oversight

Army Budget: Potential Reductions in Helicopter Programs

Published by the Government Accountability Office on 1990-12-05.

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

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                                                                                   ARMY BUDGET
                                                                                   Potential Reductions in
                                                                                   Helicopter Programs

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                                                                                                                                           142767
      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      National Security and
      International Affairs Division

      B-223087

      December 5, 1990

      The Honorable Daniel K. Inouye
      Chairman, Subcommittee on Defense
      Committee on Appropriations
      United States Senate

      The Honorable John P. Murtha
      Chairman, Subcommittee on Defense
      Committee on Appropriations
      House of Representatives

      As you requested, we reviewed the justifications for selected aircraft
      procurement line items in the Army’s $1.6 billion fiscal year 1991
      budget. Specifically, we examined the Army’s request for about
      $900 million to procure five helicopter systems-the AH-64 Apache, the
      UH-60 Black Hawk, the OH-58D Army Helicopter Improvement Pro-
      gram, the Light Helicopter program, and the Special Operations Aircraft
      modifications. Also, we reviewed the justifications for the $685.2 million
      requested for these five systems in the Army’s fiscal year 1991
      research, development, test, and evaluation (RDT&E) budget request. In
      addition, we evaluated the Army’s execution of the appropriations for
      fiscal years 1989 and 1990 to identify amounts available for rescission.
      In July 1990, we briefed your staffs on the tentative results of our
      review. The results of our review are summarized below.

      We identified $375.4 million in potential reductions to the Army’s air-
      craft procurement and RDT&E accounts: $48.2 million for fiscal year
      1989, $100.2 million for fiscal year 1990, and $227 million for fiscal
      year 199 1. We arrived at these amounts primarily by updating the
      Army’s estimates using more current information and by using the
      results of our recent evaluations of the Apache helicopter and Special
      Operations Aircraft programs. Table 1 shows the potential reductions
      by helicopter program and each reduction is discussed in detail in
      appendix I.




      Page 1                                   GAO/NSIAD-91sSBBR   Helicopter   Programs
Table 1: Potential Rescissions and
Budget Reductions to the Army’s      Dollars  in millions
Helicopter Programs                  -_..-_-.-~----.                  -__-                             -~
                                                                                                   Fiscal year
                                     Army
                                     ___..  helicopter
                                        -- _--. --._-_-~. program
                                                          _---.~--.              1989              1990              1991              Total
                                     AH-64 Apache                                                                                 ..--.- ~~~--
                                       Procurement           ~--__-._-           $45.4 -            $o.o ----.tso.o--
                                                                                                             _....__~--..-.-____----- $45.4
                                       Modifications
                                     _~.---~--.--..-.--~ --._ -...-~               0.0               6.1                  6.1             12.2
                                       Support equipment and
                                          facilities___.---                        0.0                9.2              0.0                9.2
                                       Longbow RDT&E                               1.2               1.2               0.0               2.4
                                     Total                                       46.6               16.5               6.1              69.2
                                     UH-60 Black Hawk
                                       Procurement                                 0.0
                                                                                         ~-~     --.. 11.6          205.7 .            217.3
                                     Total                                         o..               11.6~~-      -~~                  217.3
                                     OH-58D Army Helicopter
                                       Improvement Program                   ____--..-__-         ---~-..~
                                       Modifications                               1.6                 1.6                                3.5
                                     Total                                         1.6                1.6              0.3                3.5
                                     Liaht Helicooter Proaram
                                        RDT&E                                      0.0                0.0             14.9              14.9
                                     Total                                         0.0                0.0             14.9              14.9
                                     Special Operations
                                     -.__.~         __- Aircraft
                                        Modifications                              0.0              70.5               0.0              70.5
                                     Total                                         O-0              70.5               0.0              70.5

                                     Total txMntial     reductions              648.2             $100.2           $227.0            $375.4


                                     As agreed with your offices, we did not ‘obtain official agency comments
                                     on this report. However, we discussed its contents with officials of the
                                     Office of the Secretary of Defense and the Army and incorporated their
                                     comments where appropriate. Our scope and methodology are discussed
                                     in appendix II.

                                     As arranged with your offices, we are sending copies of this report to
                                     interested congressional committees, the Secretaries of Defense and the
                                     Army, and the Director of the Office of Management and Budget. Copies
                                     will be made available to others upon request.

                                     This 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




                                     Page 2                                                    GAO/NSIADSb66BB       Helicopter   Pmgmma
R-223087




have any questions. Major contributors to this report are listed in
appendix III.




Frank C. Conahan
Assistant Comptroller General




Page 3                                   GAO/NSIAD-91.BSBR   Helicopter   Programs
Contents


Letter                                                                                                     1

Appendix I                                                                                             6
Potential Reductions    AH-64 Apache
                        UH-60 Black Hawk
                                                                                                       6
                                                                                                       9
in Army Helicopter      OH-58D Army Helicopter Improvement Program                                    11
Programs                Light Helicopter                                                              13
                        Special Operations Aircraft                                                   14

Appendix II                                                                                           16
Scopeand
Methodology,
Appendix III
Major Contributors to
This Report
Table                   Table 1: Potential Rescissions and Budget Reductions to
                            the Army’s Helicopter Programs




                        Abbreviations

                        AIIII’    Army Helicopter Improvement Program
                        RDT&E     research, development, test, and evaluation


                        Page 4                                  GAO/NSIAD-9ldSBR   Helicopter   Programs
Page 5   GAO/NSIAD-91-SSBR   Helicopter   Programs
Appendix I

Potential Mu&ions in Army
Helicopter Programs

                      The Army’s aircraft procurement budget for fiscal year 1991 was
                      $1.6 billion: $573.5 million for aircraft procurement, $563.1 million for
                      modifications, $247.2 million for support equipment and facilities, and
                      $199.4 million for other items. The aircraft portion of the Army’s
                      research, development, test, and evaluation (RDT&E) budget for fiscal
                      year 1991 was $710.9 million.

                      We identified potential rescissions from prior year appropriations and
                      potential reductions from the current budget of about $375.4 million-
                      $48.2 million in fiscal year 1989, $100.2 million in fiscal year 1990, and
                      $227 million in fiscal year 1991 for the five helicopter programs we
                      reviewed. The rationales for these reductions are discussed by heli-
                      copter program below.


                      The AH-64 Apache is a single-rotor, twin-engine, tandem-seat attack
AH-64 Apache          helicopter armed with Hellfire antitank missiles, 2.75inch rockets and a
                      30-millimeter gun capable of defeating armor during the day, at night,
                      and under adverse weather conditions, As the Army’s primary attack
                      helicopter, the AH-64 will have the primary mission of killing tanks and
                      other armored vehicles. Secondary missions of the Apache include
                      reconnaissance and security.

                      The Army began acquiring the Apache helicopter in fiscal year 1982. It
                      eventually plans to procure a total of 807 Apache helicopters. In fiscal
                      year 1990, Congress appropriated about $1.5 billion for the procurement
                      of the final 132 Apache helicopters,

                      The Longbow system, a separate funding element within the Apache
                      program, is being developed to provide a fire-and-forget capability for
                      the Apache and the Light Helicopter. The system, consisting of a
                      millimeter-wave fire control radar and a Hellfire missile, is designed to
                      designate targets in adverse weather conditions, either at night or
                      during the day. The RDT&E appropriations for the Longbow system were
                      $132.6 million in fiscal year 1989 and $161.5 million in fiscal year 1990.
                      The Army has requested $220.1 million for the system in its fiscal year
                      1991 RDT&E budget.


Results of Analysis   We identified total potential rescissions and budget reductions of
                      $69.2 million to the Apache and Longbow programs: $46.6 million in
                      fiscal year 1989, $16.5 million in fiscal year 1990, and $6.1 million in



                      Page 6                                    GAO/NSIAD-91.SSBR   Helicopter   Programs
                                      Appendix I
                                      Potential Reductions   in Army
                                      Hellcopter Programs




                                      fiscal year 1991. Contract cost reductions, contract delays, and cancella-
                                      tion of certain helicopter modifications form the basis for most of the
                                      proposed rescissions and reductions.

Procurement Appropriation   for       The Office of the Secretary of Defense withheld $45.4 million of the
Fiscal Year 1989                      Apache program’s procurement appropriation for fiscal year 1989
                                      because the Army had not decided how many helicopters to buy. The
                                      Apache program manager wants the Secretary to return these funds,
                                      which have not been obligated, to the program for use for the fiscal year
                                      1990 Apache procurement. However, we believe that these funds
                                      exceeded the Army’s fiscal year 1989 needs. The $45.4 million could be
                                      considered for rescission.

Procurement Appropriation   for       The Army’s aircraft procurement appropriation for fiscal year 1990
Fiscal Year 1990                      contained $1,469.5 million for 132 Apaches, $20.7 million for 8 Apache
                                      modifications, and $97.7 million for Apache support equipment and
                                      facilities. Because of the cancellation of a modification, schedule
                                      changes, and cost reductions, we believe that the Army’s fiscal year
                                      1990 aircraft procurement appropriation has $15.3 million available for
                                      rescission:

                                  . $5 million in modification funds because the Army decided not to apply
                                    the electromagnetic interference protection modification to fielded
                                    Apaches,
                                  l $1.1 million in modification funds because the Army has delayed the
                                    award of the contract to produce laser protective visors, and
                                  . $9.2 million in funds for support equipment and facilities funds because
                                    of a reduction in the cost of aircraft survivability equipment.

                                      In fiscal year 1990, the Army’s appropriation for aircraft procurement
                                      modifications included $5 million to retrofit fielded Apaches with elec-
                                      tromagnetic interference protection for their backup control systems.
                                      However, the Army later decided not to retrofit fielded Apaches because
                                      the modification was too expensive. Program officials said that $3.6 mil-
                                      lion of the $5 million had been reprogrammed for the integration of the
                                      Global Positioning System with the Apache’s Airborne Target Handover
                                      System and that the remaining $1.4 million was needed for other modifi-
                                      cations. The contract for the Global Positioning System modification
                                      program will not be awarded until fiscal year 1991. Therefore, the
                                      $5 million requested could be reduced because these funds, even as
                                      reprogrammed, will not be needed in fiscal year 1990.




                                      Page 7                                   GAO/NSIAD-91-BBBR   Helicopter   Programs
                                   Appendix I
                                   Potential Reductions   in Army
                                   Helicopter Programs




                                   The Army included in its aircraft procurement budget for fiscal year
                                   1990 $1 .l million in modification funds to buy laser protective visors.
                                   The visors are to protect Apache crew members’ eyes from laser radia-
                                   tion and ballistic fragments. However, because of delays in awarding the
                                   contract, the visors will not be bought in fiscal year 1990; therefore, the
                                   $1.1 million is available for rescission. Program officials said these
                                   funds are needed for other Apache modifications.

                                   In fiscal year 1990, the Army’s aircraft procurement appropriation
                                   included $58.9 million in support equipment and facilities funds for
                                   Apache survivability equipment. However, the costs for this equipment
                                   have decreased to $49.7 million. We believe that the remaining $9.2 mil-
                                   lion could be considered for rescission. Apache program officials agreed
                                   that the $9.2 million exceeded the requirements for Apache
                                   survivability equipment but said that these funds were needed to
                                   finance an anticipated increase in unit cost to buy the remaining 132
                                   helicopters.

Procurement Budget for Fiscal      In fiscal year 1991, the Army requested $85.7 million for Apache modi-
Year 1991                          fications, of which $31.2 million was allocated for air-to-air Stingers on
                                   the Apache helicopter. We believe that the budget for this modification
                                   could be reduced by $6.1 million because of a delay in the procurement
                                   of training equipment.

                                   The fiscal year 1991 request for the air-to-air Stinger modification
                                   included $6.1 million to procure training simulators designed to help
                                   teach the pilots how to use the Stinger. The Army has delayed the simu-
                                   lator procurement until fiscal year 1994. Therefore, we believe these
                                   funds are available for reduction. Program officials said that these
                                   funds were needed for other Apache requirements.

EDT&E Appropriation   for Fiscal   The Army overestimated the cost of a Longbow contract for Apache air-
Year 1989                          frame integration with the McDonnell Douglas Helicopter Company. As
                                   a result, the program office has deobligated $1.2 million in fiscal year
                                   1989 RDT&E funds and plans to reprogram the $1.2 million to previously
                                   unfinanced fiscal year 1989 program requirements. We believe that the
                                   $1.2 million is available for rescission.

KDT&E Appropriation   for Fiscal   The Army’s fiscal year 1990 RDT&E appropriation has $1.2 million-
Year 1990      Y                   $0.6 million for Longbow airframe integration and $0.6 million for
                                   Longbow engineering development that is available for rescission. The
                                   program office funded $0.6 million more in payroll for Apache airframe
                                   integration than was actually required. We believe that the $0.6 million


                                   Page 8                                   GAO/NSIAD-91-56BR   Helicopter   Programs
                                Appendix I
                                Potential Reductions   in Army
                                Helicopter Program8




                                could be considered for rescission, Program officials said that they plan
                                to use the excess for other Longbow requirements.

                                As part of the Longbow’s engineering development, the Army allocated
                                $0.6 million to conduct tests in the snow, of the Apache’s target acquisi-
                                tion system. However, the tests were canceled. We believe that the
                                $0.6 million could be considered for rescission. Program officials said
                                that they plan to use the $0.6 million for other Longbow requirements.


                                The Black Hawk is a twin-engine, single-rotor, medium-lift helicopter
UH-60 Black Hawk                whose primary mission is to transport troops and equipment. Additional
                                missions are to evacuate wounded troops, resupply troops, and provide
                                command and control. The Black Hawk is the Army’s first true squad
                                assault helicopter.

                                The Sikorsky Aircraft Company produces the Black Hawk under a mul-
                                tiyear airframe contract. The initial production version of the Black
                                Hawk is designated “UH-60A.” In October 1989, the Black Hawk’s
                                engine, manufactured by General Electric, was upgraded from the
                                GE-1700 engine to the GE-T701C engine. Black Hawks with the
                                GE-T701C engine are designated “UH-60L.”

                                The Army had planned to procure 2,253 Black Hawk aircraft through
                                the year 2010. This number had represented an increase from the
                                Army’s previous procurement objective of 1,107, which was approved
                                by Congress in fiscal year 1988. With the fiscal year 1991 procurement,
                                the Army will have procured the 1,107 Black Hawks. However, current
                                Army plans developed subsequent to the budget submission do not pro-
                                vide funding for procuring additional UH-6OL Black Hawk aircraft
                                beyond fiscal year 1991.


Results of Analysis             We identified total potential rescissions and budget reductions of
                                $217.3 million to the Black Hawk program: $11.6 million from the fiscal
                                year 1990 appropriation and $205.7 million from the fiscal year 1991
                                budget request, The majority of these potential reductions, $202.3 mil-
                                lion, is attributable to advance procurement funds that will not be neces-
                                sary if the Army does not buy Black Hawks after fiscal year 1991.

Procurement ApGropriation for   The Army’s fiscal year 1990 aircraft procurement appropriation has
J?iscalYear 1990                $11.6 million-$5.1   million in advance procurement funds that will not
                                be necessary if Black Hawk procurement ends in fiscal year 1991 and


                                Page 9                                   GAO/NSIADBl-SBBR   Helicopter   Programs
                               Appendix I
                               Potential Reductions   in Army
                               Helicopter Programs




                               $6.5 million because airframe costs were overestimated-that           is avail-
                               able for rescission.

                               In fiscal year 1990, Congress appropriated $15.4 million for advance
                               procurement funding to buy Black Hawk helicopters beyond the 1,107
                               procurement objective. As discussed above, the Army’s current plans do
                               not provide funds to buy Black Hawks beyond the 1,107 objective. The
                               Army has obligated $10.3 million of the advance procurement funds,
                               leaving $5.1 million unobligated and available for rescission. Program
                               officials concurred with this potential rescission,

                               The Army’s procurement appropriation for fiscal year 1990 contained
                               $119.2 million in advance procurement funding for the fiscal year 1991
                               Black Hawk airframe procurement. The actual contract amounts for this
                               purpose, however, totaled $112.7 million. The remaining $6.5 million is
                               available for rescission. Program officials said that they need the excess
                               funds for other Black Hawk requirements.

ProcurementBudget for Fiscal   The Army’s aircraft procurement budget for fiscal year 1991 contains
Year 1991                      $663 million for the UH-6OL Black Hawk. This budget could be reduced
                               by $205.7 million: $197.2 million in advance procurement funds if the
                               Army does not buy Black Hawks after fiscal year 1991 and $8.5 million
                               because the Army has decided not to go forward with retrofitting an
                               External Stores Support System as planned.

                               In its fiscal year 1991 budget, the Army has requested $197.2 million in
                               advance procurement funds for Black Hawk procurement beyond fiscal
                               year 1991, However, the current Army plans indicate no funding will be
                               available to procure additional Black Hawk aircraft beyond fiscal year
                               1991. If procurement of the Black Hawk is terminated, program officials
                               concurred that these funds could be considered for reduction.

                               The Army’s fiscal year 1991 procurement budget request contained
                               $8.5 million to retrofit 395 UH-6OA Black Hawks with an External
                               Stores Support System. The system is a mission flexibility kit, consisting
                               of fixed attachment points and removable wing-like structures. The kit
                               allows the UH-6OA Black Hawk helicopter to carry various external
                               stores, such as fuel tanks and missile launchers. The attachment points,
                               incorporated on production aircraft starting in 1985, are permanently
                               installed on the airframe.




                               Page 10                                  GAO/NSIAD-91-BSBR   Helicopter   Programs
                        Appendix I
                        Potential Reductions    in Army
                        Helicopter Programs




                        The Army’s materiel needs documents for the Black Hawk require incor-
                        porating the system’s attachment points onto the basic airframe; how-
                        ever, the Black Hawk project manager has questioned the feasibility of
                        this retrofit. He believes that the costs would be exorbitant and that air-
                        craft downtime to complete the retrofit would be excessive. He has
                        withheld action on the retrofit until the Army determines if his conclu-
                        sions are warranted. The $8.5 million is therefore available for reduc-
                        tion from the budget. Program officials said that if the money is
                        appropriated, they are going to reallocate the $8.5 million for Flight
                        Data Recorders and for the Hover Infrared Suppressor Subsystem
                        modifications.


                        The 011-58D is a modified version of the OH-58A observation helicopter.
OH-58D Army             Aircraft modernization for this helicopter is accomplished under a
Helicopter              budget line identified as the “Army Helicopter Improvement Program”
Improvement   Program   (AIIII’). The upgraded OH-58D provides the Army with improved nap-of-
                        the-earth flight’ capability, target acquisition, and target designation in
                        daytime, at night, and under adverse weather conditions,

                        A salient feature of the OH-58D is the mast-mounted sight, a 25-inch
                        sphere mounted above the main rotor, that allows the helicopter to per-
                        form target acquisition and designation functions while remaining
                        hidden from enemy view. In addition, infrared sensors in the sight allow
                        the OH-58D to acquire targets at night and during limited visibility con-
                        ditions, Other modifications include a four-blade main rotor, an updated
                        control display system, and a significantly improved engine and drive
                        system. In battle, the helicopter will be used in a reconnaissance role to
                        locate and maintain contact with the enemy, to support attack heli-
                        copter missions, and to direct artillery fire. The OH-58D will also
                        operate as an interim scout, pending the fielding of the Army’s new
                        Light IIelicopter.

                        The Army will modify 36 helicopters in fiscal year 1990, bringing the
                        total number of OH-58Ds to 243. Beginning in fiscal year 1991, the Army
                        plans to arm all 243 helicopters with air-to-air Stinger and air-to-ground
                        weapons. The air-to-air Stinger will provide the helicopter with a mid-
                        range defensive and offensive air-to-air capability. The air-to-ground
                        weapons are IIellfire missiles, Hydra-70 rockets, and a .50-caliber
                        machine gun. The Army plans to use the fully armed OH-58D helicopter

                        ‘“Nap-of-the-earth” flight is defined as flight as close to the earth’s surface as vegetation   or obstacles
                        will permit.



                        Page 11                                                    GAO/NSIAD-9ldSBR        Helicopter     Programs
                                  Appendix I
                                  Potential Reductions   in Army
                                  Helicopter Programs




                                  in air cavalry reconnaissance units and attack helicopter companies of
                                  light divisions.

                                  The Army’s aircraft procurement appropriations contained $202.9 mil-
                                  lion for fiscal year 1989 and $192.3 million for fiscal year 1990 for AHIP
                                  modifications. In its fiscal year 1991 aircraft procurement budget
                                  request, the Army asked for $48.0 million for modifications to arm the
                                  AHIP. Also, in fiscal year 1991, the Army requested $25.8 million in
                                  HDT&E funds for the armed AHIP.



Results of Analysis               The Army’s OH-58D aircraft procurement program could be reduced by
                                  $3.5 million: $1.6 million in fiscal year 1989 rescissions, $1.6 million in
                                  fiscal year 1990 rescissions, and $0.3 million in fiscal year 1991 budget
                                  reductions. These reductions are available because of a reduced contract
                                  cost, an overestimate for program management, and an overstatement
                                  of the cost of the modifications.

Procurement Appropriation   for   The McDonnell Douglas Electronic Systems Company reduced the cost
Fiscal Year 1989                  by $1.6 million of the fiscal year 1989 portion of its mast-mounted site
                                  contract wit,h the Army. Therefore, the Army’s fiscal year 1989 aircraft
                                  procurement appropriation have available for rescission $1.6 million. A
                                  program official said the program office plans to use all this amount for
                                  other AIIII’ requirements-$0.4   million for the Integrated Systems
                                  Processor and the Optical Display Assembly and $1.2 million for an
                                  engineering change proposal.

Procurement Appropriation   for   The Army’s fiscal year 1990 aircraft procurement appropriation has
Fiscal Year 1990                  $1.6 million available for rescission because of an overestimate in the
                                  amount of funds needed for program management. In its fiscal year
                                  1990 budget request, the Army estimated that the AHIP program office
                                  needed $22.7 million for system program management. Based on our
                                  analysis of information in a contract memorandum of agreement, cur-
                                  rent contract proposals, and a previous contract; the fiscal year 1990
                                  program management cost should not exceed $2 1.1 million. Therefore,
                                  $1.6 million is available for rescission.

                                  A program official said the amount of funding needed for fiscal year
                                  1990 program management had not been determined because the Army
                                  was still negotiating the fiscal year 1990 contracts. Also, he said that if
                                  the actual program management costs were lower than the estimated
                                  program management costs, the program office would use the funding
                                  for additional mast-mounted sites and an engineering change proposal.


                                  Page 12                                   GAO/NSIAD-9166BR   Helicopter   Programs
                                Appendix I
                                Potential Reductions   in Army
                                Helicopter Programs




Procurement Budget for Fiscal   The program office’s fiscal year 1991 procurement budget for OH-58D
Year 1991                       modifications is overstated by $0.3 million. The AHIP program office pro-
                                vided documents that supported all but $0.3 million of the fiscal year
                                1991 AHIP budget request. The budget could be reduced by this unsup-
                                ported amount. A program official had no explanation for the difference
                                and said the funds were needed to cover other program requirements.


                                The Army’s Light Helicopter is intended to perform multiple missions
Light Helicopter                against the advanced enemy air defenses of the 1990s. The Army wants
                                the Light Helicopter to perform both scout and attack functions,
                                including performing battlefield reconnaissance, finding and attacking
                                armored targets, striking deep against enemy positions, and engaging
                                enemy helicopters in air combat.

                                From fiscal year 1984 through fiscal year 1990, Congress appropriated
                                $921.6 million in RDT&E funds for the Light Helicopter program, of which
                                the Army applied $401.3 million to engine development and $520.3 mil-
                                lion to preliminary design, demonstration, and validation of the air-
                                frame and mission equipment package. For fiscal year 1991, the Army
                                requested $465.1 million in RDT&E funds for the program: $53.7 million
                                to complete engine development and $411.4 million to begin full-scale
                                development of the airframe and mission equipment package.


Results of Analysis             There is $14.9 million available for reduction from the Army’s fiscal
                                year 1991 RDT&E budget request- $12 million from the airframe and
                                mission equipment line item and $2.9 million from the engine develop-
                                ment line item.

RDT&E Budget for Fiscal Year    In its fiscal year 1991 RDT&E budget request for the Light Helicopter pro-
1991                            gram, the Army added $12.0 million to the airframe and mission equip-
                                ment budget and $2.6 million to the engine development budget in
                                anticipation of budget reductions by Congress or by higher Army man-
                                agement. These amounts are available for reduction.

                                Program officials agree that these funds were included in the budget
                                request in anticipation of budget reductions but do not agree that the
                                money should be removed from the budget. They said that without the
                                extra funds the numerous small reductions made to the budget will
                                leave the program unable to meet its requirements,




                                Page 13                                  GAO/NSIAD-91-66BR   Helicopter   Programs
                                  Appendix I
                                  Potential Reductions   in Army
                                  Helicopter Programs




                                  Also, the Army’s RDT&E budget request for fiscal year 1991 contains
                                  $0.3 million more for Light Helicopter engine tests than the program
                                  office estimates the tests will require. Program officials said that these
                                  funds were needed for some engine tests that had been delayed from
                                  fiscal year 1990 and will be conducted in fiscal year 1991. We do not
                                  agree that the fiscal year 1991 funds are needed for this purpose
                                  because the delayed tests were funded in fiscal year 1990. Therefore,
                                  the $0.3 million is available for reduction from the budget.


                                  The Army plans to modify 51 CH-47D helicopters to the MH-47E config-
Special Operations                uration and 23 UH-6OL Black Hawk helicopters to the MH-6OK configur-
Aircraft                          ation. These Special Operations Aircraft are to perform clandestine,
                                  deep penetration airlift missions in adverse weather with limited light
                                  and visibility, day or night, over all types of terrain in support of special
                                  operations forces. The Army believes the currently configured helicop-
                                  ters to lack the ability to undertake special operations missions due to
                                  their limited performance characteristics, their vulnerability to various
                                  weapons systems, and their restricted self-deployment capability.

                                  To satisfy current operational requirements, the Army established the
                                  Special Operations Aircraft program to enhance the operating ability of
                                  existing helicopters. Among the most significant modifications are
                                  (1) improved engines; (2) improved navigation and communications
                                  capabilities made possible by the addition of an integrated avionics sub-
                                  system; (3) increased armaments, including air-to-air missiles and
                                  upgraded suppressive weapons; (4) improved survivability equipment;
                                  and (5) increased range through added internal and external fuel tanks
                                  and air-to-air refueling capabilities.


Results of Analysis               The Army’s fiscal year 1990 aircraft procurement appropriation for the
                                  MB-47E helicopter has $70.5 million available for rescission because
                                  there is no valid requirement for the aircraft. We identified no potential
                                  reductions in the procurement appropriation for the MH-6OK helicopter.

Procurement Appropriation   for   In fiscal year 1990, the Army received $97.7 million in advanced pro-
Fiscal Year 1990                  curement funds to modify 34 of the 51 MH-47E helicopters. The Army
                                  arrived at the need for 51 MH-47E helicopters based on a 1984 memo-
                ”                 randum of agreement between the Army and Air Force Chiefs of Staff.
                                  However, in June 1987, the Deputy Under Secretary of Defense reported
                                  to Congress that the military services needed only 17 MH-47E helicop-
                                  ters. Therefore, in a February 1990 report, we concluded that the Army


                                  Page 14                                   GAO/NSIAJ%91-65BR   Helicopter   Programs
Appendiw I
Potential Reductions   in Army
Helicopter Programs




has no mission-based justification for the remaining 34 MH-4’7E helicop-
ters and recommended that the Secretary of the Army terminate their
procurement.”

Because the Army has no mission-based justification for the 34 MH-47E
helicopters, the advanced procurement funds for MH-47E helicopters
could be reduced from the appropriation. In June 1990, the Army obli-
gated $27.2 million of the $97.7 million advanced procurement funds for
34 forward-looking infrared sensor systems. Therefore, only $70.5 mil-
lion of the advanced procurement funds is available for rescission, Pro-
gram officials disagreed with our recommendation and are pursuing the
procurement of the helicopters,




‘Special Operations Forces: The Army Plans to Buy More MH-47E Helicopters Than Needed
(GAO/NSIAD-QO-118, Feb. 14, 1990).



Page 15                                             GAO/NSIADdl-55BR     Helicopter   Programs
Appendix II

Scopeand Methodology

-.
              This review is one of a series that examines defense budget issues. It
              assesses the adequacy of the fiscal year 1991 budget estimates for cer-
              tain Army aircraft procurement programs. To perform this assessment,
              we selected budget requests for five Army helicopter systems, repre-
              senting $900 million of the Army’s $1.6 billion aircraft procurement
              budget request for fiscal year 1991. We reviewed these items in detail to
              determine whether the aircraft programs should be funded in the
              amounts requested. The aircraft systems we reviewed were the AH-64
              Apache, including the Longbow; the UH-60 Black Hawk; the OH-58D
              AMP; the Light Helicopter; and the MH-47E and MI-I-6OK Special Opera-
              tions Aircraft.

              Since procurement funding remains available for obligation for 3 fiscal
              years, we also reviewed the budget execution for fiscal years 1989 and
              1990 for the selected systems to identify funds available for rescission.
              These funds were neither reprogrammed nor obligated at the time of our
              review. In addition, we reviewed the Army’s fiscal year 1991 RDT&E
              budget request for the five systems and the defense agency fiscal year
              1991 budget request for the Special Operations Aircraft program.

              We performed our review primarily at the Army’s Aviation Systems
              Command, St. Louis, Missouri. This organization is responsible for devel-
              oping Army aircraft budgets and implementing prior-year funding pro-
              grams. In examining the execution of and justification for the selected
              aircraft systems budgets, we evaluated budget documents to determine
              the degree to which they were supported by cost estimates, program
              requirements, and valid methodology. We did not validate the Army’s
              alternative uses for the funds we believed were available for potential
              budget reduction and rescission.

              In addition, we assessed planned systems improvements or modifica-
              tions and the relationship of these changes to budget requests and exe-
              cution. We examined program status documents, such as schedules, cost
              proposals, and test results. We interviewed Army officials responsible
              for the management, development, and acquisition of the selected sys-
              tems. Finally, we reviewed the results of our recent evaluations of the
              Apache and Special Operations Aircraft programs.

              We performed our review from March to July 1990 in accordance with
              generally accepted government auditing standards.




              Page 16                                 GAO/NSW91-55BR   Helicopter   Programs
Appendix III

Major Contributors to This Report


                             Henry Hinton, Associate Director
National Security and        F. James Shafer, Assistant Director
International Affairs
Division, Washington,
DC.
                        A-
                             Charles 0. Burgess, Regional Management Representative
Kansas City Regional         Lenora V. Brown, Evaluator-in-Charge
Office                       Mark T. Amo, Evaluator
                             Gary T. Brown, Evaluator
                             Carole F. Coffey, Evaluator
                             Carol E. Kutryb, Evaluator
                             Howard 1~.McGee, Evaluator




(398387)                     Page 17                                GAO/NSIAD-91.SBBR   Helicopter   Progrmna
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