United States General Accounting Office

Report to the Honorable GAO Max Cleland, U.S. Senate

September 2002 FORCE STRUCTURE

Review of B-1B

Process Identifies

Opportunity to

Improve Future

Analysis

GAO-02-846
Page i GAO-02-846 Force Structure

Letter 1

Results in Brief 2

Background 4

Decision to Reduce and Consolidate the B-1Bs Based on Budget

Concerns, Military Judgment, and Incomplete Cost Estimates 5

Guard B-1B Units Have Similar Missions, Lower Flying Hour Costs

and Are at Least as Capable as Active Units 10

Conclusions 17

Recommendation for Executive Action 17

Agency Comments and Our Evaluation 18

Appendix I Scope and Methodology 20

Appendix II Comments from the Department of Defense 22

Appendix III GAO Contacts and Staff Acknowledgments 25

Related GAO Products 26

Tables

Table 1: B-1B Force Structure Before and After Consolidation 4

Table 2: Comparison of Active Duty and Air National Guard B-1B

Flying Hour Costs for Fiscal Years 1999-2001 11

Table 3: Comparison of Active Duty and Air National Guard B-1B

Depot-Level Reparables Cost per Flying Hour 12

Table 4: Comparison of Active Duty and Air National Guard B-1B

Consumable Supplies Cost per Flying Hour 12

Table 5: Active Duty and Air National Guard B-1B Pilot Experience

Levels 15

Table 6: Active Duty and Air National Guard B-1B Weapon Systems

Officer Experience Levels 16

Contents
Page ii GAO-02-846 Force Structure

Figure

Figure 1: Air National Guard and Active Duty B-1B Mission Capable

Rates (Fiscal Years 1999-2001) 13

Abbreviations

DOD Department of Defense

OSD Office of the Secretary of Defense
Page 1 GAO-02-846 Force Structure

September 6, 2002

The Honorable Max Cleland

United States Senate

Dear Senator Cleland:

The B-1B began operations in 1986 as a long-range heavy bomber designed

primarily to carry nuclear munitions. Although the B-1B’s nuclear mission

was withdrawn in October 1997,1

 the Air Force continues to rely on the

B-1B to support conventional wartime missions. The B-1B, equipped with

three weapons bays, has the largest payload of the Air Force’s three

bombers,2

 and recent modifications have provided the capability to deliver

near precision munitions. Future upgrades to the B-1B are expected to

provide greater flexibility by enabling it to carry three different types of

bombs simultaneously and eliminate some of its long-term survivability

and maintainability problems by improving its radar warning systems,

jamming ability, and other electronic countermeasure systems.

In May 2001, as part of a broader Department of Defense (DOD)

initiative to make funds available to further military transformation, the

Office of the Secretary of Defense (OSD) suggested retiring the entire

B-1B fleet by October 2001. In June 2001, the Air Force proposed an

alternative that reduced the B-1B fleet from 93 to 60 aircraft and

consolidated them at 2 active duty locations instead of the 3 active duty

and 2 Air National Guard (Guard) locations that housed the aircraft.

Congress delayed implementation of the fleet reduction until the Air Force

completed a review of bomber force structure and provided a report on

alternative missions and basing plans.3

 The report was delivered to

Congress on February 6, 2002, and after a 15-day period, the Air Force had

the authority to begin implementing the fleet reduction and consolidation.

The Air Force began consolidating the fleet in July 2002.

 1

 According to the Department of Defense’s 2001 Nuclear Posture Review, DOD no longer

maintains plans to reconstitute the B-1Bs’ nuclear capability.

2

 The Air Force’s bomber fleet consists of the B-1B, B-2, and B-52.

3

 National Defense Authorization Act for Fiscal Year 2002, Pub. L. No. 107-107, Sec. 1032,

115 Stat. 1012, 1215-16 (2001).

United States General Accounting Office

Washington, DC 20548
Page 2 GAO-02-846 Force Structure

In July 2001, you asked that we review the Air Force decision to reduce

and consolidate the B-1B fleet. Subsequent to your request, the Air Force

submitted the required report to Congress, and your office asked that we

document and analyze the process used to make the reduction and

consolidation decision so that the insights gained might assist those who

make force structure and basing decisions in the future. As agreed, we

determined what types of analysis DOD and the Air Force did of wartime

requirements and basing options before deciding on the number of aircraft

to retain and where to base them. Additionally, at your request, we

compared the missions, flying hour costs,4

 and selected capabilities of the

various active and Air National Guard B-1B units.

We reviewed documentation related to the B-1B force restructuring and

met with representatives of OSD, the Joint Staff, the Air Force, and the

Air National Guard to determine how the Air Force made its decision. We

obtained and analyzed data for flying hour costs and mission capable rates

for fiscal years 1999, 2000, and 2001 for all of the B-1B units and obtained

data on aircrew experience for both Air National Guard and active duty

aircrews. Additionally, we visited three of the five B-1B units. We

conducted our review from September 2001 through July 2002 in

accordance with generally accepted government auditing standards. We

discuss our scope and methodology in more detail in appendix I.

Air Force officials did not conduct a formal analysis to assess how a

reduction in B-1B bombers from 93 to 60 would affect DOD’s ability to

meet wartime requirements. Nor did they complete a comprehensive

analysis of potential basing options to know whether they were choosing

the most cost-effective alternative. Air Force officials explained that their

proposal to reduce the fleet from 93 to 60 was made in response to an

Office of the Secretary of Defense suggestion to eliminate the entire B-1B

fleet and to address significant funding shortages in the B-1B modification

program. Senior Air Force officials further explained that they are

comfortable with this decision because, based on their military judgment,

a smaller, fully modified B-1B fleet will provide more capability than a

larger fleet with no additional modifications. However, the decision was

not vetted through established DOD budget processes that normally

involve a wider range of participants and generally allow more time for

 4

 The Air Force calculates flying hour costs by dividing the cost of fuel and repair parts by

the number of hours the aircraft is flown.

Results in Brief
Page 3 GAO-02-846 Force Structure

analysis of how proposed force structure changes will affect DOD’s ability

to meet wartime requirements. Furthermore, Air Force headquarters

officials appear to have used an inconsistent methodology and incomplete

cost estimates when considering options for basing the remaining aircraft.

As a result, the Air Force understated the potential savings for some

options, and it lacks assurance that the basing option selected, which

consolidates the B-1Bs in the active component, is the most cost-effective

option available. In the absence of standard guidance for analyzing basing

alternatives, similar problems could occur in the future.

Our comparison of active and Guard units’ missions, flying hour costs,

and capabilities showed that active and Guard units were responsible

for substantially the same missions but Guard units had lower flying

hour costs and higher mission capable rates5 than their active duty

counterparts. For example, during fiscal years 1999 through 2001, the

Guard’s B-1B units averaged both lower flying hour costs and higher

mission capable rates than the active duty units, although the gap between

active and Guard mission capable rates narrowed in fiscal year 2001.

Additionally, the Guard’s B-1B aircrew members6

 were generally more

experienced, in terms of the number of hours flown, than the active duty

B-1B aircrews because most Guard aircrew members served on active

duty prior to joining the Air National Guard.

To provide an analytical basis for future aircraft realignment decisions,

we are recommending that the Secretary of Defense direct the Secretary of

the Air Force to develop a methodology for assessing and comparing the

costs of active and reserve units when evaluating potential basing options.

In commenting on a draft of this report, DOD disagreed with our

recommendation that the Air Force develop a methodology for assessing

and comparing costs because the department believes that such a

methodology currently exists. However, DOD’s written comments did not

describe the methodology or provide any evidence that such a

methodology exists and Air Force officials told us the Air Force does not

have a standard methodology. A detailed discussion of DOD’s comments

 5

 The Air Force designates a weapon system as mission capable when it can perform at

least one of its assigned combat missions. The mission capable rate measures the amount

of time an aircraft is available to complete at least one of its assigned missions.

6

 The B-1B requires four aircrew members, including the pilot, the copilot, and the

offensive and defensive weapon systems officers.
Page 4 GAO-02-846 Force Structure

and our response is included in the Agency Comments section of

this report.

In a March 1999 white paper7

 detailing modernization plans for the bomber

fleet, the Air Force advised Congress that it needed 93 B-1Bs, including

70 combat-coded aircraft8

 by the end of fiscal year 2004, to meet DOD’s

strategy of being prepared to win two nearly simultaneous major theater

wars. In June 2001, the Air Force proposed reducing the fleet from 93 to

60 aircraft and reducing the number of combat-coded aircraft to 36.

Table 1 compares the force structure before and after OSD’s June 2001

decision to reduce and consolidate the B-1B fleet.

Table 1: B-1B Force Structure Before and After Consolidation

Base Before consolidation After consolidation

Active duty Number Type Number Type

Dyess Air Force Base,

Texas

40 B-1Bs 12 combat

24 traininga

4 backupb

32 B-1Bs 12 combat

16 training

2 test

2 backup

Ellsworth Air Force

Base, South Dakota

26 B-1Bs 18 combat

6 training

2 backup

26 B-1Bs 24 combat

2 backup

Mountain Home Air

Force Base, Idaho

7 B-1Bs 6 combat

1 backup

0 B-1Bsc

Edwards Air Force

Base, California

2 B-1Bs 2 test 2 B-1Bs 2 test

Air National Guard

McConnell Air Force

Base, Kansas

9 B-1Bs 8 combat

1 backup

0 B-1Bsc

Robins Air Force

Base, Georgia

9 B-1Bs 8 combat

1 backup

0 B-1Bsc

Total 93 B-1Bs 60 B-1Bs

a

These aircraft are used to train newly qualified pilots as B-1B pilots.

b

Backup aircraft are located at each unit and are used when a primary aircraft is not available.

c

Units affected received new missions as discussed below.

Source: Compiled from data provided by the Air Combat Command.

 7

 U.S. Air Force, White Paper on Long Range Bombers (Washington, D.C., Mar. 1, 1999).

8

 Combat coded means that the aircraft is fully equipped and funded to perform all

wartime missions.

Background
Page 5 GAO-02-846 Force Structure

Partly in response to concerns expressed by Members of Congress

about OSD’s June 2001 decision to eliminate the B-1B mission at

Mountain Home, McConnell, and Robins Air Force Bases, the Air Force

identified and announced new missions for these locations in September

2001. Planning for the new missions is well underway, and the units are

expected to transition to their new missions in the fourth quarter of

fiscal year 2002. Mountain Home’s current F-15E squadron will be

increased from 18 to 24 aircraft, and its 7 KC-135 tankers will be relocated

to the Air National Guard unit at McConnell Air Force Base. The Air

National Guard unit at McConnell will be redesignated as the 184th Air

Refueling Wing and will have 10 KC-135R tankers. The Guard unit at

Robins Air Force Base will transition to the 116th Air Control Wing and

have 19 Joint Surveillance Target Attack Radar System aircraft.

As you know, we have issued numerous reports on the B-1B bomber in

response to a variety of congressional concerns. In February 1998, for

example, we reported that the Air Force could save millions of dollars

without reducing mission capability by assigning more B-1Bs to the

reserve component.9

 A list of related GAO products can be found at the

end of this report.

The decision to reduce the B-1B force was not based on a formal analysis

of how a smaller B-1B force would impact DOD’s ability to meet wartime

requirements. Air Force officials explained that their decision to reduce

the fleet from 93 to 60 was made in response to an OSD suggestion to

eliminate the entire B-1B fleet and to address significant funding shortages

in the B-1B modification program. Furthermore, the decision was not

vetted through established DOD budget processes that normally involve a

wider range of participants and generally allow more time for analysis of

proposed changes. Senior Air Force officials believe, based on their

military judgment, that the decision will not adversely affect DOD’s ability

to implement the national security strategy. With regard to the Air Force’s

 9

 We presented six options for placing more B-1Bs in Air National Guard units and

estimated that implementing our proposed options could produce savings ranging from

$87.1 million to $235.3 million in fiscal years 1999-2003. We also recommended that the

Secretary of the Air Force prepare a plan to place more B-1Bs in the reserve component. In

its response to our report at that time, DOD stated that it had the right mix of B-1Bs in the

active and reserve components and that it did not plan to move more B-1Bs to the reserve

component at that time. See U.S. General Accounting Office, Air Force Bombers: Moving

More B-1s to the Reserves Could Save Millions without Reducing Mission Capability,

GAO/NSIAD-98-64 (Washington, D.C.: Feb. 26, 1998).

Decision to Reduce

and Consolidate the

B-1Bs Based on

Budget Concerns,

Military Judgment,

and Incomplete

Cost Estimates
Page 6 GAO-02-846 Force Structure

analysis of basing alternatives, a lack of Air Force guidance led Air Force

officials in the Office of the Deputy Chief of Staff for Plans and Programs

to develop their own methodology to determine where to base the reduced

B-1B fleet. These officials did not document their methodology at the time

the decision was made and could not replicate the calculations used to

make the basing decision. However, our review of documents prepared

(at our request) after the decision was made suggests the Air Force used

an inconsistent methodology and incomplete costs when estimating the

savings generated from the consolidation. As a result, it is not clear

whether they chose the most cost-effective alternative.

In May 2001, as it considered changes to the fiscal year 2002 DOD

budget previously submitted to Congress by the prior administration,

senior OSD officials suggested eliminating the entire B-1B fleet that had

experienced long-standing survivability and reliability problems. OSD

officials in offices such as the Program Analysis and Evaluation did not

undertake any analysis of the impact of the proposed B-1B retirements on

the Air Force’s ability to meet war-fighting requirements. At that time,

the OSD Comptroller estimated that eliminating the B-1B would save

approximately $4.5 billion in fiscal years 2002 through 2007. The savings

would be achieved by eliminating the B-1Bs from both the active and

Guard fleets and canceling the B-1B modernization program, according to

an official in the Comptroller’s office.

Acknowledging that it lacked sufficient funding to complete planned

upgrades to all 93 aircraft, but at the same time believing that some B-1Bs

should be retained, the Air Force proposed reducing the size of the fleet

from 93 to 60 and reinvesting the savings in upgrades to the remaining

60 aircraft. According to the Secretary of the Air Force and the Chief of

Staff of the Air Force, the proposal was budget-driven. The Chief of Staff

told us that if the Air Force reduced the number of aircraft to 60, it would

have sufficient funds to upgrade the remaining aircraft to make them more

usable in combat. The Air Force did no formal analysis of the impact of a

smaller B-1B fleet on its ability to meet current and future war-fighting

requirements when it proposed this reduction. Senior Air Force leaders

told us that they are comfortable with the proposed reduction because

they believe that 60 upgraded aircraft will provide significantly more

capability in terms of effectiveness, survivability, and maintainability than

is available today. The Under Secretary of Defense (Comptroller) included

the reduction in the amended 2002 DOD budget request after discussions

with the Secretary of Defense and the Deputy Secretary of Defense.

Decision to Reduce the

B-1B Fleet Was Based on

Budget Considerations

Rather than Requirements

Analysis
Page 7 GAO-02-846 Force Structure

The decision to reduce the number of B-1Bs was not fully vetted through

the DOD Planning, Programming, and Budgeting System. Under

established DOD procedures, the service sends its budget to the Office of

the Under Secretary of Defense (Comptroller) where issue area experts

review it. Potential changes in the form of draft program budget decisions

are circulated to the services, the Joint Staff, the Director of Program

Analysis and Evaluation, and various assistant secretaries of defense who

are in a position to evaluate the impact of the potential budget decisions

on the national military strategy and the objectives of the Secretary of

Defense. Their comments are provided to the Comptroller who considers

them, finalizes the program budget decision, and forwards it to the Deputy

Secretary of Defense for signature. According to an official in the

Comptroller’s office, in this instance, the Comptroller approved the

program budget decision that reduced and consolidated the B-1B fleet

after discussions with the Secretary of Defense and the Deputy Secretary

of Defense. A draft program budget decision was not circulated to the

Office of the Director, Program Analysis and Evaluation, the Joint Staff, or

the Air Force according to representatives of these offices.

Air Force officials told us they were surprised when senior OSD officials

decided to implement the B-1B fleet reduction in June 2001. While

Air Force officials recommended reducing the fleet, they did not know

that the recommendation was to be included in the fiscal year 2002

amended budget until just a few days before OSD officials transmitted the

budget to Congress and made it public. These same officials told us that

they were also surprised that the consolidation was to be implemented by

October 1, 2001. They believed that they needed about 1 year to implement

the decision.

As a result of the short time frame between the OSD decision to

implement the Air Force’s proposal to reduce and consolidate the B-1Bs

and the release of the amended fiscal year 2002 budget, Air Force officials

told us the Air Force did not have time to

• determine if the Guard units would get new missions and identify those

missions or

• meet with Members of Congress from the affected states to explain the

decision.

The decision to reduce the fleet and complete the consolidation by

October 1, 2001, concerned Members of Congress. As a result, Congress

delayed implementation until the Air Force completed a review of bomber

force structure and provided information on alternative missions and
Page 8 GAO-02-846 Force Structure

basing plans.10 According to the legislation, the Air Force could begin

implementing the fleet reduction and consolidation 15 days after providing

the required report to Congress. The report was delivered to Congress in

February 2002. Among other things, the report provided a summary of the

(1) Air Force’s reasons for reducing the B-1B fleet, (2) follow-on missions

for the affected units, and (3) details of the B-1B modernization program.

The Air Force began relocating and retiring B-1Bs in July 2002.

Air Force officers in the Office of the Deputy Chief of Staff for Plans and

Programs said they considered a number of basing options before

recommending that the remaining aircraft be consolidated at two active

duty bases. However, they did not document the options considered at the

time the decision was made and could not provide a comprehensive list of

options considered. In early 2002, at our request, they prepared a paper

that outlined some of the options they believed were considered.

According to the paper, the Air Force considered options that would have

consolidated the aircraft at

• two active bases and one Guard base,

• one Guard base and one active base, or

• two active duty bases.

The option selected continues to house B-1Bs at two active duty

bases—26 at Ellsworth Air Force Base and 32 at Dyess Air Force Base.11

According to Air Force officials, they selected this option because they

believed it was the most cost-effective option available. Specifically, they

believed they would achieve significant economies of scale by

consolidating the aircraft at the two largest B-1B bases, which were

located in the active component.

Air Force headquarters staff told us they had no written guidance or

directives to assist them when they completed the cost analysis for

assessing where to locate the aircraft, and the officers at Air Force

 10 National Defense Authorization Act for Fiscal Year 2002, Pub. L. No. 107-107, Sec. 1032,

115 Stat. 1012, 1215-16 (2001).

11 The remaining two aircraft will be used for developmental testing and will be located at

the Air Force’s test facility at Edwards Air Force Base. According to Air Force officials,

these aircraft will be altered to such a degree that it is unlikely that they will ever be used

in a nontest environment.

The Air Force Used

Incomplete Cost Data

When Deciding Where to

Base the Remaining B-1Bs
Page 9 GAO-02-846 Force Structure

headquarters responsible for evaluating basing options said they received

no guidance from their senior leaders. Consequently, they developed their

own approach for determining where the B-1Bs should be retained. The

Air Force did not document its methodology at the time the consolidation

decision was made but attempted to reconstruct it in early 2002 at our

request. At that time, however, Air Force officials were unable to replicate

the savings estimates they had developed or provide a complete

explanation of the methodology used to make the basing decision.

Our review of the documentation provided to us by Air Force officials in

early 2002 suggests the Air Force may have used an inconsistent

methodology and incomplete costs when estimating potential savings for

various basing options. According to Air Force officials, for options that

stationed aircraft at both active and Guard locations, the potential savings

estimates were based solely on the anticipated reductions in the cost of

flying hours that would result from the smaller B-1B force. Other

operations and maintenance costs12 that would have been saved by

reducing the number of B-1Bs or eliminating a B-1B unit were not included

in the estimates for these options. Such costs include depot maintenance,

travel, and contractor logistics support. However, for options that

stationed the aircraft at active bases only and eliminated both Guard units,

Air Force officials included the projected flying hour savings from the

smaller fleet and the Guard’s B-1B nonflying hour operations and

maintenance costs in the savings estimates. Air Force officials could not

explain why they estimated the cost savings in this manner. However, they

noted that while they obtained complete operations and maintenance data

for the Guard units, they did not obtain similar data for the active units.

Using this methodology, the Air Force estimates for options that included

a mix of active and Guard units understated the savings that could result

from reducing and consolidating the fleet.

Air Force officials said they considered other factors when they assessed

the basing options. One factor was the impact that the consolidation might

have on the individual B-1B bases. Air Force officials told us that they

realized that they would have to select an option that included Ellsworth

Air Force Base because, without the B-1B, Ellsworth would have no

 12 The Air Force’s operations and maintenance appropriation provides funds for the

day-to-day operations of the Air Force. In addition to funds for fuel and aircraft repair

parts, this account pays for items such as travel, office supplies, contractor support,

communications, computers, and utilities and provides funds to pay Air Force civilian

employees.
Page 10 GAO-02-846 Force Structure

mission and the Air Force had no authority to close the base. A second

factor was the need to avoid generating requirements for construction of

new facilities since this would reduce the potential savings from the

consolidation and might require the Air Force to seek construction funds

from Congress. Several other factors that could have been considered but

were not include: actual flying hour costs, mission capable rates, and

aircrew experience levels for the active and Guard units. According to Air

Force officials, the Air Force did not consider these factors because they

believed the active and Guard units had similar capabilities.

In comparing their assigned missions, flying hour costs, mission capable

rates, aircrew experience, and operational readiness inspections, we found

that Guard units (1) were assigned responsibility for substantially the

same types of missions as their active duty counterparts, (2) had lower

flying hour and higher mission capable rates during fiscal years 1999-2001,

and (3) had more experienced crewmembers than the active duty units in

terms of hours flown. We also found that active and Guard units received

similar scores in their most recent operational readiness inspections.

With the exception of an additional 24 hours to recall and mobilize

Guard personnel prior to deployment, the kinds of missions assigned

to Guard B-1B units and their active duty counterparts are substantially

the same. For example, the Guard and active duty units have similar

wartime mission responsibilities, and each of the B-1B units is assigned

to support either Central or Pacific theater commanders during wartime.

Additionally, during peacetime, both active and Guard B-1B units

are scheduled to be available to meet ongoing contingency operation

needs for 90 days every 15 months under the Air Force’s Aerospace

Expeditionary Force concept.13 In the past, however, the two Guard B-1B

units have worked together to support operational requirements during

this period so that each unit is responsible for a 45-day period rather than

the full 90-day period, which places less strain on volunteer Guardsmen

and their employers.

 13 The Air Force’s Aerospace Expeditionary Force was designed to help manage

commitments to theater commanders and reduce the deployment burden. Active duty and

Guard B-1B units usually meet their commitments in on-call status at their home station.

Guard B-1B Units

Have Similar

Missions, Lower

Flying Hour Costs

and Are at Least as

Capable as Active

Units

Guard and Active Duty

B-1B Units Have Similar

Missions
Page 11 GAO-02-846 Force Structure

We compared the flying hour costs between active duty and Guard B-1B

units for fiscal years 1999-2001 and found that Guard costs averaged about

27 percent lower than active duty costs. The Air Force calculates flying

hour costs by dividing the cost of fuel and parts by the number of hours

each unit flies the aircraft. Specifically, the Air Force considers the cost of

• aviation fuel, oil, and lubricants;

• depot-level reparables, which are expensive parts that can be fixed and

used again, such as hydraulic pumps, navigational computers, engines, and

landing gear; and

• consumable supplies, which are inexpensive parts, such as nuts, bolts, and

washers, which are used and then discarded.

Table 2 shows the cost per flying hour for active and Air National Guard

B-1B units for fiscal years 1999-2001.

Table 2: Comparison of Active Duty and Air National Guard B-1B Flying Hour Costs

for Fiscal Years 1999-2001

FY 1999 FY 2000 FY 2001

3-year

average

Active duty $14,163 $13,426 $15,818 $14,486

Air National Guard 10,194 10,997 10,478 10,530

Difference $3,969 $2,428 $5,340 $3,956

Note: Numbers may not calculate due to rounding.

Source: GAO’s analysis of data provided by the Air Combat Command, the Air National Guard

Bureau, and Dyess, Ellsworth, Robins, McConnell, and Mountain Home Air Force Bases.

Our analysis showed that the Guard’s lower cost per flying hour was due

in large part to its significantly lower costs for depot-level reparables

(see table 3). The Guard attributed its lower reparables costs to the higher

experience levels of its maintenance personnel. Apprentice mechanics in

the Guard averaged over 10 years of military experience compared to

slightly more than 2 years of military experience among apprentice active

duty mechanics. Officials said that more experienced maintenance

personnel are often able to identify a problem part and fix it at the unit,

when appropriate, instead of purchasing a replacement part from the

Air Force supply system.

Guard Flying Hour Costs

Are Lower
Page 12 GAO-02-846 Force Structure

Table 3: Comparison of Active Duty and Air National Guard B-1B Depot-Level

Reparables Cost per Flying Hour

FY 1999 FY 2000 FY 2001

3-year

average

Active duty $9,110 $9,219 $9,928 $9,436

Air National Guard 5,704 7,058 5,271 5,992

Difference $3,406 $2,161 $4,656 $3,444

Note: Numbers may not calculate due to rounding.

Source: GAO’s analysis of data provided by the Air Combat Command, the Air National Guard

Bureau, and Dyess, Ellsworth, Robins, McConnell, and Mountain Home Air Force Bases.

Our analysis also showed that the lower costs of consumables in the

Guard also contributed to the lower flying hour costs14 (see table 4).

Guard officials said that they are able to keep the costs of consumables

down because their experienced maintenance crews are often able to

isolate, identify, and fix malfunctioning parts without pulling multiple

suspect parts off the aircraft. As a result, fewer consumable supplies

are used.

Table 4: Comparison of Active Duty and Air National Guard B-1B Consumable

Supplies Cost per Flying Hour

FY 1999 FY 2000 FY 2001

3-year

average

Active duty $1,776 $1,819 $1,998 $1,869

Air National Guard 1,160 1,558 1,324 1,334

Difference $616 $261 $674 $536

Note: Numbers may not calculate due to rounding.

Source: GAO’s analysis of data provided by the Air Combat Command, the Air National Guard

Bureau, and Dyess, Ellsworth, Robins, McConnell, and Mountain Home Air Force Bases.

Flying hour costs represent only a portion of the overall costs of operating

and maintaining B-1B bombers. Costs such as pilot training, test

equipment, and depot maintenance are not included in the flying hour

cost. As we noted earlier, the Air Force did not consider these costs or

 14 The cost of aviation fuel did not contribute significantly to the difference in cost per

flying hour between active duty and Guard B-1B units, as these costs were very similar

between the B-1B units. Both active duty and Guard units pay about the same price for

aviation fuel, oil, and lubricants.
Page 13 GAO-02-846 Force Structure

the historical flying hour costs detailed previously when it made its

basing decision.

The Guard’s reported mission capable rates were higher than the active

duty’s reported rates between fiscal year 1999 and 2001. The Air Force

designates a weapon system as mission capable when it can perform at

least one of its assigned combat missions. The mission capable rate

specifically measures the percentage of time a unit’s aircraft are available

to meet at least one of its missions. On average, the Guard units’ B1-B fleet

was available between 62 and 65 percent of the time during fiscal years

1999 through 2001. During those same years, the active duty mission

capable rate performance averaged between 52 and 60 percent (see fig. 1).

Figure 1: Air National Guard and Active Duty B-1B Mission Capable Rates

(Fiscal Years 1999-2001)

Source: GAO’s analysis of data provided by the Air Combat Command; the 116th Bomb Wing,

Robins Air Force Base; and the 184th Bomb Wing, McConnell Air Force Base.

According to Air Combat Command officials, the active duty units’ mission

capable rate gain in fiscal year 2001 was primarily due to (1) increased

Guard B-1B Units Report

Higher Mission Capable

Rates
Page 14 GAO-02-846 Force Structure

aircraft availability following completion of an extensive modification

program and (2) improvements in the Air Force’s inventory of spare parts.

In the 2 years prior to fiscal year 2001, both active and Guard B-1Bs

underwent extensive modifications at the depot that improved the

aircraft’s survivability and equipped the aircraft with more advanced

munitions. During this time, large portions of the B-1B fleet were at the

depot for extended periods. According to Air Combat Command officials,

active duty B-1B units experienced reduced mission capable rates because

maintaining a normal operating tempo with fewer aircraft required each

aircraft to be flown more frequently and resulted in more wear and tear to

each aircraft. However, the Guard units’ mission capable rates were less

affected. Both Air Combat Command and Guard unit officials agreed that

during this time the higher experience levels of Guard maintenance

personnel and the Guard’s lower operating tempo lessened the impact of

having large portions of the fleet at the depot on the Guard units’ mission

capable rates. The Air Force completed most of these modifications by the

end of fiscal year 2000, and the gap between the active and Guard mission

capable rates narrowed in fiscal year 2001.

According to Air Combat Command officials, the overall shortage of spare

parts experienced by the Air Force during the late 1990s also negatively

affected the active duty B-1B units’ mission capable rates prior to

fiscal year 2001.15 Although increased funding led to an improvement in the

spare parts inventory by fiscal year 1999, it took about 12 to 24 months for

the improvements to be reflected in the units’ reported mission capable

rates according to Air Staff officials. According to Guard officials, Guard

B-1B units were less affected by the shortage of spare parts because their

more experienced maintainers could sometimes repair rather than replace

problematic components.

The Air National Guard’s B-1B pilots and weapon systems officers are

generally more experienced than their active duty counterparts. The

Air Force designates aircrew members as “experienced” based on the total

number of flying hours they have accumulated both overall and in the

B-1B.16 A crewmember’s experience level determines the amount of

 15 According to Air Staff officials, the spare parts shortage affected all aircraft during

1991-2000.

16 The same requirements are applied to both active duty and Guard aircrew members.

Guard B-1B Aircrews

Are Generally More

Experienced Than Their

Active Duty Counterparts
Page 15 GAO-02-846 Force Structure

training (i.e., flying hours and sorties) he or she is required to complete

each year, which, in turn, drives the unit’s overall flying hour program. For

example, units with a higher number of inexperienced aircrew members

would require a higher allocation of flying hours to meet training

requirements each year.

In comparing the Guard and active B-1B aircrew experience levels, we

found that the majority of Air National Guard pilots were designated as

experienced. However, this was not the case for pilots assigned to

active operations squadrons at Dyess and Ellsworth. Table 5 shows the

percentage of experienced pilots by unit location.

Table 5: Active Duty and Air National Guard B-1B Pilot Experience Levels

Unit location

Number

assigned

Number

designated

experienced

Percent

experienced

Active units

Dyess 56 22 39

Ellsworth 66 30 45

Mountain Home 23 12 52

Air National Guard units

McConnell 29 25 86

Robins 33 24 73

Note: Data shown are for operations units only; information for training and test units is excluded. The

three training and test units each were staffed with 100-percent experienced pilots.

Source: Compiled from data provided by the Air Combat Command, the 184th Bomb Wing, and

the116th Bomb Wing.

Many of the Guard pilots also had other flying experience that enhanced

their ability to pilot the B-1B. For example, many had prior active duty

flying experience or flew other aircraft for the Guard. This experience

contributed to the pilots’ overall qualifications, thereby permitting them to

be designated as experienced more quickly than their active duty

counterparts.
Page 16 GAO-02-846 Force Structure

The picture was similar for the B-1B’s weapon systems officers. For

example, more than 80 percent of the Air National Guard’s weapons

system officers were considered experienced, while in the active Air Force

only about 40 percent were considered experienced. Like the Guard pilots,

most of the Guard’s weapon systems officers also had experience flying

other military aircraft that enhanced their ability in the B-1B. Table 6

shows the percentage of experienced weapon systems officers by unit

location.

Table 6: Active Duty and Air National Guard B-1B Weapon Systems Officer

Experience Levels

Unit location

Number

assigned

Number

designated

experienced

Percent

experienced

Active units

Dyess 54 20 37

Ellsworth 61 25 41

Mountain Home 22 10 45

Air National Guard units

McConnell 33 29 88

Robins 31 29 94

Note: Data shown are for operations units only; information for training and test units is excluded. The

three training and test units each were staffed with 100-percent experienced weapon systems

officers.

Source: Compiled from data provided by the Air Force’s Air Combat Command, 184th Bomb Wing,

and 116th Bomb Wing.

The Air Force conducts periodic inspections of each of its operational

units to evaluate the unit’s readiness to perform its wartime mission. The

readiness inspections, conducted by the Air Combat Command Inspector

General staff, are intended to create a realistic environment for evaluating

the units’ sustained performance and contingency response. The bomb

units are evaluated in four major areas: initial response, employment,

mission support, and ability to survive and operate in a hostile

environment. The Guard B-1B units scored as high or higher than did the

active duty units in the most recent readiness inspections. Specifically, the

B-1B bomb units at two active locations (Dyess and Ellsworth) and one

Guard location (McConnell) each received excellent ratings overall in their

most recent inspections. The Inspector General completed an inspection

of Robins’ initial response capabilities in July 2001 and rated the unit as

excellent. However, the Inspector General did not complete its inspection

of the three remaining areas since the Air Force had already decided to

remove the B-1Bs from Robins. Additionally, the Mountain Home wing,

Operational Readiness

Inspections Yielded Similar

Ratings for Active and

Guard B-1B Units
Page 17 GAO-02-846 Force Structure

which includes B-1Bs, had not undergone an operational readiness

inspection at the time of our review.

Major decisions involving force structure need to be supported by solid

analysis to document that a range of alternatives has been considered and

that the decision provides a cost-effective solution consistent with the

national defense strategy. DOD’s Planning, Programming, and Budgeting

process establishes a consultation process for civilian and military leaders

to use in reviewing alternatives to the services’ current force structure.

However, the decision to reduce the B-1B did not fully adhere to this

process because key offices such as the Office of Program Analysis and

Evaluation and the Joint Staff did not have an opportunity to review and

comment on the proposal and conduct analysis before it was approved.

Moreover, although Air Force and OSD officials are comfortable with

the decision, based on their military judgment, neither the Air Force nor

OSD conducted any formal analysis to provide data on how a range of

B-1B force size alternatives would impact DOD’s ability to meet potential

wartime requirements. By following its established budget process more

closely in the future and allowing experts from various offices to review

and analyze force structure proposals, DOD could provide better

assurance to Congress that future force structure decisions are

well-supported and are in the nation’s long-term interest.

In addition, the lack of an established Air Force methodology for assessing

the costs associated with potential basing options led officials to use

incomplete costs when estimating the projected savings for some of the

basing options considered. By focusing solely on flying hour costs for

some basing options, Air Force officials did not consider other operations

and maintenance savings that a reduction in the number of aircraft or the

number of B-1B units would generate. As a result, the Air Force may have

understated the cost savings of the options that retained B-1Bs in both

the Air National Guard and the active components. A more structured

cost estimating methodology would ensure that that the Air Force

considers all appropriate costs in calculating the savings for future

aircraft realignments.

To provide an analytical basis for future aircraft realignment decisions,

we recommend that the Secretary of Defense direct the Secretary of the

Air Force to develop a methodology for assessing and comparing the costs

of active and reserve units so that all potential costs are fully considered

when evaluating potential basing options and making future basing

decisions.

Conclusions

Recommendation for

Executive Action
Page 18 GAO-02-846 Force Structure

In written comments on a draft of this report, DOD did not agree with our

recommendation that the Air Force develop a methodology for assessing

and comparing costs to evaluate basing options because it believes that

such a methodology exists. Furthermore, DOD believes that the Air Force

used a methodology that considered all costs as well as noncost factors

when it made its basing decision and that cost-effectiveness, while an

important criterion, should not be the sole consideration in making basing

decisions. DOD’s comments are included in this report as appendix II.

After we received DOD’s comments, we asked the department to provide

documentation describing its methodology for comparing active and

reserve unit costs. DOD referred us to the instruction that outlines its

Planning, Programming and Budgeting System. This instruction describes

DOD’s process for developing the department’s overall plans and budget;

however, it does not identify a methodology for assessing and comparing

the costs associated with active and reserve units. DOD also noted that the

Air Force’s Total Ownership Cost database encompasses all cost factors

related to active and reserve costs and ensures that any comparison of

active and reserve units is done equitably. During our audit work, we

assessed whether the Total Ownership Cost database could be used to

compare total operations costs for B-1Bs located at Guard and active duty

units. We determined, however, that not all indirect costs for B-1B units in

the Guard were included in the database, making it impossible to compare

the operating costs of Guard and active units equitably. Therefore, we are

retaining our recommendation that the Secretary of Defense direct the

Secretary of the Air Force to develop a methodology.

In commenting on our presentation of flying hour costs, DOD

acknowledged the Guard’s lower flying hour costs, but it stated that

including additional costs would result in more comparable flying hour

costs for Guard and active duty units. DOD suggested using the direct and

indirect costs included in the Air Force’s Total Ownership Cost database

to calculate flying hour costs. In conducting our analysis of flying hour

costs, we relied on the Air Force’s definition. The Air Force defines flying

hour costs as the cost of fuel, depot-level reparables, and consumable

parts divided by the number of hours flown. The Air Force does not

include other costs such as software maintenance costs, contractor

support costs, or military personnel costs when it calculates the cost per

flying hour. DOD is correct when it states that there are other costs

associated with operating a B-1B and our report recognizes that fact.

In commenting on our analysis of active and Guard mission capable rates,

DOD noted that the difference between active and Guard mission capable

Agency Comments

and Our Evaluation
Page 19 GAO-02-846 Force Structure

rates is not solely attributable to the experience level of Guard personnel.

The department also noted that the Guard operates newer model B-1B

aircraft while the active duty units operate older model aircraft and

identified this as a factor contributing to lower active duty rates. While we

recognize that the oldest aircraft in the fleet (1983 and 1984 models) are

concentrated in the active units at Dyess Air Force Base, our analysis

shows that those aircraft constitute only about one-third (33 percent) of

Dyess’ fleet and only about one-fifth (or 20 percent) of the active B-1B

fleet overall. Active units at Ellsworth and Mountain Home operate newer

1985 and 1986 model aircraft—the same models as those operated by the

two Guard units. While aircraft age may have some effect on mission

capable rates, we do not believe, based on our analysis, that this effect is

significant for the B-1B force.

We are sending copies of this report to the Secretary of Defense, the

Secretary of the Air Force, and interested congressional committees.

We will also make copies available to others on request. In addition,

the report will be available at no charge on the GAO Web site at

http://www.gao.gov.

If you or your staff have any questions on this report or wish to discuss

these matters further, please call me on 202-512-4300. Key contacts and

staff acknowledgments are listed in appendix III.

Sincerely yours,

Henry L. Hinton, Jr.

Managing Director, Defense Capabilities and Management
Appendix I: Scope and Methodology

Page 20 GAO-02-846 Force Structure

To determine what types of analyses the Department of Defense (DOD)

and the Air Force did of wartime requirements and basing options before

deciding on the number of aircraft to retain and where to base them, we

obtained and analyzed the only contemporaneous documents that were

available from the Air Force—a briefing presented to the Secretary and the

Chief of Staff of the Air Force on the fleet reduction and consolidation and

a memorandum from the Secretary of the Air Force to the Under Secretary

of Defense (Comptroller) outlining the Air Force’s proposal to reduce

and consolidate the fleet. Additionally, because the Air Force had no

documents explaining its methodology for evaluating the various basing

options it considered, we asked the Air Force, in early 2002, to document

its methodology. The Air Force provided us with a statement explaining

the methodology; however, it was unable to provide us with the cost

figures used to estimate the savings. As a result, we could not verify the

savings estimates that the Air Force attributed to each option.

To supplement our document review, we interviewed several Air Force

officials who were located in the Washington, D.C., area to determine

what role each may have played in the decision to reduce the fleet and

consolidate it at two bases. The officials were the Chief of Staff, U.S.

Air Force; the Deputy Chief of Staff, Plans and Programs, U.S. Air Force;

the former Director of the Air National Guard; and the Assistant for

Operational Readiness, Air National Guard. We also spoke with officials

responsible for overseeing the B-1B program in the Office of the Deputy

Chief of Staff, Air and Space Operations, U.S. Air Force, Washington, D.C,

to determine if any analysis of current and future wartime requirements

had been completed prior to the decision. We also had numerous meetings

with officials in the Office of the Deputy Chief of Staff, Plans and

Programs, who were responsible for developing the basing options and

estimating the savings that would result for each option to discuss their

methodology and the decision process. We also met with representatives

of the Air Combat Command at Langley Air Force Base, Virginia, to

determine if they had any role in the decision to either reduce the number

of B-1Bs or consolidate them at two active duty bases. Finally, we met

with representatives of the Under Secretary of Defense (Comptroller); the

Director, Program, Analysis, and Evaluation; and the Joint Staff to

determine if they had completed any analysis of the Office of Secretary of

Defense suggestion to eliminate the B-1B fleet or the Air Force’s proposal

to reduce the fleet. In addition, we reviewed the 1999 and 2001 Air Force

bomber white papers and the 2001 Quadrennial Defense Review to gather

insight on current and future B-1B wartime requirements and copies of

congressional testimonies by the Secretary of Defense, the Deputy

Secretary of Defense, the Secretary of the Air Force, and the Chief of

Appendix I: Scope and Methodology
Appendix I: Scope and Methodology

Page 21 GAO-02-846 Force Structure

Staff of the Air Force to document DOD’s rationale for making the

B-1B decision.

To compare the flying hour costs and the capabilities of the various

active and Air National Guard B-1B units, we collected and analyzed

flying hour cost data for fiscal years 1999-2001 from the five B-1B units.

To verify the data from these sources, we collected and analyzed cost data

for the same years from the Air Combat Command; the Air Force

Cost Analysis Agency, Washington, D.C.; and the Directorate of Logistics,

Air National Guard, Andrews Air Force Base, Maryland. We also collected

and analyzed (1) mission capable rate data for fiscal years 1999-2001 from

the Air Combat Command and the two Guard units and (2) collected and

analyzed data on aircrew and maintenance crew experience from the

Air Combat Command and the Air National Guard Bureau. To determine if

there were significant differences in active and Guard units’ wartime

missions, we reviewed the wartime taskings of all five B-1B units. To

compare the units’ participation in peacetime activities, we reviewed

documents provided by officials at the Air Expeditionary Force Center,

Langley Air Force Base, Virginia. We reviewed and compared the

operational readiness inspections for the bomb wings located at Dyess,

Ellsworth, and McConnell Air Force Bases and the partial operational

readiness inspection for the bomb wing at Robins Air Force Base. The

Inspector General staff completed an inspection of Robins’ initial response

capabilities in July 2001 but did not complete its inspection of the three

remaining areas since the Air Force had already decided to remove the

B-1Bs from Robins. The wing at Mountain Home had not undergone an

operational readiness inspection at the time we completed our review. Our

work also included visits to three B-1B units to interview officials and

obtain documents: 184th Bomb Wing, McConnell Air Force Base, Kansas;

7th Bomb Wing, Dyess Air Force Base, Texas; and 116th Bomb Wing,

Robins Air Force Base, Georgia.
Appendix II: Comments from the Department

of Defense

Page 22 GAO-02-846 Force Structure

Appendix II: Comments from the Department

of Defense
Appendix II: Comments from the Department

of Defense

Page 23 GAO-02-846 Force Structure
Appendix II: Comments from the Department

of Defense

Page 24 GAO-02-846 Force Structure
Page 25 GAO-02-846 Force Structure

Janet St. Laurent (202) 512-4402

Carole Coffey (202) 512-5876

In addition to those named above, Sharron Candon, Judith Collins,

Penney Harwell, Jane Hunt, Ken Patton, and Carol Schuster made key

contributions to this report.

Appendix III: GAO Contacts and Staff

Acknowledgments

GAO Contacts

Acknowledgments
Page 26 GAO-02-846 Force Structure

Air Force Bombers: Moving More B-1s to the Reserves Could Save

Millions without Reducing Mission Capability. GAO/NSIAD-98-64.

Washington, D.C.: February 26, 1998.

Air Force Bombers: Options to Retire or Restructure the Force Would

Reduce Planned Spending. GAO/NSIAD-96-192. Washington, D.C.:

September 30, 1996.

Embedded Computers: B-1B Computers Must Be Upgraded to

Support Conventional Requirements. GAO/AIMD-96-28. Washington, D.C.:

February 27, 1996.

B-1B Conventional Upgrades. GAO/NSIAD-96-52R. Washington, D.C.:

December 4, 1995.

B-1B Bomber: Evaluation of Air Force Report on B-1B Operational

Readiness Assessment. GAO/NSIAD-95-151. Washington, D.C.:

July 18, 1995.

Air Force: Assessment of DOD’s Report on Plan and Capabilities for

Evaluating Heavy Bombers. GAO/NSIAD-94-99. Washington, D.C.:

January 10, 1994.

Strategic Bombers: Issues Relating to the B-1B’s Availability and Ability

to Perform Conventional Missions. GAO/NSIAD-94-81. Washington, D.C.:

January 10, 1994.

The U.S. Nuclear Triad: GAO’s Evaluation of the Strategic

Modernization Program. GAO/T-PEMD-93-5. Washington, D.C.:

June 10, 1993.

Strategic Bombers: Adding Conventional Capabilities Will Be Complex,

Time-Consuming, and Costly. GAO/NSIAD-93-45. Washington, D.C.:

February 5, 1993.

Strategic Bombers: Need to Redefine Requirements for B-1B Defensive

Avionics System. GAO/NSIAD-92-272. Washington, D.C.: July 17, 1992.

Related GAO Products
Page 27 GAO-02-846 Force Structure

Strategic Bombers: Updated Status of the B-1B Recovery Program.

GAO/NSIAD-91-189. Washington, D.C.: May 9, 1991.

Strategic Bombers: Issues Related to the B-1B Aircraft Program.

GAO/T-NSIAD-91-11. Washington, D.C.: March 6, 1991.

(350117)
Page 28 GAO-02-846 Force Structure

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