Naval Aviation: The V-22 Osprey--Progress and Problems

Published by the Government Accountability Office on 1990-10-12.

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

                                        -                Unittd   States Gttmral   Accounting   Office
                                                         Report to t,he Ranking Minority
GAO                                                      Member, Committee on .Arrned Services,
                                                         I-hw of’ Representatives

-_--..                   ---_P__            -..--   --

Oct.otwr 1990
                                                         NAVAL AVIATION
                                                         The V-22 Osprey-
                                                         Progress and Problems


                                   BEmICTIED--Not        to be rei&kd   outaide the
                                   General Accounting Office unless specifically
                                   approved by the Office of Congressional

._   ..-   -   -....-..   --_.”   ..--   -_----I-_.~------_--   -_____--------~----

             United Statee
GAO          General Accounting Office
             Washington, D.C. 20548

             National Security and
             International Affairs Division


             October l&l990

             The Honorable William L. Dickinson
             Ranking Minority Member
             Committee on Armed Services
             House of Representatives

             Dear Mr. Dickinson:

             As you requested, we are updating certain information in our December
             1989 report on the V-22 Osprey tiltrotor aircraft.’ You expressed partic-
             ular interest in the status of program testing, funding requirements to
             complete testing and development, and readiness of the V-22 program
             for production funding in fiscal year 1991. On October 2, 1990, we
             briefed your Committee staff and the staffs of the Senate Armed Ser-
             vices Committee and Representative Weldon on the results of our work.
             This report summarizes that presentation.

             The V-22 is a tiltrotor aircraft designed to take off and land vertically
Background   like a helicopter and to fly like an airplane by tilting its wing-mounted
             rotors to function as propellers. The V-22 is being developed to perform
             various combat missions, including medium lift assault for the Marine
             Corps, combat search and rescue for the Navy, and long-range special
             operations for the Air Force. The V-22 is intended to replace the CH-46
             Sea Knight helicopter for the Marine Corps and to supplement existing
             aircraft for the Air Force.

             The Navy is developing the aircraft under a fixed-price incentive con-
             tract with Bell Helicopter Textron, Inc., and Boeing Helicopter Company.
             The full-scale development contract was awarded in May 1986 and
             requires the two contractors to produce six aircraft for flight testing and
             three for ground testing. It included an option to buy 12 aircraft under
             pilot production. The engine is being developed under a firm fixed-price
             contract by the Allison Gas Turbine Division of General Motors.

             The program was adequately funded through fiscal year 1989. In fiscal
             year 1989, $333.9 million in advance procurement funding was appro-
             priated for the pilot production long-lead efforts. However, in an
             amended fiscal year 1990 budget submission, the Secretary of Defense
             deleted the program due to its high cost relative to its fairly narrow

             ‘Defense Acquisition Programs: Status of Selected Systems (GAO/NSIAD-90-30, Dec. 14,1989).

             Page 1                                              GAO/NSIAD-9146     The Navy’s V-22 Osprey
                   mission, which could be performed by helicopters. Subsequently, Con-
                   gress restored research and development funds through fiscal year 1990
                   but delayed a decision on production funding. As a result, the V-22 pro-
                   gram office developed a contingency plan to proceed into production.

                   The Department of Defense’s fiscal year    1991 budget request did not
                   include any funds for the V-22 program.    Instead, it requested research
                   and development funds for a medium-lift     helicopter to replace the V-22.
                   The Congress is again debating whether    to accept the administration’s
                   decision to cancel the V-22 program.

                   In our December 1989 report, we identified engineering and testing con-
Results in Brief   cerns that adversely affected the schedule, performance, and cost of the
                   V-22 aircraft, Our current work indicates that the V-22 program is con-
                   tinuing to experience developmental problems that could make the tran-
                   sition to production a high risk. In early 1989 V-22 production readiness
                   reviews, the Naval Air Systems Command concluded that program risk
                   was high due to concurrent full-scale development testing and pilot pro-
                   duction of aircraft. The Command identified concerns regarding the suit-
                   ability of composite materials for production processes and a lack of
                   software development that is essential to the proper functioning of the
                   flight control system. Navy quarterly technical progress reports, from
                   October 1989 through June 1990, showed that these problems had not
                   been resolved. For example, the Navy reported continued major con-
                   cerns with vibration, composite materials, flight controls, avionics, and
                   environmental control systems. Although development and production
                   of weapon systems can be done concurrently to expedite a program,
                   such concurrency often involves high risk. Our analyses of several
                   major concurrent weapon systems show that the systems may not per-
                   form as intended and/or may require significant funds to correct

                   Although the V-22 is a highly concurrent program and Navy production
                   readiness reviews indicated continuing problems that affect full-scale
                   development testing and could affect producibility, the program office
                   considers the technical risk to be at an acceptable level. The program
                   office believes that pilot production could be started in fiscal year 1992
                   and that long-lead procurement funding would be needed in fiscal year

                   Even if Congress decides to continue the V-22 program, the program’s
                   status and high concurrency make it impossible to know at this point

                   Page 2                                    GAO/NSIAD9145   The Navy’s V-22 Osprey
                 whether it will be ready for production in fiscal year 1992 as the pro-
                 gram office plans. If fiscal year 1991 long-lead funds are approved, we
                 believe that before obligating any funds the Secretary of Defense should
                 certify that the risks of concurrency are being managed and that the V-
                 22 program schedule is being met.

                 The V-22 program is in the full-scale development phase of the acquisi-
Program Status   tion process. This effort will extend through fiscal year 1994 if program
                 funding continues. To date, four of the six aircraft for flight testing
                 have been provisionally accepted by the Navy pending completion of
                 flight tests and installation of equipment such as the Automatic Flight
                 Control System and the Vibration Structural Life Engine Diagnostic
                 System. Aircraft number five is still under construction, and work on
                 number six has been deferred.

                 According to the program office, construction of aircraft number five is
                 about 80 percent complete and number six is about 60 percent complete.
                 However, in its June 30, 1989, Selected Acquisition Report, the Depart-
                 ment of Defense indicated that none will be “fully configured end items”
                 because, due to termination, they will not meet the “Test Aircraft
                 Delivery Configuration Requirements” of the full-scale development
                 contract. Additionally, there have been more than 130 contract modifi-
                 cations and numerous aircraft specification waivers. The pilot produc-
                 tion design has not been finalized, and the contractor has submitted
                 about 800 specification changes.

                 Under the new contingency plan, a decision for pilot production is
                 scheduled for December 1991. If approved, 10 aircraft could be con-
                 tracted for in two phases: 4 aircraft in 1992 and 6 in 1993. According to
                 the program office, the change to 10, rather than 12, pilot production
                 aircraft as originally planned was a response to higher contractor costs
                 and anticipated reductions in the Marine Corps’ program funding. Prior
                 to the Secretary of Defense’s decision to terminate all production-related
                 contracts, the Navy had exercised the full-scale development contract
                 option to buy 12 pilot production aircraft at a maximum price of
                 $900 million. According to the program office, this option was lost when
                 the Defense Department terminated the program. If the program is
                 allowed to enter pilot production, the contract will need to be renegoti-
                 ated. Because there is no binding contract, the definitive cost on the pro-
                 posed 10 pilot production aircraft is not known.

                 Page 3                                    GAO/NSIAD-9146   The Navy’s V-22 Osprey

                     According to the program office, if the program is reinstated, $238 mil-
                     lion will be needed in fiscal year 1991 for research, development,
                     testing, and evaluation (RDT&E) and $490 million will be needed for
                     long-lead procurement. Although additional RDT&E funding will be
                     needed through fiscal year 1994, the program office is uncertain of the
                     dollar amounts needed for each of the out years. The program office
                     believes that $466 million of the long-lead procurement funds require-
                     ment can be met with $165 million in new appropriations; $200 million
                     in fiscal year 1989 appropriated, but unobligated, long-lead funds; and
                     $100 million in recoupment of usable work or unexpended funds previ-
                     ously paid to the contractor for long-lead work efforts.

                     The proposed program stretches out procurement. By 2002, only
                     218 aircraft will be procured versus the 552 originally planned for the
                     Marine Corps. However, the Marine Corps’ requirement remains at 552.

                     Vibration and weight reduction remain primary issues concerning poten-
Development Issues   tial aircraft performance. Changes to the current design to correct defi-
                     ciencies already detected in testing, such as vibration, or those
                     discovered later may aggravate efforts to reduce the weight or introduce
                     other complications in a production V-22.

Vibration            Early tests identified unacceptable vibration during flight. The con-
                     tractor has designed a preliminary three-stage vibration reduction
                     package consisting of fin weights, pendulum absorbers, and a computer
                     driven suppressor unit. Whether these fixes prove workable for produc-
                     tion aircraft will not be known until they are tested.

Weight Reduction     As of August 3,1990, the V-22 was expected to be about 2,822 pounds
                     over the required weight. The contractor expects to eliminate about
                     1,600 pounds during pilot production. This leaves about 1,200 pounds of
                     excess weight. If full weight reduction is not realized, the contractor is
                     proposing that the drive system be certified to handle an increase in the
                     current continuous shaft horsepower from 4,200 to 4,570 to meet the
                     aircraft’s performance requirements. This change, however, may also
                     add weight and/or reduce range,

Flight Test Status   Although several tests pertaining to the drive system and overall air-
                     craft performance demonstrations have not been done, program officials

                     Page 4                                   GAO/NSIAD91-45   The Navy’s V-22 Osprey
                     expect that 80 percent of the flight test events will be completed by the
                     planned pilot production decision date of December 1991. The flight
                     testing program was estimated to have a requirement of 4,110 hours. As
                     of October 9, 1990, only 214 hours, or 5 percent, had been completed.
                     Nevertheless, program officials are optimistic and believe the number of
                     flight test hours needed to accomplish the test program may be reduced
                     to about 3,000. Under the contingency plan, initial operational testing is
                     scheduled to begin in May 199 1.

                     The first phase of government flight testing was conducted from
                     March 17 to April 23, 1990, 2 months behind schedule. Although a final
                     test report has not been prepared, as of August 8, 1990, about 86 defi-
                     ciencies had been noted, 33 of which were categorized as adversely
                     affecting aircraft airworthiness, primary or secondary mission capa-
                     bility, crew effectiveness, or safety. Although program officials consider
                     86 deficiencies to be a low number for a developmental program, gov-
                     ernment testing has been more limited than initially intended because of
                     aircraft vibration problems.

Program Costs        The program has experienced cost growth. The full-scale development
                     contract’s target price is $1.729 billion with a ceiling price of $1.825 bil-
                     lion. As of June 1990, the Navy’s estimated cost to complete the full-
                     scale development contract was about $1.975 billion. This is $150 mil-
                     lion over the contract ceiling price, and the contractors would be liable
                     for these costs. The cost growth is attributable to manufacturing
                     problems, ground test articles, and failed or unavailable equipment, for
                     example, multifunctional displays and mission computer. As of May
                      1990, contractor billings totaled about $1.6 billion; as of July 1990, gov-
                     ernment payments totaled about $1.4 billion. Under the contract pro-
                     gress payment schedule, only 88.5 percent of cost is paid until all
                     contract terms are fulfilled.

                     The Defense Department’s production management policy (DOD Direc-
Readiness for        tive 4245.6) requires production readiness reviews to support pilot pro-
Production Funding   duction decisions. These reviews are done to validate design readiness,
                     determine if production engineering problems have been resolved, and
                     assess the state of planning for the transition to production. In prepara-
                     tion for the previously scheduled pilot production decision of December
           ”         1989, the Navy conducted several of these reviews between January
                     and June 1989. The Navy gave the program an overall rating of high

                     Page 5                                     GAO/NSIAD9146   The Navy’s V-22 Osprey

                 risk2 because of the high degree of concurrency between full-scale devel-
                 opment and pilot production. In reviews concerning the wing/nacelle
                 and the fuselage/airframe, the Navy cited composite laminates, the use
                 of honeycomb, and inconsistencies between the program plan and the
                 production schedule as major problem areas. Evaluations of the flight
                 control system, infrared suppressors, and environmental control system
                 were given an overall risk rating of medium3 because of incomplete qual-
                 ification testing and noncompliance with specification requirements.
                 Many of these same concerns remained unresolved in subsequent Navy
                 technical quarterly progress reports.

                 Even if the Congress decides to continue the V-22 program, the pro-
Recommendation   gram’s status and high concurrency make it impossible to know at this
                 point whether it will be ready for production in fiscal year 1992 as the
                 program office plans. As a result, we recommend that prior to obligating
                 the fiscal year 1991 long-lead funds the Secretary of Defense certify
                 that the risks of concurrency are being managed and that the V-22 pro-
                 gram schedule is being met.

                 Our work was performed from July to October 1990 in accordance with
                 generally accepted government auditing standards. Information was
                 gathered through Navy and contractor program documents; interviews
                 with Navy, Marine Corps, Air Force, and contractor officials; and visits
                 to primary contractor sites and the Naval Air Test Center. We did not
                 verify cost data provided by the contractor or program office. As
                 requested, we did not obtain official written agency comments. How-
                 ever, we did discuss the results of our work with Navy officials, and
                 their comments were incorporated, as appropriate.

                 As agreed with your office, unless you publicly announce its contents
                 earlier, we plan no further distribution of this report until 30 days from
                 the date of this report. At that time, we will send copies to the
                 Chairmen, Senate and House Committees on Appropriations and on
                 Armed Services; Senate Committee on Governmental Affairs; and House
                 Committee on Government Operations, and the Secretaries of Defense

                 2A high risk is associated with events that require rescheduling or high manpower application to
                 prevent an impact on production schedules or cost.
                 3A medium risk is associated with scheduled events that are not completed and that require increased
                 management attention to prevent affecting production, for example, the need for an additional
                 facility that is scheduled but not under construction.

                 Page 6                                                  GAO/NSIAD91-46      The Navy’s V-22 Osprey
ud       E240821

         and the Navy. Copies will be made available to other interested parties
         upon request.

         Please contact me on (202) 275-6504 if you or your staff have any ques-
         tions concerning this report. An illustration of the V-22 Osprey and its
         major systems is shown in appendix I. Major contributors to this report
         are listed in appendix II.

         Sincerely yours,

         Martin M Ferber
         Director, Navy Issues

         Page 7                                   GAO/NSIAD914   The Navy’s V-22 Osprey
Appendix I

The V-22 Osprey and Its Major Systems                                                                                                ’ *au

                                                              V-22 OSPREY

                                                                    Drive Svttem:                                                           Ad

    l   Vibration Structural Life   iF u
        Engine Diagnostic            7 A4iY”

                                               Flight Contr$System:
                                                l   Prima and Automatic Flight Controls
                                                        (P&S and AFCS)
                                                l   Avionics
                                                l   Standard Attitude Heading Reference (SAHRS)
                                                l   Dual Channel Full Authonty Digital Engine Control (FADEC)

                                                Page 8                                                   GAO/NSIAIh91-46   The Navy’s V-22 Osprey
Appendix- II

M$jor Contributors to This Report

                             Brad Hathaway, Associate Director
National Security and        William C. Meredith, Assistant Director
International Affairs        Clem H. Rasberry, Evaluator-in-Charge
Division,      Washington,   Pauline F. Nowak, Evaluator


 (ssrsea)                     Page 9                                   GAO/NSIAD-814   The Navy’s V-22 Osprey
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