United States General Accounting Office

GAO Report to the Congress

August 1995 U.S.-JAPAN

COOPERATIVE

DEVELOPMENT

Progress on the FS-X

Program Enhances

Japanese Aerospace

Capabilities

GAO/NSIAD-95-145

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-261890 

August 11, 1995

The Honorable Newt Gingrich

Speaker of the House of

 Representatives

The Honorable Strom Thurmond

President Pro Tempore

United States Senate

This is an unclassified version of a classified report issued to you earlier this year, on the

progress made in implementing the U.S.-Japanese agreement on the FS-X program. We have

updated information concerning the release of F-16 technical data and FS-X technology visits to

reflect more current conditions. This report was prepared in response to the conference report

on the fiscal year 1990 appropriations act for the Departments of Commerce, Justice, and State;

the Judiciary; and related agencies.

This report contains recommendations to improve the U.S. government’s review of FS-X related

export licenses to Japan and to establish an FS-X Technology Transfer Evaluation Task Force

under the Defense Science Board to improve U.S. government and industry evaluation of

transferred Japanese FS-X technologies.

We are sending copies of this report to interested congressional committees and to the

Secretaries of Defense, State, and Commerce.

This report was prepared under the direction of David E. Cooper, Director, Acquisition Policy,

Technology, and Competitiveness Issues, who may be reached on (202) 512-4587 if you or your

staff have any questions. Major contributors are listed in appendix VII.

Henry L. Hinton, Jr.

Assistant Comptroller General
Executive Summary

Purpose In November 1988, the United States and Japan agreed to cooperatively

develop the FS-X fighter aircraft. The FS-X is a significantly modified

derivative of the U.S. Air Force’s F-16 Block 40 fighter aircraft. Congress

has been concerned about the transfer of U.S. technology to Japan through

the FS-X program and whether the program will provide the United States

with useful technology. Consequently, the conference report on the fiscal

year 1990 appropriations act for the Departments of Commerce, Justice,

and State; the Judiciary; and related agencies called for GAO to monitor and

periodically report on the implementation of the FS-X program. GAO has

issued several reports on the FS-X program since 1989.

For this report, GAO examined (1) the program’s status, (2) U.S.

government and contractor controls over technical data and hardware

provided to Japan for the program, (3) the transfer of program technology

from Japan to the United States, and (4) benefits the program has provided

to the Japanese and U.S. aerospace industries.

Background The U.S.-Japan FS-X program, funded by Japan, involves the cooperative

development of a fighter aircraft and the manufacture of six prototypes.

The FS-X is planned as the replacement for Japan’s aging, domestically

developed F-1 fighter. Japan is obtaining U.S. design and development

assistance based primarily on F-16 technical data. Japan is also purchasing

certain items and services from U.S. firms for the development program,

including engines for the prototype aircraft.

Under the FS-X agreements, the value of the U.S. work share is to reach

40 percent of Japan’s FS-X development budget. According to Department

of Defense (DOD) officials, the United States should receive, at no cost, all

FS-X technologies essentially developed (derived) from U.S. technical

data. Under these agreements, the United States must pay for FS-X

technologies that are not essentially developed from U.S. technical data

(non-derived), although the United States may obtain some information

about the non-derived technologies at no cost. The FS-X agreements allow

Japan to submit technologies to the United States for possible

reclassification to non-derived status.

The government of Japan has overall FS-X program responsibility, and

Mitsubishi Heavy Industries is the prime contractor. Lockheed Fort Worth

Company (formerly General Dynamics Fort Worth Division), the

manufacturer of the F-16, is the principal U.S. subcontractor. Lockheed

will manufacture eight left wings for the FS-X test articles and prototypes

Page 2 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Executive Summary

using composite design and manufacturing processes transferred from

Mitsubishi. The U.S. Air Force monitors day-to-day program activities for

the U.S. government and has delegated much of this responsibility to the

F-16 System Program Office.

Results in Brief The FS-X development program entered the prototype production phase in

April 1993. The first prototype flight is currently scheduled for late

summer 1995, a delay of about 2 years from earlier estimates. U.S. officials

believe the only serious technical obstacle to a successful first flight test is

Japanese development of the digital flight control software. The current

estimated value of the U.S. work share is over $1 billion and is linked to

the Japanese government’s FS-X budget. Total FS-X development costs

may exceed the FS-X budget. The United States cannot determine the

overall cost of FS-X development because the FS-X agreements do not

provide U.S. access to Japanese contractors’ FS-X related cost data. DOD

and Lockheed officials believe that the FS-X program will proceed into the

production phase and are beginning to plan for production negotiations.

The adequacy of U.S. controls of the transfer of technology and hardware

to Japan has varied. U.S. Air Force review of F-16 technical data for

release to Japan seems adequate, while Japan continues to request certain

F-16 data previously denied for release. In addition to the F-16 data, Japan

is obtaining technologies and FS-X subsystem items from U.S. companies

under export licenses. However, there is inadequate sharing of licensing

information among U.S. government entities on these and related exports

to ensure (1) compliance with DOD releasability guidelines or (2) that FS-X

items are properly categorized as derived or non-derived.

The United States has gained more access to Japanese FS-X technologies

since GAO’s June 1992 FS-X review, although some issues remain

unresolved. Japan has been reluctant to transfer data for certain systems

to the United States and is seeking to limit technology transfer to the

United States for those systems by reclassifying them as non-derived.

No one currently knows what benefits, if any, Japanese technologies will

provide to the United States. In addition, U.S. evaluation has been

incomplete and ineffective. Lockheed and U.S. officials believe that better

coordination between U.S. defense contractors is necessary to effectively

evaluate and apply Japanese FS-X technologies. Some limited U.S. efforts

are underway to improve evaluation.

Page 3 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Executive Summary

The FS-X program is helping strengthen Japan’s aerospace industry.

Japanese FS-X engineers are acquiring valuable design and systems

integration experience applicable to other military and commercial

aircraft projects. By making extensive changes to the F-16 baseline, Japan

has maximized its use of indigenous design concepts and technologies,

and has ensured an important role for Japanese companies. As a result, the

FS-X program will reduce Japan’s dependence on U.S suppliers for future

Japanese military, and possibly commercial, aircraft programs. The

program is also providing some benefits to U.S. companies that are now

acting as subcontractor or suppliers. The technological contribution to the

U.S. aerospace industry overall is currently unknown.

Principal Findings

FS-X Program Is in

Prototype Phase

Japanese and U.S. contractors are working on the FS-X prototype aircraft

and the first flight test is currently scheduled for late summer 1995. Air

Force and U.S. industry officials have expressed concerns about Japan’s

ability to develop its digital flight control software. The FS-X aircraft

cannot fly safely until the digital flight control software is operational.

Under the FS-X agreements, the U.S. work share is linked to the Japanese

government’s FS-X development budget rather than total Japanese

expenditures or costs. DOD officials stated that the United States has

access to Japan’s FS-X budget figures. Current Japanese figures show that

the value of the U.S. work share exceeds 40 percent of the development

budget. The United States is attempting to validate these figures.

According to U.S. program officials, under the FS-X agreements, the

United States does not have complete access to Japanese contractors’

FS-X related cost data. At least one Japanese company has spent more on

FS-X development than it has received from the Japanese government.

Therefore, the United States may never know the total cost of the

development program or whether total FS-X development costs exceed

the FS-X budget.

DOD believes Japan will probably produce between 50 and 130 FS-X

aircraft to (1) replace its outdated F-1 aircraft and (2) maintain its good

security relationship with the United States.

Page 4 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Executive Summary

Adequacy of Controls for

U.S. Provided Items Varies

The F-16 System Program Office completed its review of the F-16 technical

data package, which served as the baseline for the FS-X design, and

continues to review supplemental F-16 data for release. GAO’s examination

of selected cases indicated that the Program Office was adequately

screening F-16 data to ensure adherence to DOD releasability guidelines.

However, Japan persists in seeking F-16 data the U.S. government has

previously denied for release.

In addition to the F-16 related data, U. S. companies provide other

technologies and hardware to Japan for FS-X subsystems under export

licenses. The number of State Department FS-X related munitions export

licenses to Japan has increased nearly 600 percent from 75 to 518 since

June 1992. The State Department is approving munitions export licenses

for FS-X prototype items. In addition, the Department of Commerce has

approved export license applications for dual-use (military and civilian)

items that could contribute to Japan’s FS-X development program.

Inadequate sharing of information between licensing agencies and with

DOD hampers U.S. oversight of FS-X related exports to Japan. Since

agencies do not routinely share all FS-X related licensing information, DOD

is unable to ensure compliance with releasability guidelines established

for national security reasons. In one case the Department of State

improperly approved an export license for a very sensitive F-16 item

without coordinating with DOD. Further, GAO’s analysis indicates that the

Department of Commerce approved export licenses for military aircraft

items that may be under the jurisdiction of the Department of State.

Additionally, poor coordination in the licensing process can impair the

U.S. ability to properly categorize FS-X items as derived or non-derived.

For example, before August 1992, the Air Force did not provide complete

FS-X license information to the F-16 System Program Office, limiting its

oversight of and insight into FS-X related exports to Japan.

Technology Transfer From

Japan Is of Uncertain Value

Japanese transfers of FS-X technologies to the United States have

increased during the past 2 years. DOD and Lockheed have received

thousands of FS-X technical documents, including drawings, photographs,

and video tapes. Japanese subcontractors have also begun providing FS-X

technologies to the United States.

To date, Japan and the United States have agreed to classify five

technologies as non-derived: the active phased array fire control radar,

Page 5 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Executive Summary

mission computer hardware, inertial reference/navigation system,

integrated electronic warfare system, and radar absorbing material. DOD

has conducted technical visits in Japan for all of these technologies except

radar absorbing material.

During GAO’s review, the United States and Japan were negotiating the

appropriate degree of U.S. access to certain other FS-X technologies. In

December 1993, Japan submitted 12 items as candidates for

reclassification to non-derived status. The U.S. government evaluated the

12 to determine if Japan developed them with minimal or insignificant U.S.

input, as Japan claimed. In September 1994, the U.S. government told

Japan that the United States would agree to reclassify 4 of the 12 items.

U.S. officials said the Japan Defense Agency has limited technology

transfers to the United States for some of the 12 candidate technologies

pending resolution of the reclassification issue.

Through technology transfers and visits, the United States is learning

about certain Japanese FS-X technologies. Preliminary analyses of the

performance of these systems indicate that Japanese technologies, while

strong in some areas, do not match U.S. capabilities. U.S. government and

industry officials believe, however, that Japanese design and production

methods may be more promising than the technologies themselves. For

example, Japan designs and builds some avionics components that are

lighter and smaller than similar U.S. equipment.

U.S. government and industry officials told GAO that they do not know

what, if any, benefits will accrue to the United States from transfers of

Japanese FS-X technology, because:

• Until the FS-X flies a test mission, no one can know if the Japanese

modifications to F-16 systems are successful.

• U.S. sources believe that FS-X systems are based on technologies that the

U.S. Air Force should surpass with its latest generation systems.

• It is not clear that Japan will transfer key manufacturing data that would

most benefit U.S. industry.

• U.S. companies do not know what markets might exist for Japanese FS-X

technologies.

There have been only limited efforts to systematically evaluate transferred

Japanese FS-X technologies, and DOD has provided very little FS-X

information to U.S. industry. However, DOD plans to establish an FS-X

database at the Defense Technical Information Center that could improve

Page 6 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Executive Summary

dissemination of Japanese technologies. During the course of GAO’s review,

the U.S. Air Force developed a plan for analyzing Japanese modifications

to U.S. F-16 data.

Program Provides

Different Benefits to

Japanese and U.S.

Aerospace Industries

Japan’s aircraft engineers are improving their skills by designing and

developing the FS-X fighter aircraft, according to U.S. and Japanese

officials. Japan’s FS-X experience also increases the likelihood of future

autonomous Japanese aircraft development projects. U.S. officials stated

that Japanese engineers are learning systems integration skills during the

FS-X program that are also applicable to commercial aircraft projects.

According to U.S. officials, the Japanese government has provided

Mitsubishi Heavy Industries extensive financial support for improving its

aerospace composite capabilities. Japanese FS-X contractors can also use

some of the equipment acquired for the FS-X program for other aircraft

programs, including commercial projects.

Japan’s substantial changes to the F-16 design ensure that Japan’s aircraft

industry will benefit from the program. Japan modified the F-16 to meet its

stated operational requirements and to maximize opportunities for

Japanese suppliers. Consequently, Japanese firms are supplying over half

of the configuration items for the FS-X prototype aircraft. GAO’s analysis of

about 25 percent of these items indicated that Japanese firms obtained

more FS-X contracts than U.S. firms for items with commercial

applications.

While the program has enhanced the technical capabilities of the Japanese

aerospace industry, to date program benefits to the United States have

been mainly economic. The estimated value of U.S. work share has grown

from initial projections of $480 million to over $1 billion as cost estimates

for the overall FS-X development budget increased. The FS-X agreements

specifically reserved certain tasks for Lockheed and General Electric

while other U.S. firms had to compete with Japanese companies for FS-X

work. Most of the U.S. work share is reserved for Lockheed, which is

guaranteed between 30 and 31 percent of the value of the FS-X

development budget. As of May 1994, Japan had awarded over $1 billion of

contracts to over 200 U.S. firms for the development program.

Recommendations To ensure compliance with FS-X releasability guidelines, oversight of FS-X

related exports to Japan, and proper categorization of derived and

Page 7 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Executive Summary

non-derived technologies, GAO makes recommendations in chapter 3 to the

Secretaries of Commerce, Defense, and State regarding the development

and implementation of written, formal procedures for sharing information

about FS-X related export licenses and applications to Japan.

To assist DOD in developing and implementing a program to evaluate

transferred Japanese FS-X technologies and determine how the United

States may benefit from them, GAO makes recommendations in chapter 4

to the Secretary of Defense regarding the establishment of an FS-X

Technology Transfer Evaluation Task Force under the Defense Science

Board.

Agency Comments

and GAO’s Evaluation

GAO obtained comments on a draft of this report from the Departments of

Defense, State, and Commerce (see apps. IV, V, and VI, respectively). DOD

and State concurred with GAO’s recommendations for establishing and

implementing procedures to improve the sharing of export licensing

information. DOD indicated that it planned to monitor current activities to

identify, evaluate, and disseminate Japanese FS-X technologies and if they

proved to be unsatisfactory, it would consider other actions such as

establishing an FS-X Task Force under the Defense Science Board. GAO

believes that once adequate development and testing of FS-X technologies

has occurred, DOD should establish the Task Force because current U.S.

efforts are probably too limited to provide sufficient evaluation and

dissemination of FS-X technologies.

DOD commented that the U.S. contribution to substantially enhancing

Japanese aerospace capabilities is not as significant as the GAO draft

implied. DOD added that it has effectively limited Japanese access to

sensitive U.S. aerospace technologies. GAO did not attempt to measure the

significance of the U.S. contribution to enhanced Japanese aerospace

capabilities through the FS-X program. Although DOD has limited Japanese

access to certain U.S. technologies such as some software design and

systems integration know-how, a number of experts have concluded that

the Japanese aerospace industry has acquired significant technology from

the United States during the program that it could not have acquired

otherwise without considerable investments of time and money.

State and Commerce interpreted the draft report as advocating an

inappropriate use of the U.S. export licensing system to restrict FS-X

related exports. State pointed out that economic concerns are not

mentioned in the Arms Export Control Act as a criterion on which a

Page 8 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Executive Summary

license may be granted or withheld. While that statement is correct, GAO’s

draft did not propose withholding licenses for economic reasons.

Commerce also commented correctly that if statutory and regulatory

requirements are met, the fact that an export item may be used for FS-X

purposes does not provide a basis for it to deny an export license. GAO

notes, however, that the draft report recommended only that State and

Commerce share licensing information about FS-X related exports with

DOD. In GAO’s view, this exchange of information is needed to ensure that

licensing decisions take into account government-to-government

agreements and DOD releasability guidelines established for national

security reasons. This information is also needed to properly categorize

FS-X technologies as derived or non-derived.

Commerce commented that DOD would have to make a formal request for

historical information on export license applications to ship to Japan

equipment or data that could be used on military aircraft and Commerce

would have to determine that the release of such information was in the

national interest. Commerce also stated that under a proposed executive

order, DOD would be able to review all dual-use license applications

processed by Commerce, before approval, if DOD chose to do so. GAO has

not examined the draft executive order, but if properly constructed and

implemented, it could improve the sharing of licensing information among

involved executive branch agencies. This could help to ensure that

licensing decisions are made in accordance with the FS-X

government-to-government agreements and DOD’s releasability guidelines,

and that FS-X technologies are properly categorized as derived or

non-derived from U.S. sources.

Page 9 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Contents

Executive Summary 2

Chapter 1 

Introduction

14

U.S. and Japanese Governments Jointly Oversee the FS-X

Program

17

Previous GAO Reports 18

Objectives, Scope, and Methodology 18

Chapter 2 

Status of the FS-X

Program

21

FS-X Program Is Progressing, but Faces Some Challenges 21

Japan Caps FS-X Development Phase Costs 24

United States Seeks to Validate FS-X Work Share 24

Production Appears Likely 25

Agency Comments 28

Chapter 3 

United States Is

Providing Technology

to Japan for the FS-X

Program

29

U.S. Air Force Review of the F-16 Data Appears Adequate 29

U.S. Government Approves Release of Some Production Data 32

Japan Is Obtaining Data and Items Through U.S. Export Licensing

Process

33

Conclusions 37

Recommendations 38

Agency Comments and Our Evaluation 38

Chapter 4 

Technology Transfer

From Japan Is

Improving, but of

Uncertain Value

40

Progress Made on Technology Transfers From Japan, but Some

Problems Remain

40

Efforts Are Underway to Evaluate Japanese Technologies but

Obstacles Remain

47

Ultimate Value of Japanese Technologies Is Unknown 50

Conclusions 51

Recommendations 52

Agency Comments and Our Evaluation 52

Page 10 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Contents

Chapter 5 

Japanese and U.S.

Aerospace Industries

Receive Different

Program Benefits

54

FS-X Program Conforms to Japanese Defense Acquisition

Strategy

54

FS-X Program Helps Enhance Japanese Aerospace Industry 55

U.S. Firms Have Received Over

$1 Billion in FS-X Contracts

61

Conclusions 64

Agency Comments and Our Evaluation 64

Appendixes Appendix I: Data Review Statistics 66

Appendix II: United States Is Evaluating Japanese Radar Modules

Although Potential Uses Are Uncertain

67

Appendix III: F-16 and FS-X Configuration Item Manufacturers 69

Appendix IV: Comments From the Department of Defense 80

Appendix V: Comments From the Department of State 96

Appendix VI: Comments From the Department of Commerce 101

Appendix VII: Major Contributors to This Report 107

GAO Related Products 111

Tables Table 3.1: Reevaluation of Previously Denied F-16 Technical Data

Package Documents

30

Table 3.2: Types of Exports Approved Under FS-X Munitions

Licenses to Japan

34

Table 4.1: Dates of FS-X Technology Visits 42

Table 4.2: Japanese FS-X Technologies of Potential Interest to the

United States

48

Table I.1: Results of the F-16 Technical Data Package Review 66

Table I.2: F-16 Supplemental Data Review Status 66

Figures Figure 1.1: Differences Between the FS-X Configuration and

Block 40 F-16

15

Figure 2.1: First Japanese FS-X Prototype Aircraft at Mitsubishi

Heavy Industries Aerospace Systems Works Facility in Nagoya,

Japan

22

Figure 5.1: Responsibilities for FS-X Configuration Items 59

Figure 5.2: Lockheed Fort Worth Company Personnel Assigned to

FS-X and Other Programs

62

Page 11 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Contents

Abbreviations

DOD Department of Defense

DDV Direct Drive Valve

EPU Emergency Power Unit

GAO General Accounting Office

MELCO Mitsubishi Electric Corporation

MITI Ministry of International Trade and Industry

Page 12 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Page 13 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Chapter 1 

Introduction

In November 1988, the U.S. and Japanese governments signed a

memorandum of understanding establishing the FS-X cooperative

development program. Japan had seriously explored the option of

developing its own aircraft to replace its aging fleet of domestically

produced F-1 fighter support aircraft. Japanese industry and elements of

the Japan Defense Agency advocated Japanese domestic development of

the FS-X. In 1985, the Japan Defense Agency’s research and development

arm, the Technical Research and Development Institute, announced that,

except for the engine, Japan possessed the domestic capability to develop

an advanced fighter for about $1 billion. However, after extensive

discussions with the U.S. government, Japan agreed to develop the aircraft

with U.S. assistance by basing its design on Lockheed’s1

 F-16 Block 40

fighter aircraft. The block number refers to a specific stage of the F-16’s

development. In contrast to previous F-16 coproduction programs, the

United States agreed to release certain F-16 design and software data

during the FS-X program.

Japan has significantly modified the F-16 design for the FS-X program.

While similar in appearance, the FS-X will be larger and heavier than the

F-16. For example, the FS-X design calls for a 25-percent larger wing,

longer fuselage, and longer horizontal and vertical tails. The FS-X will also

have the same engine used in the latest U.S. version of the F-16 aircraft.

The FS-X will incorporate five technologies defined by FS-X agreements as

Japanese (non-derived):2

 active phased array fire control radar, integrated

electronic warfare system, inertial reference/navigation system, mission

computer hardware,3

 and radar absorbing material. Japan is also

developing a co-cured composite wing for the FS-X. Figure 1.1 shows the

major differences between the FS-X and the F-16.

1

In 1993, General Dynamics sold its Fort Worth Division, which developed and produced the F-16, to

Lockheed Corporation.

2

Given the large amount of technology the United States has provided to Japan since the 1950s, it is

likely that some of these systems are based to a certain extent on U.S. technology.

3

The FS-X mission computer performs the functions of the F-16 Block 40 fire control computer. The

mission computer integrates various on-board systems that enable the pilot to effectively aim and fire

weapons at a target.

Page 14 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Chapter 1 

Introduction

Figure 1.1: Differences Between the FS-X Configuration and Block 40 F-16

Japanese Avionics

Radar

Inertial navigation

Electronic warfare

Mission computer

Tail

Larger area

Engine

F110-GE-129

(F-16 Block 50)

Drag Chute

Weapons

Additional 


stations

Japanese anti-

 ship missle

Stealth

Application of

Japanese technology

Forward Fuselage

Canopy bow frame

Separate stronger

windshield

Larger nose

Wings

Larger modified platform

Cocured composites

Center Fuselage

Advanced composites

(Limited applications)

Aft Fuselage

Conventional

metallics

Stretch

Numerous other


airframe, systems,


and equipment


differences

Japan Provides Program

Leadership and Funding

Under a series of government-to-government and commercial agreements

on the FS-X program, Japan funds the development program and is

responsible for program leadership. It also has final authority over the

aircraft’s configuration, scheduling, and cost. Six prototype aircraft are

planned—two for ground testing and four for flight testing. The United

States is guaranteed 40 percent of the value of the total development work

share budget and approximately 40 percent of the value of the total

production budget, if the program proceeds into that phase. If Japan

decides to undertake a production program, between 50 and 130 aircraft

will likely be built.

The FS-X program agreements provide the United States access to

technologies introduced into the program. According to the Department of

Defense (DOD) officials, under the FS-X agreements, the Japan Defense

Agency will transfer to the United States, at no cost, all FS-X technologies

essentially derived from U.S. technical data. Under these agreements, the

U.S. government and U.S. companies may negotiate purchases of FS-X

technologies that are not essentially developed from U.S. technical data

Page 15 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Chapter 1 

Introduction

(non-derived) at a cost to be determined at the time of transfer. The United

States may also obtain some information about the non-derived

technologies at no cost.

Japanese and U.S. Industry

Play Roles in Program

U.S. and Japanese companies share FS-X design and manufacturing

responsibilities. Mitsubishi Heavy Industries, a Japanese company, is the

prime contractor and is responsible for portions of the airframe, some

avionics, digital flight controls, and support equipment. Mitsubishi is also

responsible for overall FS-X systems integration. Systems integration is

critical to a successful advanced aircraft program and refers to all of the

aircraft components working together to perform mission-related

functions. U.S. government officials have noted that Japan has limited

experience in advanced aircraft systems integration.

Key Japanese industry subcontractors include Fuji Heavy Industries and

Kawasaki Heavy Industries. Fuji is responsible for developing the aircraft

nose, composite wing upper skin, and tail assembly; Kawasaki is

responsible for the center fuselage. Ishikawajima Harima Industries,

another Japanese participant, will perform engine testing and maintenance

during the development phase and is expected to manufacture portions of

the U.S. engine under license if the program proceeds into production.

Certain engine manufacturing tasks will likely be reserved for U.S.

industry because of U.S. government technology release restrictions. Many

other Japanese firms participate in the program as subcontractors and

suppliers.

Lockheed Fort Worth Company is the major U.S. industry participant and

is guaranteed between 30 and 31 percent of the value of the total FS-X

development budget. Although Lockheed is a subcontractor, it is providing

technical assistance to Japan and will design and produce certain parts of

the FS-X, including the aft fuselage and leading edge wing flaps. Lockheed

is manufacturing eight co-cured composite left wings for the FS-X test

articles and prototypes. Lockheed is also designing and manufacturing

certain avionics equipment and avionics test equipment. General Electric,

another key U.S. participant, is manufacturing the engines for the

prototype aircraft. Japan is also buying various items for the FS-X from

over 200 U.S. companies. The more significant items include external fuel

tanks, armament equipment, and certain avionics equipment.

Page 16 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Chapter 1 

Introduction

FS-X Program

Encountered Delays in

Approval and

Implementation

The FS-X program was initially delayed because of congressional and

executive branch scrutiny of the proposed arrangement in early 1989.

Congress and executive branch agencies raised concerns about

(1) protecting sensitive U.S. technology, (2) minimizing Japan’s

opportunities to use the technology to advance its commercial aerospace

industry, (3) guaranteeing U.S. industrial participation beyond the

development program, and (4) ensuring U.S. access to and transfer of

Japanese technology. In response to these concerns, President Bush

ordered an interagency review of the program in February 1989, and Japan

agreed to clarifications to the basic agreement that

• ensured a production work share of approximately 40 percent for the

United States if the program proceeds into production,

• increased safeguards for U.S. technology, and

• confirmed U.S. access rights to Japanese FS-X technologies.

Lockheed and Mitsubishi planned to begin the first phase of the program

in October 1989. However, contract negotiations deadlocked in August

1989 due to fundamental differences over the transfer, use, and payment

for Japanese technology. During that time, the Air Force suspended

transfers of F-16 technical data to Japan. These highly complex issues

were finally resolved in February 1990 when the two governments signed a

clarifying agreement that cleared FS-X technology for transfer to the

United States.

U.S. and Japanese

Governments Jointly

Oversee the FS-X

Program

An FS-X Technical Steering Committee, composed of government officials

from the United States and Japan, is responsible for general program

management and oversight. The Committee is cochaired by

representatives from the U.S. Air Force and the Japan Defense Agency’s

Technical Research and Development Institute. Four subcommittees are

responsible for managing specific aspects of the program, including work

share, budget, technology transfer, interoperability, logistics, and technical

support. The Department of Commerce is an adviser to the Committee,

and Commerce officials attend meetings of the subcommittee that

oversees work share, budget and technology transfer policy. The

Technical Steering Committee refers issues it cannot resolve to higher

levels in the defense agencies of both countries for resolution.

The Air Force’s F-16 System Program Office, located at Wright-Patterson

Air Force Base, Dayton, Ohio, monitors the day-to-day activities of the

FS-X program for the U.S. government. The Program Office also

Page 17 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Chapter 1 

Introduction

(1) approves the release of most Lockheed F-16 and FS-X technical data,

(2) monitors work share issues, and (3) coordinates DOD’s collection and

evaluation of Japanese technologies. Two program office liaison officers

stationed in Japan facilitate program management and exercise oversight.

DOD officials from the Office of the Secretary of the Air Force, the Defense

Security Assistance Agency, and the Defense Technology Security

Administration monitor the program and participate in Steering

Committee activities.

Previous GAO Reports Since November 1989, we have issued a number of reports dealing with

the FS-X program. In general, these reports concluded that

• the development program cost estimate had increased by 70 percent from

initial estimates and the date for the first flight test had changed from 1993

to 1995,

• the United States was adequately controlling the release of F-16 related

technical data to Japan, and

• little technology had been transferred from Japan to the United States.

A list of GAO products on this subject is on pages 111 and 112. In addition,

we have four classified reports on the FS-X development program.

Objectives, Scope,

and Methodology

In response to a requirement in the conference report on the fiscal year

1990 appropriations act for the Departments of Commerce, Justice, and

State; the Judiciary; and related agencies, we have continued to monitor

implementation of the FS-X program. Specifically, during this review we

examined

• the program’s status, including schedule, cost, work share, and production

issues;

• U.S. government and contractor controls over technical data and hardware

the United States provided to Japan for the program;

• the transfer of program technology from Japan to the United States; and

• benefits the program has provided to the Japanese and U.S. aerospace

industries.

We reviewed pertinent schedule, cost, and work share data from U.S.

government and industry sources. We did not evaluate the accuracy of the

estimates. We obtained information on production issues from U.S. and

Japanese government and industry sources.

Page 18 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Chapter 1 

Introduction

We converted FS-X development cost estimates from yen to U.S. dollars at

intervals that corresponded with the Japanese government’s fiscal years.

We did this because the Japanese government funds the FS-X program

with annual budgets based on the Japanese fiscal year.

To assess the adequacy of U.S. controls over the release of the F-16

technical data to Japan, we reviewed data release policies and procedures

established by the U.S. Air Force, the Defense Technology Security

Administration, and Lockheed Fort Worth Company. We also reviewed

technical data released or authorized for release, determined if the release

was consistent with established U.S. guidelines, and discussed the release

criteria with appropriate U.S. government and industry officials. Given the

amount of data that has been transferred to Japan, we made spot checks

of certain types of data, such as supplemental F-16 technical data, to

evaluate compliance with releasability guidelines and procedures. We also

observed document security systems at Lockheed and Mitsubishi Heavy

Industries.

To evaluate U.S. government export licenses for technical data and

hardware related to the FS-X program, we obtained data lists from DOD,

State, and Commerce. We also met with officials from DOD, Air Force,

State, and Commerce responsible for reviewing and approving these

licenses. We were unable to determine the exact number of FS-X licenses

State approved because State’s database did not identify specific FS-X

related munitions license cases.4

 The list of FS-X license cases we

obtained from DOD may not be complete because State may not have

provided all FS-X cases to DOD.

To address technology transfers from Japan to the United States, we

reviewed pertinent government-to-government agreements and held

discussions with officials from DOD, the U.S. Air Force, Commerce, State,

and U.S. Embassy, Japan, as well as U.S. industry representatives in Japan

and the United States. We met with representatives from Lockheed Fort

Worth International Corporation (Nagoya, Japan) and Lockheed Fort

Worth Company. We had discussions with representatives from Texas

Instruments, General Electric, Hughes Airborne Radar Systems,

Westinghouse Electric Corporation, and Norden Systems as well as from

the Rand Corporation, a research organization. We also met with officials

from the Naval Air Warfare Center and the Air Force’s Wright Laboratory,

4

We asked State officials to help us identify FS-X license cases in State’s database for this review and

our prior FS-X review (see U.S.-Japan Codevelopment: Update of the FS-X Program

(GAO/NSIAD-92-165, June 5, 1992)), but that database was not programmed to identify FS-X license

cases. However, State officials agreed to add a code to mark FS-X licenses processed after March 1994.

Page 19 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Chapter 1 

Introduction

Dayton, Ohio, to discuss specific technical aspects of Japan’s FS-X radar

development and other technology issues.

We met with representatives from the Japan Defense Agency, and the

Japanese Ministries of Foreign Affairs and International Trade and

Industry to address technology transfer and other program issues. We also

held discussions with officials from Mitsubishi Heavy Industries,

Ltd./Nagoya Aerospace Systems; Mitsubishi Electric Corporation (MELCO)

Headquarters; MELCO Communications Equipment Works; and MELCO

Kamakura Works; and Fuji Heavy Industries, Ltd./Aerospace Division.

To ascertain the benefits provided to the U.S. and Japanese aerospace

industries, we examined U.S. government and industry documents, spoke

with and reviewed literature from U.S. experts in Japanese industrial and

aerospace policy, and analyzed allocations of FS-X work among U.S. and

Japanese companies. We also addressed industrial base issues in our

discussions with U.S. and Japanese government and industry officials.

We obtained written comments from DOD and the Departments of State

and Commerce on a draft of this report. We incorporated their comments

where appropriate.

We conducted our primary review from April 1993 through June 1994. For

this report, we updated information pertaining to the release of F-16

technical data and FS-X technology visits to reflect more current activities

as of March 1995. We performed our review in accordance with generally

accepted government auditing standards.

Page 20 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Chapter 2 

Status of the FS-X Program

FS-X contractors are working on the prototype aircraft, which is currently

scheduled for its first flight test in late summer 1995. U.S. officials believe

the only serious technical obstacle to a successful first flight test is

Japanese development of the digital flight control software. In March 1992,

the Japan Defense Agency imposed a limit on the FS-X development

budget. This forced Lockheed to modify some of its tasks. According to a

Japan Defense Agency estimate, the current value of the U.S. FS-X

development work share, which is linked to the Japanese government’s

FS-X budget, is over $1 billion. At the time of our review, the U.S. Air

Force was trying to validate U.S. work share data. The United States may

never learn the true cost of the development program because the FS-X

agreements do not provide U.S. access to Japanese FS-X contractors’ cost

data. DOD and Lockheed officials believe that the FS-X program will

probably enter a production phase and are planning for production

agreement negotiations.

FS-X Program Is

Progressing, but

Faces Some

Challenges

Japan and the United States have made considerable progress in

developing the FS-X aircraft, according to both U.S. and Japanese officials.

Despite difficulties in the initial stages of the program, Lockheed and

Mitsubishi Heavy Industries officials said their companies are now

cooperating satisfactorily to meet FS-X cost and schedule goals. The FS-X

program entered the prototype production phase in April 1993. Prototype

production drawings are complete, and Japan has selected equipment

suppliers for all major items. On January 12, 1995, the Japan Defense

Agency introduced the first FS-X prototype to the public (see fig. 2.1).

Page 21 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Chapter 2 

Status of the FS-X Program

Figure 2.1: First Japanese FS-X

Prototype Aircraft at Mitsubishi Heavy

Industries Aerospace Systems Works

Facility in Nagoya, Japan

The first FS-X prototype flight test is scheduled for late summer 1995, a

delay of about 2 years from earlier estimates.

FS-X Schedule Is Very

Aggressive

DOD, Air Force, and Lockheed officials described the FS-X development

schedule as aggressive, with tight deadlines for contractor tasks. Despite

the compressed schedule, the Air Force had no evidence the program

would encounter significant delays. Lockheed officials stated that

Lockheed would meet deadlines for its tasks as long as Japan continued to

provide Lockheed with required resources, such as composite wing data,

on a timely basis. Japanese officials told us that the FS-X program was on

schedule and had no major technical problems.

Japan Must Overcome

Some Significant Technical

Risks

Japanese officials and U.S. government reports have identified several

areas of significant technical risk. In February 1993, Japanese officials

identified three FS-X systems that pose great technical challenges: the

co-cured composite wing, the leading edge flap drive system, and the

Page 22 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Chapter 2 

Status of the FS-X Program

digital flight control software.1 According to a U.S. official, in

October 1993, the Japan Defense Agency also said that the integration of

the avionics systems would be technically challenging. Additionally, U.S.

government reports state that Japan has had technical problems with the

radar and electronic warfare system. Japan has been simplifying some

aspects of its original FS-X design and equipment to reduce potential

technical problems and meet the revised first flight schedule, according to

Air Force and Lockheed officials.

Concerns About Digital

Flight Control Software

U.S. Air Force and U.S. industry officials and some Japanese military

officials are concerned that Japanese problems with their digital flight

control software could lead to significant schedule delays and possibly

jeopardize continued Japanese government support for the program.

Japan chose to develop its own software after the U.S. government said

Japan could not have the F-16 flight control software for the FS-X unless

Lockheed developed it in the United States with minimal Japanese

participation. The F-16 flight control software is considered

state-of-the-art, is unique in its sophistication, and can have direct

application to commercial aircraft.

Japanese government officials believe it will be technically challenging to

develop a safe digital flight control system. While the other FS-X avionics

systems do not have to be fully operational for the aircraft to achieve its

scheduled first flight date, the FS-X cannot fly safely until the digital flight

control software functions properly. U.S. Air Force and industry officials

have expressed concerns about Japan’s ability to develop the software. Air

Force officials based their concerns largely on indirect evidence such as

difficulties experienced developing digital flight control software for other

aircraft. They also noted Japan’s limited experience with digital flight

control software development. Because Japan is developing the software

without U.S. assistance, the United States has had limited insight into its

progress.

According to Lockheed officials, in August 1993, the Air Force asked

Lockheed to begin assessing how to respond to a possible Japanese

request for assistance in testing the digital flight control software.

Additionally, a U.S. Air Force official said that in October 1993 the Air

Force briefed Japanese officials on how to reduce flight control

development risks and offered to test the Japanese flight control software

1

Digital flight control computer software enables inherently unstable aircraft such as FS-X to fly and

maneuver quickly and safely.

Page 23 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Chapter 2 

Status of the FS-X Program

on Air Force test aircraft. However, Japanese officials reportedly said that

U.S. assistance would be unnecessary.

Japan Caps FS-X

Development Phase

Costs

In early 1992, the Japan Defense Agency established a limit on the FS-X

development budget in response to significant growth in its program cost

estimates. In 1992, we reported that the estimate of FS-X development

costs had increased by about 70 percent to 280 billion yen from a 1987 cost

estimate of 165 billion yen. According to an Air Force official, the

Technical Steering Committee’s Japanese co-chairman told U.S.

government and Lockheed officials that the program could be canceled if

the contractors did not limit their costs to meet the budget limit.

Subsequently, Lockheed agreed to modify some of its tasks to reduce

program costs. Mitsubishi Heavy Industries and Lockheed then signed a

March 1992 agreement limiting Lockheed’s development budget costs to

$735 million.2

Lockheed achieved its greatest cost savings by agreeing, with the

concurrence of the U.S. government, to (1) produce left-hand co-cured

composite wings, instead of both left and right hand wings and (2) provide

Mitsubishi with less capable avionics test equipment. By producing only

left-hand wings, Lockheed will not need separate tooling for right-hand

wings. Despite its modified wing tasks, Lockheed should not suffer any

loss of work quality or composite wing technology, according to Lockheed

and Air Force officials.

United States Seeks to

Validate FS-X Work

Share

In October 1993, Japan estimated the value of U.S. work share at over

$1 billion and told the United States that this figure exceeded the

40-percent U.S. share specified in an FS-X agreement. The Japanese

estimate of U.S. work share ranged from 41 to 46 percent of the value of

the FS-X development budget.3

 Under the FS-X agreements, the U.S. work

share is linked to the Japanese government’s FS-X development budget,

not to Japan’s total FS-X development expenditures or costs. DOD officials

stated that the U.S. government has access to the Japanese government’s

FS-X development program budgets. At the time of our review, the Air

Force was trying to validate the Japanese data for the value of U.S. work

2

According to Lockheed officials, the $735 million Lockheed budget did not include a $60-million

licensing fee paid by Mitsubishi Heavy Industries, costs incurred to support FS-X development phase

ground and flight test activities, and certain other costs.

3

The Japan Defense Agency estimate of U.S. work share varied according to the exchange rate used.

For the October 1993 estimate, the agency used yen to dollar exchange rates ranging from 130 to 100

yen per dollar.

Page 24 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Chapter 2 

Status of the FS-X Program

share by contacting all U.S. companies Japan identified as holding FS-X

contracts to verify the dollar value of the contracts.4

U.S. government officials do not know if the program’s total costs equal

the Japanese government’s FS-X development budget figures. At least one

Japanese company is spending more on FS-X development than it has

received from the Japanese government. These added costs are not

included in FS-X budget data the Japanese government reports to the

United States nor are they included in work share calculations. DOD

officials stated that under the FS-X agreements, the United States does not

have access to the Japanese contractors’ cost data that would be needed

to determine the total cost of the FS-X development program. However, it

is clear that Japan will spend far more developing and producing the FS-X

than it would have purchasing F-16s from the United States.

Production Appears

Likely

U.S. government and industry officials believe the Japanese government

will fund production of the FS-X aircraft. DOD believes Japan will probably

produce the FS-X because Japan (1) needs to replace its outdated F-1

aircraft and (2) does not want to risk harming its security relationship with

the United States by abandoning production. An Air Force official noted

that Japan has never terminated a major defense program before

production. However, U.S. officials said that FS-X production might not

occur if

• the estimated production costs of the aircraft increase significantly;

• a major technical problem, such as failure of the digital flight control

software, prevents the aircraft from flying safely;

• a prototype aircraft crashes during flight tests; or

• a drastic change in Japanese defense policy eliminates military

requirements for the FS-X.

U.S. officials expected formal production discussions to begin in 1994.

However, a DOD official stated that the U.S. government will not begin

formal negotiations for an FS-X production agreement with Japan until

DOD agrees that the United States has received sufficient technology

transfer from Japan during development. Current Japanese plans call for

FS-X production activities to begin in 1996.

4

The United States and Japan agreed that any deviations from the 40-percent development phase

target, in either direction, would be considered in the production phase work share.

Page 25 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
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Status of the FS-X Program

U.S. and Japanese government officials believe Japan will probably

produce between 50 and 130 aircraft. However, Lockheed officials, citing

Japan’s history of producing more aircraft than originally estimated, felt

that Japan might ultimately produce as many as 200 FS-X aircraft.

U.S. Production Work

Share Target Will Be

Difficult to Attain

In 1989, the U.S. and Japanese governments agreed that the United States

would receive a work share of about 40 percent of the value of any FS-X

production program. However, U.S. government program officials believe

that goal will be very difficult to achieve because

• the decline of the dollar against the yen, since the work share percentage

was agreed to, makes U.S. work cheaper;

• changes in DOD policy have eliminated nonrecurring cost recoupment

charges5

 Japan would pay to the U.S. government during the production

phase;

• Japan’s selection of many Japanese suppliers for the development phase

did not account for U.S. production work share; and

• many U.S. companies providing end items for development might not want

to bear the costs of maintaining production capability for the projected

small quantities of FS-X aircraft (a maximum of 24 aircraft annually), and

instead choose to accept lower licensed production payments from Japan.

A U.S. government memorandum stated that, to attain a 40-percent U.S.

production work share, U.S. companies would need to build some parts

during the production phase that Japanese firms manufactured for the

development phase. Such a shift could disrupt the program’s schedule and

increase its costs.

Allocation of FS-X engine work share is another potentially difficult

production issue. General Electric is selling its F110-129 “improved

performance” engine, which the U.S. Air Force uses on its latest F-16s, to

Japan for the development program. Japanese agency officials responsible

for FS-X production have indicated that Japan will want to maximize its

share of engine licensed production.

Japan seeks to maximize its engine work because its jet engine design and

development capabilities lag behind the United States. Japan would like to

use an FS-X production program to improve its aircraft engine technology

and move toward its national goal of independently developing and

5

According to a DOD official, nonrecurring cost recoupment charges are payments made by foreign

purchasers for DOD’s investment in the development and production of major defense equipment.

Page 26 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
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Status of the FS-X Program

producing advanced aircraft engines. U.S. government officials

acknowledged that Japan’s desire to maximize its share of engine work

and the difficulty of reaching a 40-percent U.S. production work share will

make the engine an important production agreement issue.

Program Officials’ Views

on Lessons Learned to

Date

U.S. program officials said their development program experiences can

help the United States develop strategies for negotiating a production

agreement. They said that the United States should try to minimize the

number of government-to-government production agreements. Nine

separate agreements—in addition to the memorandum of

understanding—governed the development phase. Elements of the

agreements are contradictory and extremely difficult, if not impossible, to

interpret. The two governments spent considerable time trying to resolve

differing Japanese and U.S. interpretations of the agreements. The

governments could limit this problem by resolving conflicts and ensuring

adequate specificity and consistency before signing production

agreements, and by minimizing the number of agreements.

U.S. program officials also suggested that the United States should require

Japan to clearly define the elements that comprise the production phase

work share to avoid delays, confusion, and subsequent disagreement

during the production phase. During development, the United States

learned, contrary to initial expectations, that Japan’s FS-X budget did not

include certain costs.

The United States would benefit from a formal statement of U.S. goals and

improved U.S. government interagency coordination during production

negotiations, according to U.S. program officials. At various times during

the development program, there were significant disagreements within the

U.S. government on program issues that led to delays and awkward shifts

in U.S. positions. U.S. program officials stated that the lack of unified U.S.

positions created ill will with Japan and led Japan to be very cautious

about undertaking other cooperative defense programs with the United

States. The officials said that the U.S. government should resolve internal

differences before negotiating production agreements so that it presents a

consistent, united position to Japan.

Page 27 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
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Status of the FS-X Program

Agency Comments In commenting on a draft of this report, DOD generally concurred with this

chapter. DOD agreed that:

• Under the FS-X agreements, the U.S. work share is linked to the Japanese

government’s FS-X development budget.

• The United States should require Japan to define clearly the elements

comprising the U.S. work share for a production phase. DOD plans to

identify each element of a U.S. production phase work share explicitly in

the production memorandum of understanding projected for early 1996.

• The United States would benefit from a formal statement of U.S. goals and

improved interagency coordination before negotiating production phase

agreements. A formal statement of U.S. goals relating to the production

phase has been prepared for interagency coordination. DOD stated that

steering and working groups have been established to consider all relevant

viewpoints during the drafting and negotiation of production phase

agreements.

Page 28 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
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United States Is Providing Technology to

Japan for the FS-X Program

The adequacy of U.S. controls over the transfer of technology and

hardware to Japan has varied. U.S. controls over F-16 and Lockheed

generated FS-X technical data seem adequate, while Japan has continued

to seek the release of previously denied F-16 technical data. The U.S.

government has delegated release authority to Lockheed for certain FS-X

data. Lockheed’s release decisions appear consistent with U.S.

government releasability guidelines. After extensive review, the U.S.

government released some F-16 related production information to Japan.

In addition to the F-16 and FS-X technical data, Japan has obtained FS-X

subsystem items and technologies through the U.S. export licensing

process. Although U.S. government agencies review export license

applications for Japan, they do not adequately share licensing information

for certain items. Furthermore, there is no comprehensive interagency

information on U.S. technologies and hardware exported to Japan for FS-X

subsystems. As a result, the United States is not adequately monitoring

and controlling the release of FS-X subsystem items and technologies to

Japan.

U.S. Air Force Review

of the F-16 Data

Appears Adequate

The Air Force’s F-16 System Program Office completed its review of the

F-16 technical data package, which served as the baseline for the FS-X

design, and approved release of over 90 percent of the package and

supplemental data documents to Japan in complete or modified form.

However, the United States continues to withhold sensitive software and

design data. The Program Office continues to review supplemental F-16

data for release. Our examination of selected cases indicated that the

Program Office was adequately reviewing F-16 data to ensure adherence to

DOD releasability guidelines.1

Lockheed continues to generate data to supplement the F-16 technical

data package, which the Air Force reviews for release to Mitsubishi. The

supplemental data includes:

• Technical assistance requests, which clarify, complete, or complement the

F-16 technical data Lockheed has provided to Mitsubishi.

• Engineering or technical interface memorandums, containing

supplemental technical data, that Lockheed personnel use to support

ongoing program activities.

1

The Air Force, in coordination with the Defense Technology Security Administration, drafted a

Delegation of Disclosure Authority Letter, which provides criteria on what technical data and

hardware the United States can and cannot release to Japan in support of the FS-X program.

Page 29 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
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United States Is Providing Technology to

Japan for the FS-X Program

• Technical data requests for missing or illegible pages of previously

released F-16 data. Mitsubishi can also obtain data referenced in

previously released F-16 documents through technical data requests.

• Engineering change proposals, which transmit information about certain

design or engineering changes proposed for items found on the F-16 Block

40 aircraft.

When these types of requests and proposals generate technical data not

previously approved for release, the Air Force is required to review the

information in accordance with Lockheed’s State Department approved

commercial agreements with Mitsubishi. Our test checks of these F-16

supplemental data release records provided no indication that the Air

Force or Lockheed was not adhering to established releasability

procedures and policies. Appendix I shows the status of the review of the

F-16 technical data package and supplemental F-16 data requests as of

February 1, 1994.

Japan Repeatedly Requests

Previously Denied Data

Japan has persisted in seeking certain F-16 data that the U.S. government

has repeatedly declined to release. In June 1992, we reported that the

System Program Office, in response to a Mitsubishi request, had

reevaluated about 250 F-16 documents it had previously denied and that it

again declined to release about 200 of them.2

 After completing the

reevaluation exercise, the Program Office told Mitsubishi to request the

specific data it required, rather than entire documents. Mitsubishi again

submitted requests for 24 of the denied documents. The Program Office,

working with Lockheed, completed its reevaluation of these requests in

the summer of 1992. Table 3.1 shows the results of the review.

Table 3.1: Reevaluation of Previously

Denied F-16 Technical Data Package

Documents

Document status Number Percent

Releasable or modified 3 13

Alternate data provided for FS-X 13 54

Not releasable 8 33

Total 24 100

The types of data the Program Office authorized for release in complete,

modified, or alternate form included pre-Block 40 data and an engine

support document. The Program Office modified pre-Block 40 information

and approved its release when Block 40 documents did not sufficiently

explain changes to the F-16 Block 40. The United States released the

2

U.S.-Japan Codevelopment: Update of the FS-X Program (GAO/NSIAD-92-165, June 5, 1992).

Page 30 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
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United States Is Providing Technology to

Japan for the FS-X Program

engine document after Japan selected General Electric as the FS-X engine

contractor. At the end of our review, a Program Office official told us that

Mitsubishi had again submitted requests for some of the denied technical

data.

U.S. Government Delegates

Release Authority for

Some FS-X Data to

Lockheed

With the transfer of virtually all of the releasable portions of the Lockheed

F-16 technical data package to Mitsubishi, the principal flow of technology

between Lockheed and Mitsubishi now involves data produced during the

FS-X program, known as foreground data.3

 Starting in September 1992, the

Air Force, with the concurrence of DOD’s Defense Technology Security

Administration and the State Department, delegated release authority to

Lockheed for certain types of foreground data Lockheed generates for the

program. Air Force and Lockheed officials stated that the delegations were

necessary because (1) most of the foreground data is not sensitive because

Lockheed creates it from previously released data or Japanese-provided

data and (2) the program’s tight schedule required expediting the flow of

foreground information to Mitsubishi.

The delegation of foreground data review and release responsibilities to

Lockheed has occurred in stages, with program office personnel training

and testing Lockheed engineers in releasability review procedures and

policies for specific items or technologies. Program Office officials said

that they trained Lockheed personnel to adopt a conservative approach to

data release decisions and to consult with the Program Office on

questionable cases. In the final stage, Lockheed officials make release

decisions and ship data judged releasable immediately to Japan.

Subsequently, Lockheed provides the Program Office with periodic reports

on the released data.

As of February 1, 1994, the Air Force and Lockheed had released 1,456

foreground data documents, withheld 26, and modified 12. According to

Program Office officials, Lockheed’s decisions have been consistent with

U.S. government release guidelines. Our limited review of Lockheed and

Air Force records of delegated release decisions revealed no evidence that

either party was not conforming to applicable releasability procedures and

policies.

3

As defined in the FS-X memorandum of understanding, foreground data is “technical data and

computer software, including any invention, process, or discovery, whether or not patentable,

conceived or first actually reduced to practice in the performance of work under the program.”

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United States Is Providing Technology to

Japan for the FS-X Program

U.S. Government

Approves Release of

Some Production

Data

In late 1991, in response to Japanese requests and after a DOD review, the

U.S. government authorized the release of some F-16 related production

data for items that Japan said were essential for completing the FS-X

design. DOD’s review was prompted by Japanese industry requests in the

summer of 1991 for proposals from U.S. and Japanese companies to

provide licensed production data for 122 FS-X subsystems. The Japan

Defense Agency justified the requests by stating that it needed production

information to ensure the safety of the FS-X design and to avoid schedule

delays.

According to U.S. program officials, the Japanese requests caused concern

within the U.S. government because many U.S. officials believed that

licensed production of U.S. items would not be discussed at least until

negotiations for a government-to-government FS-X production agreement

began. One DOD official also saw the Japanese request for production

information as a means of circumventing the FS-X development agreement

and obtaining U.S. technology. An Air Force official stated that Japan

wanted licensed production information to avoid having to purchase end

items from U.S. firms. This would increase the number of jobs for

Japanese workers and ensure an adequate level of contractor support

during the program. The Japan Defense Agency had complained about the

support it received from U.S. companies on other programs and believed it

could obtain more timely assistance from Japanese firms.

In July 1991, at a meeting of the FS-X Technical Steering Committee, the

U.S. position was that, in general, the United States could not approve

licensed production before production negotiations. The United States

asked Japan to reduce its license production requests to the minimum

required to ensure the safety of the FS-X design. In August, DOD told the

Japan Defense Agency that the United States would consider Japanese

requests for licensed production information on a case-by-case basis. DOD

also said that U.S. companies should not, as called for in one of the

Japanese requests, be expected to transfer intellectual property rights to

participate in the FS-X program and that Japan should give U.S. companies

more time to respond to the requests. The Japan Defense Agency accepted

DOD’s offer and suggestions and subsequently reduced its requests from

122 to 96 items.

DOD, in consultation with Commerce and U.S. industry, analyzed the

Japanese requests and approved 22 items for full or partial licensed

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production.4 Items approved for licensed production included the

windshield, a fuel tank, and main and nose landing gear assemblies. The

United States offered 74 other items to Japan as end items, including the

head-up display unit, 600-gallon fuel tank, bomb ejector unit, radar

altimeter, and high frequency radio.

In May 1992, Japan announced most of the source selections for FS-X

subsystems. Japan selected U.S. companies for 19 of the 225

 items offered

by the United States for complete or partial licensed production. Of the 74

items offered as end items, Japan selected 48 from U.S. companies. The

Japanese co-chairman of the FS-X Technical Steering Committee told DOD

that one factor in Japan’s selection of some Japanese firms was U.S.

restrictions on the release of licensed production information during the

development phase. DOD officials stated that the United States would

probably allow more licensed production by U.S. firms upon completion of

an FS-X production agreement.

Japan Is Obtaining

Data and Items

Through U.S. Export

Licensing Process

In addition to F-16 and Lockheed FS-X technical data, Japan has obtained

technology and items from U.S. firms through the export licensing

process. As of March 18, 1994, State had issued at least 518 export licenses

for items on the U.S. Munitions List to U.S. companies to provide

technologies and items to Japan for the FS-X program.6

 In addition,

between 1988 and 1993, Commerce approved at least one export license

for the program. We were unable to obtain a definite count of FS-X related

export licenses due to difficulties in analyzing State and Commerce

licensing data. Further, while licensing procedures have improved since

our last review, inadequate sharing of licensing information between State,

DOD, and Commerce remains a concern and has resulted in inadequate

monitoring and controls of program technology and hardware releases to

Japan.

4

The United States offered licensed production for the 22 items to Japan on a “build-to-print” basis.

This means that U.S. companies could provide Japanese firms with the technical drawings and

associated specifications to replicate a specific item. However, the U.S. companies could not provide

any detailed design, development, or production data. The United States included this “build-to-print”

restriction as a proviso in the export licenses for these items.

5

The Japan Defense Agency eliminated one of these items, the vertical canard actuator, from the FS-X.

6

We did not confirm that companies actually exported items under these approved licenses.

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Several U.S. Government

Entities Review FS-X

Export Applications

Both the State and Commerce Departments review and approve export

license applications for the FS-X program. State has jurisdiction over items

and services on the U.S. Munitions List while Commerce maintains

jurisdiction over dual-use items (items with both civil and military uses).

Neither State nor Commerce are required to refer FS-X related license

applications to DOD or share information with DOD about these cases.

However, State frequently provided FS-X related license applications to

DOD while Commerce generally did not share licensing information with

State or DOD. As a result, no U.S. government agency or office has

complete information on approved FS-X related licenses to Japan.

Program officials said that the separate systems of license application

review lead to gaps in knowledge that prevent them from fully monitoring

FS-X transfers to Japan.

Number of Approved

Munitions Licenses Has

Increased

The number of approved FS-X munitions export licenses to Japan has

increased from 75 to at least 518 since our June 1992 report. Most of these

licenses cover hardware for the development and production of prototype

aircraft. As table 3.2 shows, 54 percent of the approved munitions licenses

to Japan for the FS-X program are for program hardware. In contrast, our

1992 review showed that most of the approved licenses were for

marketing purposes. U.S. companies continued seeking approval for

marketing presentations to Japan, and State has approved 109 licenses for

marketing purposes since 1987.

Table 3.2: Types of Exports Approved

Under FS-X Munitions Licenses to

Japan

Approved licenses

Type of export Number Percent

Development or prototype aircraft

hardware 278 54

Marketing information (brochures,

presentations, and plant visits) 109 21

Technical data, drawings, or consultations 61 12

Maintenance and testing data or

equipment 23 4

Castings and toolings 18 3

Technical Assistance Agreements 29 6

Total 518 100

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Japan Has Obtained

Dual-Use Item Licenses

With Possible FS-X

Applications

Under the Export Administration regulations, the vast majority of dual-use

goods and technologies are exported to Japan under general licenses and

require neither applications nor Commerce-issued documents. Many

dual-use items that may have utility in the FS-X program can be exported

to Japan under general licenses. Consequently, it was difficult to identify

many exports that may contribute to the FS-X program. We identified, and

Commerce confirmed, only one Individual Validated License7

 for exporting

U.S. goods to Japan specifically for use in the FS-X program.

However, Commerce approved additional licenses to Japan for dual-use

items that, according to knowledgeable Commerce officials, may

contribute to the FS-X program. For example, during our search of

Commerce licensing data, we found approved Individual Validated

Licenses to Japan for materials and technical data for radomes, parts for

military inertial reference/navigation systems, material useful for radar

absorbing purposes, and military aircraft testing equipment. Commerce

and State Department officials have conflicting views on which

department has jurisdiction over some of these items. Moreover,

Commerce officials told us Commerce is not obligated to coordinate its

review of these licenses or share information on these cases with State or

DOD. We found that Commerce did not coordinate or share information on

the licenses we examined. DOD officials are concerned that certain

Commerce-approved licenses may be inconsistent with U.S. releasability

guidelines for the FS-X program. However, Commerce officials said they

have no legal basis for denying most licenses to Japan and that Commerce

is not legally obligated to follow DOD FS-X program releasability guidelines.

Commerce also stated that the dual-use items it has jurisdiction over

would not make significant contributions to the development of an

advanced weapon system such as the FS-X, but did not provide evidence

to support this statement.

State and DOD Coordinate

Review of FS-X Munitions

License Applications

State’s Office of Defense Trade Controls reviews applications to export

items and services on the U.S. Munitions List. To help ensure full

consideration of technical, national security, and foreign policy concerns,

Defense Trade Controls sends license applications that require additional

scrutiny to bureaus within the State Department and other U.S.

government agencies, principally DOD. State and DOD officials said that

Defense Trade Controls sends nearly all FS-X applications to DOD for

review. However, we were unable to verify this and found one case where

7

Commerce requires U.S. companies to obtain Individual Validated Licenses for the export of certain

categories of goods to Japan. These items include stealth technology, inertial reference/navigation

equipment, and other aircraft subsystems.

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Defense Trade Controls did not send an application for an especially

sensitive item to DOD for review.

Within DOD, three units routinely review FS-X related license

applications—the Defense Technology Security Administration, the Air

Force, and the Defense Security Assistance Agency. The Defense

Technology Security Administration coordinates DOD’s reviews of military

export license applications and establishes the DOD position in

consultation with other DOD reviewing entities. It conducts a technical and

policy review and ensures that other units review each FS-X license.

In June 1992, we reported that the Air Force did not routinely forward the

FS-X munitions applications to the F-16 System Program Office. This

situation has improved during the past 2 years. The System Program Office

is the DOD entity most familiar with the FS-X program. It uses the FS-X

releasability guidelines to determine what items the United States can

release to Japan. We found that the Air Force forwarded about 61 percent

of the FS-X munitions license applications to the Program Office for

review and comment between September 25, 1992, and February 16, 1994.

In another 14 percent of FS-X cases, the Air Force found license

applications that clearly should be approved and did not require Program

Office review. Nonetheless, the Air Force provided information on these

cases to the Program Office after license approval. In total, Program Office

officials have seen about 75 percent of FS-X munitions licenses since

September 1992. Since August 1993, however, the Program Office has

reviewed or received nearly all incoming FS-X munitions license

applications.

Commerce Does Not Share

Information About

Dual-Use Applications

Our analysis of Commerce licensing data showed that Commerce had not,

except for one occasion, shared information on licenses for items with

possible FS-X applications with DOD or State. Commerce did provide some

of its licensing information to the Program Office for analyzing whether

certain technologies are non-derived; however, we found that information

to be incomplete. DOD FS-X program officials said they know very little

about items Commerce approves for export to Japan. As a result, they are

unable to monitor all transfers to Japan that may contribute to the FS-X

development. It is possible, therefore, that Japanese companies are

obtaining U.S. technology for the FS-X program through licenses for other

programs. In addition, since licenses are not required for most commercial

exports to Japan, Commerce officials stated they are unable to monitor

most of these exports.

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Licensing Irregularities

Pose Risk of Improper

Releases to Japan

During our review, we encountered irregularities in U.S. export license

processing that may undermine efforts to control the release of technology

to Japan during the FS-X program. For example:

• State approved a munitions export license for a very sensitive item related

to the FS-X program without referring the application to DOD for review.

U.S. Air Force officials believe State should have denied this license

because export of the item is strictly limited. U.S. officials intercepted this

item at a port and were able to prevent shipment.

• State approved an FS-X engine license without the limitations required by

DOD’s FS-X releasability guidelines. This license permitted a U.S. company

to (1) export some data without government review and (2) discuss

prohibited production issues with the Japanese importer. Program office

officials had recommended, including limitations based on a previously

approved engine license.

• Program Office personnel did not always review referred license

applications within the allotted time. As a result, DOD processed the

applications without the Program Office input. Program Office officials

said they often receive unrealistic deadlines for reviewing proposed

licenses.

Management Information

System Could Improve

Flow of Licensing Data

In June 1992, we reported that the Program Office’s insight into the

licensing process could improve with installation of a computer terminal

with access to DOD’s Foreign Disclosure and Technical Information

System. The system contains a database that lists the status of DOD’s

review of all military export license cases State refers to DOD, including the

DOD position on applications. As of May 1994, Air Force officials were not

aware of any specific plans to install the terminal.

Conclusions The FS-X program involves the transfer of certain sensitive U.S.

technology to Japan. Monitoring this transfer is critical for ensuring

compliance with U.S. releasability guidelines. Inadequate sharing of

information between licensing agencies and with DOD hampers U.S.

oversight and control of FS-X related exports to Japan. There is no

centralized source of interagency information on FS-X related licenses to

Japan. As a result, program officials are unable to fully monitor the release

of FS-X items and technologies to Japan.

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Recommendations To ensure compliance with FS-X releasability guidelines and oversight of

FS-X related exports to Japan, we recommend that the Secretaries of

State, Commerce, and Defense direct the appropriate offices within their

departments to develop and implement written, formal procedures for

sharing information about export license applications to Japan that are

potentially related to the FS-X program. These procedures should, among

other things,

• require State to refer all FS-X munitions license applications to DOD for

review,

• provide sufficient information for F-16 System Program Office personnel

to adequately monitor FS-X related export license applications to Japan,

• provide program office personnel on-line access to DOD’s Foreign

Disclosure and Technical Information System, and

• require Commerce to provide DOD information on Individual Validated

Licenses for exports to Japan of equipment or data with existing or

potential uses on military aircraft.

Agency Comments

and Our Evaluation

In commenting on a draft of this report, DOD and State agreed with our

recommendations. Commerce stated that it could, as we recommended,

provide historical information to DOD on Individual Validated License

applications for exports to Japan of equipment or data with existing or

potential uses on military aircraft. However, Commerce said DOD would

have to make a formal request and Commerce would have to determine

that the release of such information is in the national interest. Commerce

also stated that under a proposed executive order, DOD would be able to

review all dual-use license applications processed by Commerce if DOD

chose to do so. We have not examined the draft executive order, but if

properly constructed and implemented, it should enhance sharing of

licensing information among executive branch agencies, which would help

to ensure that licensing decisions take into account both the FS-X

government-to-government agreements and DOD’s FS-X releasability

guidelines, which were established for national security reasons. This

exchange of information is also needed to properly categorize FS-X

technologies as derived or non-derived.

State and Commerce interpreted the draft report as advocating an

inappropriate use of the U.S. export licensing system to restrict the export

of items and technologies to Japan for the FS-X program. State

commented that economic concerns are not mentioned in the Arms

Export Control Act as a criterion on which a license may be granted or

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withheld. While that statement is correct, our draft did not propose

withholding licenses for economic reasons. Commerce also commented

correctly that if statutory and regulatory requirements are met, the fact

that an export item may be used for FS-X purposes does not provide a

basis for it to deny an export license. However, we note that the draft

report only recommended that State and Commerce share licensing

information about FS-X related exports with DOD. In our view, this

exchange of information is needed to ensure that licensing decisions take

into account the FS-X agreements and DOD guidelines, and that FS-X

technologies are properly categorized.

Commerce commented that current law and regulations do not authorize

it to deny export license applications for dual-use items to Japan on the

basis of their potential use in the FS-X program. This point is valid if the

applications in question fall under Commerce’s jurisdiction. As noted in

the report, Commerce may have processed some license applications for

Japan that fall under State’s jurisdiction. Commerce stated that all but one

of 12 licensing cases we identified as potentially falling under State’s

jurisdiction were clearly under Commerce’s jurisdiction. We note that

Commerce can not unilaterally make a commodity jurisdiction

determination; such determinations are reached by State after

coordination with DOD and Commerce. Furthermore, these 12 cases

represent only a sample of a larger number of items licensed by Commerce

that could have potential applications for the FS-X or fall under State’s

jurisdiction.

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Improving, but of Uncertain Value

Although transfers of both derived and non-derived Japanese FS-X

technologies to the United States have increased since our June 1992

report, it is unclear how much the United States will benefit from these

transfers. U.S. evaluation of Japanese FS-X technologies has been limited

and the U.S. government has done little to help U.S. industry obtain

information about FS-X technologies. Questions remain about Japanese

technical capabilities and the value of Japanese technologies to the United

States. Japanese design and manufacturing techniques could be useful, but

the United States may not obtain these technologies under the FS-X

program. In addition, U.S. and Japanese industry officials do not know

what markets exist at this time for transferred Japanese FS-X technology.

Progress Made on

Technology Transfers

From Japan, but Some

Problems Remain

Overall, Japanese efforts to transfer FS-X technical information to the

United States have improved since 1992 and U.S. program officials are

generally satisfied with the transfers. The United States has collected

information on the FS-X wing and the four Japanese non-derived avionics

systems: the active phased array fire control radar, the mission computer

hardware, the inertial reference/navigation system, and the integrated

electronic warfare system. Japan has provided increasing levels of access

to these technologies as they reach key development points. However,

program officials are uncertain if Japan is transferring all the data it

should. The United States and Japan also disagree on how the United

States may use some Japanese FS-X technology.

United States Is Receiving

FS-X Technology From

Japan

The United States had received thousands of FS-X technical documents,

including drawings, photographs, and video tapes as of early 1994.

Japanese subcontractors have also begun providing FS-X technologies to

the United States. Japan has provided English translations of technical

documents that Lockheed officials believe are complete and accurate.

Japan has also hosted U.S. government technology visits for Japanese

non-derived FS-X avionics technologies.

A U.S. Air Force official stated that technology transfers will continue

throughout the development program and that the number of U.S.

companies receiving Japanese technology should increase further, now

that Japan has selected about 200 U.S. firms to participate in the program.

Under the FS-X agreements, a U.S. firm is entitled to Japanese FS-X

technologies that incorporate changes, modifications, or improvements to

technical data the U.S. firm supplied to Japan for the program.

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The United States Is

Obtaining Some Japanese

FS-X Data Through

Technology Visits

The FS-X agreements specify that DOD may request technology visits to

obtain information about Japanese non-derived FS-X systems. At the time

of our review, Japan had hosted 11 U.S. government technology visits. The

U.S. strategy is to have at least one technology visit during both the design

and prototype production stages of the development program to ensure

that DOD collects information about Japanese design and production

approaches. During each visit, U.S. and Japanese engineers

• discuss design philosophy and technical specifications of the system;

• review test methodology, test data, and evaluate the system’s test

performance;

• review the development schedule for the item as well as key dates for

integrating the item into the FS-X aircraft;

• examine system hardware; and

• tour applicable Japanese Defense Agency research and development sites,

as well as the design and manufacturing facilities of the associated

Japanese manufacturer(s).

Upon its return, the DOD team produces a technology visit report that will

be available to DOD agencies and certain U.S. DOD contractors. Table 4.1

shows the dates of prior and planned FS-X technology visits.

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Table 4.1: Dates of FS-X Technology

Visits Japanese non-derived

system Date Purpose of visit

Active phased array fire

control radar

March 1990 Assess Japanese design

May 1991 Assess Japanese

development/

manufacturing facilities

June 1992 Commerce/DOD/Mitsubishi

Electric Corporation radar

symposium in Washington,

D.C.

July 1993 Test Module Controller

May 1994 Share/compare testing

results

November 1994 Commerce/DOD/industry

assessment; company

discussions

Mission computer November 1991 Assess Japanese design

May 1993 Assess Japanese

development/

manufacturing facilities

Integrated electronic warfare

system

July 1993 Assess Japanese design

September 1994 Assess Japanese

development/

manufacturing facilities

Inertial reference/navigation

system

November 1993 Assess Japanese design

September 1994 Assess Japanese

development/

manufacturing facilities

Radar absorbing material May 1995

(planned)

Assess Japanese design

U.S. and Japanese officials told us they have been satisfied with the most

recent technology visits. U.S. team members reported that the Japanese

have provided good access to FS-X facilities and responded completely to

U.S. inquiries about the non-derived technologies. The Air Force intends to

continue monitoring development of the Japanese non-derived FS-X

systems.

Air Force officials have indicated that they are seeking U.S. industry

participation in upcoming avionics technology visits. Commerce officials

have also discussed additional industry visits to Japan to facilitate

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discussions between U.S. and Japanese industry on the non-derived

systems. Parts of the technology visit reports will be available to qualified

users of the Defense Technical Information Center1

 and from Commerce

through electronic databases and industry associations. However, as of

June 1994, all of these efforts to share FS-X information outside DOD were

still in the planning stages.

Lockheed and DOD Need

Additional Data to Assess

Novel Japanese Wing

Design

According to Lockheed officials, they are receiving sufficient data and

technical assistance from Mitsubishi Heavy Industries to build FS-X wings

that meet Japanese technical specifications. Lockheed has produced

co-cured composite wing sections according to the Mitsubishi design.

However, at the time of our review, Mitsubishi had not yet provided all the

information Lockheed needed to apply the composites technology to other

programs. Nevertheless, Lockheed continues to receive wing data from

Mitsubishi, and officials were optimistic that Lockheed would receive

sufficient data to consider using the co-cured composite technology for

other applications.

Some U.S. officials are concerned about the capabilities of the Japanese

FS-X co-cured composite wing design. Sections of Lockheed and

Mitsubishi wings meet testing specifications. However, the overall wing

design has several unique features such as (1) extensive application of

composite materials,2

 (2) a novel configuration of internal wing support

structures, and (3) a complex Japanese manufacturing process. Japan

must prove this design on a flying prototype. Since the Japanese design

represents a departure from typical U.S. approaches, some U.S. officials

are uncertain whether the composite wing will meet all FS-X mission

requirements.

U.S. program officials have requested full access to Japanese FS-X flight

testing, which will ultimately verify the capabilities of the wings. These

officials stressed the importance of participating in the flight test program

and obtaining as much testing data as possible from Japan. Flight testing

will (1) verify the wing’s performance characteristics, (2) allow Lockheed

to better evaluate Japanese composites design and processes, and

(3) provide insight into other potential (non-FS-X) uses of this technology.

1

A DOD computerized defense information service available to qualified government and industry

personnel.

2

Composite materials include carbon based fabrics and resins that, when heated under high pressure,

bond to create a single structure.

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During our review, members of the FS-X Technical Steering Committee

had been negotiating U.S. involvement in flight testing.

Questions About FS-X

Radar Remain Following

1992 Symposium

Following two DOD technology visits to Japan, Commerce and DOD

sponsored a symposium on the FS-X active phased array fire control radar

in June 1992. Mitsubishi Electric Corporation (MELCO), which is developing

the radar, provided a technical overview to over 150 U.S. industry and

government attendees in Washington, D.C. Reviews of the symposium

varied. U.S. government and some industry officials said that Japanese

willingness to participate in the symposium was unprecedented and

provided a possible model for future technology exchanges. Other radar

industry officials, on the other hand, said MELCO provided very limited

information about the FS-X radar. Consequently, they were unable to

adequately evaluate Japanese radar technology.

There has been little follow-up to the symposium by either Commerce or

MELCO, although some U.S. firms have been expecting such efforts. MELCO

officials told us they had contacted several U.S. companies about

commercial applications for FS-X radar technology. When we contacted

some of these companies, however, officials said that MELCO has been

reluctant to discuss its radar technology. This is partly because Japanese

companies are generally prohibited from exporting goods for military use.

MELCO officials said this prohibition interferes with efforts to export its

modules that MELCO believes have both commercial and military

applications. Japan’s Ministry of International Trade and Industry has told

MELCO it must demonstrate a commercial application of the modules

before receiving approval to export them.

Interest in the FS-X radar among the U.S. radar companies we contacted is

mixed. Some U.S. radar industry officials told us they would like to visit

MELCO’s FS-X facilities in Japan to learn more about their radar modules.3

U.S. companies produce similar modules and believe they could benefit

from knowledge of Japanese production methods. However, some of these

companies believe U.S. radar technology itself is more advanced and

therefore they cannot learn much from Japan. Radar experts are also

uncertain about the potential market for this technology especially since

current module costs preclude widespread commercial applications.

Commerce officials told us that a government-sponsored radar industry

visit to Japan would help resolve these questions. Such a visit occurred in

3

These approximately 3.5x1.1x.0.3 inch modules incorporate state-of-the-art gallium arsenide

monolithic microwave integrated circuit technology. Each FS-X active phased array radar antenna will

use about 800 individual modules.

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November 1994 and involved more than a dozen U.S. companies,

according to a Commerce official.

In the spring of 1994, DOD completed testing of five radar modules the

United States purchased from Japan. Appendix II describes the U.S.

testing program and module costs.

United States and Japan

Continue to Consider

Technology Transfer Issues

Under the FS-X agreements, Japan may submit evidence and requests to

change the technology transfer status for specific FS-X technologies. If

Japan demonstrates it developed a technology with insignificant or no U.S.

input, the United States may agree to reclassify the technology as

non-derived. Under non-derived classification, Japan may limit certain

technology transfers to the United States. Japan may also sell non-derived

technologies to the United States. In contrast, Japan is required to provide

complete technology transfers for changes, modifications, or

improvements to derived technologies free of charge to the United States.

In February 1993, the United States agreed to reclassify radar absorbing

material to non-derived status. According to DOD officials, the U.S. decision

was primarily based on DOD’s export license records, which showed that

no U.S. licenses referred to DOD had been approved for transfer of radar

absorbing material to Japan. However, we identified two approved

Commerce licenses to Japan for an item classified as radar absorbing

material. An official from the U.S. company that obtained these licenses

told us that his firm had exported the item to Japan on at least two

occasions under Commerce Department export licenses. He also said that

the Japanese importers could use the imported material for FS-X radar

absorbing applications.

This company official told us that his firm attempted to obtain a State

Department munitions export license for this material, but that State, in

coordination with DOD, determined that the item was not controlled under

the U.S. Munitions List. As a result, the company obtained export licenses

from Commerce. The company official was surprised about State’s

response because State had previously controlled a similar item under the

Munitions List and the company had obtained munitions export licenses

for the item. Commerce provided us with documents showing that State

had passed jurisdiction for these cases to Commerce.

We asked DOD to inquire about Commerce’s licensing jurisdiction over this

item. At the time of our review, DOD was seeking information on these

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cases from Commerce and had not completed its review. From the

information we obtained for these cases, it appears that DOD lacked

complete information when it decided to reclassify radar absorbing

material.

In December 1993, Japan requested non-derived classification for 12 FS-X

items.4

 The United States conducted an analysis to determine the level and

significance of U.S. input into the 12 candidate items and to assess the

technology transfer consequences of agreeing to non-derived status. For

example, DOD searched for military licenses—and some dual-use and

commercial export licenses—State and Commerce issued for Japan that

contributed to any of the 12 candidates. We encouraged DOD to work with

Commerce and State to obtain and analyze all pertinent U.S. export

licenses approved for Japan. DOD officials agreed that a thorough analysis

was needed because changing the classification of these items could limit

U.S. program benefits. Additionally, if improperly classified as

non-derived, the United States could later buy technology derived from

U.S. data. In September 1994, the U.S. FS-X Technical Steering Committee

co-chairman informed his Japanese counterpart that the United States had

agreed to change 4 of the 12 candidate items to non-derived status. At the

time of our review, the Japan Defense Agency was studying the U.S.

decision.

Japan May Not Be

Transferring All FS-X Data

The Japan Defense Agency has been holding up transfers for

reclassification candidate technologies pending the resolution of the

December 1993 reclassification request. The agency is reluctant to transfer

candidate technologies before the U.S. evaluation is complete, because it

believes they are not essentially developed from U.S. technology. On the

other hand, U.S. officials contend that all FS-X technology is derived until

classified otherwise and that Japan is obligated to transfer data until

classification negotiations end. At the time of our review, the United States

and Japan had not resolved this issue.

4

Among the 12 candidates for reclassification are the map generator, cockpit displays, the aircraft

video tape recorder, the radar liquid cooling system, and the digital flight control software.

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Japan Is Disputing U.S.

Rights to Use Some FS-X

Technology

The two countries also disagree on how the United States may use some

transferred Japanese FS-X technology. The FS-X agreements state that DOD

may use certain Japanese data for defense purposes.5 U.S. officials believe

this allows the U.S. government to share Japanese data with companies

not involved in the FS-X program for use in other defense programs.

Japanese companies are concerned that this arrangement may reveal

company secrets. By the end of our review, DOD had received several

requests for Japanese FS-X wing data from U.S. companies that are not

participating in the program. As a result, the two governments were

working to resolve differences over how the U.S. government could

distribute Japanese data.

Efforts Are Underway

to Evaluate Japanese

Technologies but

Obstacles Remain

Overall, U.S. efforts to evaluate Japanese-provided FS-X technologies have

been limited and uncoordinated. This is partly because the U.S.

government did not originally consider technology transfer from Japan as

a primary program goal and did not have an established infrastructure to

evaluate transferred technology. As late as 1993, Air Force, Commerce,

and Lockheed officials told us they lacked the resources to evaluate

Japanese FS-X technology transfers.

DOD and several U.S. firms were evaluating three Japanese FS-X

technologies at the time of our review: the co-cured composite wing, the

digital flight control computer, and Japanese radar modules (see app. II for

further information on the radar evaluation). In addition, following our

inquiries, the Air Force began an analysis to determine which FS-X

technologies might be of interest to U.S. industry. According to an Air

Force official, DOD plans to distribute the results of this analysis within DOD

and to most U.S. FS-X contractors. Preliminary results of this analysis

show that the United States may be interested in several Japanese FS-X

technologies listed in table 4.2.

5

Specifically, the FS-X memorandum of understanding essentially states that the Japan Defense

Agency grants to the U.S. government a non-exclusive and irrevocable license to use the technical data

essentially developed from U.S. technical data (derived technology) for its defense purposes (including

Grant Aid) and defense sales (including Foreign Military Sales).

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Table 4.2: Japanese FS-X

Technologies of Potential Interest to

the United States

Technology/system Important characteristics

Four Japanese non-derived avionics

systems:

Active phased array fire control radar

Mission computer hardware

Integrated electronic warfare system

Inertial reference/navigation system

Represent a culmination of years of

Japanese avionics development work.

Gallium Arsenide Monolithic Microwave

Integrated Circuit technology in the radar

is of special interest because the United

States currently produces and uses this

technology.

Active matrix standby and multi-function

displays

Display manufacturing technologies and

dual-redundancy of the multi-function

display system.

Emergency Power Unit (EPU) The FS-X EPU will use JP-4 fuel, a less

hazardous substance than the hydrazine

that powers the F-16 EPU.

Airframe sections Material properties, material and process

specifications, and tooling concepts.

Nose radome Knowledge of material properties,

coatings, and processing techniques.

Direct drive valve (DDV) cartridges DDV cartridges are a relatively new

technology and the United States could

learn from Japanese test results.

Possible replacements for F-16 equipment

including:

Fuel/oil heat exchanger

Variable delivery hydraulic pump

Rate of fuel flow transmitter

Substitution of Japanese equipment could

increase the performance capability of

certain U.S. F-16 systems.

United States Lacks an

FS-X Technology

Evaluation Strategy

U.S. program officials and observers told us the United States has not done

much to evaluate Japanese FS-X technologies with potential value to the

United States due to a lack of resources. These include flat panel displays,

the co-cured wing, and beta titanium technology, according to a former

program official. Ideally, one observer said, the United States should have

begun evaluating these technologies and considering uses for them as

soon as Japan provided technical data on them.

Lockheed Fort Worth officials further explained that they cannot fully

evaluate Japanese FS-X technologies without input from other

experienced U.S. defense companies. Because Lockheed and other

manufacturers guard their industrial secrets very closely, Lockheed does

not know all of the capabilities of other companies in areas such as

composites. Lockheed officials believe that Commerce and DOD must lead

overall evaluation efforts because competing U.S. defense companies are

very unlikely to do so on their own.

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U.S. officials contend that there are limited opportunities to use Japanese

FS-X technologies without military requirements for them. For example,

with the pending closure of F-16 production lines, a program official stated

the company will not have a program that could readily incorporate

Japanese technology.6

 This official also noted that the next generation U.S.

F-22 fighter aircraft currently in development is unlikely to benefit from

transferred FS-X technology. However, the United States will not know if

Japanese FS-X technologies will benefit U.S. programs without further

evaluation of those technologies.

The lack of a comprehensive U.S. evaluation program several years into

FS-X development could hamper subsequent use of Japanese FS-X

technologies. During FS-X development, the United States can obtain

virtually any technical document for Japanese systems essentially derived

from U.S. technical data. However, this opportunity could end with

completion of the development phase. Until DOD and U.S. industry examine

Japanese technology transfers, they cannot know what additional

information the United States should request from Japan.

Plans for Disseminating

Japanese FS-X Technology

Are Limited

As discussed in one of our prior reports, the United States is generally less

effective in disseminating foreign technology among its government

institutions and industry than Japan.7

 This seems to be the case with the

FS-X program. Although certain Lockheed and DOD officials have had

access to Japanese technical data for over a year, we found little evidence

of measures to share the data outside of Lockheed and the F-16 System

Program Office. The limited distribution of Japanese data within the

United States partially explains, in our opinion, the limited evaluation of

Japanese FS-X technology by U.S. government and industry.

U.S. FS-X officials made little progress in distributing Japanese technical

information during our review. In May 1993, F-16 System Program Office

officials disclosed plans to distribute Japanese data through the Defense

Technical Information Center. However, a year later no FS-X data was

available on the system. A Center official told us that in April 1994, the

Center and the Air Force had agreed to add bibliographies of Japanese

FS-X technical reports to the system. Qualified users could also order

6

Although Lockheed is involved in the F-22 program, program officials believe that transferred FS-X

technology would be of little use in this program.

7

Foreign Technology: Collection and Dissemination of Japanese Information Can Be Improved

(GAO/NSIAD-93-251, Sept. 30, 1993).

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specific documents in those bibliographies from the Center or the

Program Office.

The only FS-X data publicly available from the U.S. government is a video

providing an overview of the fire control radar. The Department of

Commerce’s National Technical Information Service began selling this

video in February 1994. Certain DOD FS-X technical reports developed in

cooperation with Japan are available within the U.S. government and to

some industry officials. For example, a U.S. Air Force official said the U.S.

government is distributing a report of its radar module testing results to all

attendees of the 1992 radar symposium.

Commerce would like to develop opportunities for U.S. companies

interested in Japanese FS-X technology. Commerce could organize

industry visits to Japan to examine non-derived technologies, for example.

Commerce is also considering a composites conference similar to the

radar symposium of 1992. During 1993, however, Commerce officials told

us that, due to the transition between administrations and staff cuts, they

encountered delays in developing and proceeding with these efforts. As of

mid-1994, Commerce was still developing plans for industry outreach for

the FS-X program.

Ultimate Value of

Japanese

Technologies Is

Unknown

U.S. program officials do not know how the United States will benefit from

transfers of Japanese FS-X technologies because (1) many Japanese FS-X

technologies are unproven, (2) the United States may not seek or obtain

information on Japanese production methods, and (3) program officials do

not yet know how the United States can apply or market Japanese

technologies. Further, until the FS-X successfully completes flight testing,

neither the United States nor Japan can know how new systems will

perform.

Preliminary U.S. evaluations of some Japanese FS-X technologies yielded

mixed reviews. For example:

• While U.S. engineers believe that U.S. radar modules are more advanced

than Japanese modules overall, the Japanese module matches U.S.

capabilities in certain areas and may prove innovative in another.

However, one U.S. radar expert noted that the United States does not yet

know how well complete Japanese FS-X radar arrays (as opposed to

individual modules) will perform.

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• The other Japanese non-derived avionics systems represent conservative

yet proven and competitive designs.

• In a few areas, Japanese technologies use novel design or manufacturing

approaches. In particular, U.S. engineers have noted certain Japanese

innovations for designing the FS-X mission computer hardware and the

inertial reference/navigation system. Moreover, some avionics components

are lighter and smaller than similar U.S. equipment.

There is general agreement among U.S. program officials and observers

that insight into Japanese manufacturing techniques would be useful to

the United States. However, it is not clear how or when Japan might

transfer production information to the United States for three reasons:

(1) Japanese companies may be unwilling to give proprietary derived

technology to the United States, (2) a U.S. company must build something

to obtain and test Japanese manufacturing technology, and (3) under the

FS-X agreements, U.S. firms must pay for certain Japanese technologies.

Therefore, the company would have to buy rights to the technology and

then make a large capital investment for the necessary production

equipment. According to an Air Force program official, this scenario

seems unlikely.

Regardless of the ultimate value of Japanese technology itself, the United

States could benefit from transfers of Japanese technology for two

reasons. First, the FS-X program set precedents and provided lessons for

technology transfers from Japan that may prove useful in the future.

Second, U.S. program engineers are gaining experience with Japanese

design and development methods that may be valuable in other aircraft

programs. However, the United States may not recognize the value of this

information. Program officials explained that some U.S. engineers are

skeptical of high technology not invented or developed in the United

States. This “not invented here” syndrome may contribute to unwarranted

skepticism about Japanese technology that could interfere with U.S.

attempts to fully exploit transferred Japanese FS-X technologies.

Conclusions Although the United States continues to receive a large volume of

Japanese FS-X technical data, to date the efforts to evaluate and use this

data have been limited and ineffective. U.S. government and industry have

been unwilling or unable to fully analyze or use Japanese FS-X

technologies outside the program. As a result, the United States may not

be receiving the full benefits accorded its participation in the FS-X

development program.

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The development program thus offers an important lesson to U.S. policy

makers as they approach a production program. As our previous work

shows,8

 Japan’s coordinated approach to technology management can

foster new uses for existing technologies, as well as the development of

new technologies. We believe the United States has an opportunity to

improve management of transferred Japanese technology during an FS-X

production program.

Recommendations To ensure effective evaluation of transferred Japanese FS-X technologies,

we recommend that the Secretary of Defense direct the Defense Science

Board to establish and convene an FS-X Technology Transfer Evaluation

Task Force. To the extent the FS-X agreements and Defense Science

Board Charter permit, this Task Force should include U.S. government and

industry FS-X officials. To the maximum extent possible, consistent with

the agreements, representatives of the four services and of leading U.S.

aerospace companies who have expertise in fighter aircraft (including the

F-22), composites applications, or potential commercial uses for FS-X

technologies should be included on the Task Force.

Such a task force could (1) assist DOD in developing and implementing a

program to more thoroughly evaluate transferred Japanese FS-X

technology and (2) determine how the United States can most benefit, if at

all, from transfers of Japanese FS-X technologies. In particular, the Task

Force could:

• Determine if and how Japanese technology improves upon or surpasses

U.S. technology.

• Identify Japanese FS-X design, technology, or manufacturing approaches

that differ from U.S. experience and that could provide instructive lessons

for the United States.

• Develop a strategy for identifying, obtaining, managing, and applying

useful or promising Japanese FS-X technologies.

Agency Comments

and Our Evaluation

DOD did not believe that the establishment of a Defense Science Board

FS-X Task Force was currently warranted. DOD stated that it would

consider establishing such a task force or taking other actions, if its

ongoing FS-X technology identification, evaluation, and dissemination

activities proved unsuccessful. DOD officials also told us DOD did not want

8

In our 1993 report on foreign technology, we reported that Japanese experts collect information in

specific areas of interest, which is targeted to the needs of users, and then use extensive and multiple

channels to disseminate the data.

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to commit additional resources at this time to evaluate FS-X technologies

because most of them, such as the co-cured composite wing, were not yet

fully developed or had not been adequately tested.

We believe that once adequate development and testing has occurred, DOD

should establish the Task Force because current U.S. efforts are probably

too limited to ensure sufficient evaluation and dissemination of FS-X

technologies. The Task Force would ensure that more aerospace experts

from outside of the FS-X program are allowed to evaluate FS-X

technologies and Japanese design and manufacturing approaches. It would

also provide DOD with an overall assessment of the value of Japanese FS-X

technologies. Such an assessment would provide DOD and Commerce with

guidance as to the level of resources that should be committed to

disseminating FS-X technologies.

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Overall, Japan has received technological benefits from the FS-X program,

while to date, U.S. aerospace firms have obtained primarily contract

orders. The program is consistent with the Japanese government’s strategy

of making defense development and production as indigenous as possible.

Our analysis of a limited number of FS-X supplier selections indicated that

Japanese firms obtained more work than U.S. firms for items with

commercial applications. Japan has obtained proven F-16 design data and

the program has strengthened Japan’s aerospace industry by providing

Japanese engineers with valuable experience and skills they can use for

future military and commercial aerospace projects.

Japanese aerospace firms have acquired new equipment and, according to

U.S. government and industry officials, received Japanese government

financial assistance through the program that will be useful for other

aerospace projects. Substantial Japanese modifications to the F-16 design

and the terms of the FS-X agreements ensure that Japanese firms will

produce over half of the FS-X configuration items.1

 Changing the F-16

design made it easier to incorporate Japanese design ideas into the FS-X

and for Japan to justify awarding contracts to Japanese firms. The

cumulative effect of the program has been to help improve Japanese firms’

ability to compete for future aircraft projects.

To date, program benefits to U.S. aerospace firms have primarily consisted

of additional work and payments. Cost increases in the FS-X budget have

resulted in an increase of the estimated value of the U.S. work share from

$480 million to over $1 billion. Most of the U.S. FS-X work share is

reserved for Lockheed, which is guaranteed between 30 and 31 percent of

the value of the FS-X development budget. Although over 200 U.S. firms

have received FS-X contracts from Japan, about 90 percent of the value of

the U.S. work share will go to three U.S. firms—Lockheed, General

Electric, and Allied Signal. U.S. officials believe that, in overall terms, U.S.

firms received an acceptable share of FS-X development work.

FS-X Program

Conforms to Japanese

Defense Acquisition

Strategy

Japan views its defense programs not only as weapon acquisitions, but,

more importantly, as technology acquisitions. The FS-X program

contributes to this strategy by providing work and learning opportunities

to many Japanese subcontractors and suppliers, increasing the skills and

experience of Japanese aerospace engineers, and prompting Japanese

1

An item the Japan Defense Agency or Mitsubishi Heavy Industries designates for monitoring by

inclusion on the FS-X baseline configuration lists.

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firms to purchase new equipment and construct facilities that can be used

for future projects.

During the FS-X program, Japanese firms have sought to sever their

dependence on U.S. licensed production and position themselves to be

suppliers for future aircraft programs. A comparison of F-16 and FS-X

manufacturers provides evidence of Japan’s intention to use the FS-X

program to increase Japanese aerospace capabilities. A list of F-16 and

FS-X configuration item manufacturers in appendix III shows that, of the

249 items common to both aircraft, Japanese firms are responsible for

providing over half of them for the FS-X. This increase in capabilities will

make it easier in the future for Japan to develop a completely indigenous

military aircraft and for Japanese firms to compete more effectively with

U.S. suppliers for military, and possibly commercial, aircraft-related sales.

Japanese firms have replaced U.S. companies to become key suppliers or

even sole sources for certain commercial and military products, which in

some cases, Japan originally licensed from U.S. firms.

Japanese Companies

Appear to Obtain High

Quality Work Share

To determine the quality of the FS-X work share obtained by Japanese and

U.S. companies, we examined data the U.S. Air Force used to evaluate

Japan’s 1991 licensed production requests. This data, covering about

25 percent of FS-X configuration items, does not represent a random

sample of FS-X items. Our analysis of this group of items indicates that

Japan will manufacture about 77 percent of the items with commercial

applications. The results of this limited analysis are consistent with U.S.

government and other assessments of Japanese industrial policy that

contend that Japan consistently seeks to develop and manufacture items

with the greatest commercial applications.

FS-X Program Helps

Enhance Japanese

Aerospace Industry

The FS-X program has increased the capabilities of Japan’s aerospace

industry. Unlike previous F-16 international coproduction programs,

which released only operations, maintenance, and production data, the

United States has released F-16 design data for the FS-X program. As part

of a $60-million licensing fee, Lockheed provided Mitsubishi Heavy

Industries with the rights to use large volumes of F-16 design and

manufacturing data proven by years of F-16 production. This F-16 design

data provides Japanese aerospace engineers with valuable information

that will increase the knowledge level of the Japanese aerospace industry.

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Japanese and U.S. officials agreed that a major program benefit for Japan

is the experience Japanese aircraft engineers have gained in design and in

system development and integration. Mitsubishi Heavy Industries seeks to

use the FS-X program to develop an engineering work force capable of

future independent Japanese aircraft development projects. The program

is particularly important to the Japanese aerospace industry and engineers

because of decreasing Japanese licensed production of F-15 aircraft and

the lack of any other full-scale aircraft development projects.2

 The

program addresses a weakness in Japan’s military aerospace capabilities

by providing Japanese engineers the experience of working through all the

phases of the aircraft concept-to-design cycle. A lack of knowledge and

experience in the concept-to-design process can lead to major mistakes in

aircraft development program and design acceptance decisions. A U.S. Air

Force official noted that the overall experience of developing a modern

fighter aircraft and integrating its sophisticated systems will be even more

valuable to Japan’s aerospace industry than the knowledge derived from

developing specific FS-X technologies. Japan is unlikely to obtain such

experience through its current participation in civil aircraft programs.

According to U.S. government officials, the most valuable experience for

Japanese engineers will be in systems integration. Systems integration

consists of combining various aircraft components to work with each

other successfully to perform mission-related functions. U.S. government

officials stated that Japan has had limited experience in advanced aircraft

systems integration, which these officials believe it is an art only learned

through costly trial and error. According to U.S. officials, any systems

integration skills Japanese engineers acquire during the FS-X program will

be applicable to future commercial, as well as military, aerospace projects.

A Mitsubishi Heavy Industries official stated that the FS-X experience has

confirmed that Japanese aerospace engineers have systems integration

skills comparable to those of Lockheed’s F-16 engineers.

The program is also enhancing Japan’s avionics capabilities and may

enable Japanese avionics firms to sever or reduce their ties with U.S.

industry, according to a U.S. Air Force official. For example, because

Japan is independently developing the FS-X inertial reference/navigation

system, U.S. government experts believe Japanese firms will enhance their

competitiveness with U.S. firms in this market. The increase in Japanese

inertial navigation systems capabilities has commercial significance

because this technology is applicable to both military and commercial

2

Although they are not coequal partners with Boeing, Japanese aerospace firms are significantly

involved with the design and development of Boeing’s 777 commercial aircraft.

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aircraft. Because of the redundancy built into the FS-X inertial navigation

system, it is highly useful for commercial applications that generally

require higher safety standards than military applications. A U.S. industry

official stated that Mitsubishi Electric Corporation, the Japanese firm

responsible for the FS-X advanced phased array fire control radar, may

use its FS-X experience to provide upgrades for the radar on Japanese

F-15 aircraft.

Japan Defense Agency officials acknowledged that the FS-X program will

give Japan the opportunity to lead the development of a complex aircraft,

but added that their agency views the program’s primary goal as fulfilling

certain Japanese defense requirements. In our June 1992 report, Japan

Defense Agency officials rejected the idea that the FS-X program promotes

Japan’s commercial aviation industry. However, according to a U.S.

observer of the Japanese aerospace industry, the president of Mitsubishi

Heavy Industries and Japanese engineers have acknowledged the link of

FS-X design and manufacturing experience to future commercial aircraft

such as hypersonic and supersonic transports. Further, a U.S. Air Force

official stated that Japanese officials have also indicated that if Japan opts

to develop its YSX passenger aircraft, Japan will use as much FS-X

co-cured composite technology as possible on that aircraft.

U.S. government officials believe that while the FS-X program is advancing

Japanese aerospace capabilities, Japan is obtaining more commercially

useful benefits from programs with Boeing such as the 777 program. U.S.

aerospace experts in Japan noted that during the Boeing 777 program,

about 200 Japanese engineers were trained and allowed to work for about

2 years in Boeing design facilities in the United States.3

Japanese Firms Make

Capital Investments and

Obtain Government

Financial Assistance to

Improve Their Industrial

Capabilities

Mitsubishi Heavy Industries has improved its capabilities by making

certain capital investments for the FS-X program that will be useful for

other aerospace projects. For example, Mitsubishi purchased

sophisticated, expensive composites tape-laying equipment, contour

measuring machinery, and established composite test facilities for

producing the FS-X co-cured composite wings. Mitsubishi also established

a testing and integration facility for the FS-X aircraft’s avionics systems.

U.S. and Japanese officials stated that the composite and avionics-related

equipment and facilities will be used for other aircraft projects.

3

Technology Transfer: Japanese Firms Involved in F-15 Coproduction and Civil Aircraft Programs

(GAO/NSIAD-92-178, June 10, 1992).

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Mitsubishi officials said that they purchased the composite-related

machinery and avionics and composite testing facilities with the firm’s

own funds and officials from Japan’s Ministry of International Trade and

Industry (MITI) said that their ministry had not made expenditures for the

FS-X program. However, U.S. government and industry officials noted that

before the FS-X program formally began, the Japanese government had

provided extensive funding to Mitsubishi and other Japanese firms for

developing technologies intended for use on the FS-X aircraft, including

those related to the co-cured composite wing and the active phased array

radar. A U.S. Air Force official stated that MITI saw the FS-X program as a

means of increasing the composite capabilities of Mitsubishi.

Japanese industry officials did not provide us figures on the costs of

investments made for the FS-X program. They said that because their firms

use the equipment and facilities for other programs, they could not

determine the costs incurred exclusively for the FS-X program.

Japanese Suppliers Have

Major Role in Program

Japanese firms are responsible for providing over half of the configuration

items for the FS-X prototype aircraft. Figure 5.1 shows the extent to which

Japanese, U.S. and third country firms are providing FS-X items.

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Figure 5.1: Responsibilities for FS-X

Configuration Items

42% • Japanese (107 items)

12% • Japanese with some U.S. inputa

(32 items)

•44%

United States (114 items)

2%

Third country (4 items)

Note: Lockheed and Mitsubishi are both producing one FS-X configuration item, the left wing.

Therefore, the total number of items here is one greater than the 256 items listed in the F-16/FS-X

Baseline Configuration List.

aThis category covers instances in which the designated supplier is a Japanese company, but the

Japanese supplier received either end item hardware or significant technical assistance from a

U.S. firm.

The substantial Japanese role in supplying FS-X configuration items

resulted from several factors. Because FS-X agreements left Japan with

about 60 percent of the total value of the FS-X development budget, it was

inevitable that many Japanese firms would be selected to provide FS-X

items. Furthermore, Japan claimed that because of previous negative

experiences with U.S. suppliers on coproduction programs, it wanted to

select Japanese firms for certain items to ensure timely contractor support

if any modifications or repairs were needed during the development phase.

More importantly, major modifications to the F-16 baseline also led to a

prominent Japanese industry role in providing FS-X items.

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FS-X Design Changes

Contribute to Significant

Japanese Industry Role

Contrary to U.S. views in the early years of the program that the FS-X

aircraft would be a lightly modified version of the F-16, the FS-X aircraft

has evolved to be a significantly modified aircraft, with basic changes in

the F-16 design leading to many changes in the configuration items. Under

the terms of the FS-X memorandum of understanding, Japan did not have

to purchase items for the FS-X from U.S. F-16 suppliers if the U.S. items

did not satisfy Japanese FS-X performance requirements or if it was not

cost-effective to do so. After finalizing the general configuration of the

FS-X aircraft and the program budget, the Japan Defense Agency

concluded that many of the F-16 items available from U.S. manufacturers

did not meet Japanese FS-X requirements for factors such as cost,

schedule, performance, design, and engineering risk.

Although Japanese defense operational requirements caused many of the

modifications to the F-16 baseline, the desire of the Japanese military and

industry to incorporate as many of their own design concepts as possible

into the FS-X aircraft and to maximize the participation of Japanese

subcontractors and suppliers also led to many changes. For the most part,

Japan selected Japanese firms to provide FS-X items that were

significantly modified from the equivalent F-16 items. Conversely, Japan

tended to select U.S. firms to provide those FS-X items that were identical

to those found on the F-16.

Throughout the development process, Japan, particularly Japanese

industry, sought to achieve many of the objectives of an indigenous

development program that it was denied as a result of the political

compromise that led to U.S. involvement in the program. Furthermore,

according to Japanese government and industry officials, Japanese firms

were playing a smaller role in the FS-X program than originally planned

because of the need to shift certain FS-X tasks to U.S. companies.

Changing the F-16 design made it easier to incorporate Japanese design

ideas into the FS-X and for Japan to justify awarding certain tasks to

Japanese firms. Consequently, Japanese industry partially obtained its goal

of an indigenous aircraft development effort. Air Force officials

acknowledged that FS-X agreements did not provide the United States

with adequate authority to control changes to the F-16 baseline.

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U.S. Firms Have

Received Over

$1 Billion in FS-X

Contracts

To date, the benefits provided to the U.S. aerospace industry through the

FS-X program have consisted primarily of contracts to U.S. companies to

act as subcontractors or suppliers. As discussed in chapter 4, it is not yet

clear if U.S. firms will acquire significant technological benefits from the

program. As of May 1994, Japan had awarded over $1 billion of contracts

to over 200 U.S. firms for the program.

Lockheed Is Primary U.S.

Program Beneficiary

FS-X agreements reserved specific development phase work for only two

U.S. firms—Lockheed and General Electric, the company selected to

supply the engines for the FS-X prototype aircraft. Furthermore, FS-X

commercial agreements guaranteed that Lockheed would receive work

valued between 30 and 31 percent of the FS-X development budget, the

largest share for any U.S. company. At the time of our review, Lockheed

had received over $849 million and General Electric over $60 million of

FS-X contracts.

According to U.S. government and industry officials, the economic

importance of the FS-X program for U.S. contractors has increased in

recent years as sales of military items to DOD have declined. With F-16

production rapidly declining, the FS-X program has become increasingly

valuable to Lockheed in terms of sales and jobs, according to Lockheed

officials. According to U.S. government and industry officials, Lockheed

could earn hundreds of millions of dollars in sales if the program enters

production.

Figure 5.2 shows the number of Lockheed Fort Worth Company personnel

that have and are projected to work on the FS-X program and other

assignments, including the F-16 program.

Page 61 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Chapter 5 

Japanese and U.S. Aerospace Industries

Receive Different Program Benefits

Figure 5.2: Lockheed Fort Worth

Company Personnel Assigned to FS-X

and Other Programs

Number of Staff

0

2000

4000

6000

8000

10000

12000

14000

16000

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Year

Other programs

FS-X

Note: These employment figures do not include Lockheed staff time for functions such as

accounting and contracting that are not directly related to the actual design, manufacture, and

testing of aircraft. According to Lockheed officials, if such indirect labor is included, the

employment figures would increase by over 30 percent.

According to Lockheed, FS-X employment figures for 1996 to 2000 and

beyond assume that (1) the FS-X program will enter production in 1996

and (2) the Japanese government will commit to procuring 130 FS-X

aircraft at a rate of 2 per month. At the time of our review, Lockheed did

not provide us with employment figures beyond 2000; however, a

Lockheed official subsequently told us that Lockheed anticipates that its

FS-X production activities would go well beyond 2000. According to

Lockheed, figures for other programs assume (1) Lockheed will deliver

about 750 F-16 aircraft between 1994 and 2000 and (2) Lockheed will have

a certain level of F-22 work.

Page 62 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Chapter 5 

Japanese and U.S. Aerospace Industries

Receive Different Program Benefits

U.S. suppliers have also benefited from subcontracts awarded by

Lockheed for FS-X work. According to Lockheed data, as of June 1994,

approximately 800 U.S. firms were supplying items or services to

Lockheed for the FS-X program. The value of these subcontracts was over

$49 million, according to Lockheed officials. Most of these companies

were also subcontractors or suppliers for the F-16 program. Lockheed data

indicated that approximately 80 U.S. firms had provided unique FS-X items

(not used for the F-16) and services to Lockheed. Using Lockheed data, we

identified about $2.7 million of Lockheed purchase orders issued to U.S.

firms for unique FS-X structural parts.

According to Lockheed officials, their firm has made no capital

investments for the FS-X program and used existing equipment as much as

possible. Lockheed has procured two major pieces of equipment valued at

nearly $3 million with FS-X funds—a coordinate measuring machine and a

wing roll-over fixture—used, respectively, for checking and manufacturing

composites. Lockheed will likely use this equipment during for FS-X

production if the program proceeds into that phase. Mitsubishi can reclaim

these items following Lockheed’s contractual use of the equipment.

U.S. Generally Satisfied

With Japanese FS-X

Selections, but Questioned

Some Choices

U.S. government officials involved with the FS-X program were generally

satisfied with Japan’s selection of over 200 U.S. companies for FS-X

contracts. They believed there were cases where U.S. companies were not

chosen even though they offered superior products; however, the officials

stated that, in overall terms, U.S. firms obtained an acceptable share of

FS-X work considering that the program was completely funded by Japan

and subject to a U.S. 40-percent work share.

During our review, we found 11 cases where the U.S. government formally

questioned the Japan Defense Agency’s selections of suppliers for FS-X

items. For example, in July 1992, the U.S. Air Force told the Japan Defense

Agency that the United States was disappointed with Japan’s apparent

emphasis on not selecting U.S. companies when licensed production was

not permitted. In several cases where Japan had requested licensed

production, Japan did not select U.S. companies because of U.S.

government restrictions on the release of detailed design data. The Japan

Defense Agency believed it required this data to integrate items into the

aircraft with acceptable risk. Japan justified the questioned selections to

the United States on the basis of criteria found in the FS-X memorandum

of understanding. The memorandum stipulated that work share selections

should be based on such factors as cost effectiveness, schedule,

engineering risks, and Japanese performance requirements. A DOD official

Page 63 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Chapter 5 

Japanese and U.S. Aerospace Industries

Receive Different Program Benefits

said that Japan generally chose U.S. firms when the U.S. government was

willing to transfer some technology, and Japanese firms otherwise.

DOD questioned Japan’s choice to license produce two FS-X items with

British and French companies. DOD stated that the FS-X memorandum of

understanding was intended to prohibit third country involvement unless

Japan proved U.S. or Japanese solutions were unacceptable and that U.S.

policy was to review such selections on a case-by-case basis. In the British

case, Japan responded to DOD’s concerns by providing further justification

for purchasing the British item.

In the French case, Japan justified its selection by indicating that the U.S.

firm competing for the contract did not meet Japanese engineering risk

and performance requirements. However, the U.S. contractor stated that

the selection process was unfair because it had not been provided a

reasonable time in which to submit a proposal to meet a late change in

Japan Defense Agency technical specifications. An Air Force review of the

case could find no definitive evidence of Japanese unfairness in making

the selection and concluded that the selection had been in accordance

with criteria agreed upon by the United States and Japan.

Conclusions Generally, the FS-X program provides different benefits to the Japanese

and U.S. aerospace industries. The information we collected during our

review indicates that the primary benefit to the Japanese aerospace

industry is an increase in the level of its technological capabilities.

Conversely, the benefits to the U.S. aerospace industry, because they have

come primarily in the form of payments and work orders rather than new

technologies, tend to preserve existing U.S. aerospace capabilities, rather

than enhance them. It is not yet clear if U.S. firms will acquire significant

technological benefits from the program.

Agency Comments

and Our Evaluation

DOD agreed that the FS-X program will enhance Japanese aerospace

capabilities in certain areas. However, DOD commented that the U.S.

contribution to substantially enhancing Japanese aerospace capabilities is

not as significant as we implied. DOD added that it has effectively limited

Japanese access to sensitive U.S. aerospace capabilities. We did not

attempt to measure the significance of the U.S. contribution to enhanced

Japanese aerospace capabilities through the FS-X program. Although DOD

has limited Japanese access to certain U.S. technologies such as some

software design and systems integration know-how, we note that some

Page 64 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Chapter 5 

Japanese and U.S. Aerospace Industries

Receive Different Program Benefits

experts on these matters believe that the Japanese aerospace industry has

acquired significant technology from the United States during the program

that it could not have acquired otherwise without considerable

investments of time and money.

Page 65 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix I 

Data Review Statistics

The following tables show the status of the F-16 System Program Office’s

review of the F-16 Technical Data Package and F-16 supplemental data as

of February 1, 1994.1

Table I.1: Results of the F-16 Technical

Data Package Review Document status Number Percent

Releasablea 9,757 93

Not releasable 568 5

Releasable with modifications 201 2

Total 10,526 100

aIncludes approximately 7,900 technical drawings the Air Force and Lockheed do not consider

sensitive.

Table I.2: F-16 Supplemental Data

Review Status Document status Number Percent

Releasable 2,127 71

Not releasable 653 22

Releasable with modifications 224 7

Total 3,004 100

1

According to a Lockheed official, one F-16 Technical Data Package item was shipped to Japan in

June 1994.

Page 66 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix II 

United States Is Evaluating Japanese Radar

Modules Although Potential Uses Are

Uncertain

The United States has obtained more information on the Japanese active

phased array fire control radar than any other non-derived FS-X

technology. In August 1992, DOD purchased five Japanese FS-X radar

transmit/receive modules, supporting connectors, and technical data for

testing purposes. DOD paid the then current Japan Defense

Agency/Mitsubishi Electric Corporation prototype module contract price

of $4,800 per unit and about $70,000 for technical data and additional

items required to test the modules.

Mitsubishi Electric officials reported in November 1993 that they had

reduced module unit costs to about $3,300. Mitsubishi Electric officials

would like to reduce module costs even further by increasing the module

production run to at least 20,000 units annually. Mitsubishi Electric’s cost

goal is about $1,400 per unit for the FS-X program, assuming production of

120,000 units (or enough for about 130 aircraft). Mitsubishi Electric

officials noted that they do not expect to reach the $1,400 per module goal

until 2 years into full-rate FS-X production.

Mitsubishi Electric officials said they will pursue commercial applications

for FS-X transmit/receive modules that could reduce module costs during

FS-X production. Mitsubishi Electric officials noted, however, that

commercial applications are not practical at this time because of the

modules’ high cost. Commercial applications could include air traffic

control antennas, satellite and mobile communications, and anticollision

automobile radars.

In August 1993, U.S. engineers at the Wright Laboratory Solid State

Electronics Directorate began testing the five radar modules DOD

purchased from Japan. By February 1994, the United States had finished a

complete set of verification tests for module performance. The tests

indicated that the modules perform according to specifications and will

meet Japanese FS-X radar requirements. A U.S. engineer involved in the

testing said that the performance of Japanese modules was very good and

in one area are on a par with the best U.S. modules.

In May 1994, a U.S. radar module testing team visited Japan to compare

and verify U.S. and Japanese test results. U.S. engineers may conduct

additional tests to assess the performance of FS-X radar modules relative

to U.S. modules planned for use on the F-22 aircraft.1 DOD was preparing a

1

Japan has also tested a complete FS-X radar array on the ground and in flight aboard a specially

modified Japanese C-1 electronics testbed aircraft. Japan had not shared its radar array testing data

with the United States as of March 1994, according to a radar expert, nor would Japanese officials

permit us to observe ground-based radar array testing during our November 1993 trip to Japan.

Page 67 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix II 

United States Is Evaluating Japanese Radar

Modules Although Potential Uses Are

Uncertain

report summarizing the results of the radar testing at the time of our

review.

Page 68 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix III 

F-16 and FS-X Configuration Item

Manufacturers

This appendix lists the manufacturers of certain F-16 and FS-X

configuration items. For the FS-X program, configuration items are items

the Japan Defense Agency or Mitsubishi Heavy Industries designates for

monitoring by inclusion on the FS-X baseline configuration lists. The first

column of this appendix lists items that are common, unless otherwise

noted in the second column, to both aircraft. The second column lists the

qualified manufacturer1

 of the item for the F-16 aircraft, and the third

column the FS-X manufacturer. Non-U.S. manufacturers are also noted in

the second and third columns.

Of the 256 items listed in this appendix, 249 are common to the FS-X and

F-16. Japanese companies will provide 132, or over half of the FS-X

configuration items common to the F-16. The list provides evidence of

Japan’s ability to produce indigenously many of the items needed for

modern fighter aircraft. For example, instead of purchasing the F-16 fire

control radar (item 180) from the U.S. firm Westinghouse Electric

Corporation, the Japan Defense Agency chose Mitsubishi Electric

Corporation to develop and produce the FS-X fire control radar.

Configuration item F-16 manufacturer FS-X manufacturer

System: Air vehicle

1. F-16C Air vehicle (1 seat) Lockheed Fort Worth Co. Mitsubishi Heavy Industries, Ltd.a

2. F-16D Air vehicle (2 seat) Lockheed Fort Worth Co. Mitsubishi Heavy Industries, Ltd.a

System: Airframe

3. Forward fuselage assembly (1 seat) Lockheed Fort Worth Co. Mitsubishi Heavy Industries, Ltd.a

4. Forward fuselage assembly (2 seat) Lockheed Fort Worth Co. Mitsubishi Heavy Industries, Ltd.a

5. Center section fuselage assembly (1 seat) Lockheed Fort Worth Co. Kawasaki Heavy Industries, Ltd.a

6. Center section fuselage assembly (2 seat) Lockheed Fort Worth Co. Kawasaki Heavy Industries, Ltd.a

7. Aft fuselage assembly Lockheed Fort Worth Co. Lockheed Fort Worth Co.

8. Ventral fin support fitting Lockheed Fort Worth Co. Lockheed Fort Worth Co.

9. Right ventral fin Lockheed Fort Worth Co. Fuji Heavy Industries, Ltd.a

10. Left ventral fin Lockheed Fort Worth Co. Fuji Heavy Industries, Ltd.a

11. Right wing box assembly Lockheed Fort Worth Co. Mitsubishi Heavy Industries, Ltd.a

12. Left wing box assembly Lockheed Fort Worth Co. Mitsubishi Heavy Industries, Ltd.,a and

Lockheed Fort Worth Co.

13. Right wing leading edge flap maneuver

assembly

Lockheed Fort Worth Co. Lockheed Fort Worth Co.

(continued) 1

A qualified F-16 manufacturer is a company that has demonstrated that it can produce an item that

meets all designated specifications for use on the F-16 aircraft. However, not all qualified F-16

suppliers have actually provided items for the F-16. For example, CLA-VAL company is a qualified F-16

supplier for the ground refuel adaptor (item 86), but it has not yet supplied this item for the F-16,

according to an Air Force official.

Page 69 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix III 

F-16 and FS-X Configuration Item

Manufacturers

Configuration item F-16 manufacturer FS-X manufacturer

14. Left wing leading edge flap maneuver

assembly

Lockheed Fort Worth Co. Lockheed Fort Worth Co.

15. Right wing assembly Lockheed Fort Worth Co. Mitsubishi Heavy Industries, Ltd.a

16. Left wing assembly Lockheed Fort Worth Co. Mitsubishi Heavy Industries, Ltd.a

17. Wing flaperon assembly (right) Lockheed Fort Worth Co. Fuji Heavy Industries, Ltd.a

18. Wing flaperon assembly (left) Lockheed Fort Worth Co. Fuji Heavy Industries, Ltd.a

19. Vertical stabilizer assembly (1 seat and

2 seat

Lockheed Fort Worth Co. ) Fuji Heavy Industries, Ltd.a

20. Vertical stabilizer fairing assembly (1 seat

and 2 seat)

Lockheed Fort Worth Co. Fuji Heavy Industries, Ltd.a

21. Rudder assembly Lockheed Fort Worth Co. Fuji Heavy Industries, Ltd.a

22. Horizontal stabilizer assembly Lockheed Fort Worth Co. Fuji Heavy Industries, Ltd.a

23. Windshield panel Item not found in F-16 Mitsubishi Rayon Co., Ltd.a

24. Nose radome assembly Brunswick Corporation Sumitomo Electric Industriesa

25. Canopy transparency (1 seat) Sierracin-Sylmar, and

Texstar Inc.

Mitsubishi Rayon Co., Ltd.a

26. Canopy transparency (2 seat, forward) Sierracin-Sylmar, and Texstar Inc. Mitsubishi Rayon Co., Ltd.a

27. Canopy transparency (2 seat, aft) Sierracin-Sylmar, and Texstar Inc. Mitsubishi Rayon Co., Ltd.a

28. Fixed canopy transparency assembly

(F-16C, aft)

Texstar Inc. Mitsubishi Rayon Co., Ltd.a

System: Landing gear

29. Drag chute actuator assembly Kaiser Fluid Technologies Kaiser Fluid Technologies

30. Hydraulic actuator for main landing gear

door & uplock (right)

Arkwin Industries Inc. Arkwin Industries Inc.

31. Hydraulic actuator for main landing gear

door & uplock (left)

Arkwin Industries Inc. Arkwin Industries Inc.

32. Hydraulic actuator assembly for nose

landing gear door

Arkwin Industries Inc. Arkwin Industries Inc.

33. Single acting pneumatic actuator for

arresting hook

GST Industries Inc. GST Industries Inc.

34. Valve assembly for emergency landing

gear control

Sterer Engineering & Manufacturing Co. Sterer Engineering & Manufacturing Co.

35. Arresting hook assembly Lockheed Fort Worth Co. Sumitomo Precision Products Co., Ltd. a

36. Forward landing gear control assembly Lockheed Fort Worth Co. Koito Manufacturing Co., Ltd.a

37. Aft landing gear control assembly (2 seat) Lockheed Fort Worth Co. Koito Manufacturing Co., Ltd.a

38. Nose landing gear sequence valve

assembly

Sterer Engineering & Manufacturing Co. Sterer Engineering & Manufacturing Co.

39. Landing gear door sequence valve

assembly

Sterer Engineering & Manufacturing Co. Sterer Engineering & Manufacturing Co.

40. Hydraulic valve assembly for nose wheel

steering

Sterer Engineering & Manufacturing Co. Sumitomo Precision Products Co., Ltd.a

41. Valve assembly for arresting hook control Sterer Engineering & Manufacturing Co. Sterer Engineering & Manufacturing Co.

(continued)

Page 70 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix III 

F-16 and FS-X Configuration Item

Manufacturers

Configuration item F-16 manufacturer FS-X manufacturer

42. Control box for nose gear steering Sterer Engineering & Manufacturing Co. Sumitomo Precision Products., Ltd.a

43. Valve assembly for main landing gear

brake control

Lockheed Fort Worth Co. Kayaba Industry Co., Ltd.a

44. Hydraulic solenoid-operated valve for

landing gear selector

Sterer Engineering & Manufacturing Co. Sterer Engineering & Manufacturing Co.

45a. Brake control box assembly Loral Corp. Sumitomo Precision Products Co., Ltd.a

45b. Skid control box assembly, brake control

box

Aircraft Braking Systems Corp. Sumitomo Precision Products Co., Ltd.a

46. Valve assembly for drag chute control E.G.&G. Wright Components Inc. E.G.&G. Wright Components Inc.

47. Steerable shock strut assembly for nose

landing gear

Menasco Aerosystems Sumitomo Precision Products Co., Ltd.a

48. Drag brace assembly for nose landing

gear (upper and lower)

Menasco Aerosystems Sumitomo Precision Products Co., Ltd.a

49. Nose landing gear wheel assembly Marc Avenue Corp., and B.F. Goodrich

Co.

Marc Avenue Corp.

50. Main landing gear tire B.F. Goodrich Co., and Goodyear Tire &

Rubber

Michelinb

51. Nose landing gear tire Goodyear Tire and Rubber Co., Michelin,

and Dunlop Ltd. Precision Rubber Div.

Michelinb

52. Drag chute assembly Irvin Industries Inc. Irvin Industries Inc.

53. Hydraulic actuator assembly for nose

landing gear retract

Arkwin Industries Inc. Arkwin Industries Inc.

54. Main landing gear shock strut assembly Menasco Aerosystems Sumitomo Precision Products Co., Ltd.a

55. Drag brace assembly for main landing

gear (upper and lower)

Menasco Aerosystems Sumitomo Precision Products Co., Ltd.a

56. Main landing gear tension strut assembly

(right)

Menasco Aerosystems Sumitomo Precision Products Co., Ltd.a

57. Main landing gear tension strut assembly

(left)

Menasco Aerosystems Sumitomo Precision Products Co., Ltd.a

58. Anti-skid wheel speed sensor for main

landing gear brake (left)

Goodyear Aerospace Corp. Sumitomo Precision Products Co., Ltd.a

59. Main landing gear increased capacity

wheel assembly

Aircraft Braking Systems Corp. Kayaba Industry Co., Ltd.a

60. Main landing gear increased capacity

brake assembly

Aircraft Braking Systems Corp. Kayaba Industry Co., Ltd.a

61. Hydraulic retract actuator assembly for

main landing gear

Menasco Aerosystems Sumitomo Precision Products Co., Ltd.a

System: Propulsion

62. Engine monitor computer General Electric Co. General Electric Co.

63. Turbine power unit for emergency power

unit (EPU)

Allied Signal Aerospace Co. Mitsubishi Heavy Industries, Ltd.a

64. EPU controller Allied Signal Aerospace Co. Mitsubishi Heavy Industries, Ltd.a

65. Lube oil-fuel heat exchanger, EPU Allied Signal Aerospace Co. Mitsubishi Heavy Industries, Ltd.a

(continued)

Page 71 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix III 

F-16 and FS-X Configuration Item

Manufacturers

Configuration item F-16 manufacturer FS-X manufacturer

66. Jet fuel starter assembly Sundstrand Aerospace Sundstrand Aerospace

67. Hydraulic jet fuel starter actuator for air

inlet/exhaust doors

Crissair Inc. Crissair Inc.

68. Airframe-mounted drive shaft accessory Lucas Western Inc. Power Transmission Lucas Western Inc. Power Transmission

69. Engine starting system gearbox assembly Sundstrand Aerospace Mitsubishi Heavy Industries, Ltd.a

70. Engine starter assembly Sundstrand Aerospace Mitsubishi Heavy Industries, Ltd.a

71. Hydraulic start motor Sundstrand Aerospace Mitsubishi Heavy Industries, Ltd.a

72. Engine starting controller Sundstrand Aerospace Mitsubishi Heavy Industries, Ltd.a

73. Fuel control assembly Sundstrand Aerospace Mitsubishi Heavy Industries, Ltd.a

74. Regulator & shutoff valve, EPU Whittaker Controls Inc. Whittaker Controls, Inc.

75. Regulator & shutoff-nacelle ejector valve Whittaker Controls Inc. Whittaker Controls, Inc.

76. Fire detection sensing element Fenwal Safety Systems Fenwal Safety Systems

77. Overheat sensing element Fenwal Safety Systems Fenwal Safety Systems

78. Overheat sensing element Fenwal Safety Systems Fenwal Safety Systems

79. Turbofan engine General Electric Co. General Electric Co.

80. Ice detection system DNE Technologies Inc. DNE Technologies Inc.

System: Fuel

81. Motor operated valve Teleflex Control Systems Teleflex Control Systems

82. Single ply forward fuel cell assembly

(F-16C)

American Fuel Cell, and Goodyear

Aerospace Corp.

The Yokohama Rubber Co., Ltd.a

83. Single ply forward fuel cell assembly

(F-16D)

American Fuel Cell, and Goodyear

Aerospace Corp.

The Yokohama Rubber Co., Ltd.a

84. Aerial refueling receptacle assembly XAR Industries Inc. XAR Industries Inc.

85. Hydraulic actuator (aerial refuel) GST Industries Inc. GST Industries Inc.

86. Ground refuel adaptor CLA-VAL Co., and Parker Hannifin Corp. Shaw Aero Devices, Inc.

87. Vent & pressurization valve for external

fuel tank

HR Textron Inc. HR Textron Inc.

88. Shutoff valve (refuel) J.C. Carter Co. Inc. J.C. Carter Co., Inc.

89. Refuel/transfer float valve J.C. Carter Co. Inc. J.C. Carter Co., Inc.

90. Refuel shuttle valve J.C. Carter Co. Inc. J.C. Carter, Co., Inc

91. Control valve for inerting fuel tank Parker Hannifin Corp. Parker Hannifin Corp.

92. Halon reservoir Walter Kidde Aerospace Walter Kidde Aerospace

93. Fuel tank pressure & vent control valve Parker Hannifin Corp. Parker Hannifin Corp.

94. Fuel ejector pump Parker Hannifin Corp. Parker Hannifin Corp.

95. Fuel ejector pump (2 seat) Parker Hannifin Corp. Parker Hannifin Corp.

96. Remote sensing fuel pressure relief valve J.C. Carter Co. Inc., and Parker Hannifin

Corp.

J.C. Carter Co., Inc.

97. Cross feed fuel valve XAR Industries Inc. XAR Industries Inc.

98. Cross feed fuel valve (jet fuel starter

bypass)

XAR Industries Inc. XAR Industries Inc.

(continued)

Page 72 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix III 

F-16 and FS-X Configuration Item

Manufacturers

Configuration item F-16 manufacturer FS-X manufacturer

99. Single inlet fuel transfer pump Argo-Tech Corp. Argo-Tech Corp.

100. Fuel flow proportioner assembly J.C. Carter Co., Inc. J.C. Carter Co., Inc.

101. Dual inlet power driven centrifugal fuel

pump assembly

Argo-Tech Corp. Argo-Tech Corp.

102. Fuel-oil heat exchanger Parker Hannifin Corp., and

Hughes-Treitler Manufacturing Corp.

Parker Hannifin Corp.

103. Flexible engine feed line/disconnect Aeroquip Corp., and IMPCO

Technologies Inc.

Aeroquip Corp., and IMPCO

Technologies Inc.

System: Environment control

104. Cooling turbine Allied Signal Aerospace Co. Shimadzu Corp.a

105. Primary and secondary air to air heat

exchanger

Hamilton Standard Corp. Shimadzu Corp.a

106. Regenerative heat exchanger Hamilton Standard Corp. Shimadzu Corp.a

107. Digital environmental and electrical

equipment cooling set sensor controllers

Dynamic Controls Corp. Shimadzu Corp.a

108. Liquid pump package Item not found in F-16 Shimadzu Corp.a

109. High pressure air pressure regulator and

shutoff valve

Allied Signal Aerospace Co. Shimadzu Corp.a

110. Intermediate pressure air pressure

regulator and shutoff valve

Whittaker Corp. Shimadzu Corp.a

111. Aircraft cabin air pressure regulator Allied Signal Controls and Accessories Allied Signal Controls and Accessories

112. Cabin air pressure relief and dump valve Allied Signal Controls and Accessories Allied Signal Controls and Accessories

System: Crew

113. Liquid oxygen converter The Aro Corp. Tokyo Aircraft Instrument Co., Ltd.a

114. Oxygen diluter demand regulator The Aro Corp., and Litton Systems Inc. Tokyo Aircraft Instrument Co., Ltd.a

115. Forward seat assembly McDonnell Douglas Aerospace Daicel Chemical Industries, Ltd.a

116. Aft seat assembly McDonnell Douglas Aerospace Daicel Chemical Industries, Ltd.a

117. Electromechanical actuator for rotary

canopy (1-place)

Teleflex Control Systems, and Datron

Systems Inc.

Teleflex Control Systems

118. Electromechanical actuator for linear

canopy (2-place)

Teleflex Control Systems, and Datron

Systems Inc.

Teleflex Control Systems

119. Anti-gravity valve Alar Products Inc. Alar Products Inc.

120. Detonation transfer assembly for canopy

jettison (right)

Lockheed Fort Worth Co., and ET Inc. Daicel Chemical Industries, Ltd.a

121. Detonation transfer assembly for canopy

jettison (left)

Lockheed Fort Worth Co., and ET Inc. Daicel Chemical Industries, Ltd.a

122. Rocket assembly for canopy remover

(right and left)

OEA Inc. Daicel Chemical Industries, Ltd.a

123. Emergency canopy release (right and left) ET Inc. Daicel Chemical Industries, Ltd.a

124. Release-canopy actuator bolt OEA Inc. Daicel Chemical Industries, Ltd.a

System: Flight Control

(continued)

Page 73 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix III 

F-16 and FS-X Configuration Item

Manufacturers

Configuration item F-16 manufacturer FS-X manufacturer

125. Digital flight control computer assembly Allied Signal Aerospace Co. Japan Aviation Electronics Industries,

Ltd.a

126. Flight control rate gyro assembly Lockheed Fort Worth Co. Tamagawa Seiki Co., Ltd.a

127. Force transducer assembly Lear Astronics Corp. Lear Astronics Corp.

128. Flight control panel assembly Lockheed Fort Worth Co. Koito Manufacturing Co., Ltd.a

129. Manual trim panel assembly Lockheed Fort Worth Co. Tokyo Aircraft Instrument Co., Ltd.a

130. Servoactuator assembly for horizontal tail

& flaperon

Abex/National Waterlift Teijin Seiki Co., Ltd.a

131. Servoactuator assembly for horizontal tail

& flaperon

Abex/National Waterlift Mitsubishi Heavy Industries, Ltd.a

132. Servoactuator assembly for rudder Abex/National Waterlift Kayaba Industry Co., Ltd.a

133. Leading edge flap drive system

Rotary actuator gearbox for leading edge

drive system (stations 1 - 4)

Power drive unit assembly for leading

edge drive system

Curtiss-Wright Flight Systems, and Allied

Signal Aerospace Co.

Lockheed Fort Worth Co.

Mitsubishi Heavy Industries, Ltd.a

134. Hydraulic control valve for speed brake Tactair Fluid Controls Inc. Tactair Fluid Controls Inc.

135. Lateral & normal accelerometer assembly Lockheed Fort Worth Co. Tokimec Inc.a

136. Rudder pedal position sensor Kavlico Corp. Kavlico Corp.

137. Hydraulic actuator assembly for speed

brake (right)

Arkwin Industries Inc. Arkwin Industries Inc.

138. Hydraulic actuator assembly for speed

brake (left)

Arkwin Industries Inc. Arkwin Industries Inc.

System: Hydraulic

139. Variable delivery hydraulic pump

(emergency)

Vickers Inc. Vickers Inc.

140. Variable delivery hydraulic pump (main

system)

Abex/National Waterlift Abex Japan, Ltd.a

141. Hydraulic reservoir assembly (system A) Parker Hannifin Corp. Parker Hannifin Corp.

142. Hydraulic reservoir assembly (system B) Parker Hannifin Corp. Parker Hannifin Corp.

143. High pressure pneumatic reservoir

(brake/jet fuel starter)

Tavco Inc., and HR Textron Inc. Tavco Inc.

144. Drag chute accumulator York Industries Inc. York Industries Inc.

145. 100-cubic inch hydraulic accumulator Parker Hannifin Corp. Parker Hannifin Corp.

146. Self-sealing hydraulic ground service

coupling half (ground test manifold,

system A)

Aeroquip Corp. Aeroquip Corp.

147. Self-sealing hydraulic ground service

coupling half (ground test manifold,

system B)

Aeroquip Corp. Aeroquip Corp.

148. Self-sealing hydraulic ground service

coupling half (hydraulic fill connector)

Aeroquip Corp. Aeroquip Corp.

(continued)

Page 74 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix III 

F-16 and FS-X Configuration Item

Manufacturers

Configuration item F-16 manufacturer FS-X manufacturer

149. Pressure filter manifold assembly (system

A)

Lockheed Fort Worth Co. Koito Manufacturing Co., Ltd.a

150. Pressure filter manifold assembly (system

B)

Lockheed Fort Worth Co. Koito Manufacturing Co., Ltd.a

151a. Return filters and bypass valve for filter

manifold assembly (system A)

Lockheed Fort Worth Co. Koito Manufacturing Co., Ltd.a

151b. Return filters and bypass valve for filter

manifold assembly (system B)

Lockheed Fort Worth Co. Koito Manufacturing Co., Ltd.a

152. Hydraulic valve assembly for cooler

thermal bypass

Standard-Thomson Corp. Standard-Thomson Corp.

153. Hydraulic reservoir accumulator York Industries York Industries

154. Hand pump FCD Corp., Teledyne Republic

Manufacturing, and Crane Co.

FCD Corp.

155. Hydraulic accumulator (brake and jet fuel

starter)

Parker Hannifin Corp. Parker Hannifin Corp.

156. Hydraulic pressure switch assembly

(EPU pump)

Eaton Corp. Eaton Corp.

157. High pressure 200-cubic-inch pneumatic

reservoir

Tavco Inc. Tavco Inc.

System: Armament

158. M-61A1 20mm automatic gun Martin Marietta Armament Systems Martin Marietta Armament Systems

159. Ammunition handling unit Martin Marietta Armament Systems Martin Marietta Armament Systems

160. Gun control unit Dynamic Controls Corp. Dynamic Controls Corp.

System: Weapon delivery

161. Guided missile launcher assembly Lockheed Fort Worth Co. Fuji Heavy Industries, Ltd.a

162. AIM-7 under wing launcher Item not found in F-16 Japan Aircraft Mfg. Co., Ltd.a

163. Modified triple ejection rack-9A Lockheed Fort Worth Co. Marvin Engineering Co., Inc.

164. Wing missile launcher adapter Lockheed Fort Worth Co. Fuji Heavy Industries, Ltd.a

165. Rack ejector Warner Robins Air Logistics Command EDO Corp.

166. Alternate fuel pylon assembly Lockheed Fort Worth Co. Japan Aircraft Mfg. Co., Ltd.a

167. Weapon pylon assembly (left) Lockheed Fort Worth Co. Fuji Heavy Industries, Ltd.a

168. Weapon pylon assembly (right) Lockheed Fort Worth Co. Fuji Heavy Industries, Ltd.a

169. Centerline fuselage pylon assembly Lockheed Fort Worth Co. Japan Aircraft Mfg. Co., Ltd.a

170. 370-gallon external fuel tank Sargent-Fletcher Co. Sargent-Fletcher Co.

171. 300-gallon center line external fuel tank Sargent-Fletcher Co. Sargent-Fletcher Co.

System: Avionics

172. Enhanced central interface unit assembly Lockheed Fort Worth Co. Lockheed Fort Worth Co.

173. Advanced missile remote interface unit

for Stores Management System (SMS)

Lockheed Fort Worth Co. Lockheed Fort Worth Co.

174. Advanced conventional remote interface

unit (SMS)

Lockheed Fort Worth Co. Lockheed Fort Worth Co.

(continued)

Page 75 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix III 

F-16 and FS-X Configuration Item

Manufacturers

Configuration item F-16 manufacturer FS-X manufacturer

175. Jettison & release remote interface unit

(SMS)

Lockheed Fort Worth Co. Lockheed Fort Worth Co.

176. RT-1300/ARC-186(V) receiver/transmitter

(VHF/UHF)

Rockwell International Corp. NECa

177. RT1159A TACAN receiver/transmitter Rockwell International Corp. Rockwell International Corp.

178. HF radio Item not found in F-16 Kokusai Electric Co., Ltd.a

179. R-1781/ARN-108 instrument landing

system receiver

Rockwell International Corp. Toshiba Corp.a

180. Fire control radar (APG-68) Westinghouse Electric Corp. Mitsubishi Electric Corp.a

181. Identification friend or foe

receiver/transmitter

Teledyne Electronics Hazeltine Corp.

182. General avionics computer Teledyne Systems Co. Mitsubishi Electric Corp.a

183. Electronic warfare computer for

integrated electronic warfare system

(IEWS)

Tracor Corp. Mitsubishi Electric Corp.a

184. Electronic support measures for IEWS Loral Corp. Mitsubishi Electric Corp.a

185. Electronic countermeasures for IEWS Westinghouse Electric Corp., and

Raytheon Corp.

Mitsubishi Electric Corp.a

186. Countermeasures dispensers for IEWS Tracor Corp. Mitsubishi Electric Corp.a

187. Advanced interference blanker unit SCI Systems Inc. SCI Systems Inc.

188. Map generator Item not found in F-16 Toshiba Corp.a

189. Angle-of-attack transmitter (right and left) Teledyne Avionics Japan Aviation Electronics Industries,

Ltd.a

190. Inertial navigation set Litton Systems Inc. Japan Aviation Electronics Industries,

Ltd.a

191. Crash-survivable flight data recorder

signal acquisition and memory units

Smith Industries Inc. Kanto Aircraft Instrument Co., Ltd.a

192. Airborne video tape recorder Teac Corp. of America Teac Corp.a

193. Central air data computer Honeywell Inc. Tokimec Inc.a

194. Head-up display set: electronics and

display units

Aft seat head-up display monitor

GEC Avionics Ltd.c

Astronautics Corp. of America

Shimadzu Corp.a

195. Rate sensor unit Honeywell Inc., and GEC Avionics Ltd.c Honeywell Inc.

196. Fuselage-mounted air data probe Rosemount Aerospace Inc. Rosemount Aerospace Inc.

197. Combined altitude radar altimeter

receiver/ transmitter unit

Gould Defense Systems Inc. Japan Radio Co., Ltd.a

198a. Engine warning control unit SCI Systems Inc. Shinko Electric Co., Ltd.a

198b. Voice message unit SCI Systems Inc. Shinko Electric Co., Ltd.a

199. Extended capability data entry electronic

unit

Lockheed Fort Worth Co. Lockheed Fort Worth Co.

200. Pilot fault list display Litton Systems Canada, Ltd.d Litton Systems Canada, Ltd.d

201. Data entry display power supply Litton Systems Canada, Ltd.d Litton Systems Canada, Ltd.d

(continued)

Page 76 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix III 

F-16 and FS-X Configuration Item

Manufacturers

Configuration item F-16 manufacturer FS-X manufacturer

202. Data entry display Litton Systems Canada, Ltd.d Koito Manufacturing Co., Ltd.a

203. Aft station integrated control panel

assembly (2 seat)

Lockheed Fort Worth Co. Koito Manufacturing Co., Ltd.a

204. Nose mounted pitot static tube Rosemount Aerospace Inc. Rosemount Aerospace Inc.

205. Standby display set Item not found in F-16 Yokogawa Electric Corp.a

206. Data link set Item not found in F-16 Hitachi, Ltd.a

207. Auxiliary communication panel Lambda Novatronics Inc. Lambda Novatronics Inc.

System: Electricity

208. 10KVA AC generator Westinghouse Electric Corp. Shinko Electric Co., Ltd.a

209. 10KVA generator control unit Westinghouse Electric Corp. Shinko Electric Co., Ltd.a

210. 10KVA frequency converter Westinghouse Electric Corp. Shinko Electric Co., Ltd.a

211. Constant speed drive Sundstrand Aerospace Teijin Seiki Co., Ltd.a

212. 5KVA AC Emergency power generator Lucas Aerospace, and Pacific Scientific

Co.

Shinko Electric Co., Ltd.a

213. Electrical converter and 5KVA generator

control unit

Aerospace Avionics Inc. Shinko Electric Co., Ltd.a

214. 60KVA AC generator Westinghouse Electric Corp. Shinko Electric Co., Ltd.a

215. 60KVA AC generator control unit Westinghouse Electric Corp. Shinko Electric Co., Ltd.a

216. Converter regulator Aerospace Avionics Inc., and Lockheed

Fort Worth Co.

Mitsubishi Electric Corp.a

217. Nickel-cadmium aircraft storage battery Marathon Power Technologies, and Saft

America Inc.

The Furukawa Battery Co., Ltd.a

218. Battery charger/control unit Aerospace Avionics Inc. The Furukawa Battery Co., Ltd.a

219. External power receptacle Burton Electrical Engineering Corp. Burton Electrical Engineering Corp.

220. Ground electrical receptacle Avibank Mfg. Inc. Avibank Mfg. Inc.

221. DC converter Lockheed Fort Worth Co. Mitsubishi Electric Corp.a

System: Instrumentation

222. ABU-11/A aircraft mechanical clock Aerosonic Corp., Macleod Instrument

Corp., and Waltham Clock Co., Inc.

Tokyo Aircraft Instrument Co., Ltd.a

223. ARU-42/A1 attitude indicator Jet Electronics & Technology, Inc. Jet Electronics and Technology, Inc.

224. Multi-function display set:

AQU-13A/A horizontal situation indicator

and ARU-50/A flight attitude indicator

AAU-34/A servo control altimeter

Multi-function programmable display

generator

Astronautics Corp. of America, and Litton

Systems Inc.

Litton Systems Inc., and Sequa Corp.

Honeywell Inc.

Yokogawa Electric Corp.a

225. AN/AXQ-16(V)-1 TV cockpit sensor Loral Fairchild Corp. NAC Inc.a

226. Pilot’s controller grip assembly Lockheed Fort Worth Co. Koito Manufacturing Co., Ltd.a

(continued)

Page 77 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix III 

F-16 and FS-X Configuration Item

Manufacturers

Configuration item F-16 manufacturer FS-X manufacturer

227. TRU-63/A-3 fuel flow transmitter Ametek Aerospace Products Inc., and

Gull Electronic Systems Div.

Ametek Aerospace Products Inc.

228. Engine control and aft station throttle

quadrant assembly

Lockheed Fort Worth Co. Koito Manufacturing Co., Ltd.a

229. Light assemblies

Master caution light assembly

Aerospace Avionics Inc.

Grimes Aerospace

Koito Manufacturing Co., Ltd.a

230. AAU-3A/A pressurized compartment

altimeter

Aerosonic Corp., and Kearflex

Engineering Co., Inc.

Aerosonic Corp.

231. Total temperature deiceable probe Rosemount Aerospace Inc. Rosemount Aerospace Inc.

232. Fuel quantity measuring system BF Goodrich Military Fuels & Integrated

Systems

Yokogawa Electric Corp.a

System: Operational software

233. Stores management computer software Lockheed Fort Worth Co. Lockheed Fort Worth Co.

234. Up front control software Lockheed Fort Worth Co. Mitsubishi Heavy Industries, Ltd.a

235. Programmable display generator software Lockheed Fort Worth Co. Mitsubishi Heavy Industries, Ltd.a

236. Mission computer software Lockheed Fort Worth Co. Mitsubishi Heavy Industries, Ltd.a

237. Flight control computer software Lockheed Fort Worth Co. Mitsubishi Heavy Industries, Ltd.a

Mitsubishi Heavy Industries Configuration Control Items

238. RT-1168b UHF receiver/transmitter Magnavox Co. Magnavox Co.

239. AM1963/AIC-1 intercommunication

amplifier

Andrea Radio Corp. Andrea Radio Corp.

240. C6624/AIC-25 intercommunication station Andrea Radio Corp., Melcor Electronics

Corp., and Monmouth Industries Inc.

Andrea Radio Corp.

241. Data transfer unit Fairchild Defense Co. Fairchild Defense Co.

242. Data transfer cartridge assembly Fairchild Defense Co. Fairchild Defense Co.

243. TRU-2A/A rate gyro transmitter Aircraft Instr. & Dev. Inc.; Honeywell Inc.;

Smith Industries Inc.; Abex/National

Waterlift; Condor Pacific Industries Inc.;

and Jet Electronics and Technology Inc.

Aircraft Instrument and Development Inc.

244. AGU-1B/U hydraulic pressure indicator Allied Signal Inc. Courter Operations Allied Signal Inc. Courter Operations

245. EHU-49/A fan turbine inlet temperature

indicator

Gull Electronic Systems Div., and Ametek

Aerospace Products Inc.

Tokyo Aircraft Instrument Co. Ltd.a

246. Rate of fuel flow indicator Ragen Data Systems Inc. Tokyo Aircraft Instrument Co., Ltd.a

247. ALU-16/A nozzle position indicator Litton Special Devices, and Gull

Electronic Systems Div.

Litton Special Devices

248. EGU-12/A oil pressure indicator Allied Signal Inc. Courter Operations Allied Signal Inc. Courter Operations

249. Electrical tachometer indicator Aero Mechanism Inc., and Ametek

Aerospace Products Inc.

Tokyo Aircraft Instrument Co., Ltd.a

250. Emergency fuel quantity indicator model

1822

Ametek Aerospace Products Inc., and

Aerosonic Corp.

Ametek Aerospace Products Inc.

251. ABU-4A/A accelerometer QED Inc. QED Inc.

(continued)

Page 78 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix III 

F-16 and FS-X Configuration Item

Manufacturers

Configuration item F-16 manufacturer FS-X manufacturer

252. Landing/taxi light Grimes Aerospace Co., and Godfrey

Engineering Inc.

Koito Manufacturing Co., Ltd.a

253. Landing/taxi light transformer Grimes Aerospace Co., and Godfrey

Engineering Inc.

Grimes Aerospace Co.

254. Anti-collision light system: anti-collision

light power supply, strobe light

Grimes Aerospace Co.

,

Koito Manufacturing Co., Ltd.a

255. Navigational aircraft formation light (left

and right)

Grimes Aerospace Inc., and Specialty

Lighting Inc.

Koito Manufacturing Co., Ltd.a

256. Aircraft formation light Grimes Aerospace Co., and Specialty

Lighting Inc.

Koito Manufacturing Co. Ltd.a

aIndicates a Japanese company.

bMichelin is a French company.

cGEC Avionics is a British company.

dIndicates a Canadian Company.

Page 79 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix IV 

Comments From the Department of Defense

Note: GAO comments

supplementing those in the

report text appear at the

end of this appendix.

Page 80 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix IV 

Comments From the Department of Defense

Page 81 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix IV 

Comments From the Department of Defense

Now on pp. 2-4 and

14-18.

Now on pp. 3-4 and

21-24.

Page 82 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix IV 

Comments From the Department of Defense

Page 83 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix IV 

Comments From the Department of Defense

Now on pp. 3-4 and

24-27.

See comment 1.

Page 84 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix IV 

Comments From the Department of Defense

Now on pp. 5 and 29-33.

Page 85 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix IV 

Comments From the Department of Defense

Page 86 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix IV 

Comments From the Department of Defense

Now on pp. 5 and 33-37.

See comment 2.

Page 87 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix IV 

Comments From the Department of Defense

Now on pp. 5 and 33-37.

Page 88 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix IV 

Comments From the Department of Defense

Now on pp. 6 and 45-47.

See comment 3.

Page 89 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix IV 

Comments From the Department of Defense

Page 90 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix IV 

Comments From the Department of Defense

Now on pp. 5-7 and

47-52.

Page 91 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix IV 

Comments From the Department of Defense

Now on pp. 7 and 54-64.

Page 92 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix IV 

Comments From the Department of Defense

Now on pp. 8 and 37-38.

Now on pp. 8 and 52.

Page 93 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix IV 

Comments From the Department of Defense

Now on pp. 8 and 52.

Now on pp. 8 and 52.

Page 94 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix IV 

Comments From the Department of Defense

The following are GAO’s comments on the Department of Defense’s letter

dated May 22, 1995.

GAO Comments 1. We revised the report to clarify the distinction between the FS-X budget,

which is paid for by the Japanese government, and the total costs of the

FS-X development program, which include Japanese government funds

and any costs paid by Japanese firms with their own corporate funds. We

also added language indicating that U.S. officials do not know the total

FS-X development costs or whether FS-X costs exceed the FS-X budget.

2. We modified the report’s text in response to this comment.

3. We revised our report to indicate that it is the status of 12 FS-X

technologies that is in question. We also added updated DOD-provided

information on the status of the reclassification process. We note that

while the rules governing the reclassification process are established, the

technology transfer required for derived technologies is greater than that

for non-derived items.

Page 95 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix V 

Comments From the Department of State

Note: GAO comments

supplementing those in the

report text appear at the

end of this appendix.

Page 96 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix V 

Comments From the Department of State

See pp. 8-9 and 38-39.

Page 97 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix V 

Comments From the Department of State

Now on p. 3.

See comment 1.

See comment 2.

Page 98 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix V 

Comments From the Department of State

See comment 3.

Page 99 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix V 

Comments From the Department of State

The following are GAO’s comments on the Department of State’s letter

dated May 26, 1995.

GAO Comments 1. While both derived and non-derived technologies may be made available

to the United States, Japan can limit U.S. access to technologies classified

as non-derived. In contrast, under the FS-X agreements, derived

technologies must be transferred to the United States automatically and

free of charge, including any background data necessary to make such

transfers effective.

2. State’s failure to refer a sensitive case to DOD and possible Commerce

licensing of munitions items, demonstrate that the U.S. government’s FS-X

related licensing activities could be improved. As stated in the report, we

believe that increased sharing of licensing information between DOD, State,

and Commerce would improve the U.S. government’s ability to monitor

the flow of U.S. items and technologies to the FS-X program. This, in turn,

would enhance the quality of FS-X related licensing decisions and the U.S.

government’s examination of Japanese requests to reclassify FS-X

technologies to non-derived status. We note that State in its comments on

our draft report agreed that a central registry would assist the U.S. FS-X

program office to monitor program developments.

3. We believe Japan’s repeated requests for previously denied F-16 data

demonstrate the continued need for adequate U.S. controls over the

transfer of U.S. technology for the FS-X program.

Page 100 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix VI 

Comments From the Department of

Commerce

Note: GAO comments

supplementing those in the

report text appear at the

end of this appendix.

Page 101 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix VI 

Comments From the Department of

Commerce

See pp. 8-9 and 38-39.

Now on p. 3.

See comment 1.

Now on p. 5.

See pp. 8-9 and 38-39.

Page 102 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix VI 

Comments From the Department of

Commerce

Now on p. 5.

See pp. 8-9 and 38-39.

Now on p. 5.

See pp. 8-9 and 38-39.

Now on p. 8.

See comment 2.

See pp. 8-9 and 38-39.

Now on p. 33.

See pp. 8-9 and 38-39.

Now on p. 33.

See pp. 8-9 and 38-39.

Page 103 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix VI 

Comments From the Department of

Commerce

Now on p. 35.

See comment 3.

Now on p. 53.

See pp. 9 and 39.

Now on p. 36.

See pp. 8-9 and 38-39.

Now on p. 37.

See pp. 8-9 and 38-39.

Now on pp. 37-38.

See pp. 9 and 38.

Page 104 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix VI 

Comments From the Department of

Commerce

Page 105 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix VI 

Comments From the Department of

Commerce

The following are GAO’s comments on the Department of Commerce’s

letter dated June 20, 1995.

GAO Comments 1. We do not have the responsibility for determining what items are

covered by DOD’s FS-X releasability guidelines. If Commerce were to

consistently share licensing information with DOD, DOD could assist

Commerce in determining a license application’s significance and

potential utility for the FS-X program. Such sharing would permit DOD to

determine if its FS-X releasability guidelines and the FS-X

government-to-government agreements were consistent with Commerce’s

interpretations of the requirements of the Export Administration Act,

improve DOD’s ability to properly categorize FS-X technologies as derived

or non-derived from U.S. sources, and facilitate DOD’s compilation of FS-X

work share data.

2. We responded to Commerce’s October 12, 1994, comments on the

classified version of this report.

3. We agree that there is no way to know whether general license exports

are FS-X related.

Page 106 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix VII 

Major Contributors to This Report

National Security and

International Affairs

Division, Washington,

D.C.

James F. Wiggins

Davi M. D’Agostino

David G. Jones

Daniel B. Mezger

Jai Eun Lee

Wanda R. Beasley

Page 107 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix VII 

Major Contributors to This Report

Page 108 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix VII 

Major Contributors to This Report

Page 109 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
Appendix VII 

Major Contributors to This Report

Page 110 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
GAO Related Products

U.S. Military Coproduction Programs Assist Japan in Developing Its Civil

Aircraft Industry (GAO/ID-82-23, Mar. 18, 1982).

Industrial Policy: Japan’s Flexible Approach (GAO/ID-82-32, June 23, 1982).

Industrial Policy: Case Studies in the Japanese Experience (GAO/ID-83-11,

Oct. 20, 1982).

Support for Development of Electronics and Materials Technologies by the

Governments of the United States, Japan, West Germany, France, and the

United Kingdom (GAO/RCED-85-63, Sept. 9, 1985).

U.S. Military Aircraft Coproduction With Japan (GAO/T-NSIAD-89-6, Feb. 23,

1989).

U.S.-Japan FS-X Codevelopment Program (GAO/T-NSIAD-89-31, May 11, 1989).

U.S.-Japan FS-X Codevelopment Program (GAO/T-NSIAD-89-32, May 16, 1989).

Investment in Foreign Aerospace Vehicle Research and Technological

Development Efforts (GAO/T-NSIAD-89-43, Aug. 2, 1989).

U.S.-Japan Codevelopment: Review of the FS-X Program (GAO/NSIAD-90-77BR,

Feb. 6, 1990).

Commercialization of Technology by Japanese Companies

(GAO/T-NSIAD-91-32, Apr. 30, 1991).

Aerospace Plane Technology: Research and Development Efforts in Japan

and Australia (GAO/NSIAD-92-5, Oct. 4, 1991).

Foreign Technology: Federal Processes for Collection and Dissemination

(GAO/NSIAD-92-101, Mar. 23, 1992).

Defense Technology Base: Risks of Foreign Dependencies for Military

Unique Critical Technologies (GAO/NSIAD-92-231, June 5, 1992).

U.S.-Japan Codevelopment: Update of the FS-X Program (GAO/NSIAD-92-165,

June 5, 1992).

Technology Transfer: Japanese Firms Involved in F-15 Coproduction and

Civil Aircraft Programs (GAO/NSIAD-92-178, June 10, 1992).

Page 111 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
GAO Related Products

High-Technology Competitiveness: Trends in U.S. and Foreign

Performance (GAO/NSIAD-92-236, Sept. 16, 1992).

Competitiveness Issues: The Business Environment in the United States,

Japan, and Germany (GAO/GGD-93-124, Aug. 9, 1993).

Foreign Technology: Collection and Dissemination of Japanese

Information Can Be Improved (GAO/NSIAD-93-251, Sept. 30, 1993).

Asian Aeronautics: Technology Acquisition Drives Industry Development

(GAO/NSIAD-94-140, May 4, 1994).

(705102)(705005) Page 112 GAO/NSIAD-95-145 U.S.-Japan Cooperative Development
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