United States Government Accountability Office

Washington, DC 20548 

 

June 20, 2006 

The Honorable C.W. Bill Young 

Chairman 

Subcommittee on Defense 

Committee on Appropriations 

House of Representatives 

Subject: Tactical Aircraft: DOD Should Present a New F-22A Business Case before Making Further 

Investments 

Dear Mr. Chairman: 

The F-22A is the Air Force’s next generation air superiority1

 fighter aircraft. It incorporates a low 

observable (stealth) and highly maneuverable airframe, advanced integrated avionics, and a new engine 

capable of sustained supersonic flight without the use of afterburners. It was originally designed to

counter threats posed by the Soviet Union and was intended to replace the F-15 fighter in the air-to-air 

combat role. However, the Air Force now plans to add a more robust ground attack and intelligencegathering capability not previously envisioned but now considered “necessary” to increase the utility of 

the aircraft. In December 2005, the Air Force changed designations from the F/A-22 to the F-22A. The 

aircraft maintained all current capabilities as well as the expanded ground attack capabilities. Officials 

have initiated a modernization program to develop and integrate these new capabilities. 

In March 2005,2

 we reported that despite substantial changes to the F-22A program since it started in 

1986, Air Force leaders have not developed a new business case for investing billions more dollars to 

modernize the aircraft. Over time quantities have been reduced, and in recent years both funding and 

quantities have been in a state of flux. Given significant changes in quantities and planned capabilities, 

the large investments still planned, and the potential for further changes, you requested that we review 

the F-22A program. Specifically, we assessed the need for a new business case3

 before further 

investments are made in the F-22A program and statutory criteria the Air Force is required to meet to 

enter a multiyear contract for the remaining aircraft. 

To assess the Air Force’s business case for further investments in the F-22A program, we reviewed 

recent Office of the Secretary of Defense Program Budget Decisions (PBDs) and F-22A requirements 

documents. We also reviewed F-22A planned modernization schedules and documents and interviewed 

 1 Air superiority is the degree of air dominance that allows the conduct of operations by land, sea, and air forces without prohibitive 

interference by the enemy.

2 GAO, Tactical Aircraft: Air Force Still Needs Business Case to Support F/A-22 Quantities and Increased Capabilities, GAO-05-304 

(Washington, D.C.: Mar. 15, 2005).

3 A business case provides demonstrated evidence that (1) the warfighter need exists and that it can best be met with the chosen concept and

(2) the concept can be developed and produced within existing resources—technologies, design, funding, and time. Establishing a business case

calls for a realistic assessment of risks and costs; doing otherwise undermines the intent of the business case and invites failure. 

 GAO-06-455R F-22A Tactical Aircraft 
program officials from the F-22A program office, Air Combat Command, and the Air Force Program 

Executive Officer for Tactical Air. To assess the Air Force’s proposed use of a multiyear contract for the 

remaining F-22As, we compared program documentation on cost, schedule, and performance with 

statutory criteria for entering into a multiyear contract. We conducted our review between August 2005 

and April 2006 in accordance with generally accepted government auditing standards. 

Summary

Based on our review, in our opinion, the DOD has not demonstrated the need or value for making further 

investments in the F-22A program. The Air Force’s current stated “need” is for 381 F-22As to satisfy airto-air missions and recently added requirements for more robust ground attack and intelligencegathering capabilities. However, because of past cost overruns and current budget constraints, the 

Office of the Secretary of Defense (OSD) states that it can now afford only 183 F-22As. This leaves a 

198-aircraft gap between the Air Force’s stated need and what is currently affordable. The Air Force is 

planning to invest about $4.4 billion through 2011 to add more robust ground attack and intelligence 

gathering capabilities for the F-22A. However, because of the large aircraft gap between stated Air Force 

requirements and current and future budget realities, it may not be prudent to make additional 

investments for these new missions and capabilities. Furthermore, alternatives such as the Joint Strike 

Fighter and F-15 might be able to execute ground attack more cost-effectively given the substantially 

fewer numbers of F-22As that OSD has committed to buy. 

In December 2005, OSD restructured the F-22A program by extending production to 2010, adding 

4 aircraft for a total planned procurement of 183 F-22As and adding $1 billion to the procurement 

program. Under the restructured acquisition program, the Air Force is planning to procure a total of 

60 F-22As in a multiyear procurement. However, in the Air Force’s multiyear procurement justification 

package sent to Congress on May 16, 2006, it stated that an additional $674 million is needed to fully fund 

the multiyear program being proposed. Our work led us to make observations on issues that could affect 

the Air Force’s ability to satisfy several of the statutory criteria for entering into a multiyear contract, 

including the documentation of savings, a stable design, and available funding. 

We believe the Congress should consider withholding additional funding for procurement and 

modernization until the Department completes a comprehensive business case that addresses the 

concerns we have raised herein. In response to a draft of this report, the Department stated that a 

recently completed Joint Air Dominance (JAD) study conducted by DOD adequately identified the 

quantity and mix of tactical aircraft needed and thus already satisfied the intent of our recommendation. 

We have asked OSD to provide us access to the JAD study, but it has not yet done so. We plan to pursue 

this matter with the Department. However, because Congressional deliberations on this issue are 

ongoing, we believe it is important to provide the data and analysis in the report at this time. Given the 

way this program has unfolded, with frequently changing OSD-approved requirements, repeated cost 

overruns, and given that DOD did not object to the data and analysis contained in the report, we are not 

changing our matter for Congressional consideration. If Congress does decide to provide more funding 

for the F-22A program, that funding should be conditioned on DOD providing the JAD study and 

subjecting it to independent review to ensure that it provides adequate justification for sound investment 

of taxpayer resources. 

Background 

The F-22A began development in 1986 to replace the F-15 air superiority aircraft. The continued need 

for the F-22A, the quantities required, and modification costs to perform its mission have been the 

subject of a continuing debate within DOD and the Congress. Supporters cite its advanced features—

Page 2 GAO-06-455R F-22A Tactical Aircraft 
stealth, supercruise speed, maneuverability, and integrated avionics—as integral to the Air Force’s 

Global Strike initiative and for maintaining air superiority over potential future adversaries.4

 Critics 

argue that the Soviet threat the fighter was originally designed to counter no longer exists and that its 

remaining budget dollars could be better invested in enhancing current air assets and acquiring new and 

more transformational capabilities that will allow DOD to meet evolving threats. The Air Force has 

already committed funds to acquire 122 F-22As. To complete the procurement program, it now plans to 

buy the remaining F-22As using a 3-year multiyear contract that ends procurement in 2010. To begin the 

multiyear strategy, the Air Force has included $2.0 billion for advance procurement of parts and 

subassembly activities in its fiscal year 2007 budget request. Additionally, it has included $800 million for 

continuing development and modifications of existing aircraft. 

DOD Has Not Completed a New Business Case to Justify Further Investments in the F-22A 

Program 

The Air Force’s business case for the F-22A program is unexecutable as planned because there is a 

significant mismatch between the Air Force’s stated “need” for the F-22A aircraft and the resources OSD 

is willing to commit. According to Air Force officials, a minimum of 381 F-22A aircraft are needed to

satisfy today’s national security requirements, yet OSD states it can only afford to buy 183 F-22A aircraft. 

This results in a 198-aircraft gap in capability. Additionally, the Air Force now states a “need” for greater 

ground attack and intelligence-gathering capabilities, not included in the existing business case that will 

require an extensive modernization program. The value of this planned investment in modernization is 

highly questionable absent a new business case that supports the minimum capability-based need, given 

credible current and future threats, and that considers various options that are both affordable and 

sustainable over time. 

The Air Force states a need for one squadron of 24 F-22A aircraft for each of the 10 Air Expeditionary 

Forces, the planned organization of the Air Force aircraft and personnel for operations and 

deployments. This requirement is established to carry out missions including support in major regional 

conflicts, home land security, and others. According to the Air Force, this requires a total of 381 F-22As, 

240 primary aircraft and 141 aircraft for training, attrition, and to allow for periodic aircraft depot 

maintenance. 

OSD has restructured the F-22A acquisition program twice in the last 2 years (in December 2004 and 

December 2005) to free up funds for other priorities. These decisions have created a mismatch between 

the Air Force’s stated requirements and what OSD considers an affordable quantity of F-22As. In 

December 2004, OSD reduced the program to 179 F-22As to save about $10.5 billion. This budget 

decision also terminated procurement in 2008. Then in December 2005, OSD changed the F-22A program 

again, adding $1 billion to extend production for 2 years to ensure a 5th generation fighter5

 aircraft 

production line would remain in operation in case the Joint Strike Fighter experienced delays or 

problems. OSD also added 4 aircraft for a total planned procurement of 183 F-22As. 

The Air Force is currently planning to provide the F-22A with greater ground attack and intelligencegathering capabilities. It estimates these will cost about $4.4 billion between 2005 and 2011. It is also 

 4 Global Strike is one of six complementary concepts of operations laying out the Air Force’s ability to rapidly plan and deliver limited-duration

and extended attacks against targets.

5 F-22A and F-35 are considered 5th generation fighter aircraft as compared to the F-15, F-16, F/A-18 and F-117. The primary characteristics are 

Very Low Observable (VLO) stealth and information fusion capabilities that make 5

th generation aircraft more survivable and lethal. 

Page 3 GAO-06-455R F-22A Tactical Aircraft 
planning additional modernization efforts for more of these capabilities in the future, but the cost, 

content, and timing has not yet been determined. However, the 198- aircraft gap between the Air Force’s 

stated “requirement” and the planned procurement quantities raises questions on whether the F-22A will 

be able to carry out its planned missions. The Air Force is buying less than half the required 381 aircraft 

to fill out its planned organizational structure—necessary to carry out planned air-to-air, ground attack, 

and intelligence-gathering missions. Other alternatives could be available to carry out the ground attack 

and intelligence gathering capabilities. For example, DOD is also investing billions of dollars to develop 

the Joint Strike Fighter aircraft—a 5th generation fighter-intended for ground attack and billions of 

dollars to develop intelligence, surveillance, and reconnaissance platforms and sensors. 

Air Force Is Requesting to Use a Multiyear Contract for the F-22A 

The Air Force is proposing to buy the remaining 60 F-22As over a 3 year period with a multiyear contract 

and submitted its justification to the Congress on May 16, 2006.6

 To enter into a multiyear contract the 

Air Force must first meet the statutory criteria listed in 10 U.S.C. § 2306b (a). Table 1 shows the six 

criteria that must be satisfied before entering into a multiyear contract and our observations on issues 

that could affect the Air Force’s ability to satisfy several of the criteria. 

 6 The Air Force needs statutory authorization for its proposed multiyear contract under 10 U.S.C. § 2306b and the annual DOD appropriations 

act.

Page 4 GAO-06-455R F-22A Tactical Aircraft 
Table 1: Observations of F-22A Multiyear Contract Criteria as of April 2006 

Multiyear criteria GAO observations 

Contract will result in 

substantial savings 

The Air Force has not completed an estimate of savings, but its 

preliminary indications are a maximum of 5 percent savings. 

However, when the unit procurement costs for the planned 

multiyear approach is compared to how the Air Force had 

previously planned to buy the remaining aircraft, the unit 

procurement costs increase under multiyear. 

Minimum need expected to 

remain substantially unchanged 

during contract period in terms 

of production rates and total 

quantities 

Quantities have continually been in a state of flux in the F-22A

program including changes in the last two budget submissions. 

Reasonable expectation agency

head will request funding at 

required level to avoid contract 

cancellation

The Air Force has indicated that its multiyear budget is currently 

under funded by $674 million. Further, it is proposing to use 

incremental funding rather than fully funding each aircraft lot.

There is stable design, and 

technical risks are not excessive 

While the design for the baseline F-22A aircraft, designed primarily 

for an air superiority role, is stable, the design for the ground

attack capability to be added has not been demonstrated and thus 

cannot be considered “stable.” 

Estimates of contract cost and 

cost avoidance are realistic 

The Air Force has not completed its analysis of contract cost or 

cost avoidance at this time. 

Use of contract will promote 

national security of the United 

States 

No observation. 

Source: GAO Analysis and 10 U.S.C. 2306b.

The Air Force has requested statutory authorization for a multiyear contract for the remaining F-22As as 

part of the fiscal year 2007 authorization and budget process in order to award the contract in early 2007. 

As shown in the table above, we believe there are some critical considerations that need to be addressed 

before the multiyear plan can be justified. These include the following considerations: 

Savings—The Air Force stated in its May 16, 2006, multiyear justification package that cost 

avoidance would approximate $225 million or about 2.7 percent. This is based on comparing 

three annual contracts to a single multiyear contract to buy 56 aircraft. The document also 

identifies a need for an additional $674 million to fully fund a 60 aircraft multiyear contract as 

was proposed in the fiscal year 2007 President’s budget. While building an estimate for three 

separate annual contracts provides a basis to compare to a multiyear approach, it is not how the 

Air Force had previously planned to buy the aircraft remaining in the F-22A program. The fiscal 

year 2006 President’s Budget included procurement costs to buy the remaining 56 F-22As in two 

lots—29 F-22As in 2007 and 27 F-22As in 2008. If the unit procurement costs of this previous plan

are compared to the planned multiyear procurement unit costs for 60 aircraft as proposed in the 

fiscal year 2007 President’s Budget, the unit costs increase by 10 percent. In other words, the unit 

procurement costs increase from $166 million per aircraft to $183 million per aircraft for the 

proposed multiyear contract. 

Page 5 GAO-06-455R F-22A Tactical Aircraft 
Funding—The Air Force has stated that the proposed multiyear plan for 60 aircraft is under 

funded by about $674 million. The Air Force believes it will need these funds in fiscal years 2009 

and 2010. Additionally, the Air Force has proposed using incremental funding to pay for the 

multiyear contract. Instead of fully funding the buy for each fiscal year, it plans four funding 

increments—economic order quantity, advanced buy, subsystem, and final assembly. 

Incremental funding for multiyear procurement is neither permitted by the annual DOD 

appropriations act,7

 nor the multiyear authorizing statute which requires that funds only be 

obligated under a multiyear contract “for procurement of a complete and usable end item.”8 

However, the Air Force is seeking an exception to these requirements in its request to Congress 

for statutory authorization for the multiyear contract. The Air Force’s proposed F-22A multiyear 

strategy includes an increment of funding in each fiscal year to begin manufacturing subsystems, 

not considered a complete and useable end item. For example, the fiscal year 2007 budget 

request includes $1.5 billion for subassemblies. It would not be until fiscal year 2008 that the final

assembly would be fully funded. 

Design Stability—The baseline F-22A aircraft, designed primarily for the air superiority role, 

has successfully completed development and initial operational testing, and its design is stable 

for that particular mission. However, the Air Force has stated that to be “effective” in the future a 

more robust ground attack capability is needed for the F-22A. It plans to spend several billions of 

additional dollars to add this ground attack capability. A key to the success of this effort is the 

development and integration of a new radar. The Air Force expects to take delivery of the first 

aircraft with the new radar in November 2006 but the software needed to provide the robust 

ground attack capability will not be completed until 2010. According to a representative of the 

Director, Operational Test and Evaluation (DOT&E), the key to achieving a more robust ground 

attack capability will center on the integration of this new radar. A December 2005 report issued 

by the Defense Contract Management Agency stated that problems encountered during the test 

and integration of the new radar has added risk to the development program. Until software and 

integration testing in the F-22A have been successfully completed, we consider the design 

unstable creating the potential for significant cost overruns and schedule delays. 

Conclusions 

 

The F-22A development has spanned more than a 19-year period during which time requirements have 

changed both in terms of the quantity of aircraft needed and the capabilities that would be incorporated. 

At the same time, new budgetary constraints have grown and other priorities have come to the forefront 

in DOD, including the need for funding the war on terrorism. While the Air Force’s stated need is 381 

F-22As, OSD will commit to fund only 183. The Air Force also states the basic capabilities developed for 

the F-22 are not sufficient to be effective in the current and future national security environment. The 

conditions facing the F-22A program are significantly different than those addressed by the original 

business case, yet despite these significant changes the Air Force has not developed a new business case 

to justify currently planned and proposed additional investments in the F-22A. Given our nation’s 

growing fiscal challenges, the changing security threats, and prevailing best business practices for

acquisitions, it is highly questionable whether it is prudent to continue in the current path proposed by 

 7

 Section 8008 of the fiscal years 2005 and 2006 Department of Defense Appropriations Acts (Public Laws 108-287 and 109-148, respectively)

require full funding of units to be procured. 

8 10 U.S.C. § 2306b (i)(4)(A). This restriction was added by section 820 of the Bob Stump National Defense Authorization Act for Fiscal Year

2003 (Public Law 107-314). 

Page 6 GAO-06-455R F-22A Tactical Aircraft 
the Air Force. DOD must begin to make the difficult choices required to counter current and credible 

future threats at current and expected future resource levels because it will not have enough money to 

purchase everything that it wants. Furthermore, going to a multiyear procurement strategy appears to be 

more costly than previous Air Force plans and would tie up significant amounts of funds at a time when 

DOD already has more wants than it is likely to be able to afford and sustain over time. The Department 

needs to reevaluate the value delivered by continuing production of the F-22A past what it has already 

committed to by examining the likely future threat and risk environment, the funding it can make 

available relative to other demands, and the alternative ways to achieve air-to-air and air-to-ground 

military superiority. 

Matters for Congressional Consideration 

Because of the large disparity between what the Air Force wants for the F-22A program and what OSD 

has committed to fund, there is a significant break in the business case to justify buying more F-22As. 

For this reason, Congress may want to consider withholding additional funding for procurement and 

modernization until the Department completes a comprehensive business case that addresses the 

concerns we have raised herein. The additional issues surrounding this matter and our reporting are 

discussed in the Agency Comment section of this report. 

Recommendation 

Because of the significant and continuing changes in the F-22A program that have created an 

environment of investment uncertainty as well as the significant mismatch between stated Air Force 

needs and wants and future resource levels, we recommend that Secretary of Defense delay further 

investments in F-22A procurement and modernization until it completes a comprehensive business case 

analysis that adequately considers alternatives, justifies the need for further investments, and reconciles 

the numbers of F-22As that are needed (i.e. based on credible current and future threats and considering 

other alternative approaches) as well as affordable and sustainable (i.e., based on current and expected 

DOD resource levels). 

Agency Comments and Our Evaluation 

In written comments on a draft of this report, DOD stated that it did not concur with our 

recommendation that the Secretary of Defense delay further investments in F-22A procurement and 

modernization until it completes a new business case analysis that adequately considers alternatives, 

justifies the need for further investments, and reconciles the numbers of F-22As that are needed. They 

stated a Joint Air Dominance (JAD) study conducted by DOD adequately identified the quantity and mix 

of tactical aircraft needed. DOD stated that delaying investments in the F-22A would disrupt production 

and create program instability. DOD also stated that keeping the F-22A production line active, preserves 

the Department’s options and sustains the industrial base for efficient transition to Joint Strike Fighter 

production. 

Preserving options and the industrial bases will be costly. The 2007 future year’s defense plan added 

$1.05 billion for a 60 aircraft multiyear procurement contract and subsequently the Air Force identified 

an additional $674 million needed to fully fund this plan. Therefore, the total additional multiyear 

procurement cost is $1.724 billion. Furthermore, it will add two years to the F-22A procurement 

program. This represents significant opportunity cost. That is, the funding used here will not be available 

to support other DOD priorities. If preserving options and the industrial base are primary reasons for 

these added costs and the extension of the procurement program, DOD should make them more 

transparent to the Congress as it seeks authorizations and appropriations to execute this plan. 

Page 7 GAO-06-455R F-22A Tactical Aircraft 
As to the Department's position that they have already conducted the business case called for in our 

recommendation, we asked OSD to provide us access to the JAD study, but they have not yet done so. 

Because Congressional deliberations are ongoing, we believe it is important to provide the data and 

analysis in the report at this time. Given the way this program has unfolded, with frequently changing 

OSD-approved requirements, repeated cost overruns, and delays in fielding capability to the warfighter, 

and given that DOD did not object to the data and analysis contained in the report, we are not changing 

our matter for Congressional consideration. If Congress does decide to provide more funding for the 

F-22A program, that funding should be conditioned on DOD providing the JAD study and subjecting it to 

independent review to ensure that it provides adequate justification for sound investment of taxpayer 

resources. 

- - - - - 

We are sending copies of this report to the Secretary of Defense; the Director, Office of Management and 

Budget; and interested congressional committees. We will also make copies available to others upon 

request. In addition, the report will be available at no charge on the GAO Web site at http://www.gao.gov. 

Should you or your staff have any questions on matters discussed in this report, please contact Michael 

Sullivan on (202) 512-4163 or Michael Hazard on 937-258-7917. Principal contributors to this report were 

Marvin Bonner and Daniel Chen. 

Sincerely 

David M. Walker 

Comptroller General 

Of the United States 

Enclosure 

Page 8 GAO-06-455R F-22A Tactical Aircraft 
Enclosure 

Comments from the Department of Defense

Page 9 GAO-06-455R F-22A Tactical Aircraft 
Page 10 GAO-06-455R F-22A Tactical Aircraft 
Page 11 GAO-06-455R F-22A Tactical Aircraft 
(120558)

Page 12 GAO-06-455R F-22A Tactical Aircraft 
Enclosure 

Page 13 GAO-06-455R F-22A Tactical Aircraft