993/1994

        Total

The Army plans      to add portions      of planned     Block  II armor on a
trade-off     basis   as planned   weight    savings    are achieved.       However,
most    of the Army’s     planned  weight    reductions     are scheduled     for
development      and are not expected      to be realized      until   after    the
start     of MlA2 production.

CONCLUSIONS

Improved     survivability          1s one of the Army’s       top priorities     in tank
development.         Yet       a number of factors     suggest    that   the goal of
improved     survivability          to justify   Block    II production       is
quest ionable.

AGENCY COWMENTS AND OUR EVALUATION

In commenting           on a draft        of this     report,     DOD stated           that    it was
confident        that    Block     II armor packages           would be developed                in
sufficient         time,    with     sufficient      protection          capabilities,           and
within     current       overall      weight     requirements          to enter        production      as
planned.         Testing      that    has been completed             since     our report          was
drafted,       however,       shows that        some candidates            for the armor package
have failed          to meet expectations.               Award of full-scale                development
contracts        has been       moved     back.     Thus,     development           of the armor
packages       is now behind          in meeting        an already        compressed
development          schedule.        In addition,        OSD has not approved                 any part
of the survivability               enhancement        package      for production.




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               Appendix   I
               Unclassified Version of
               November 1989 Report




r-
                                                    CHAPTER      2

                                      PROPOSED       ARMOR PACKAGES          MAY
                                       NOT IMPROVE SURVIVABILITY


     The     Army may not      reach    its   Block   II survivability            goals       because
     (1)     the Block II      armor specifications            are understated            and
     (2) weight      constraints        preclude     adding      most of the additional
     armor.     As a result,         the Army’s     survivability         justification             for      the
     Block    II program       is questionable.          Increased      tank      sucvivabllity              IS
     a long-standing         Army priority        and is an important             justification              foe
     the current      Block      II program.

     Current  plans    call   for the survivability              enhancement      portion      of the
     Block     II
                program     to enter    full-scale         development       at the same time
     as the MlA2    advanced     procurement        decision       is to be made.         That
     schedule   depends     on successful        testing      of the armor packaqes.

     Even with        successful        and timely           results,       the   Army will       not be able
     to add all        armor currently             under development              because      its additional
     weight      will    further     constrain          available         tank support         equipment     and
     the   tank’s      suspension        system.           The Army’s         weight      goal for the tank
     is 68.5 tons,           and its     limit       is 69.5 tons.              Currently      planned
     Block     II additions        will      bring       the    weight      to over 72 tons.           Al though
     the   Army has program             goals      for weight         reduction,          these goals     are
     not planned         to be met until             after       the  start      of MlA2 production.

     BLOCK II ARMOR
     SPECIFICATIONS ARE UNDERSTATED

     Performance        specifications       for part     of         the   Block    II armor
     development        program       do not sufficiently             account     for all     threat
     munitions      expected        to be in the field.                In addition,       recently
     revised     threat     projections      may neutralize              other    planned     Increases
     in protection.

     CAPABILITY    OF PROPOSED
     SURVIVABILITY    ENHANCEMENT
     IS UNCLEAR

     Development    of new armor          packages   for the Block      II               survivability
     enhancements     will      not    be complete   before  the Army’s                   advanced
     procurement    decisions          are made.   A number    of private                   companies       and
     two government        laboratories       are developing     candidate                  armor
     packages.

     The armor      developers      have been given         expected   threat    capabilities,
     weight    limits,       and size dimensions         for each survivability
     enhancement       package     against    which their       armor will     be measured.
     The packages        vary widely       in their    technologies      and designs.           At
     least   one of the government            candidates       exceeds   the weight       limit.

                                                         19




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               Appendix1
               UnclasaifiedVereionof
               November1989 Report




r
    estimated        component       costs      and production         quantities          of 516 tanks
    per year       (in constant         dollars).          This cost ceiling             replaced        its
    earlier     ceiling      of $300,000           for the Block         II package.             The DAB
    believes       the per-tank         unit      cost ceiling       to be sufficient                to produce
    the MlA2 tank with             the CITV and the ICWS, using                     the integrated            core
    approach.         This   amount does not include                 sufficient          funding       to
    produce     the survivability               enhancements,        the position/navigation
    unit,     and the carbon          dioxide        laser    range finder.            Production          of
    these    components        was made contingent                on the Army's          ability       to
     (1) demonstrate,           through       further      analysis,       their      cost-effectiveness
    or (2) reduce          component        or baseline         tank   costs      to meet        the
    $3.037     million      ceiling.

    The DAB also directed              the Army to demonstrate,                before    the
    milestone         III   production     decision,       that    the tank will         meet proqram
    specifications.              These specifications           include      the results        of full-
    up live-fire          testing.       Such tests      are currently          scheduled       for
    February        to July      1991, with     the production          decision      scheduled      for
    August       1991.      The DAB retreated         from its       earlier      requirement,
    however,        that    the Army demonstrate           the linkages         between      the
    Block      II program        and its next generation             tank.

    Since     the DAB review,      the Army has requested        additional   research,
    development,     test,    and evaluation        funding  and now estimates      that                         it
    needs $94.9 million         to complete     full-scale    development.      A
    significant     amount    ($18.5   million)       is for core software
    development.

    OBJECTIVES,           SCOPE, AND METHODOLOGY

    The House Committee              on Armed Set-vices              asked that      we review      the
    Army's     Block     II tank modernization                  program.      Our objectives          were to
    examine      the Army's        justification             for the Block       II program        and to
    determine       (1) whether          the improved           performance      the Army expects           of
    the proposed         modification            package       can be realized;          (2) whether      the
    Army’s     acquisition         strategy         allows       for adequate      testing    and
    evaluation        to be performed             before       production     decisions      must     be
    made; and (3) what impact,                    if any, the Block           II program      will     have
    on future       tank modernization                plans.

    To do so, we examined                Army and DOD documents      that               supported       and
I   analyzed  the program.                We discussed  their   contents                 with
    --   officials         and engineers          from    the     Tank-Automotive          Command;

    --   analysts         at the Training     and Doctrine     Command (TRADOC)                      Analysis
         Center      at     the White   Sands Missile     Range;

    --   tank commanders,   gunners,                 and other        officials       from     the   Armor
         Center and School:



                                                         17




                                                                                                                      J



               Page20                                           GAO/NSIAI%fKJ-67AbramsTankBlockUModitications
           Appendix I
           Unclaesifed Version of
           November 1989 Report




consists     of six segments,           which provide     the means to monitor           and
control     electrical        power for tank subsystems,           process     data and
transmit      it among subsystems,            and display    information        to the tank
Crew.     The core system          will    use some existinq       components        but will
require     newly developed         software.       The software      will    connect
existing      tank     components,      which are for the most part             analog,   with
new dlqital        components.

The Army hopes              that      the    core integration         will     decrease       the costs      of
future       tank modifications                 because    future     capabilities           will    only
require        software         changes.         The Army also posits              that    the core will
add important              capabilities          above    and beyond cost savings                 with    no
loss of reliability.                      These capabilities          include        increased
survivability,              ease of maintenance,              and needed experience                with
digital        electronics            in a ground       combat    vehicle.           The Army believes
that    such experience                 is important      , given     its plans         for the next
generation           tank,      which call         for an all-digital            electronics         system.

ADDITIONAL MODIFICATIONS
PLANNED FOR THE MlA2 TANK

The Army plans            to make a series             of production           changes     to the
Abrams tank that              are not part         of the Block          II development           program.
One significant             change,      to the fire          control      system,      is required        to
integrate        improved        munitions        being      developed       in the Army’s         Armament
Enhancement        Initiative.             This    initiative         is the Army’s          program     to
improve      the   effectiveness            of the current            qeneration        of munitions.
One munition,           designed       for the secondary              tank mission         of air
defense,       is expected          to achieve         a higher       probability         of hitting       its
target     because        of changes        made possible           by the       new core
configuration.              The Army plans           to retrofit         existing       MlAl    tanks with
fire    control       system      changes       for this        and other        improved     Armament
Enhancement         Initiative         munitions.

Another     change that       the Army plans        to retrofit  to Abrams    MlAl
tanks    includes       new torsion   bars,      which are needed to support       the
Increased      weight     of the current       MlAl   production   model,  which has
heavier     armor     than previous      versions.

PROGRAM HAS NOT RECEIVED
PRODUCTION APPROVAL BY THE OFFICE
OF THE SECRETARY OF DEPENSE

During   the fiscal        year 1990 budget        preparation,         DOD’s Conventional
Systems    Committee       (CSC) determined        that    the Block        II program    would
be reviewed      by the DAB as pat-t         of its oversight           responsibility.
The DAB provides         the Secretary       of Defense        with    advice    on major
weapons    systems     acquisitions.         Likewise,       the CSC, as one of the
DAB’s 10 acquisition            committees   , works with         the Army to identify
and resolve      program      issues    whenever     possible       and formulate
recommendations        for the DAB’s consideration                when appropriate.


                                                     15




           Page 19                                        GAO/NSIAIW9-57 Abrame Tank Block II Mndiflcation:
          Appendix I
          Unclassified Version of
          November 1989 Report




The Block        II    components         are intended       to    address   the following
deficiencies           in    current      tank capabilities,           as identified     by the
U.S. Army        ArmOK       Center      and School:

--   A commander’s   independent     thermal    viewer      (CITV)   will               allow      the
     commander   to detect    and acquire    targets      independent                  of the
     gunner.   The commander     and gunner     currently       use the                same sight
     to search   for targets.

--   Survivability            enhancements          in the form of        new armor     packages         are
     designed         to    increase      the    tank’s   protection       against    threat
     munitions.

--   An improved      commander’s      weapons station      (ICWS) is required
     because   of    changes    caused    by the   addition     of armor  and space
     requirements       for the CITV.       This   station    is intended    to provide
     the commander        with  a greater    field    of view and an integrated
     display      of data from tank systems.

--   A position/navigation                   (POS/NAV)   system   will      assist    the   tank    crew
     in identifying             its     location    on the battlefield.

--   A carbon      dioxide       laser    range finder,     which will   replace     the
     current     range      finder,     will    be safer  to use and will      improve
     precision       gunnery        in some foggy     and smoky environments       in which
     the current         range finder        cannot   be used.

These     improvements            are    shown    in   figure     1.1.




                                                       13




           Page 16                                          GAO/NSIAD9067   Abrams Tank Block Jl Modifxcations
              Appendix 1
              Unclsssifled Version of
              November 1989 Report




-
                                                      CHAPTER 1

                                                    INTRODUCTION


    The Army’s          Abrams     main battle        tank (the Ml) was developed                         in the
    late     197os,      and the Army authorized                full-rate          production           of it in
     1981.      The Army’s          plan called       for adding          capabilities             through
    “block      improvements.”             The most recent            major     block         improvement,         the
    MlAl,     was fielded           in December        1986 and included               a larger         main tank
    gun. improved            armoc,     and a nuclear,          biological,            and chemical
    protection          system.        Additional       armor has since              been       added.      The
    Army’s      current        upgrade      package,     called       the “Block           II pcogcam,”          is
    the third        in the series            of block    modifications              to the Abrams           tank.
    Production          costs     are expected        to be about          $1.5      billion.

    THE ARMY’S           TANK MODERNIZATION             PROGRAM

    In December          1988,   the    Department        of Defense’s           (DOD) Defense
    Acquisition         Board    (DAB)     gave the Army conditional                  approval       to
    proceed       with    its Block      II program,         and the Army awarded              a full-
    scale     development         (FSD)    contract       to General         Dynamics     Corporation
    shortly       thereafter.         The Army believes              that    the Block      II program
    will     provide      an interim       response       ducinq       the mid-1990s        to an
    increasing         Soviet    threat      by improving          the lethality,         survivability,
    and fiqhtability           (the ease and efficiency                   with which the crew can
    operate       the tank)      of the MlAl        until      the next generation             tank      can be
    produced.          The Army performed           a cost and operational                effectiveness
    analysis        (COEA),    which     it believes         justifies         the expenditure           of
    additional         funds   for the proposed             upgrades.

    The Block       II      program      is expected    to proceed                  into  full-rate
    production         as     the MlA2 tank in August            1991             and stay      in production
    until    fiscal         year    1997.    The Army’s      fiscal               year   1990 budqet       reauest
    contains      over       $166 million        for pcocucement                  of lonq-lead       items    and
    noncecurrinq            production      start-up    costs.

    The Army’s         heavy     force    modernization      program     calls  for the
    fielding       of a follow-on           to the Abram6 tank in fiscal           year      1997.
    This     next   generation         tank,    which   is being     developed    under the
    Army’s      heavy force         modecnization       concept,1     is sometimes       referred      to
    as “Block        III.”       The Army, however,         has not decided       whether       its
    next generation            tank will      be a follow-on       to the Abram6       or part      of
    the Abram6         series.

    The Army        is     to begin  systems      engineering                analysis       for         its      next
    generation           tank in fiscal      year    1990.             Its    design       has     not          yet   been


     1This     concept    calls        for    a common       chassis         to    be   used      for         all   heavy
    combat      vehicles.


                                                           11




               Page 14                                          GAO/NSIAIMO-57          Abrams Tank Block II .%IodiIications
          Appendix I
          UnclassUitxl Version of
          November 19&Y Report




  5             COST-EFFECTIVENESS      HAS NOT BEEN ESTABLISHED
                  FOR ALL COMPONENTS                                                                  35
                  COEA Conducted     to Determine      System and Cost-
                     Effectiveness                                                                    35
                  Effectiveness     Overstated     Due to Assumptions
                     Not Supported     by Operational      Data or
                     Reassessed    on the Basis     of Updated   Information                          36
                    Conclusions                                                                       37
                    Agency        Comments    and Our      Evaluation                                 38

  6             CONCLUSIONS AND RECOMMENDATIONS                                                       39
                  Agency Comments and Our Evaluation                                                  41

APPENDIX
      I         MAJOR CONTRIBUTORS             TO THIS       REPORT                                   43

                                                 TABLES
                                                 --
  1.1           Block     II Production        Components                                             12
  2.1           Weight      Savings     Opportunities     for the
                    Abrams Tank                                                                       21
  3.1           Production        Cost Estimates      of Block      II
                    Components                                                                        23
  3.2           Alternative         MlA2 Procurement      Quantities                                  24

                                                FIGURE

  1.1           Planned   Block II           Improvements        to     the   Abrams
                   Tank                                                                               14
  4.1           Dates of Funding             Decisions       and Testing         for
                   the MlA2                                                                           30




                                                  9




          Page 12                                        GAO/NSIADM-57        Abrams Tank Block 11 Mcdificathm\
       Appendix I
       Unclasslfled Version of
       November 1989 Report




    Additional     Department     of     Defense   comments     have   been   noted,   as
    appropriate,     throughout        the report.




I                                                7




        Page 10                                GAO/NSlADSO-67     Abrams Tank Block U Modifications
              Appendix I
              Unclassified Version of
              November 1989 Report




-

    Defense’s        commitment          to   the    program     at   the    time     of   the    production
    decision.

    Performance          Capabilities
    of Integrated           System       Unknown

    The proposed          electronics         package      of the tank’s        digital       core,    which
    will    integrate         the Block        II components,         has not previously            been
    used in a tank.              The Army expects            to realize      numerous       advantages
    from the core configuration,                     such as improved         tank reliability,
    increased        survivability,            lower    operation       and support       costs,      and
    fewer maintenance               problems.        However,     the Army does not have
    analyses       that     support       these    expectations.           In addition,         developing
    adequate       software         is critical       to the performance            of the core
    system.        Army     and Office         of the Secretary          of Defense       officials
    believe      that     this      will    be a difficult        developmental         task and that
    much needs to be accomplished                      in a short       amount of time.

    Effectiveness           Gains       Overstated

    The Army performed                 a cost and operational                effectiveness            analysis,
    which concluded               that   the major        gains     in effectiveness              expected       with
    the Block         II improvements             supported       the increased            program       cost of
    $532,000        per tank.           The analysis         was based on certain                 key
    operational            assumptions         that    are not supported              by actual
    experience.             For example,          the analysis          assumed that           commanders        of
    currently         fielded        tanks     do not search          for targets.             Tank
    commanders,            however,      routinely        perform       that     task.       Likewise,        the
    analysis        assumed that            with    the new independent                thermal      viewer,
    commanders          would spend all             of their      time searching.               I” fact,        some
    commanders           (two of four           in a platoon)         have numerous            additional
    responsibilities,                a factor       that   was not considered.                  These
    assumptions            resulted       in the overstatement               of the new tank’s
    effectiveness.

    Linkage   Between   Block II
    and Future    Tanks Not Defined

    The Army believes        that    it needs to produce          and field     the digital
    electronics      system,    or core tank,       planned     for the Block       II package
    to test      out certain    new corzepts      that    will    support    future    tank
    efforts.      However,   the Army “as not determined              a system
    configuration       for its     next generation       tank,    and preliminary
    indications      are that     there  may be little         commonality      between     the
    two models.

    RECOMMENDATIONS

    GAO recommends            that    the Secretary    of Defense    withhold                    approval       of
    the obligation            of advanced     or other   procurement      funds                  for the       Block
    II tank program             until


                                                            5




                Page 8                                          GAO/NSIAIWJ-67 Abrams Tank Block II Modifications
             Appendix I
             Unclassified Version of
             November 1989 Report




In December       1988,     the     Defense      Acquisition       Board conditionally
approved     the Block         II program        for development          but    placed      a 5300,000
per tank cost limit              on the modifications.              The Block         II package,        as
currently      desiqned        by the Army,          is expected      to cost roughly
$532,000     per    tank.        Total     program      production      costs      are expected        to
exceed    $1.5 billion           to procure        2,926 tanks.         In August         1989,    the
Office    of the Secretary              of Defense        approved    continued         development
and established           a new production             cost ceiling       of $3.037 million            per
tank.     This    amount       is not sufficient             to produce       the entire        Block    II
package,     given     current         costs.

RESULTS IN          BRIEF

The Army         believes           that    It needs           the Block           II program           to improve
the Abrams   tank’s                 survivability,               fightability,               and lethality           to
meet an increased                   Soviet       tank threat            expected           in the mid-1990s.
The Army also believes                      that      the      Block       II improvements                are needed to
provide        a link         to the next            generation            tank,       which     is expected           to
meet     the    Soviet          threat      at the         turn      of the century.                  However,       the
currently          approved           tank does not include                      all     survivability,
f ightabil       ity,       and lethality             enhancements               that     were      assumed to be
available          when the           Army performed               its     cost and operational
effectiveness               analysis.            Further,          the Army has not demonstrated                          its
additional            justification--the                  link       between         this     and the next
generation            tank.         In its       attempt         to field          an upgraded            Abrams     tank
within       this       time      frame,       the Army has adopted                      a compressed
acquisition             strategy.           This       strategy          is risky         because         key
components            of the Block             II package            are in the early                 stages      of
development,              and testing            and evaluation                of the components                and the
integrated            system        will    not      be complete             when certain             production
decisions          are made.             This means that                 under current              plans,      the Army
will     commit         advanced         procurement             funds before              test     results       of the
system       are available.

The     compressed       development            schedule,          the lack         of test       data,     and the
absence         of a trial       period       of low-rate            initial        production         may result
 in performance           problems        after        the program           enters     full-rate
production.            These problems             could       delay      the Block        II program          and
raise       its   cost,     thereby       calling          into   question          the Army’s
justification           for the MlA2 as an interim                         solution       to meet the
threat        and hindering         future        critical         tank      modernization           efforts.

PRINCIPAL          FINDINGS

Enhanced         Survivability             Questionable

The proposed      Block       II armor packages           may have only      limited     impact
on the tank’s       survivability--          one of the Army’s         top tank
modernization       priorities.            The Army may not reach          its Block       II
survivability       goals.         In addition,         a tank made heavier         with   the
addition      of armor      will     further     stress     tank suspension        and support
systems.       The Army’s        planned      weight     reduction   program       will  not   show

                                                             3




             Page 6                                              GAO/NSIADBO-57 Abrame Tank Block II ModifIcatiol
Appendix I

Unclassified Version of November 1989 Report




             I    B-235418


                  November 30, 1989

                  The Honorable   Les Aspin
                  Chairman,   Committee    on Armed             Services
                  House of Representatives

                  Dear    Mr.   Chairman:

                  This    report     responds      to your request     that       we review  the
                  Army's     plans     to modernize      the Abrams tank.           We have also
                  provided       several    briefings      on the program         to your staff.

                  The Army's       Block    II Abrams modification              program     entered
                  full-scale       development        in December        1988.     The Army plans
                  to make a production            decision         on the program       in August
                  1991.      However,     procurement           funds are being       requested     in
                  the fiscal       year 1990 budget             for long lead time and non-
                  recurring      items.       The full       program     has not been approved
                  for production         by the Secretary            of Defense.        This report
                  focuses     on the Army's         justification         for the Block        II
                  program     and problems        that      have been or may be encountered
                  in the development           phase.         It contains      recommendations        to
                  the Secretary         of Defense.

                  We are sending       copies   of the report     to         the Chairmen        of
                  the Senate     Committee     on Armed Services             and on
                  Appropriations       and the House Committee               on Appropriations
                  and the Secretarles         of Defense  and the            Army.      We will
                  also make it available         to other  interested              parties      with
                  appropriate     clearances.
                  The report    was prepared      under the direction     of Richard
                  Davis,  Director,       Army Issues,   who may be reached       on
                  (202) 275-4141       if you or your staff     have any questions.
                  Other major     contributors     are listed   in appendix    I.
                  Sincerely      yours,




                  Frank C. Conahan
                  Assistant Comptroller            General




                 Page 4                                      GAO/NSlAWW-57 Abrams Tank Block II Modifications
5235418




Unless you publicly announce its contents earlier, we plan no further
distribution of this report until 30 days after its issue date. At that time.
we will send copies to the Chairmen of the Senate Committee on Armed
Services and the Senate and House Committees on Appropriations; the
Director, Office of Management and Budget; and the Secretaries of
Defense and the Army. We will also make it available to other interested
parties.

The report was prepared under the direction of Richard Davis, Director,
Army Issues, who may be reached on (202) 275-4141 if you or your
staff have any questions.

Sincerely yours,




Frank C. Conahan
Assistant Comptroller General




 Page 2                          GAO/NSlAD-90-57   Ab-   Tank Block II Modifications