United States General Accounting Office

GAO Testimony

Before the Subcommittee on AirLand Forces, Committee

on Armed Services, U.S. Senate

For Release on Delivery

Expected at

10:00 a.m., EST

Wednesday,

March 25, 1998

F-22 AIRCRAFT

Progress of the Engineering

and Manufacturing

Development Program

Statement of Louis J. Rodrigues, Director, Defense

Acquisition Issues, National Security and International

Affairs Division

GAO/T-NSIAD-98-137

Mr. Chairman and Members of the Subcommittee:

I am pleased to be here today to discuss the progress of the Air Force’s

F-22 engineering and manufacturing development (EMD) program. The

National Defense Authorization Act for Fiscal Year 1998

(P.L. 105-85) requires us to review the F-22 program and report on the

extent to which it is meeting planned cost, schedule, and performance

goals. We issued a report in response to that requirement earlier this

month.1

 My testimony today discusses the challenges that the EMD program

is encountering in achieving cost, schedule, and performance goals as well

as the impact of program schedule slippages on the Department of

Defense’s (DOD) request to buy the first two F-22 production aircraft in

fiscal year 1999.

Background The F-22 EMD program began in 1991. The objectives of the program are to

(1) design, fabricate, test, and deliver ground and flight test vehicles;

(2) design, fabricate, integrate, and test the avionics suite; and (3) design,

develop, and test the support and training systems. The F-22 has two prime

contractors: Lockheed Martin Aeronautical Systems is responsible for the

aircraft, and United Technologies Corporation (Pratt & Whitney) is

responsible for the engines.

Because of concerns about potential cost growth in the F-22 program, the

Assistant Secretary of the Air Force for Acquisition established the Joint

Estimating Team in June 1996 to estimate the most probable cost of the

F-22 program and to identify realistic initiatives that could be implemented

to lower program costs. The team consisted of personnel from the Air

Force, DOD, and private industry. In January 1997, the team estimated that

F-22 program costs would increase by about $1.5 billion over previous

estimates and that additional time would be required to complete the EMD

program. The team made several recommendations to restructure the

program, which the Air Force and DOD adopted.2

The National Defense Authorization Act for Fiscal Year 1998, enacted in

November 1997, imposed cost limitations of $18.688 billion on the F-22

EMD program and $43.4 billion on the production program. The limitation

on production cost did not specify a quantity of aircraft to be procured.

1

F-22 Aircraft: Progress in Achieving Engineering and Manufacturing Development Goals

(GAO/NSIAD-98-67, Mar. 10, 1998).

2

For more information on these recommendations, see Tactical Aircraft: Restructuring of the Air Force

F-22 Fighter Program (GAO/NSIAD-97-156, June 4, 1997).

Page 1 GAO/T-NSIAD-98-137
The act instructed the Secretary of the Air Force to adjust the cost

limitations for the amounts of increases or decreases in costs attributable

to (1) economic inflation after September 30, 1997, and (2) compliance

with changes in federal, state, or local laws enacted after September 30,

1997. Since the law’s enactment, the Air Force adjusted the EMD and

production cost limitations once and plans to further adjust them to

$18.939 billion and $40.940 billion, respectively.

Results in Brief The Air Force’s cost estimate supporting the fiscal year 1999 budget

request indicates that the EMD program can be completed within the

adjusted statutory cost. However, the F-22 EMD program has been hindered

in achieving schedule goals by several technical and manufacturing

problems, which caused the delay of the first flight and projected late

deliveries of other flight test aircraft. The Air Force is studying the

potential impact of schedule delays to determine if the cost estimate

includes sufficient amounts to complete the EMD program. The Air Force

expects that the F-22 will meet or exceed all of its established

performance requirements. However, the amount of flight testing planned

in May 1997 has not been achieved.

The Air Force plans to enter production having completed significantly

fewer flight test hours than they had planned to have done. DOD has

previously indicated that if major problems exist, they usually occur

within the first 10 to 20 percent of flight testing. If the Air Force awards

the contract for the first two F-22 production aircraft in December 1998, it

will have accomplished only 183 flight test hours, or 4 percent of the total

flight test hours planned, instead of 601 flight test hours, or 14 percent of

the total flight test hours planned in May 1997.

Extent to Which Cost

Goals Are Being Met

In the fiscal year 1999 President’s budget, the Air Force’s estimate to

complete the F-22 EMD program was $18.9 billion. The estimate includes

the $16 billion negotiated price of the major prime contracts with

Lockheed Martin and Pratt & Whitney and $1.5 billion in planned contract

modifications as of February 1998. The estimate also includes other

government costs and a margin to accommodate future cost growth. 

Table 1 shows the Air Force’s program cost estimate.

Page 2 GAO/T-NSIAD-98-137
Table 1: Air Force’s Estimated Cost of

the F-22 EMD Program Dollars in billions

Cost element Amount

Lockheed Martin and Pratt & Whitney contracts $16.0

Planned modifications to contracts 1.5

Other government costs 1.2

Margin for cost growth 0.2

Total cost $18.9

Because the F-22 contracts with Lockheed Martin and Pratt & Whitney

were modified in August and September 1997, there is limited information

on the extent to which contractors are completing scheduled work at the

planned costs. When the contracts were modified, the contractors

rebaselined the systems that measure cost and schedule progress and

calculate how actual costs and schedules vary from contract goals. Before

modifying the contracts, Lockheed Martin and Pratt & Whitney reported

cost growth at completion of EMD totaling about $1.2 billion.

Lockheed Martin and Pratt & Whitney report monthly to the Air Force

concerning their progress in relation to contract costs and schedules.

These reports define the cost and schedule variances from the contract

plans. In January 1998, Pratt & Whitney and Lockheed Martin reported

variances of less than 1 percent from the negotiated contract cost and

planned schedule. The most significant variance identified in the reports

was a $70-million unfavorable schedule variance for Lockheed Martin. The

contractors’ reports showed that the negotiated costs included about

$194 million for management reserves; that is, funds set aside in case of

cost increases due to unplanned efforts or cost growth in planned efforts.

Lockheed Martin and Pratt & Whitney also reported in January 1998 that

they planned to complete the contract efforts within the negotiated costs.

However, the impact of delays in the delivery of wing and aft fuselage

assemblies and the flight test program were not reflected in those reports.

Lockheed Martin advised the Air Force that it could execute the revised

schedule caused by the delays at no increased cost to the EMD contract. At

the time of our review, the Air Force was assessing whether changes due

to these delays could be accomplished with no cost increase to the EMD

contract. The Air Force was also assessing the impact that late software

development may have on the estimated cost of the EMD program.

Page 3 GAO/T-NSIAD-98-137
Extent to Which

Schedule Goals Are

Being Met

In January 1998, the F-22 program was not meeting its schedule goals. The

first flight of the first F-22 EMD aircraft occurred about 3 months late.

Furthermore, the flight test program was suspended after two flights, and

its resumption is not expected until late April 1998 to correct a problem

discovered in the horizontal tail of the aircraft. Also, the late delivery of

the aft fuselage and wing assemblies is expected to delay the delivery of

other EMD aircraft and the progress of the flight test program. The Air

Force has revised its schedule to reflect the late first flight. However, it

had not determined how the late deliveries of aft fuselage assemblies and

wing assemblies will impact the overall F-22 EMD schedule. The Air Force

planned to complete its evaluation of the schedule impact of these

manufacturing problems in March 1998. In addition, Air Force officials are

planning to revise software schedules by May 1998.

First F-22 Flight Was

Delayed

Because of a number of technical problems with the first F-22 EMD aircraft,

the first flight was delayed over 3 months, from late May to early

September 1997. Among the problems causing the late first flight were a

fuel tank leak, a software defect, failure of an auxiliary power unit, and

damage from debris being ingested into the engine. Furthermore, the

aircraft flight test program was suspended after two flights to accomplish

planned ground tests and make minor structural additions to the airframe.

The flight test program will not resume until at least late April 1998

because materials in the horizontal tail of the aircraft became disbonded,

or separated. Air Force officials said that the identified solution to this

problem will not impact other EMD aircraft schedules.

Wings and Aft Fuselages

Are Expected to Be

Delivered Late

F-22 wing deliveries are behind schedule because of problems in

developing and manufacturing the large titanium wing castings, which are

the foundation for building the wing. As of January 1998, the contractor,

Boeing (the subcontractor for the wing assemblies), and the Air Force

were still working to resolve these problems. The wings for the third

through the sixth flight test aircraft and two ground test articles are

expected to be delivered about 2 weeks to over 4 months late to Lockheed

Martin.

Delivery of the F-22 aft fuselage—the rear aircraft body section—is also

expected to be late for the third through the sixth flight test aircraft and

the two ground test articles because of the late delivery of parts and

difficulties with welding the many pieces of the fuselage together due to

the close tolerances required. An Air Force and contractor team is

Page 4 GAO/T-NSIAD-98-137
currently evaluating potential cost, schedule, testing, and production

impacts associated with this problem. The team planned to complete its

assessment by March 1998.

As a result of the late deliveries of the wings and aft fuselages, the first

flights of the third (aircraft 4003) through the sixth (aircraft 4006) flight

test aircraft will be delayed by about 2 weeks to over 5 months. Table 2

shows the scheduled and expected first flights of EMD aircraft.

Table 2: Comparison of Schedules for

First Flights of EMD Aircraft

EMD

aircraft number

Scheduled first

flight as of May

1997

Expected first

flight as of

February 1998 Delay in months

4001 May 29, 1997 September 7, 1997a 3.3

4002 July 9, 1998 July 9, 1998 0

4003 June 16, 1999 November 22, 1999 5.2

4004 August 17, 1999 February 3, 2000 5.6

4005 January 11, 2000 March 31, 2000 2.7

4006 May 18, 2000 May 30, 2000 0.4

4007 September 25, 2000 September 25, 2000 0

4008 February 2, 2001 February 2, 2001 0

4009 June 1, 2001 June 1, 2001 0

aThe first flight occurred on this date.

Progress in Completing

Software Development Is

Concern

Since completing the audit work for the report we issued earlier this

month, we learned that the schedule for developing F-22 avionics is a

potential concern. In 1993, DOD’s Defense Science Board rated the

integrated avionics as the highest technical risk in the F-22 program and

therefore indicated the need for a long period of evolutionary software

development. The Air Force is concerned that the writing and testing of

avionics software may not be progressing sufficiently to provide software

deliveries on schedule. The Air Force is assessing the progress of the

avionics software development effort to determine a revised schedule and

the estimated impact on cost. The Air Force expects to complete this

assessment by May 1998.

Page 5 GAO/T-NSIAD-98-137
Impact of Late Aircraft

Deliveries on Flight Test

Plans for Fiscal Years

1998-99

The delay in first flight and expected delays in delivery of the third through

sixth EMD flight test aircraft have affected the number of flight test hours

planned for fiscal years 1998 and 1999. About 55 percent of the flight test

hours planned for fiscal year 1998 (120 of 217) and about 11 percent of the

flight test hours planned for fiscal year 1999 (51 of 449 hours) have been

deferred until later in the test program. As a result, only about one-third of

the flight test hours that were planned as of May 1997 (183 of 601) will be

completed before the scheduled award date of the contract for the first

two production aircraft in December 1998. The planned number of flight

test hours before production contract award has declined since

November 1994, as shown in table 3.

Table 3: Comparison of F-22 Flight

Test Hours Planned

Flight test schedule

as of

Total flight test

hours planned

Flight test hours

planned before

production award

Percent of flight

test hours planned

before production

award

November 1994 5,191 1,400 27

May 1997 4,337 601 14

February 1998 4,337 183 4

The Air Force acknowledges that fewer flight test hours than planned will

be completed before production contract award than were planned by the

Joint Estimating Team in May 1997. In response to our 1995 report on the

F-22 program,3 DOD cited a Defense Science Board report that denoted that

when major program problems occur, it is usually within the first 10 to

20 percent of flight testing. The Board stated that if the F-22 could

complete 1,000 flight test hours before the first production contract award,

it would be equivalent to 10 to 20 percent of the total number of flight test

hours planned for the F-22 program. Although the 601 flight test hours that

the Air Force had previously planned in May 1997 was 14 percent of the

total flight test program, the 183 flight test hours planned as of

February 1998 represent only 4 percent of the total program. Accordingly,

the Air Force plans to enter production having completed significantly

fewer flight test hours than the amount that would likely identify any

major problems.

The Air Force maintains that the confidence gained in the aircraft’s design

from the first 200 hours of flight testing will be proportionately greater

than the later 400 hours. The officials stated that the later 400 hours will

provide only minimal increased confidence and should not be the basis for

3

Tactical Aircraft: Concurrency in Development and Production of F-22 Aircraft Should Be Reduced

(GAO/NSIAD-95-59, Apr. 19, 1995).

Page 6 GAO/T-NSIAD-98-137
accepting higher program costs from delaying the fiscal year 1999 contract

award. The Air Force believes that maintaining the planned schedule and

awarding the full production contract for two aircraft in December 1998 is

the most cost-effective strategy.

Extent to Which

Performance Goals

Are Being Met

As of January 1998, the Air Force estimated that, at the end of the EMD

program, the F-22’s performance will meet or exceed the goals for all of its

10 established parameters. The 10 parameters are radar cross section from

the front sector of the aircraft, supercruise, acceleration, maneuverability,

payload, combat radius, radar detection range, airlift support, sortie

generation rate, and mean time between maintenance. Performance

estimates are engineering judgments based on computer and other models,

ground and limited flight testing, and analyses. The goal for each

parameter is based on the EMD contract specifications.

We identified and reviewed two additional features—situational

awareness and low observability—that are integral to the F-22’s being able

to operate as intended. Although these additional features are not official

performance parameters, the Air Force considers them to be critical

system characteristics, which it describes as generic characteristics that

do not lend themselves well to measurement and reporting.

The F-22 sensors, advanced aircraft electronics, and cockpit display

screens are required to provide the pilot with improved situational

awareness of potential enemy threats and targets. This increased

awareness is to improve pilot response time to the threats, thus increasing

the lethality and survivability of the aircraft. The F-22’s low observable, or

stealthy, features allow it to evade detection by enemy aircraft and

surface-to-air missiles. As of January 1998, the Air Force estimated that the

F-22 would meet the performance requirements of these two additional

features.

Mr Chairman, this concludes my prepared statement. I would be happy to

respond to any questions you or other members of the Subcommittee may

have.

(707338) Page 7 GAO/T-NSIAD-98-137
Ordering Information

The first copy of each GAO report and testimony is free.

Additional copies are $2 each. Orders should be sent to the

following address, accompanied by a check or money order

made out to the Superintendent of Documents, when

necessary. VISA and MasterCard credit cards are accepted, also.

Orders for 100 or more copies to be mailed to a single address

are discounted 25 percent.

Orders by mail:

U.S. General Accounting Office

P.O. Box 37050

Washington, DC 20013

or visit:

Room 1100

700 4th St. NW (corner of 4th and G Sts. NW)

U.S. General Accounting Office

Washington, DC

Orders may also be placed by calling (202) 512-6000 

or by using fax number (202) 512-6061, or TDD (202) 512-2537.

Each day, GAO issues a list of newly available reports and

testimony. To receive facsimile copies of the daily list or any

list from the past 30 days, please call (202) 512-6000 using a

touchtone phone. A recorded menu will provide information on

how to obtain these lists.

For information on how to access GAO reports on the INTERNET,

send an e-mail message with "info" in the body to:

info@www.gao.gov

or visit GAO’s World Wide Web Home Page at:

http://www.gao.gov

PRINTED ON RECYCLED PAPER
United States

General Accounting Office

Washington, D.C. 20548-0001

Official Business

Penalty for Private Use $300

Address Correction Requested

Bulk Rate

Postage & Fees Paid

GAO

Permit No. G100