JOINT STRIKE

FIGHTER

ACQUISITION

Development Schedule

Should Be Changed to

Reduce Risks

Statement of Louis J. Rodrigues, Director, Defense Acquisitions Issues,

National Security and International Affairs Division

United States General Accounting Office

GAO Testimony

Before the Subcommittees on Military Procurement and on

Military Research and Development, Committee on Armed

Services, House of Representatives

For Release on Delivery

Expected at

1:00 p.m.,

Thursday

March 16, 2000

GAO/T-NSIAD-00-132
1

Mr. Chairman and Members of the Subcommittees:

I am pleased to be here today to discuss the results of our

review of the Joint Strike Fighter (JSF) aircraft program. My

testimony today summarizes our draft report on the JSF, which was

prepared at the request of the Chairman, Subcommittee on National

Security, Veterans Affairs, and International Relations, House

Committee on Government Reform. The Department of Defense (DOD)

is scheduled to provide its comments on our draft by the end of

next week. Therefore, my remarks today do not include the

Department’s views on our report.

DOD has designated the Joint Strike Fighter program as a flagship

program for acquisition reform. According to the Joint Strike

Fighter Single Acquisition Management Plan, a principal objective

of the current concept demonstration phase is to demonstrate to a

low level of technical risk those critical technologies,

processes, and system characteristics necessary to produce an

affordable family of strike aircraft that meets all participants’

needs before entering engineering and manufacturing development.

Our review focused on whether the acquisition strategy (1) is

designed to accomplish this objective and (2) is being

implemented in a manner that will ensure that the objective will

be achieved.
2

SUMMARY

The Joint Strike Fighter acquisition strategy is designed to meet

affordability goals by reducing program risk before proceeding

into the engineering and manufacturing development phase. To

that end, the acquisition strategy is designed to ensure a better

match between the maturity1

of key technologies and the

aircraft’s requirements. Matching the requirements and the

maturity of technology when a program enters engineering and

manufacturing development (development phase) is a critical

determinant of a program’s success. Once the development phase

begins, a large, fixed investment in the form of human capital,

facilities, and materials is sunk into the program and any

significant changes will have a large, rippling effect on

schedule and cost. Beginning the development phase when critical

technologies are at a low level of maturity serves to

significantly increase program risk and the likelihood of

schedule delays, which in turn result in increased program costs.

While we were encouraged by the design of the Joint Strike

Fighter acquisition strategy, we have some concerns about its

implementation. Our biggest concern is that critical

technologies are projected to be at low levels of technical

1 A technology is considered to be mature when it has been developed to a point that it can be readily integrated into

a new product and counted on to meet product requirements.
3

maturity when the engineering and manufacturing development

contract is scheduled to be awarded. In addition, when the

competing contractors experienced design problems and cost

overruns, DOD restructured the program in a manner that will

provide less information than originally planned prior to

selecting between the two competing contractor proposals.

We believe that to demonstrate DOD’s commitment to acquisition

reform, follow best commercial practices, and reduce the risk of

future cost growth, the Joint Strike Fighter program office

should continue to focus on risk-reduction efforts by maturing

critical technologies prior to entering engineering and

manufacturing development, and be allowed to do so without the

penalty of withdrawal of funding support.

I would like now to further discuss the factors that led us to

our recommendation that the JSF program office adjust its

currently planned engineering and manufacturing development

decision date of March 2001.

BACKGROUND

As currently planned, the JSF program will cost about $200

billion to develop and procure over 3,000 aircraft and related

support equipment for the U.S. Air Force, Marine Corps, and Navy

and for Great Britain. To date, the program has awarded
4

contracts totaling over $2 billion to Boeing and Lockheed Martin

for the current concept demonstration phase. DOD is scheduled to

award the contract for engineering and manufacturing development

to either Boeing or Lockheed Martin in March 2001. During

engineering and manufacturing development, the Joint Strike

Fighter will be fully developed, engineered, designed,

fabricated, tested, and evaluated to demonstrate that the

production aircraft will meet stated requirements.

The Air Force expects its JSF variant will cost about $28 million

per unit; the Navy variant is estimated to cost between $31

million and $38 million; and the Marine Corps variant will cost

between $30 million and $35 million.2 Other independent

estimates are not so optimistic. For example, in congressional

hearings held in March 1999, the Congressional Budget Office

estimated that the unit cost of the Joint Strike Fighter could be

as much as 47 to 51 percent higher than expected, depending on

which variant was being procured. DOD and the Congressional

Budget Office estimates vary as a result of differing estimating

techniques, including estimating the cost of incorporating

stealth technologies into the Joint Strike Fighter design.

JSF ACQUISITION STRATEGY DESIGNED TO

REDUCE TECHNICAL RISK

2 Expected costs include the cost to produce the basic aircraft, propulsion system, and avionics and are stated in

fiscal year 1994 dollars.
5

The Joint Strike Fighter acquisition strategy is designed to

lower technical risk through aircraft flight demonstrations and

advanced technology development prior to awarding the engineering

and manufacturing development contract.

During the current concept demonstration phase, DOD requires each

contractor to design and build two aircraft--one aircraft for

conventional takeoff and landing and one for short takeoff and

vertical landing--to demonstrate the following:

• commonality/modularity to validate the contractors’ ability to

produce three aircraft variants on the same production line;

• the aircrafts’ ability to do a short takeoff and vertical

landing, hover, and transition to forward flight; and

• satisfactory low airspeed, carrier approach flying and

handling qualities.

Each contractor will also be required to submit a Preferred

Weapon System Concept, which outlines its final design concept

for developing an affordable JSF aircraft to meet the goals

specified in the final requirements document. The Preferred

Weapon System Concept will include results from the flight and

ground demonstrations and will ultimately be used by DOD to
6

select the winning aircraft design and to award the engineering

and manufacturing development contract.

We are encouraged by the design of the acquisition strategy and

its focus on risk reduction by maturing critical technologies

before entering the engineering and manufacturing development

phase. Once in a development environment, external pressures to

keep the program moving become dominant, such as preserving cost

and schedule estimates to secure budget approval. For example,

DOD policies require that a program be funded in the current year

and that funds be made available over the next 6 years in the DOD

planning cycle. If a program manager decided that an additional

year was needed to reach the desired level of technical maturity

during the risk reduction/concept demonstration phase, the

planned start of the engineering and manufacturing development

phase could be delayed. This delay could jeopardize the funding

for the development phase, thus risking the funding support for

the entire program. Consequently, the program manager may be

more likely to accept the risk of moving forward with a lower

level of technology rather than risk losing the program. That

decision would raise cost/benefit issues because cost increases

and performance compromises would likely occur.

IMPLEMENTATION OF JSF ACQUISITION STRATEGY WILL

NOT ENSURE THAT PROGRAM OBJECTIVE IS ACHIEVED
7

Contrary to a principal objective of its acquisition strategy,

the Joint Strike Fighter program will not enter the engineering

and manufacturing development phase with low technical risk. In

addition, when the competing contractors experienced design

problems and cost overruns, DOD restructured the program in a

manner that is moving away from best commercial practices that

were evident in the original strategy toward traditional

practices that have caused problems on other programs.

Critical Technologies Not Developed

to Acceptable Levels

The aircraft being produced during the concept demonstration

phase are not intended to demonstrate many of the technologies

considered critical for achieving JSF program cost and

performance requirements, such as those for integrated avionics.

Instead, many of these technologies will be demonstrated only in

laboratory or ground testing environments and therefore will have

low levels of technical maturity when the engineering and

manufacturing development contract is scheduled to be awarded.

To determine the maturity of Joint Strike Fighter technologies,

we requested the program office to identify the technology areas

they considered critical to meeting JSF cost and/or requirement

objectives. The program office identified eight critical

technology areas encompassing avionics; flight systems;
8

manufacturing and producibility; propulsion; supportability, and

weapons delivery system.3 We then requested the program office

and the two competing contractors to assign maturity levels for

these critical technologies using a tool referred to as

technology readiness levels (TRLs). Using this tool, technology

maturity levels are measured on a scale of one to nine: studies

of the basic concept have a readiness level of one, laboratory

demonstrations have a readiness level between three and six, and

technologies that have been proven through integration and

operation on the intended product have a readiness level of nine.

Without going into the details of each level, let me note that a

level four equates to a laboratory demonstration of a technology

that is not in its usable form. Imagine, if you will, an

advanced radio technology that can be demonstrated with

components that take up a table top. A level seven is the

demonstration of a technology that approximates its final form

and occurs in an environment outside the laboratory. The same

radio at level seven would be installed and demonstrated in an

aircraft similar to the JSF.

The lower the level of maturity when a technology is included in

a development program, the higher the risk that it will cause

problems. According to the people in DOD that use the TRLs in

rating the maturity levels of technologies, level seven enables a

3 Due to the current JSF competition, the critical technologies are not specified so as not to associate them with the

respective contractors.
9

technology to be included in a development program with

acceptable risk. With this measurement tool, the program office

can gauge the likely consequences of placing various technologies

at a given maturity level into a development program and make

informed choices and trade-offs if necessary to meet program

goals.

The TRLs were pioneered by the National Aeronautics and Space

Administration and adopted by the Air Force Research Laboratory

to determine the readiness of technologies to be incorporated

into a weapon or other type of system. The Joint Advanced Strike

Technology program--from which the JSF program evolved--made

extensive use of TRLs to assess early maturity levels for many of

the current JSF technologies. The program also identified TRL 7

as the acceptable readiness level for low-risk transition into

the engineering and manufacturing development phase.

We also used TRLs in our prior work when, at the request of the

Chairman of the Senate Armed Services Committee’s Subcommittee on

Readiness and Management Support, we assessed the impact of

technology maturity on product outcomes. During that work, we

reviewed commercial and DOD experiences in incorporating 23

different technologies into new product and weapon system

designs. Table 1 shows that cost and schedule problems arose

when programs started when technologies were at low readiness

levels and it conversely shows that programs met product
10

objectives when the technologies were at higher levels of

readiness when the programs were started.

Table 1: Cost and Schedule Experiences on Product Developments

Product Development

Product and associated technologies

TRL at

program

start Cost Growth

Schedule

Slippage

Comanche helicopter

Engine

Rotor

Forward looking infrared

Helmet mounted display

Integrated avionics

5

5

3

3

3

101 percent 120 percent

Brilliant Anti-Armor Submunition

Acoustic sensor

Infrared seeker

Warhead

Inertial measurement unit

Data processors

2

3

3

3

3

88 percent 62 percent

Hughes HS-702 satellite

Solar cell array 6

None None

Ford Jaguar

Adaptive cruise control

Voice activated controls

8

8

None None

Note: The Comanche has experienced a great deal of cost growth and schedule slippage for many

reasons, of which technology immaturity is only one. Other factors, such as changing the scope,

funding, and pace of the program for affordability reasons, have also contributed to cost

increases.

Unlike the Comanche and Brilliant Anti-Armor Submunition programs

discussed in table 1, other DOD programs have more attentively

matched customer requirements with technological capabilities.
11

For example, the Joint Direct Attack Munition program used

modified variants of proven product lines for its guidance

component and global positioning system. It also used mature,

existing components from other proven manufacturing processes for

its own system for controlling tail fin movements. The designs

for the battery and the tail housing both used mature technology

and were built using mostly existing tooling and processes. The

Deputy Under Secretary of Defense (Acquisition and Reform)

attested to the success of the Joint Direct Attack Munition

program during a hearing today before the Government Reform

Committee. The Deputy Under Secretary testified that the Joint

Direct Attack Munition performed flawlessly in Kosovo and was

purchased for less than half of its expected unit cost.

Regarding the Joint Strike Fighter, in conjunction with the

program office and the two competing contractors, we determined

the readiness levels of critical technologies at two points in

time: when the JSF program was started in 1996 and when the

program is scheduled to enter engineering and manufacturing

development in March 2001. Those assessments showed that when

the JSF program was started, most of the critical technologies

were well below TRL 6, which is the level considered acceptable

risk to begin a program by the Air Force Research Laboratory. In

terms of engineering and manufacturing development, none of the

critical technology areas are projected to be at readiness level

7, which the Air Force Research Laboratory considers acceptable
12

risk for entry into engineering and manufacturing development.

The technology readiness levels of the eight critical JSF

technology areas are shown in table 2.

Table 2: JSF Critical Technology Readiness Levels at Program

Start and as Projected for Entry into Engineering and

Manufacturing Development
13

0123456789

Te chnology 8

Te chnology 7

Te chnology 6

Te chnology 5

Te chnology 4

Te chnology 3

Te chnology 2

Te chnology 1

Critical Techno lo gy Areas

Technology Readiness Level

Program Start (contract award - 11/96)

Current (12/99)

Engineering and M anufacturing Development Start (4/01)

Source: Joint Strike Fighter program office.

Acceptable risk for program start

Acceptable risk for entry into

Engineering and Manufacturing

Development phase

As shown in table 2, all of the critical technology areas are

expected to be at maturity levels lower than considered

acceptable risk for entry into engineering and manufacturing

development (readiness level 7) and six of the technologies will

still be below the level of maturity (readiness level 6) which is

considered acceptable risk for program start, which occurred over

3 years ago for the JSF program.

Should any of these technologies be delayed or, worse still, not

available for incorporation into the final JSF design, the impact

on the program would be dramatic. For example, if one of the
14

above critical technologies needed to be replaced with its

planned backup, DOD could expect an increase of several billion

dollars in production and operation and support costs.4 The

backup technology would also significantly increase aircraft

weight, which can negatively impact aircraft performance. This

technology is expected to be TRL 5 at the beginning of the

engineering and manufacturing development phase, which indicates

that substantial technology development must still occur during

this phase.

DOD RESPONSE TO CONTRACTOR COST AND SCHEDULE PROBLEMS IS

INCONSISTENT WITH ACQUISITION STRATEGY GOALS

As a result of cost growth and schedule concerns related to both

competing contractors, DOD restructured the JSF program in May

1999. Under the program restructuring, the contractors will

provide DOD with less information than originally planned prior

to submission of their proposals. For example, the JSF flight

test program has been decreased, which will reduce the data

available for final proposal evaluation. JSF program officials

stated that with these flight test reductions, only the minimum

acceptable flight quality demonstrations are expected. The

number of preferred weapon system design updates has also been

reduced, which means that information submitted for evaluation

will be less representative of the final JSF design. Finally,

4 Specific details cannot be provided due to the competitive nature of the Joint Strike Fighter program.
15

DOD has eliminated risk-reduction efforts and delayed other

technology demonstrations, which will increase the program’s

technical risk as it transitions into engineering and

manufacturing development.

CONCLUSIONS

A key objective of the Joint Strike Fighter acquisition strategy

--entering into engineering and manufacturing development with

low technical risk--will not be achieved due to the manner in

which the JSF program office is implementing the acquisition

strategy. On its current schedule, the program will enter the

engineering and manufacturing development phase without having

reduced to an acceptable level the technical risk of technologies

that the program office has identified as critical to meeting the

program’s cost and performance objectives. This approach is not

consistent with best commercial practices in which technologies

are more fully developed before proceeding into product

development. It is also not consistent with DOD’s originally

planned approach for developing the Joint Strike Fighter.

Instead, the program office’s revised approach is consistent with

DOD’s traditional approach in weapons system programs of

concurrently developing technologies and products. This

traditional approach has often raised cost/benefit issues as a

result of cost increases, schedule delays, and compromised
16

performance as problems arose in completing technology

development.

RECOMMENDATION

The Joint Strike Fighter program is at an early development stage

and, therefore, DOD still has the opportunity to both demonstrate

its commitment to acquisition reform and chart a course to avoid

the problems that often befall major weapon systems. A decision

to allow the JSF to proceed as planned, without mature critical

technologies, would compromise DOD’s position on acquisition

reform, not follow best commercial practices, and would

perpetuate conditions that have led to cost growth and schedule

delays in many prior DOD weapon system acquisition programs.

Accordingly, in our draft report we recommend that the Secretary

of Defense direct the JSF program office to adjust the currently

planned March 2001 engineering and manufacturing development

decision date, without the penalty of withdrawal of funding

support, to allow adequate time to mature critical technologies

to acceptable maturity levels, thereby closing the gap between

technology and requirements, before awarding the engineering and

manufacturing development contract.

----

Mr. Chairman, that concludes my statement. I will be happy to

respond to any questions you or other Members of the

Subcommittees might have.
17

(707495)
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