oversight

Status of the B-2 Bomber Program

Published by the Government Accountability Office on 1990-02-22.

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

                    United States General Accounting         OflIce
                    Testimony




For Release         Status     of   the   B-Z   Bomber     Program
on Delivery
Expected    at
9:00   a.m. EST
Thursday
Feb.   22,  1990




                     Statement       of
                     Frank     C. Conahan
                     Assistant      Comptroller       General
                     National      Security     and   International
                     Affairs     Division


                     Before    the
                     Defense     Policy    Panel
                     Committee       on Armed Services
                     House of Representatives




                         (pg--py<J
GAO/T-NSIAD-90-16
Mr. Chairman              and Members of the Panel:


I am pleased              to be here               today     to discuss           the current           status       of the
B-2 stealth             bomber program.                     Today,       in conjunction            with      this
hearing,          we are pleased                   to release          an unclassified             and updated
report       on the           history         and status             of the B-2 program.                  In my
testimony,             I will           briefly         summarize        our principal            findings          about
the program,              and offer               some conclusions               and observations               drawn from
our      work.


THE B-2 BOMBER PROGRAM
The Air          Force         plans       to procure          a total          of 133 B-2 aircraft:                      6
development             aircraft             and 127 production                  aircraft.            Through       fiscal
year      1990,        the      Congress           has authorized               production        of the 6
development             aircraft,             and 10 production                  aircraft,        and a total                 of
$26.8       billion            has been appropriated                     for     the program.             The
President's              fiscal          year      1991 budget           requests          $5.3 billion           for         an
additional             five       production             aircraft,         long-lead          items     For future
aircraft,          and continuing                   the development               and testing           programs.


One development                   aircraft          has been delivered.                      Deliveries         of the
second and third                   aircraft             are scheduled            during       the next       year or so.
Currently,             the      first        aircraft         is undergoing               some planned
modifications                  after       completing          some early           air      worthiness          flight
testing.              Flight       testing          of this          aircraft       is scheduled           to resume in
April.
PROGRAMCOST
In 1981 the Air                 Force        estimated             that        the cost         to procure              133 B-2s
would be $32.7                 billion        in 1981 dollars.                          In 1986 the Department                        of
Defense      announced              the estimated                  cost        would      be $36.6            billion          in 1981
dollars,       which           was equivalent                to $58.2             billion            in escalated             dollars
over   the life               of the B-2's               procurement.                  A June 1989 program                       cost
estimate,        which           is the most recent                       official           total       program          estimate
available,        puts           the cost           for     the     133 B-2s at $70.2                        billion.            This
estimate       represents                a net       increase             of     $12 billion             over       the     1986
estimate:          $18.2          billion           in cost            increases            offset       by $6.2           billion
in estimated             savings           from      projected             productivity                 improvements                and
multiyear        procurement.                      We have been told                     that        a revised          cost
estimate       is being             considered              by the Office                   of the Secretary                   of
Defense,       which           includes            additional             costs         from such changes                   as
increased        inflation               rates,           and the         cost         of the        recent       strike         at The
Boeing       Company.             We estimate               that        the changes             will         add another
several       billion            dollars           to the B-L's                estimated             cost.


The principal                 causes        for     the cost            increases            to date           have been an
incomplete         aircraft              design           at the start                 of manufacturing,
underestimated                 material            costs     for        composite            aircraft,            and
production         schedule              extensions.


In early        1981,          the Air            Force     modified             its     requirements               to include             a
low-altitude             capability                for     the B-2.              This       change       forced         Northrop
to redesign             its      original           B-2 airframe,                 adding        additional                control

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surfaces        and improved             structures               to accommodate                  the   stresses              of
low-altitude             high-speed          flight.              Northrop's               redesign       of the
airframe        also       delayed.its          efforts             to complete                 other   aspects             of the
B-2 design.              To meet its           first           flight        deadline,            the Air          Force
directed         ?!orthrop         to begin        manufacturing                    of the        aircraft             in 1986,
even though             the design         was not completed.                            The incomplete                 B-2
design        led to cost           growth       from significant                         increases          in
manufacturing              labor      hours,       parts          shortages,               tooling       problems,              and
the     unintended          and uneconomical                     transfer           of manufacturing
activities          to the final             B-2 assembly                   site.


The Air        Force's        earlier        cost       estimates                 were based on a cost
estimating          model drawn from                   experience                 in building           aluminum
airplanes.              Even though          efforts             were made to adjust                     the estimate                 to
reflect         building       with       composites,               the model produced                       an estimate
that      was significantly                lower        than        the costs              actually          incurred.
Manufacturing              delays       and other              factors            also     caused       significant
schedule         oelays,        which      in turn             increased            development              and production
costs.          The June 1989 cost                  estimate               reflected            a 3-year          deiay         in the
final        aircraft        deliveries          compared                to the          1986 estimate.


B-2 PROGRAMFLIGHT TESTING AND PRODUCTION SCHEDULE
The Air         Force planned             a 3,600-hour                   flight          test     program         to
demonstrate             B-2 performance                capabilities                 over        approximately               4
years,        which      began with          the       first            flight      of the aircraft                    on
July       17, 1989.          To date,          1 percent                of the flight               hours        in this          test
program       have been completed.                             Under the current                   schedule,         the Air
Force       plans         to complete              development              and initial            operational            testing
in 1993.            It     now appears               that      the completion               of testing           could        slip
into    1994,            as a result              of delays          in delivering               the development
aircraft.


The first           l-1/2            years       of flight         testing        will       be primarily            to
demonstrate               basic         flying       qualities,             and to provide             prelsminary             data
on the low observable                            features        of the aircraft.                    The aircraft             will
not be flown               approximately                 6 months           of this        time,      so additional
planned       modifications                      can be made.               The pace of testing                  will
increase        as the                remaining         five     development              aircraft       become
available           during             1990 and 1991.                  If   current        schedules          are met,          it
will     be at least                   3 years       before        critical            performance        testing,
including           integrated                  offensive         and defensive              avionics,         is
completed.                It     has been during                  this      critical         performance            testing
that     significant                   performance             problems        have been discovered                     in other
advanced        weapon system                     programs.


OBSERVATIONS
The B-2 program's                       cost      and schedule              remain        uncertain.           In addition,
the current               acquisition               strategy           requires          funding      of $7.5        to
$8.0 billion                   for     fiscal       year       1992 through              1995.       There     has been
much debate               on whether              the    Department            of Defense            can realistically
expect       to receive                 these       funding        levels.             Revisions       to the program
to accommodate                       more moderate             annual       funding        levels      will      also       result

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in cost       increases,           unless       the proposed               production           quantity         is
reduced.


The B-2 is a radically                   new aircraft               design,          and there          is much
uncertainty        about          whether       its     critical           performance           characteristics
will       be proven.            Even in programs                 in which          the aircraft           design          is
more traditional,                 such as the           B-l       bomber,         significant           problems
persist,       which       require          continuing            investment          of unanticipated
resources.          Under the current                   acquisition               plan,      31 aircraft            will         be
on order       and over           $48 billion           will       be appropriated               before         anyone
knows whether             the B-2 will            do its          job.


We believe        that      it     would      be prudent             to reduce            the pace of funding
and production             for     the B-2,           to limit           up-front          investment       until          the
critical       performance            elements          of the aircraft                    are adequately
evaluated.


Northrop        Corporation           officials           have recently                argued        to us that             an
interruption             in production            funding          would      result         in significant
additional        costs          to maintain           production            capability          for     the       future.
Given the current                 production           aircraft           on order          and the delivery
schedule,        which      contemplates               delivery           dates      for     these      aircraft
several       years       hence,       it      is unclear            when or how these                  costs         would
occur.          Moreover,          some level            of increased               cost     may very       well           be
warranted        until      such time           as sufficient                information             on the B-2's
performance                capabilities             is available               to support         moving      into     full-
scale       production.


Given the continuing                       difficulties                and uncertainties              in the
development                of the aircraft,                the changing             world        circumstances,             and
the questions                 raised       about      the        feasibility            of funding         levels      as
high      as the current                  program         requires,            the Secretary          of Defense
should       provide           the Congress               with        an analysis         of practical           and
realistic            alternatives             for     the        future        acquisition         of this      program.
This      analysis            would       form a more useful                    basis     for     budget     action
than      the current             program           provides.


This      concludes            my prepared            statement,               Mr. Chairman.           I will        be
happy to answer any questions                               you may have,                to the extent          possible
in this        open forum.                 In addition                to the      information         provided         in the
unclassified                report        we issued         today,         we will        be providing          further
details        on certain              performance               and testing            issues     in a classified
form.         If     your questions                 address           issues     that     we believe         to be
classified,                we will        be pleased             to provide         answers        at a later          date
in that            form.




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