United States General Accounting Office

GAO Report to the Secretary of Defense

February 1997 WEAPONS

ACQUISITION

Better Use of Limited

DOD Acquisition

Funding Would Reduce

Costs

GAO/NSIAD-97-23

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-272633 

February 13, 1997

The Honorable William S. Cohen

The Secretary of Defense

Dear Mr. Secretary:

In response to congressional concerns about the way that the Department

of Defense (DOD) buys weapons, we reviewed (1) DOD’s practice of

reducing the annual production of weapons below planned optimum rates

during full-rate production, (2) the reasons for this practice, and (3) the

effect of this practice on the costs and availability of weapons. In addition,

we looked into the benefits of changing DOD’s current practice.

Background The fiscal year 1997 DOD procurement appropriation is $43.8 billion, a

reduction of over 67 percent from the $134.3 billion (in constant fiscal year

1997 dollars) appropriated in 1985. Many weapon acquisitions have been

affected by this decline in the procurement budget. DOD’s primary response

to the reduced budget has been to reduce annual procurement quantities

of weapons in full-rate production and extend their production schedules.

DOD buys new weapons in two phases: low-rate initial production (LRIP)

and full-rate production. When in LRIP, according to 10 U.S.C. 2400, DOD is

to buy minimum quantities of a new weapon. This legislation resulted from

concern in the Congress about the large quantities of weapons units

bought before adequate testing. The purpose of LRIP is to (1) provide

weapons for operational test and evaluation, (2) establish an initial

production base for the weapon, and (3) permit an orderly increase in

production before full-rate production begins. Operational test and

evaluation is key to ensuring that a weapon’s capabilities operate as

designed before full-rate production begins. At this time, field tests are

done to demonstrate the weapon’s effectiveness and suitability for military

use. After the weapon’s design has stabilized and the weapon’s capabilities

are proven, the services enter full-rate production to begin buying proven

weapons in economic quantities. In practice, DOD views low-rate

production as any production prior to completion of initial operational

tests and full-rate production as the production that follows these tests,

with the terms low rate and full rate having little or no relevance to the

annual quantity bought.

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We reviewed 6 weapons in LRIP and 22 weapons in full-rate production.

(See app. I for a list of the weapons.) The 22 weapons in full-rate

production represent those that in fiscal year 1996 had substantial ongoing

production lines. The six low-rate production weapons were ones in

production in fiscal year 1996 with substantial planned follow-on full-rate

production quantities. For the six weapons in low-rate production, we

looked for increases in production rates before operational tests were

completed and decreases in the planned future full production rates. For

the 22 weapons in full-rate production, we compared DOD’s planned

optimal production rates, costs, and schedules to that of actual full-rate

production through fiscal year 1996 (see app. II).

Results in Brief DOD has inappropriately placed a high priority on buying large numbers of

untested weapons during LRIP to ensure commitment to new programs and

thus has had to cut by more than half its planned full production rates for

many weapons that have already been tested. This practice is wasteful

because DOD must often modify, at high cost, the large numbers of

untested weapons it has bought before they are usable and must lower

annual buys of tested, proven weapons; stretching out full-rate production

for years due to a lack of funds. We have repeatedly reported on DOD’s

practice of procuring substantial inventories of unsatisfactory weapons

requiring costly modifications to achieve satisfactory performance and, in

some cases, deployment of substandard weapons to combat forces. As

examples, the Air Force’s C-17 airlift aircraft, the Navy’s T45A trainer

aircraft, and the Army’s Family of Medium Tactical Vehicles encountered

problems during test and evaluation that required major changes after

significant quantities were bought during low-rate production.

We found the practice of reducing planned full production rates to be

widespread. Primarily because of funding limitations, DOD has reduced the

annual full-rate production for 17 of the 22 proven weapons reviewed,

stretching out the completion of the weapons’ production an average of 

8 years longer than planned. According to DOD’s records, if these weapons

were produced at their originally planned rates and respective cost

estimates, the quantities produced as of the end of fiscal year 1996 would

have cost nearly $10 billion less. At the same time, DOD is funding

increased annual quantities of weapons in low-rate production that often

are in excess of what is needed to perform operational tests and establish

the production base.

Page 2 GAO/NSIAD-97-23 Weapons Acquisition
B-272633 

If DOD bought untested weapons during LRIP at minimum rates, more funds

would be available to buy other proven weapons in full-rate production at

more efficient rates and at lower costs. Also, this would reduce costly

modifications to fix substandard weapons bought in low-rate production

and allow full-rate production of weapons with demonstrated performance

to be completed and deployed to combat forces earlier.

DOD Often Decreases

Production Rates of

Proven Weapons

It is not uncommon for DOD to reduce the annual production quantities of

proven weapons, stretching out full-rate production schedules for years.

For 17 of the 22 proven weapons we reviewed, the actual production rates

were 57 percent lower than originally planned. Decreased rates vary from

10 percent for the E-2C Hawkeye to 88 percent for the Standard missile

system. For 12 of these weapons with reduced rates during full-rate

production, program officials cited insufficient funding as a contributing

reason for lower rates, and therefore stretching out production. As a result

of reduced rates, production of the 17 weapons will take an average of

over 8 years, or 170 percent, longer to complete than originally planned.

The number of years the 17 weapons’ production schedules have been

stretched out ranges from 1 year for the Avenger to 43 years for the Black

Hawk helicopter based on current production rates. (See app. III for the

reduced production rates on each of these weapons.) Examples of proven

weapons with reduced annual production rates follow:

• At the extreme for slowed production is the Army’s Black Hawk

helicopter. If the Army continues to buy the Black Hawk at the current

rate, full-rate production will take almost 54 years to complete, about 

43 years longer than originally planned.

• The Navy’s production of the Tomahawk missile was to be completed in 

9 years or by 1992, but instead it will take 15 years or until 1998, a

67-percent schedule increase. Originally, the Navy’s planned procurement

rate was 600 Tomahawks annually; instead, it has averaged 276 missiles a

year, a decrease of over 50 percent from the planned production rate.

Extended Schedules

Result in Higher

Acquisition Costs

Because of their reduced annual production rates and stretched out

schedules, the acquisition of the 17 weapons we reviewed in full-rate

production has cost nearly $10 billion more, through fiscal year 1996, than

the program offices estimated based on their original planned production

rates. Since 14 of the 17 weapons will still be in production beyond fiscal

year 1996, the total increased cost at completion of these weapons could

be significantly more than $10 billion. When the annual production

Page 3 GAO/NSIAD-97-23 Weapons Acquisition
B-272633 

quantity of a weapon is reduced, its unit cost generally increases because

fixed costs are spread over a smaller quantity. This was the case for 14 of

the 17 weapons we reviewed that had reduced production rates (see 

app. II).1

 For example, the Navy planned to produce 48 T45 training

aircraft annually at a unit cost of $8.7 million. Instead, an average of 12

T45s has been produced annually since full-rate production began in 1994,

at a unit cost of $18.2 million. For the quantity produced in full-rate

production through fiscal year 1996, T45 costs have increased from the

original estimate by $345 million.

When weapon systems are funded at their planned full production rates or

higher, the unit cost of the weapon generally decreases, as illustrated in

the following examples:

• The Army’s program office increased the quantities of its Global

Positioning System (with an original planned annual rate of 14,000) from

11,000 to 18,500 during 4 years of full-rate production. As a result, the unit

cost of the system decreased from $1,400 to $1,076.

• If annual production were increased, the Army could save up to an

estimated $491 million on the remaining 109 Kiowa Warrior helicopters it

needs to finish full-rate production. For each of the last 3 years, the

program office has procured an average of 16 units a year at a unit cost of

$10.22 million.2

 According to Kiowa program officials, the most efficient

annual production rate of 72 helicopters would reduce unit cost to

$5.72 million.

Making Large

Investments in

Untested Weapons

Increases Cost and

Performance Risks

The practice of allocating funds during low-rate production to increase

annual production quantities before successful completion of initial

operational test and evaluation has frequently been wasteful. As we

reported in November 1994, the consequences of buying large quantities of

untested weapons are increased acquisition costs, the accumulation of

unsatisfactory weapons that require costly modifications to meet

performance requirements and, in some cases, the deployment of

substandard weapons to combat forces.3

 That report contained 

12 illustrative examples describing the problems experienced when the

1

The three remaining weapons had lower unit costs for reasons not tied directly to the production rate.

If these weapons were procured at their planned rates, additional acquisition cost savings could be

realized.

2

This is the unit cost for fiscal year 1995, the last year actual cost data were available on the helicopter.

This figure applies only to remanufactured vehicles.

3

Weapons Acquisition: Low-Rate Initial Production Used to Buy Weapon Systems Prematurely

(GAO/NSIAD-95-18, Nov. 21, 1994).

Page 4 GAO/NSIAD-97-23 Weapons Acquisition
B-272633 

weapons were tested, the major fixes required after significant quantities

were bought and, in many cases, the deployment of substandard weapons

to combat forces. (Those 12 examples are included in appendix IV of this

report.) In one case, before the Army did any operational test and

evaluation, a multiyear production contract was awarded for up to 10,843

trucks. Operational testing was suspended 2 months after it began because

the trucks were found to be unreliable and therefore not operationally

effective. Production continued while the contractor modified the truck

design to correct deficiencies. By the time the trucks passed operational

testing, over 2,000 trucks were produced, the majority of which required

extensive remanufacturing to correct the deficiencies.

Most program offices developed an acquisition strategy for both low-rate

and full-rate production based on optimistic projections of available

funding. As a result, the offices tended to over program the number of

weapons that can be bought with the dollars available in DOD’s spending

plan. As we have previously reported, the use of optimistic planning

assumptions has led to program instability, costly program stretch-outs,

and program terminations.4

 Current DOD acquisition guidelines permit

increasingly higher quantities of weapons in low-rate production to

provide for the orderly transition to full-rate production. In addition, DOD’s

acquisition culture encourages this practice to solidify organizational

commitment to keep weapon acquisition programs moving and to protect

them from interruption.5

 In this regard, within DOD’s acquisition culture, a

weapon’s acquisition manager’s success depends on getting results, and in

acquisitions, results mean getting the weapon into production and into the

field.

The trend to reduce the full production rates from the original plans

because of limited funds and to produce more quantities than are needed

for testing during low-rate production increases procurement costs. For

example, DOD increased the annual low-rate production of the Army’s

untested Longbow Hellfire Missile in fiscal years 1995, 1996, and 1997 from

0 to 352, and 1,040, respectively; while the Navy reduced full-rate

production of the Standard missile system for those fiscal years from 202,

to 64, and 127, respectively. Between fiscal years 1995 and 1997, low-rate

production funding for the Longbow was increased from $41.2 million to

$249.5 million while the full-rate funding for the Standard missile was

reduced from $240.4 million to $197.5 million. The Navy originally planned

4

Future Years Defense Program: Optimistic Estimates Lead to Billions in Overprogramming

(GAO/NSIAD-94-210, July 29, 1994).

5

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

Page 5 GAO/NSIAD-97-23 Weapons Acquisition
B-272633 

to produce 2,160 Standard missiles a year during full-rate production over

a period of 4 years. Instead, the Navy has averaged only 266 missiles a year

and at that rate it will take 21 years to complete production, 17 years

longer than planned, and at a cost of $286 million more than estimated at

the originally planned rate.

Many times, the services steadily increased the annual LRIP quantities,

exceeding the number ultimately needed to complete operational tests and

prove out the production line. The increase in annual quantities of

weapons produced during low-rate production resulted in a substantial

reduction of funds available for the production of proven weapons at

planned rates. By minimizing the quantities of weapons procured during

LRIP, DOD can reduce the risk associated with producing untested weapons

and increase the funding available to produce other proven systems in

full-rate production at planned rates, lowering their unit cost.

For eight of the weapons we reviewed, the services’ procurement rates

during LRIP were equal to or more than they were during full-rate

production. For example, the program office for the advanced medium

range air-to-air missile increased the quantities produced during low-rate

production to 900 units annually. However, since 1992, when it completed

operational tests and entered full-rate production, the missile has been

produced at an annual rate of 900 or more only twice. In fact, from fiscal

years 1997 to 2007, the program office plans to procure an average of only

338 units a year. Table 1 shows the remaining seven weapons with

low-rate production quantities equal to or higher than full-rate quantities.

Page 6 GAO/NSIAD-97-23 Weapons Acquisition
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Table 1: Systems With Low-Rate

Production Equal to or Higher Than

Full-Rate Quantities

Quantity in last 

2 low-rate years

Quantity in first 

2 full-rate years

Full-rate

production

quantity in

fiscal year

1996

System

Black Hawk 92 94 80 96 60

Commander’s tactical

terminal

33 58 51 51 0a

Improved recovery vehicle 15 24 12 12 0a

JSTARS ground station 16 20 20 19 0a

Multiple launch rocket

system launcher

68 72 76 44 0b

Rolling airframe missile 250 250 180 240 200

T45 trainer aircraft 12 12 12 12 12

aSystem is still currently in low-rate production. Full-rate quantities shown are current planned

rates occurring beyond fiscal year 1996.

bFiscal year 1995 was the last year with production quantities for this system.

DOD continues to generate optimistic full-rate production plans that are

rarely achieved. One example where this situation could occur and where

planned increases in low-rate production quantities may be unnecessary is

the Navy’s F/A-18E/F system. The Navy plans to procure 72 F/A-18E/F

aircraft over 3 years during LRIP—12 in 1997, 24 in 1998, and 36 in 1999 and

then procure 72 each year during peak full-rate production years.

However, the Congress has questioned the affordability of this full

production rate and has directed DOD to calculate costs based on estimates

of 18, 24, and 36 aircraft a year.6

 In addition, the conferees on the Omnibus

Consolidated Appropriations Act for Fiscal Year 1997 asked for

calculations based on 48 aircraft a year.7

 The increased quantities

procured during low-rate production are not necessary to transition to

full-rate production, especially if the number of aircraft procured during

full-rate production drops significantly. Even if the Navy buys the aircraft

at the rate originally planned, production rate increases to reach peak full

rates could occur after the system has been operationally tested, rather

than before. The same optimistic planning is reflected in the Air Force’s

F-22 program. The Air Force plans to contract for F-22 aircraft under four

low-rate buys of 4, 12, 24, and 36 aircraft for a total of 76 aircraft at an

6

National Defense Authorization Act for Fiscal Year 1997, Public Law 104-201, Section 219.

7

H.R. Report (Conference) No. 104-863, 104th Congress, 2nd Session (1996) at 897, on Making Omnibus

Consolidated Appropriations for Fiscal Year 1997.

Page 7 GAO/NSIAD-97-23 Weapons Acquisition
B-272633 

estimated cost of nearly $11 billion prior to completing initial operational

test and evaluation and entering full-rate production at 48 aircraft a year.

Conclusions During LRIP, DOD is supposed to restrict the number of weapons produced

to the minimum quantity necessary to conduct operational testing,

establish the initial production base, and allow for an orderly increase into

full-rate production. However, because DOD often budgets available

funding for unnecessary increases in low-rate production quantities of

unproven weapons, it rarely is able to buy proven weapons at originally

planned full-rates. When funding is insufficient to produce proven

weapons in full-rate production at optimum levels and therefore to

complete programs in a timely manner, it is not cost-effective to use

limited funds to unnecessarily increase production of untested weapons

whose designs are not yet stabilized. This wasteful practice could be

minimized by shifting increases in annual production rates from the

low-rate production phase to the beginning of full-rate production.

Recommendations We recommend that the Secretary of Defense revise DOD’s weapon

acquisition policies to require that (1) annual quantities of weapons

bought during LRIP be limited to the minimum necessary to complete initial

operational test and evaluation and prove the production line and (2) rates

and quantities not be increased during low-rate production to ease the

transition into full-rate production unless DOD clearly establishes that the

increase is critical to achieving efficient, realistic, and affordable full

production rates and can be accomplished without affecting the efficient

production of proven systems.

We also recommend that the Secretary of Defense direct the Under

Secretary of Defense for Acquisition and Technology and the Under

Secretary of Defense (Comptroller and Chief Financial Officer) to submit

future budgets that place priority on funding the efficient production of

weapons in full-rate production.

Agency Comments

and Our Evaluation

In commenting on a draft of this report, DOD agreed with the principle that

premature commitment to LRIP is unwise and that LRIP should not be used

to buy equipment that is known not to work. DOD believes the existing

policy as set forth in the requirements of 10 U.S.C. 2400 (enacted in

1995) and DOD Directive 5000.2-R (issued in 1996) adequately provides an

acquisition structure that allows DOD to focus on minimizing LRIP

Page 8 GAO/NSIAD-97-23 Weapons Acquisition
B-272633 

quantities, while providing the flexibility to maintain an adequate

industrial base capability (e.g. ramp-up) to meet the interest of national

security. DOD also stated that it makes every effort to fund full-rate

production programs to the maximum extent possible within funding

availability, changing priorities, and program realities.

Concerning our recommendations, DOD commented that (1) its current

acquisition policies fully comply with the intent of the policy proposal to

minimize the quantities produced under LRIP, (2) increasing production

rates (ramping-up) during LRIP allows the contractor to hire and train his

production team and maintain a production workforce while operational

testing is being conducted, and (3) it makes every effort to fund full-rate

production programs but fiscal realities driven by a fluid environment is a

serious challenge that will continue to impact the stability of major

defense acquisition program production rates and quantities.

Although efforts have been made in the last year to reduce the quantities

bought under LRIP, our review indicates that DOD is still buying more than

the minimum quantities needed. By allowing the ramp-up of quantities

under LRIP to hire, train, and maintain a workforce to produce a still

unproven product, funding is diverted from contractors producing proven

products and their workforce by reducing their production rates and

quantities.

DOD’s comments have not addressed (1) the negative effect of the current

approach on the industrial base, (2) the cost implications, and (3) the

delayed deployment of proven weapons. Cost implications include the

added funding that will be needed to correct the problems in products

produced before operational testing is completed and the increased costs

from stretching out the production run of proven products. Stretched

production schedules can also undermine national security interests by

delaying deployment of needed proven systems to field units.

If the LRIP rate “ramp-up” was delayed until after the completion of

operational test, initial quantities of unproven systems would be reduced

and additional funding would become available to buy the proven systems

at more efficient rates. Although there are many reasons why weapon

quantities and funding for full-rate production should be changed (such as

changes in threats and technology), as long as the existing requirement

remains valid, we believe priority should be given to funding the already

tested, less risky full-rate systems at the most efficient rate possible.

Page 9 GAO/NSIAD-97-23 Weapons Acquisition
B-272633 

DOD’s comments are presented in their entirety in appendix V.

Scope and

Methodology

To quantify the number of weapons being bought below their planned full

production rates, we screened the line items contained in the

February 1995 Procurement Programs document. We determined that

88 percent of the budget for fiscal year 1996 was concentrated into 300 line

items. We then reviewed the 300 line items, primarily using budget back-up

books’ documentation, to determine which of those items were being

bought on an annual repetitive production basis, which is more conducive

to increased rate production. We narrowed our universe to 83 line items,

or 80 weapons, by excluding line items that were multiple procurement

items such as spares, modification programs if the work was being done at

a depot, advance procurements, commercial products, and items that did

not have a repetitive annual production profile, such as a single one-time

procurement.

As we obtained additional program-specific data on the 80 weapons, we

determined that an additional 52 weapons should be excluded based on

the original criteria. Thus, our final universe was 22 weapons in full-rate

production and 6 weapons in LRIP with a total cost of about $6.5 billion in

fiscal year 1996 procurement funds. We collected cost and schedule data

for all 28 weapons through interviews and documents from program

officials for each weapon, service- and DOD-level acquisition officials, a DOD

Comptroller office official, and a defense contractor. We did our review

primarily at the individual program offices responsible for procuring the

weapons.

We performed our review from August 1995 through November 1996 in

accordance with generally accepted government auditing standards.

This report contains recommendations to you. The head of a federal

agency is required under 31 U.S.C. 720 to submit a written statement on

actions taken on our recommendations to the Senate Committee on

Governmental Affairs and the House Committee on Government Reform

and Oversight no later than 60 days after the date of the report. A written

statement must also be submitted to the Senate and House Committees on

Appropriations with an agency’s first request for appropriations made

more than 60 days after the date of the report.

Page 10 GAO/NSIAD-97-23 Weapons Acquisition
B-272633 

We are sending copies of this report to appropriate congressional

committees and the Secretaries of the Army, the Navy, and the Air Force.

We will also make copies available to others on request.

Please contact me at (202) 512-4841 if you or your staff have any questions

concerning this report. Major contributors to this report are listed in

appendix VI.

Sincerely yours,

Louis J. Rodrigues

Director, Defense Acquisitions Issues

Page 11 GAO/NSIAD-97-23 Weapons Acquisition
Contents

Letter 1

Appendix I 

Weapon Systems

Reviewed by Location

14

Appendix II 

Full-Rate Production

Systems Procured

Below Original

Planned Production

Rates

16

Appendix III 

Full-Rate Production

Systems Procured

Slower Than

Originally Planned

17

Appendix IV 

Excerpt From Prior

GAO Report

18

Appendix V 

Comments From the

Department of

Defense

20

Appendix VI 

Major Contributors to

This Report

26

Page 12 GAO/NSIAD-97-23 Weapons Acquisition
Contents

Table Table 1: Systems With Low-Rate Production Equal to or Higher

Than Full-Rate Quantities

7

Abbreviations

AGM air-to-ground missile

AMRAAM advanced medium range air-to-air missile

ATACMS Army Tactical Missile System

DOD Department of Defense

DOT&E developmental operational test and evaluation

FAAD Forward Area Air Defense

GBS Ground Based Sensor

GPS Global Positioning System

GMLS Guided Missile Launch System

LRIP low-rate initial production

MLRS Multiple Launch Rocket System

OT&E operational test and evaluation

RAM rolling airframe missile

Page 13 GAO/NSIAD-97-23 Weapons Acquisition
Appendix I 

Weapon Systems Reviewed by Location

Aviation and Troop

Command, Mo.

Black Hawk

Kiowa Warrior

Apache Longbow

Fort Monmouth, N.J. JSTARS ground stationa

Commander’s Tactical Terminala

Global Positioning System (GPS) user equipment

Single Channel Ground and Airborne Radio System

Frequency hopping multiplexor

Redstone Arsenal, Ala. Avenger

Multiple Launch Rocket System (MLRS) launcher

Army Tactical Missile System (ATACMS)

Stinger modification program

Forward Area Air Defense (FAAD)/Ground Based Sensor (GBS)

Longbow Hellfire missilea

Eglin Air Force Base, Fla. Advanced medium range air-to-air missile (AMRAAM)

Air-to-ground missile (AGM)-130a

Sensor fuzed weapon

Warner Robins Air Force

Base, Ga.

R-11 fuel truck

Tank and Automotive

Command, Mich.

Improved Recovery Vehiclea

Wright-Patterson Air Force

Base, Ohio

C-17a

Page 14 GAO/NSIAD-97-23 Weapons Acquisition
Appendix I 

Weapon Systems Reviewed by Location

Naval Sea Systems

Command, Va.

Standard missile

Rolling airframe missile (RAM)

RAM Guided Missile Launch System (GMLS)

Naval Air Systems

Command, Va.

F/A-18C/D

E-2C Hawkeye

T45 training system

Tomahawk

Strategic Systems

Programs, Va.

Trident II missile

aDenotes system in low-rate initial production (LRIP). All others are in full-rate production (FRP).

Page 15 GAO/NSIAD-97-23 Weapons Acquisition
Appendix II 

Full-Rate Production Systems Procured

Below Original Planned Production Rates

Annual full production rate Unit flyaway costa

Dollars in millions

Army Planned

Current

average

Percent

below Planned

Average

to date

Units to

dateb

Increased

cost to datec

ATACMS Block 1 470.0 190.0 55.2 $0.465 $0.642 1477.0 $261.4

Avenger 144.0 105.2 26.9 0.674 1.140 721.0 336.0

Black Hawk 165.0 60.0 63.6 3.685 6.022 1193.0 2,788.0

FAAD GBS 31.0 17.5 43.5 2.634 2.300 24.0 0

Kiowa Warrior 120.0 36.0 70.0 3.106 5.235 366.0 779.2

MLRS launcher 76.0 47.5 37.5 7.787 8.143 570.0 202.9

Stinger modifications 2593.0 650.0 74.9 0.006 0.013 1850.0 13.0

Total $4,380.5

Air Force

AMRAAM 3000.0 484.4 83.9 $0.360 $0.596 4038.0 $953.0

Sensor fuzed weapon 2150.0 500.0 76.7 0.152 0.310 500.0 79.0

Total $1,032.0

Navy

E-2C 4.0 3.6 10.0 $64.318 $65.229 7.0 $6.4

F/A-18C/D 74.8 55.6 25.7 18.841 24.859 612.0 3,683.0

RAM 900.0 240.0 73.3 0.137 0.285 620.0 91.8

RAM GMLS 12.0 8.0 33.3 4.900 6.021 29.0 32.5

Standard missile 2160.0 266.0 87.7 0.486 0.556 4087.0 286.1

T45TS 48.0 12.0 75.0 8.652 18.233 36.0 344.9

Tomahawk 600.0 275.5 54.1 1.808 1.624 3913.0 0

Trident II missile 72.0 22.8 68.3 32.426 16.283 343.0 0

Total $4,444.7

Average 56.7

Total cost $9,857.2

aIn constant fiscal year 1996 dollars.

bDoes not include foreign military sales.

cDespite being procured at rates lower than planned, unit costs for the FAAD GBS and

Tomahawk systems decreased as a result of cost-reduction initiatives, which reduced the

production cost. Likewise, the Trident II missile reduced its procurement rate for industrial base

preservation and affordability reasons, yet it still had lower production costs. If these systems

could be produced at their planned rates, unit costs could be even lower.

Page 16 GAO/NSIAD-97-23 Weapons Acquisition
Appendix III 

Full-Rate Production Systems Procured

Slower Than Originally Planned

Army

Years to

complete

planned

schedule

Years to

complete

current

schedule

Years over

planned

schedule

Percent

longer

ATACMS Block 1 4.0 6.0 2.0 50.0

Avenger 7.0 8.0 1.0 14.3

Black Hawk 11.0 53.6 42.6 387.3

FAAD GBS 4.0 6.0 2.0 50.0

Kiowa Warrior 6.0 15.0 9.0 150.0

MLRS launcher 7.5 12.0 4.5 60.0

Stinger modifications 5.0 11.0 6.0 120.0

Air Force

AMRAAM 3.0 16.0 13.0 433.3

Sensor fuzed weapon 3.0 10.0 7.0 233.3

Navy

E-2C 9.0 10.0 1.0 11.1

F/A-18C/D 8.0 11.0 3.0 37.5

RAM 1.0 4.0 3.0 300.0

RAM GMLS 5.1 8.0 2.9 56.9

Standard missile 4.0 21.0 17.0 425.0

T45TS 2.4 10.0 7.6 316.7

Tomahawk 9.0 15.0 6.0 66.7

Trident II missile 7.0 19.0 12.0 171.4

Average 8.2 169.6

Page 17 GAO/NSIAD-97-23 Weapons Acquisition
Appendix IV 

Excerpt From Prior GAO Report

System

Program

category

Inadequate

system

deployed to

field

Percent

procured

in LRIP Comments

Air Force C-17 Aircraft Major To be

determined

33 The C-17’s reliability is significantly less than

expected, and the system cannot meet current

payload/range specifications. Also, while known

problems with the wings, flaps, and slats are being

fixed, other problems continue to emerge.

(GAO/T-NSIAD-94-166, Apr. 19, 1994).

Air Force AN/ALR-56C

Radar Warning Receiver

Nonmajor Yes 8a Despite the poor operational, test, and evaluation

(OT&E) results, the Air Force continued full-rate

production and had acquired about 750 systems at a

cost of over $570 million, as discussed in a classified

GAO report.

Air Force AN/ALQ-135

Quick Reaction Capability

Jammer

Nonmajor Yes 100 All 65 systems were produced under LRIP at a cost of

$256 million, before any OT&E was conducted.

Because of performance problems, most of the

jammers were placed in storage and only 24 were

installed on aircraft. One year later, the 24 jammers

were deactivated because of poor performance.

(GAO/NSIAD-90-168, July 11, 1990).

Air Force AN/ALQ-135

Improved Jammer

Nonmajor Yes 64b Through 1993, 331 of the 514 planned units were

acquired under LRIP. However, the system has

encountered significant software problems, which

have delayed completion of development testing by

about 2 years. OT&E has not yet started.

Air Force AN/ALQ-131

Block II Jammer

Nonmajor Yes 100 After the Air Force bought most of the total quantity of

units under LRIP, tests found serious performance

problems. As a result, the system was deployed with

the receiver/processor inoperative due to a lack of

software. Other deficiencies were also present.

(GAO/NSIAD-90-168, July 11, 1990).

Air Force AN/USM-464

Electronic Warfare Test Set

Nonmajor Yes 100 Before the Air Force conducted OT&E, 72 test sets

were procured under LRIP at a cost of $272 million.

Later testing showed that the equipment would not

meet requirements, and the units were put in storage.

Air Force AN/ALQ-184

Jammer

Nonmajor Yes 8c Developmental, operational, test, and evaluation

(DOT&E) recommended that jammers production be

stopped because of poor OT&E results. However, the

system had already entered and continued full-rate

production anyway. We later found that most of the 24

jammers deployed to a tactical fighter wing had been

placed in storage. (GAO/NSIAD-90-168, July 11, 1990).

Navy F-14D Aircraft Major Yes 100 OT&E showed that the F-14D was not sufficiently

developed and lacked critical hardware and software

capabilities. The program was terminated after 55 units

were produced. (GAO/IMTEC-92-21, Apr. 2, 1992).

(continued)

Page 18 GAO/NSIAD-97-23 Weapons Acquisition
Appendix IV 

Excerpt From Prior GAO Report

System

Program

category

Inadequate

system

deployed to

field

Percent

procured

in LRIP Comments

Navy T-45A Aircraft Major Yes 33 One year into LRIP, OT&E found that the T-45A was

not effective in a carrier environment and was not

operationally suitable because of safety deficiencies.

Subsequent major design changes have included a

new engine, new wings, and a modified rudder.

(GAO/NSIAD-91-46, Dec. 14, 1990).

Navy Pioneer Unmanned 

Aerial Vehicle

Nonmajor Yes Not

applicable d

The Navy procured and deployed Pioneer as a

nondevelopmental item and without testing it.

Numerous problems ensued, including engine failures,

landing difficulties, and a cumbersome recovery

system. Many modifications were required to bring

Pioneer up to a minimum essential level of

performance.

Army Family of Medium

Tactical Vehicles

Major To be

determined

4e Before the Army did any OT&E, a multiyear production

contract was awarded for up to 10,843 trucks.

Subsequent OT&E was suspended because the

vehicles were found to be unreliable and not

operationally effective. However, production continues.

(GAO/NSIAD-93-232, Aug. 5, 1993).

Army Palletized Load

System/Family of Heavy

Tactical Vehicles

Major Yes 29 OT&E showed the system to be not operationally

suitable. Despite the need for design modifications to

correct reliability and maintainability problems, full-rate

production was approved.

Source: Weapons Acquisition: Low-Rate Initial Production Used to Buy Weapon Systems

Prematurely (GAO/NSIAD-95-18, Nov. 21, 1994).

aProceeded beyond LRIP before OT&E was conducted.

bBecause of the quantity already procured in LRIP and the lack of OT&E to date, additional units

are likely to be procured in LRIP.

cProceeded beyond LRIP beyond OT&E was conducted.

dProduction was not separated into LRIP and full-rate production phases.

eAt least 3,800 trucks are expected to be produced in LRIP, or about 4 percent of the more than

87,000 units planned to be procured.

Page 19 GAO/NSIAD-97-23 Weapons Acquisition
Appendix V 

Comments From the Department of Defense

Note: GAO comments

supplementing those in the

report text appear at the

end of this appendix.

See comment 1.

Page 20 GAO/NSIAD-97-23 Weapons Acquisition
Appendix V 

Comments From the Department of Defense

Page 21 GAO/NSIAD-97-23 Weapons Acquisition
Appendix V 

Comments From the Department of Defense

See p. 8.

Page 22 GAO/NSIAD-97-23 Weapons Acquisition
Appendix V 

Comments From the Department of Defense

Now on p. 8.

Page 23 GAO/NSIAD-97-23 Weapons Acquisition
Appendix V 

Comments From the Department of Defense

Page 24 GAO/NSIAD-97-23 Weapons Acquisition
Appendix V 

Comments From the Department of Defense

The following is GAO’s comment on the Department of Defense’s letter

dated December 26, 1996.

GAO Comment 1. Appendix IV provides examples that illustrate how buying large

quantities of unproven systems during LRIP has been costly. All costs are

reported in fiscal year 1996 constant dollars unless otherwise indicated.

We have modified the report to recognize the fact that there may be a

number of valid reasons for changing the quantities and funding for

full-rate production, but if the existing requirement is still valid and

everything else is equal, we believe priority should be given to buying the

proven systems over the unproven.

Page 25 GAO/NSIAD-97-23 Weapons Acquisition
Appendix VI 

Major Contributors to This Report

National Security and

International Affairs

Division, Washington,

D.C.

Laura Durland

Brenton Kidd

Howard Manning

Brian Mullins

Nancy Ragsdale

Atlanta Field Office Tana Davis

John Warren

Chicago Field Office Arthur Cobb

Daniel Hauser

(707126) Page 26 GAO/NSIAD-97-23 Weapons Acquisition
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