United States General Accounting Office

GAO Report to Congressional Committees

October 1997 NAVY AVIATION

V-22 Cost and

Capability to Meet

Requirements Are Yet

to Be Determined

GAO/NSIAD-98-13

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-272631 

October 22, 1997

Congressional Committees

This report conveys the results of our review of the V-22 Osprey program.

The program is intended to provide 523 new tilt-rotor aircraft—425 for the

Marine Corps, 50 for the Special Operations Command (SOCOM), and 

48 for the Navy. Since the program began over 15 years ago, Congress has

continued to provide funding, while expressing concern that the planned

low rate of production is inefficient. Our objective was to review the status

of the program to identify areas of potential cost increases or performance

challenges and assess whether the aircraft being developed will meet the

stated requirements of each of the services. We are addressing the report

to the congressional committees that have jurisdiction over the matters we

discuss.

Background The V-22 Osprey program was approved in 1982. The V-22 was being

developed to meet joint service operational requirements that would

satisfy various combat missions, including medium-lift assault for the

Marine Corps, search and rescue for the Navy, and special operations for

the Air Force. The program advanced into full-scale development in 1986.

In December 1989, the Department of Defense (DOD) directed the Navy to

terminate all V-22 contracts because, according to DOD, the V-22 was not

affordable when compared to helicopter alternatives. DOD notified

Congress that in order to satisfy the joint service requirements, the aircraft

would require substantial redesign and testing. Congress continued to

fund the program and in August 1992, the Acting Secretary of the Navy

testified that a V-22 that met the joint service operational requirements

could not be built with the funds provided. In October 1992, the Navy

terminated the V-22 full-scale development contract and awarded a

contract to begin engineering, manufacturing, and development (EMD) of a

V-22 variant.

During the FSD phase, five prototype aircraft were built.1

 We have been

monitoring the V-22 program for the past several years. Our reports2

1

Two of these prototype aircraft were destroyed in crashes. The cause of the first crash, which

occurred in June 1991, was reported to be incorrect wiring in a flight-control system. The cause of the

second crash, which occurred in July 1992, was reported to be an on-board fire due to component

failures and design problems in the engine nacelles.

2

Defense Acquisition Programs: Status of Selected Systems (GAO/NSIAD-90-30, Dec. 14, 1989); Naval

Aviation: The V-22 Osprey-Progress and Problems (GAO/NSIAD-91-45, Oct. 12, 1990); and Naval

Aviation: V-22 Development Schedule Extended, Performance Reduced, and Costs Increased

(GAO/NSIAD-94-44, Jan. 13, 1994).

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B-272631 

consistently discussed testing and development issues such as weight,

vibration, avionics, flight controls, landing gear, and engine diagnostic

deficiencies.

The current V-22 program, which entered EMD in 1992, is scheduled to

proceed with developmental testing through 1999. During the EMD phase,

the contractor is required to build four production representative aircraft

to Marine Corps specifications and deliver them to Patuxent River Naval

Air Station, Maryland, in 1997 for developmental and operational testing.

Operational testing for the Marine Corps’ V-22 is scheduled to extend into

fiscal year 2000.

After completion of operational testing to determine whether the EMD

aircraft will meet Marine Corps requirements, one of the aircraft will be

remanufactured and tested to determine whether it will meet SOCOM

requirements. Operational testing for the SOCOM variant is scheduled to

extend through fiscal year 2002.

In March 1997, one EMD aircraft was delivered to Patuxent Naval Air

Station to begin developmental and operational testing. Three more

aircraft are under construction and are expected to be delivered by

October 1997. DOD approved the program to begin low-rate initial

production (LRIP) in April 1997 and will purchase 25 V-22 aircraft in 

4 LRIP lots of 5, 5, 7, and 8 through fiscal year 2000.

Full-rate production is scheduled to begin in fiscal year 2001 and continue

through fiscal year 2018. Initial operational capability (IOC)3

 for the V-22

Marine Corps variant is scheduled for 2001 and in 2005 for the SOCOM

version. IOC for the Navy V-22 aircraft has not yet been specified.

Through fiscal year 1997, more than $6.5 billion has been provided for the

program.

Results in Brief The V-22 has been in development for almost 15 years. Although Congress

has provided significant funding and support to DOD, the system has not

yet achieved program stability in terms of cost or aircraft design. There are

large disparities among the cost estimates from the program office, the

contractors, and the Office of the Secretary of Defense. These estimates

range from about $40 million to $58 million for each aircraft. The design of

3

IOC is the first attainment of the capability to effectively employ 12 aircraft, operated by an

adequately trained, equipped, and supported military unit.

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the aircraft will not be stabilized until further testing is completed and

several important performance and operational issues, such as payload

capability, aerial refueling, and downwash4

 are resolved. Resolution of

these issues, which could also require mission trade-offs or changes to

planned operational concepts, will likely escalate program costs and

extend the program schedule. The April 1997 LRIP decision was based, in

large part, on the results of early operational testing using aircraft

produced under an earlier full-scale development program. However,

those aircraft are not representative of the aircraft currently being

developed during the engineering and manufacturing development phase

of the V-22 program. Furthermore, the DOD Director, Operational Test and

Evaluation, has characterized the tests on which the LRIP decision was

based as “extremely artificial” because of significant test limitations.

Future production decisions for the V-22 should be based on more realistic

testing.

Cost Estimates Vary The cost data reported in the December 31, 1996, V-22 Selected Acquisition

Report (SAR) is different from the data in the program office submission to

support the fiscal year 1998-99 President’s Budget. For example, the SAR

indicates that average unit flyaway costs5 at program completion would be

about $55.4 million, while the program office estimate for the President’s

Budget shows that average unit flyaway cost will be about $57.5 million at

program completion. Table 1 provides a comparison of the various cost

estimates at different program milestones. (See app. I for a more detailed

comparison.)

4

The downward force from the V-22 proprotor blades while in a hover mode.

5

We used unit flyaway cost estimates for comparison because they are more standardized and

concentrate on those costs directly related to the production of the aircraft. This includes the cost of

the basic system equipment, as well as both recurring and nonrecurring costs associated with the

production of a usable end item of military hardware.

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Table 1: Comparison of V-22 Cost Estimates at Various Program Milestones (then-year dollars in millions)

Units produced Average unit flyaway cost Average unit flyaway cost

Program office data SAR data

Milestone Year Annual Cumulative Annual Cumulative Annual Cumulative

LRIP begins 1997 5 5 $116.0 $116.0 $112.3 $112.3

Last year LRIP 2000 8 25 76.4 91.3 73.9 88.5

Full-rate production/SOCOM

V-22 begins 2001 16 41 73.7 84.5 71.2 81.8

Production lot 9a 2005 31 158 53.9 65.1 51.8 62.7

Navy V-22 begins 2010 26 299 52.2 59.0 50.2 56.8

Program completion 2018 30 523 59.3 57.5 57.0 55.4

aThis lot is included because it contains production unit number 153, the point at which the

program is expected to reach the contractor estimated unit cost of $40.9 million.

Furthermore, the contractor is estimating that the average unit flyaway

cost, in then-year dollars, for the V-22 will eventually get down to about

$40.9 million. The contractor estimate is based on the assumption that the

production quantities and cost will stabilize (commonly referred to as the

production learning curve) at about the time that aircraft number 153 is

produced. Thus, the contractor estimate of $40.9 million would occur at a

point in time in the program when the program office estimate and the SAR

indicate that the average unit flyaway cost would be about $53.9 million

and about $51.8 million, respectively.

These widely differing estimates indicate that the V-22 has not matured to

the point that there can be reasonable confidence that the costs are stable.

This is particularly true because, as discussed later, the aircraft design is

not yet stable and further changes are expected as the test program

continues. Resolution of performance and operational issues will likely

increase V-22 program costs. In that regard, we and other organizations,

such as the Congressional Budget Office and the Institute for Defense

Analyses, have performed reviews of weapon systems over the years that

have shown that, historically, the cost of major weapons programs

increases by over 20 percent.6

6

Weapons Acquisition: A Rare Opportunity for Lasting Change (GAO/NSIAD-93-15, Dec. 1992); CBO

Papers: An Analysis of the Administration’s Future Years Defense Program for 1995 Through 1999

(Jan. 1995); and The Effects of Management Initiatives on the Costs and Schedules of Defense

Acquisition Programs, Volume 1: Main Report (IDA Paper P-2722, Nov. 1992).

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Unresolved Issues

May Impact

Multi-Mission

Requirements

At this point in the V-22 program, it is questionable whether the aircraft

being produced will be able to meet the multi-mission requirements

outlined in the current Operational Requirements Document (ORD). The

following are some issues that must be resolved before a determination

can be made as to whether the V-22 will satisfy the services’ stated

requirements.

External Payload The current Marine Corps medium-lift helicopter fleet, consisting of

CH-46E and CH-53D helicopters, is aging and now has an average age of 

24 to 27 or more years. Navy and Marine Corps documents indicate that

this fleet is deficient in payload, range, and speed. In addition, the fleet is

incapable of providing the operational performance needed by the Marine

Corps. And, according to Marine Corps officials, the medium-lift aircraft

inventory is well below what is required.

While the V-22 is to replace the Marine Corps’ CH-46E and CH-53D

helicopters, its payload capabilities have yet to be demonstrated. The ORD

stipulates that the V-22 must be able to lift external loads up to 

10,000 pounds. By comparison, the CH-46E and CH-53D are able to lift

8,000 to 12,000 pounds. Testing to evaluate the V-22’s lift capability, and to

measure structural load/stresses/strains in flight and the operational

capabilities to carry external cargo is planned to take place in fiscal year

1998. Moreover, it has yet to be determined if the high-speed capability of

the V-22 will enhance the Marine Corps’ external lift capabilities, since the

airborne behavior of operational equipment such as multi-purpose

vehicles, heavy weapons, and cargo vehicles carried at speeds at or in

excess of 200 knots has yet to be tested. If the V-22 cannot rapidly move

operational equipment, then its utility as an external cargo carrier to

replace current Marine Corps medium-lift assets will have to be

reevaluated.

Terrain Following/Terrain

Avoidance Capability

The V-22 ORD requires that, at a minimum, the CV-22 have the capability to

fly at 300 feet using terrain following/terrain avoidance, in all weather

conditions during both daylight and night-time environments. Testing done

with the FSD prototype V-22 aircraft has shown that the AN/APQ 174

multi-functional radar, which would provide this capability, interferes with

the V-22’s radar jamming system. Further EMD aircraft testing with the

AN/APQ 174 radar system is necessary to resolve this issue. That testing is

not scheduled to be completed until the middle of fiscal year 2001.

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Refueling Probe According to the ORD, the V-22 must have an aerial refueling receiver

capability compatible with current Marine Corps and SOCOM tanker assets.

SOCOM personnel told us that it was vital for both the pilot and the co-pilot

to be able to see the probe during aerial refueling. However, the current

V-22 design prevents the pilot in the left seat of the aircraft from being able

to see the refueling probe. Testing to date with the full-scale development

version of the aircraft shows that the pilot in the left seat must either raise

the seat or lean forward in the seat to clearly see the refueling probe.

According to SOCOM officials, being able to readily see the refueling probe

from both pilot seats without the pilot having to make these physical

adjustments is essential to safe flight operations. From a mission and

training point of view, these officials claim that it is critical that both pilots

be able to see the entire refueling operation in the event that the pilot in

the left seat has to take over the operation. While SOCOM pilots perform

significantly more missions requiring refueling, Marine Corps officials told

us that they believe that as long as the pilot in the right seat can clearly see

the probe, the pilot in the left seat could make necessary adjustments to

safely conduct the refueling mission should the need arise.

V-22 program officials have agreed that if future testing shows that the

current design of the refueling probe is a problem, necessary steps will be

taken to correct the baseline aircraft. However, if a redesign is necessary,

it could have an impact on aircraft performance (weight, range, and speed)

or other aircraft systems, such as the radar.

Proprotor Downwash The downward force from the V-22 proprotor blades while in the hover

mode (referred to as downwash) continues to be an area of concern.

Downwash is a concern for both the Marine Corps and SOCOM in areas such

as personnel insertions/extractions, external load hookups, fast rope

exercises, and rope ladder operations.

According to DOD documentation, the extremely intense rotor downwash

under the aircraft makes it a challenge to stand under the aircraft, let alone

perform useful tasks. According to the DOD Director, Operational Test and

Evaluation report issued in March 1997, resolution of this issue will

require further testing. Program officials told us that downwash is a

common concern with rotary aircraft and V-22 users will have to adjust

mission tactics while under the aircraft to compensate for downwash.

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Survivability Trade-Offs Survivability is a critical concern as the services seek to perform their

missions, particularly in hostile environments. The V-22 ORD defines the

necessary capabilities that must be available on each configuration of the

aircraft. However, our review showed that in order for the aircraft to meet

key performance parameters, such as range, trade-offs are being

considered. Critical subsystems may be delayed or deleted, while others

may require future upgrades or modifications that may affect the

program’s cost and schedule.

One such subsystem is the AN/AVR-2A laser-warning receiver. By giving

the pilot advance warning, this subsystem would reduce the susceptibility

of the aircraft to laser illumination and attacks. The ORD requires that

consideration be given to protecting crew and electro-optical sensors from

low- to medium-powered lasers. While the Marine Corps V-22 aircraft will

have this capability, the SOCOM V-22 aircraft will only have space and

wiring provisions. Currently, the SOCOM variant will not have the

laser-warning receiver because, according to SOCOM officials, it would

prevent the aircraft from meeting its range requirements. In that regard,

the V-22 ORD states that a key performance parameter for the SOCOM variant

is the requirement for a mission radius of 500 nautical miles; that is, the

aircraft must have the ability to fly from a base station out to 500 nautical

miles, hover for 5 minutes, and return. According to SOCOM officials, the

V-22 will not meet this range requirement with the laser-warning

subsystem installed. SOCOM officials contend that the lack of the laser

warning receiver is a concern relative to successful mission

accomplishment and survivability of aircraft and crew.

Another survivability concern is the lack of a defensive weapon on the

V-22. The requirement document states that the V-22 must have an

air-to-ground and air-to-air weapon system compatible with night vision

devices. This is a required capability for the Marine Corps variant and a

desired capability for the SOCOM variant. Originally, the V-22 was to be

equipped with a 50-caliber machine gun; however, for affordability

reasons, it will now be produced without a defensive weapon system.

Finally, the ORD requires that the V-22 include a ground collision avoidance

and warning system with voice warning. Currently, the Navy claims that

this requirement was added to the ORD after the V-22 had validated its

design and, therefore, was not included in the planned production.

Instead, the system is a potential limitation to the Marine Corps’ V-22

configuration and will be included as a preplanned product improvement

to be evaluated through the course of the test program. The Navy intends

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to correct this deficiency, most likely through a retrofit process, and pay

for it within program baseline funding.

More Realistic Testing

Needed

The V-22 program was approved to proceed with LRIP in April 1997. One of

the primary criterion that the program was required to meet was the

completion of an operational assessment endorsing potential operational

effectiveness and suitability7

 of the V-22’s EMD design.8 Three series of

early operational assessments were used to support DOD’s LRIP decision.

Due to the significant limitations of these early operational assessments,

their reliability as the basis for deciding to proceed into LRIP is

questionable and future production decisions should be based on more

realistic tests.

The three operational assessments that have been conducted used aircraft

produced under the earlier full-scale development program. Previously,

DOD had determined these aircraft to be incapable of meeting V-22 mission

requirements and, at one point, the Secretary of Defense sought to cancel

the full-scale development program. V-22 program officials believe that

even though the full-scale development aircraft did not meet mission

requirements, the lessons learned from having produced them reduced the

risk associated with developing the current EMD aircraft.

The first of the three early operational assessments was conducted

between May and July 1994; the second assessment between June and

October 1995. These assessments were conducted jointly by the Navy’s

Operational Test and Evaluation and the Air Force’s Operational Test and

Evaluation Center. In both assessments, the joint test teams concluded

that the development aircraft demonstrated the potential to be

operationally effective and suitable. Although the third assessment was

not completed at the time of the decision to proceed with LRIP, an interim

report was prepared for this milestone. This report highlighted limitations

and risks remaining from previous assessments and cited additional areas

of concern, but still projected that the V-22 will be potentially

operationally effective and suitable.

7

Operational effectiveness is the degree to which a system can accomplish its missions when used as

expected. Operational suitability is the degree to which the system can be placed satisfactorily in field

use, considering such things as availability, reliability, and safety.

8

Additional criteria, which were met, were (1) empty weight would not exceed 34,182 pounds,

(2) complete ferry to Patuxent River Naval Air Station, and (3) demonstrate airspeed of 220 knots.

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In March 1997, DOD’s Director for Operational Test and Evaluation issued

the Fiscal Year 1996 Annual Report. In that report, the Director,

Operational Test and Evaluation, concluded that V-22 testing had

concentrated on system integration and flight envelop expansion, but had

“not extensively investigated mission applications of tiltrotor technology

and potential operational effectiveness and suitability of the EMD V-22.”

The report also highlighted the following operational test and evaluation

limitations relative to the operational assessments of the V-22. The aircraft

• was not cleared to hover over unprepared landing zones,

• could not hook up to or carry any external loads,

• could not carry any passengers, and

• was not cleared to hover over water.

The Director, Operational Test and Evaluation report also stated that the

aircraft configuration was not representative of any mission configuration.

The Director, Operational Test and Evaluation said this combination of

limitations to clearance and configuration results in an “extremely

artificial” test environment for early operational test and evaluation. The

Director, Operational Test and Evaluation also reported serious concerns

regarding the effects of downwash previously mentioned in this report and

recommended further evaluation in this area.

The initial flight of the first of four EMD aircraft, originally scheduled for

December 1996, was delayed until February 1997. As a result, the required

ferry to Patuxent River was delayed until March 1997. The aircraft arrived

at the test facility needing several changes before the test program could

continue as planned. In order to meet the ferry date and thus obtain

approval to proceed with LRIP, component changes and modifications were

not completed at the contractor’s facility. Instead, they were to be

completed at Patuxent River after the required ferry flight. During a visit to

the Naval Air Station test facilities in April 1997, we observed the aircraft

undergoing modifications by contractor personnel. According to test

officials with whom we spoke, the modifications were originally only

expected to take about 2 weeks. However, as of June 16, 1997, the

modifications were still ongoing, nearly 2 months after they began.

The next major milestone decision for the V-22 is the LRIP lot 2 production

decision. That decision is scheduled for early 1998 and will represent DOD’s

approval to procure the next five V-22 aircraft. The criteria that must be

met for LRIP lot 2 approval are:

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• delivery of two additional EMD aircraft and

• completion of certain static tests to determine the structural strength of

the aircraft.

Impact of Accelerated

Production on

Schedule and Testing

Congressional committees have expressed concern that the planned V-22

production schedule (4 LRIP lots of 5, 5, 7, and 8 aircraft with eventual

full-rate production of as many as 31 aircraft per year through 2018) is

inefficient.9

 (See app. I for complete V-22 program schedule and cost

estimates.)

In August 1996, the contractors submitted an unsolicited cost estimate to

the Under Secretary of Defense for Acquisition and Technology that

suggested that accelerated production rates, combined with a multi-year

procurement strategy, could result in savings of nearly 25 percent over the

life of the V-22 program. The contractor proposed accelerating the

production schedule to a rate of 24 aircraft by fiscal year 1999, instead of

the 7 aircraft currently planned in fiscal year 1999. DOD responded that

while this strategy had the potential for significant savings, it was

inappropriate to consider such an alternative until the aircraft design was

more stable. DOD indicated that to do otherwise would unnecessarily

increase technical risk to the program. In addition, DOD stated that such an

increase in annual procurement quantities would not be affordable within

the overall defense budget. Further, the May 1997 Quadrennial Defense

Review recommended lowering the number of V-22 aircraft to be procured

from 523 to 458 and increasing the planned production rate after the

program enters full-rate production. The recommendation retains the

limited LRIP rates currently planned by DOD.

According to V-22 program test personnel, accelerating the production

schedule and increasing the rate would add risk to the program in the

event the test program finds problems that require a significant amount of

time and resources to fix, and result in a larger number of aircraft to

retrofit or modify. These views are consistent with the conclusions in our

February 13, 1997, report that described the effects of increased

production during LRIP of 28 weapon systems and the cost and schedule

impact to these programs.10 This report showed that when DOD

inappropriately placed priority on funding production of unnecessary

9

H.R. Rep. No. 104-563, at 48 (1996) and S. Rep. No. 104-267, at 59 (1996) on the National Defense

Authorization Act for Fiscal Year 1997.

10Weapons Acquisition: Better Use of Limited DOD Acquisition Funding Would Reduce Costs

(GAO/NSIAD-97-23, Feb. 13, 1997).

Page 10 GAO/NSIAD-98-13 Navy Aviation
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quantities during LRIP, the result was a large number of untested weapons

that subsequently had to be modified. Moreover, it points out that because

of overall budgetary constraints, decisions to buy unnecessary quantities

of unproven systems under LRIP forced DOD to lower the annual full

production rates of proven weapons thereby stretching out full-rate

production for years and increasing unit production costs by billions of

dollars.

Conclusions and

Recommendations

There is no consensus on the acquisition strategy for acquiring the V-22

Osprey. Congress has been attempting to increase the annual production

rates to achieve more efficient production and DOD has been attempting to

keep the annual production rates at a more limited quantity. The key to

efficient production and the efficient use of the funds Congress has

provided for the V-22 is program stability. However, after 15 years of

development effort, the V-22 design has not been stabilized. To begin the

process of achieving consensus on the acquisition strategy for the V-22, we

believe that DOD needs to present Congress with a strategy for overcoming

the production inefficiencies that Congress views as present in the current

acquisition strategy. As part of that strategy, we believe that DOD needs to

introduce more realistic testing into the program to achieve aircraft design

stability. Ideally, this testing should be done as early as possible in the

program schedule and should be directed at ensuring that the required

capabilities of the V-22 are adequately demonstrated before a significant

number of aircraft are procured. In that regard, the next scheduled major

program milestone is the LRIP lot 2 production decision scheduled for early

1998.

Accordingly, we recommend that the Secretary of Defense provide in the

Department’s next request for V-22 funds an explanation of how it plans to

(1) introduce more realistic testing earlier into the V-22 program schedule

and (2) achieve the production efficiencies desired by Congress. An

agreement between Congress and DOD in this regard would be a significant

step toward reaching consensus on the acquisition strategy for the V-22

program.

Agency Comments

and Our Evaluation

DOD reviewed and partially concurred with a draft of this report. In its

comments, DOD agreed to continually assess and correct operational

deficiencies found during V-22 testing. However, DOD did not concur with

our recommendation to provide Congress an explanation of how it plans

to introduce more realistic testing earlier into the V-22 program schedule

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and achieve production efficiencies. DOD stated that it considers test

results, production efficiencies, and other factors in developing its budget

and does not consider additional explanatory materials necessary. DOD

also stated that the Defense Acquisition Board, in April 1997, determined

that the V-22 test program was adequate and properly sequenced.

We continue to believe that the V-22 test program and the criteria for

proceeding with the low-rate production program should be made more

realistic. Given the artificial nature of the prior operational testing that

was used to justify LRIP lot 1 production and the fact that earlier tests were

conducted using nonproduction representative aircraft developed under

the earlier V-22 full-scale development program, we believe that DOD

should expand the LRIP lot 2 criteria to introduce more realistic testing into

the program, using aircraft produced under the EMD phase of the program.

We believe that at a minimum, the limitations of the prior tests, which

were disclosed by the Director, Operational Test and Evaluation in its

March 1997 report, should be addressed before a decision is made to

proceed into the next LRIP lot. This would allow the test program to

validate the projected capabilities of the EMD-configured aircraft without

injecting unnecessary risk into the program.

DOD also emphasized in its comments on our draft report that the

Quadrennial Defense Review (QDR) resulted in an accelerated production

profile that addresses many of the production efficiencies desired by

Congress. The QDR recommends an overall reduction in aircraft for the

Marine Corps, from 425 aircraft to 360 with an increase in the rate of

production during the full production phase of the program. The four

low-rate production lots of 4, 5, 7, and 8 aircraft planned during the period

1997-2000 are retained. It is during this LRIP phase of the program that we

believe more realistic testing is needed and should be included as criteria

for procuring the next EMD LRIP lots. Therefore, we believe our position is

consistent with the intent of the QDR recommendation, which would not

take effect until the full-rate production phase of the V-22 program.

DOD’s comments and our evaluation of them are presented in their entirety

in appendix II.

Scope and

Methodology

We reviewed the status of the V-22 aircraft development and readiness of

the program to proceed into production. We reviewed and analyzed test

plans and reports, including the Test and Evaluation Master Plan and

results of three V-22 Operational Assessments; cost and budget estimates,

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including the SAR and President’s Budget Estimates for fiscal years 1997-99;

and other program documentation, including the ORD and the EMD and LRIP

contracts. We also obtained information on Marine Corps medium-lift

requirements and capabilities of existing assets. In addition, we met with

officials in the office of the Secretary of Defense and conducted interviews

with program officials from the following locations:

• U.S. Navy Headquarters, Washington, D.C.;

• U.S. Marine Headquarters, Arlington, Virginia;

• Office of the Chief of Naval Operations, Washington, D.C.;

• U.S. Special Operations Command, Tampa, Florida;

• V-22 Program Office, Crystal City, Virginia; and

• Naval Air Warfare Station, Patuxent River, Maryland.

Finally, we visited contractor facilities at Boeing Defense and Space

Group-Helicopters Division, Philadelphia, Pennsylvania, and Bell

Helicopter Textron, Fort Worth, Texas.

We performed our review from March 1996 through June 1997 in

accordance with generally accepted government auditing standards.

We are sending copies of this report to the Secretary of the Navy; the

Secretary of the Air Force; the Commandant of the Marine Corps; and the

Director, Office of Management and Budget. We will also make copies

available to others on request.

Page 13 GAO/NSIAD-98-13 Navy Aviation
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Please contact me at (202) 512-4841 if you or your staff have any questions

concerning this report. Major contributors to this report were 

Steven F. Kuhta, Assistant Director; Samuel N. Cox, Evaluator-in-Charge;

and Brian Mullins, Senior Evaluator.

Louis J. Rodrigues

Director, Defense Acquisitions Issues

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List of Congressional Committees

The Honorable Strom Thurmond

Chairman

The Honorable Carl Levin

Ranking Minority Member

Committee on Armed Services

United States Senate

The Honorable Ted Stevens

Chairman

The Honorable Daniel K. Inouye

Ranking Minority Member

Subcommittee on Defense

Committee on Appropriations

United States Senate

The Honorable Floyd Spence

Chairman

The Honorable Ronald V. Dellums

Ranking Minority Member

Committee on National Security

House of Representatives

The Honorable C. W. Bill Young

Chairman

The Honorable John P. Murtha

Ranking Minority Member

Subcommittee on National Security

Committee on Appropriations

House of Representatives

Page 15 GAO/NSIAD-98-13 Navy Aviation
Appendix I 

V-22 Procurement Schedule and Cost

Estimate

Program office estimate Selected acquisition report

(Then-year dollars in millions)

Fiscal year Units

Program

flyaway cost

Unit flyaway

cost

Program

flyaway cost

Unit flyaway

cost

1997 5 $579.9 $116.0 $561.3 $112.3

1998 5 494.8 99.0 480.7 96.1

1999 7 597.6 85.4 579.0 82.7

2000 8 611.0 76.4 591.3 73.9

2001 16 1,179.5 73.7 1,139.9 71.2

2002 24 1,617.2 67.4 1,559.3 65.0

2003 31 1,810.1 58.4 1,738.4 56.1

2004 31 1,720.4 55.5 1,652.5 53.3

2005 31 1,671.8 53.9 1,606.8 51.8

2006 31 1,642.7 53.0 1,578.8 50.9

2007 31 1,629.6 52.6 1,566.2 50.5

2008 29 1,499.9 51.7 1,442.0 49.7

2009 24 1,239.2 51.6 1,192.0 49.7

2010 26 1,356.5 52.2 1304.9 50.2

2011 26 1,371.2 52.7 1,318.9 50.7

2012 27 1,440.7 53.4 1,385.9 51.3

2013 27 1,463.4 54.2 1,407.6 52.1

2014 27 1,478.9 54.8 1,422.4 52.7

2015 27 1,500.2 55.6 1,443.2 53.5

2016 30 1,690.3 56.3 1,626.2 54.2

2017 30 1,715.0 57.2 1,649.9 55.0

2018 30 1,778.4 59.3 1,710.8 57.0

Total 523 $30,088.3 $57.5 $28,958.0 $55.4

Page 16 GAO/NSIAD-98-13 Navy Aviation
Appendix II 

Comments From the Department of Defense

Note: GAO comments

supplementing those in the

report text appear at the

end of this appendix.

See comment 1.

Page 17 GAO/NSIAD-98-13 Navy Aviation
Appendix II 

Comments From the Department of Defense

See comments 2 & 3.

See comment 4.

Page 18 GAO/NSIAD-98-13 Navy Aviation
Appendix II 

Comments From the Department of Defense

The following are GAO’s comments on the Department of Defense’s (DOD)

letter dated August 27, 1997.

GAO Comments 1. We recalculated the cost data obtained from the V-22 Selected

Acquisition Report, using DOD inflation indices, to reflect then-year dollars

for comparison to program office budget estimates. The recalculated cost

data are reflected in the final report.

2. We agree that the Operational Requirements Document (ORD) validated

by the Joint Requirements Oversight Council in June 1995 does not specify

an airspeed requirement for carrying external loads. However, the V-22

program was justified on the basis that it would overcome the

shortcomings of the Marine Corps’ current medium-lift helicopters. In that

regard, the ORD is specific in identifying inadequate payload, range, speed

and survivability in the current medium-lift force that severely limit the

Marine Corps’ ability to accomplish the assault support missions in current

and future threat environments.

We also agree that the ORD does not identify the specific equipment that

the V-22 must have to protect the aircraft and crew from laser threats.

However, the ORD does require that the aircraft be designed for operations

in a hostile environment with features that increase aircraft, crew, and

passenger survivability. Specifically, it requires that consideration be given

to protecting crew and electro-optical sensors from low- to

medium-powered lasers. While the MV-22 will be equipped with an

AN/AVR-2A laser-warning receiver, the CV-22 will not be so equipped.

Instead, the aircraft will be produced with available space and wiring for

installation of laser protection capabilities.

3. We note that the approved CV-22 exit criteria is as follows:

• For lot 1 advanced procurement funding, flight testing of the first of two

CV-22 flight test aircraft must have started.

• For lot 1 full funding and advanced procurement for lot 2, flight testing

with the second CV-22 aircraft must have started and the terrain

following/terrain avoidance testing must have started using the first CV-22

aircraft.

Page 19 GAO/NSIAD-98-13 Navy Aviation
Appendix II 

Comments From the Department of Defense

We question the value of “flight test started” as sufficient criteria for

making an informed decision to proceed with production of the CV-22

model aircraft.

4. This comment is consistent with the discussion in the report.

(707156) Page 20 GAO/NSIAD-98-13 Navy Aviation
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