Tactical Aircraft: Status of the F/A-22 and Joint Strike Fighter Programs
Published: 2004-03-25T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Department of Defense's (DOD) two major tactical aircraft fighter programs, the F/A-22 and the Joint Strike Fighter, represent an investment of about $280 billion. Problems in the F/A-22 development program have led to a 10-year delay in delivering the initial capability and development cost increases of $16 billion. The Joint Strike Fighter, which experienced problems early in the program, is now at a critical crossroad in development. Any discussion of DOD's sizeable investment that remains in these programs must also be viewed within the context of the fiscal imbalance facing the nation within the next 10 years. GAO was asked to testify on the status of the F/A-22 and draw comparisons between both F/A-22 and Joint Strike Fighter programs' acquisition approaches.
section_title: What GAO Found
paragraphs: The F/A-22 program has experienced several significant challenges since it began development in 1986. First, the Air Force had originally planned to buy 750 aircraft, but it now estimates it can only afford about 218 aircraft. Second, in order to develop an expanded air-to-ground attack capability, DOD estimates that the Air Force will need $11.7 billion in modernization funding. Third, the Air Force has determined that new avionics computer processors and architecture are needed to support most planned enhancements, which will further increase program costs and risk. Lastly, the development test program continues to experience problems and risks further delays primarily due to avionics failures and problems meeting reliability requirements. Because of the risks of future cost increases and schedule delays, a congressional subcommittee requested that DOD provide business case information on the F/A-22. However, the information DOD provided did not address how many aircraft the Air Force needs to accomplish its missions, how many the Air Force can afford considering the full life-cycle costs, whether investments in new air-to-ground capabilities are needed, and what are the opportunity costs associated with purchasing any proposed quantities of this aircraft. The Joint Strike Fighter program started system development and demonstration in 2001 and has already encountered some cost and schedule problems. It is now working toward maturing the aircraft design and is considering delays in its critical design reviews to attain greater knowledge before making a decision to increase its investment significantly. In contrast, the F/A-22 program encountered poor cost and schedule outcomes because it had not gathered the appropriate knowledge at critical junctures in the program. The Joint Strike Fighter program is still early in its development program, with a greater opportunity to efficiently apply knowledge to its critical investment decisions.

section_title: Letter
paragraphs: I am pleased to be here today to participate in the Subcommittee’s hearing  on the status of the Department of Defense’s (DOD) major tactical aircraft  fighter programs, the F/A-22 and the F-35, also known as the Joint Strike  Fighter (JSF). Both programs are intended to replace aging tactical fighter  aircraft with highly advanced, stealthy aircraft. The F/A-22 and JSF  represent a substantial potential investment for DOD—about $280 billion.
Any discussion of DOD’s sizeable investment that remains in the F/A-22  and JSF programs must also be viewed within the context of the fiscal  imbalance facing the nation within the next 10 years. There are important  competing priorities, both within and external to DOD’s budget, that  require a sound and sustainable business case for DOD’s acquisition  programs based on clear priorities, comprehensive needs assessments,  and a thorough analysis of available resources. Funding specific programs  or activities will undoubtedly create shortfalls in others.
The federal government’s future resource needs are staggering. For  example, efforts to ensure homeland security has resulted in the creation  of the Department of Homeland Security—the largest government  reorganization in more than 50 years, involving 170,000 employees and a  $40 billion budget. Also, legislation was enacted to modernize the  Medicare program to include a prescription drug benefit, at a potential  cost of more than $500 billion over the next 10 years alone. Given these  and other important national priorities and relatively weak economic  performance, historic budget deficits have returned and are projected to  continue for the next decade. These important demands on our nation  increasingly require policymakers to distinguish wants from needs and to  judge what the nation can afford, both now and in the longer term.
These two fighter programs require substantial investments as shown in  the figure 1. They must compete inside DOD with other important DOD  major acquisition investments that will likely dominate future budget calls,  including missile defense systems, the Army’s Future Combat Systems,  and larger investments in space programs to transform communication,  intelligence, surveillance and reconnaissance capabilities.
My statement today is primarily based on our recently issued report on the  F/A-22. Specifically, I will highlight significant changes in the development  program, the readiness to begin initial operational testing and full rate  production, and the sufficiency of DOD’s current business case to justify  the need for and the affordability of quantities necessary to carry out  intended missions. Additionally, based on more limited work we have  completed on the JSF, I will discuss the status of the JSF program, make  some observations based on broad comparisons of its current acquisition  approach to the acquisition experiences of the F/A-22 program, and  identify additional challenges attendant with international cooperation.  We performed the work associated with this statement in accordance with  generally accepted government auditing standards.
In summary, because of the many changes that have occurred in the  F/A-22 program and the remaining investment still to be made, we believe  decision makers would benefit from a new business case that justifies the  need for the full air-to-air and air-to-ground capabilities and the quantities  needed that DOD can afford. Regarding the JSF, we understand that  program managers are considering a delay in its critical design review to  attain greater design stability in its airframe. In addition to seeking greater  design stability, leadership in DOD could reap the benefits of its new  acquisition policy that embraces the best practice concepts of knowledge- based, evolutionary acquisition by actively promoting and maintaining a  disciplined approach to its acquisitions throughout the remaining critical  decision points over the next few years.
subsections: section_title: Background
paragraphs: The Air Force began the F/A-22 development program in 1986 and  expected to complete development in 9 years for an estimated cost of  $12.6 billion. Today, after being in development for almost two decades,  the estimated development cost is $28.7 billion, a 127 percent increase.  The average unit procurement cost to buy the F/A-22 has also increased  122 percent. The result of these changes has been a loss of buying power  that has reduced the initial buy quantity from 750 to 277 aircraft. Table 1  shows the changes in the development program from 1986 to 2002.
We have reported in the past that the F/A-22 acquisition approach was a  major contributor to the cost increases and delays in schedule that led to  reduced buying power. In testimony last year, we identified lessons to be  learned in the F/A-22 program, which did not follow a knowledge-based  acquisition approach used by successful commercial firms. Leading  commercial firms that we studied employ an acquisition approach that  evolves a product to its ultimate capabilities on the basis of mature  technologies and available resources. These firms then ensure that high  levels of knowledge exist at three critical junctures in a development  program. First, a match must be made between a customer’s needs and the  available resources—technology, engineering knowledge, time, and  funding—before a new development program is launched. Second, a  product’s design must demonstrate its ability to meet performance  requirements and be stable about midway through development. Third, the  developer must show that the product can be manufactured within cost,  schedule, and quality targets and is demonstrated to be reliable before  production begins. DOD issued new acquisition policy in May 2003 that  governs the development of major acquisition systems. This new policy  embraces the best practice concepts of knowledge-based, evolutionary  acquisition and represents a good first step toward achieving better  outcomes from major acquisition programs.
The initial F-22 acquisition strategy did not employ an evolutionary  approach. Instead, it sought to develop revolutionary capabilities from the  outset of the program taking on significant risk and onerous technology  challenges. Three critical technologies were immature at the start of the  program—low-observable materials, propulsion, and integrated avionics.  Integrated avionics has been a source of major schedule delays and cost  increases in the F/A-22 program. Starting the program with these immature  technologies prevented the program from knowing cost, schedule, and  performance ramifications until late in the development program, after  significant investments had already been made. Efforts to mature  technology cascaded into development, delaying attainment of design and  production maturity.
The JSF, which started in 1996, is not as far along in its development, but  is experiencing problems that could similarly threaten DOD’s investment.  It is at a critical crossroad, one that, based on our prior work, was  approached and passed by several other DOD programs without capturing  the appropriate knowledge for the sizable investment decisions being  made. While the JSF program started with higher risks by failing to mature  its technologies, it is considering a delay to its investment decision that  determines the need to invest in tooling, labor, and facilities to  manufacture aircraft until the airframe design has become more stable.
section_title: Significant Changes Require Additional Investments to Expand F/A-22 Capability
paragraphs: The basic mission of the F/A-22, initially focused on air-to-air dominance,  has changed to include a significantly greater emphasis on attacking  ground targets. To accomplish this expanded mission, the Air Force will  need additional investments to develop and expand air-to-ground attack  capabilities for the F/A-22. Moreover, the efforts to expand its capability  will also add risks to an already challenged program. To accommodate  planned changes will also require a new computer architecture and  processor to replace the current less capable ones.
The expanded air-to-ground attack capability will allow the F/A-22 to  engage a greater variety of ground targets, such as surface-to-air missile  systems, that have posed a significant threat to U.S. aircraft in  recent years. This was not previously considered a primary role for the  aircraft as it was intended to be primarily an air-to-air fighter to replace  the F-15. From the outset the F/A-22 was built to counter expected large  numbers of new advanced Soviet fighter aircraft, but this expected threat  never materialized.
The Air Force has a modernization program to improve the capabilities of  the F/A-22 focused largely on a more robust air-to-ground capability. It  intends to do so using five developmental spirals planned over more than a  10-year period, with the initial spiral started in 2003. In March 2003, the  Office of Secretary of Defense’s Cost Analysis Improvement Group  (CAIG) estimated that the Air Force would need $11.7 billion for the  planned modernization program. The CAIG estimate included costs for  development, production, and the retrofit of some aircraft. As of March  2003, the Air Force F/A-22 approved program baseline did not include  estimated costs for the full modernization effort. Instead, the Air Force  estimate included $3.5 billion for modernization efforts planned through  fiscal year 2009. Table 2 shows each spiral as currently planned.
To complete the planned enhancements, the F/A-22 will also need a new  computer architecture and avionics processors. Current architecture and  processors will be upgraded to support enhancement through the Global  Strike Enhanced development spiral. However, because the current  architecture and processors are old and obsolete and do not have  sufficient capacity to meet the increased processing demands required for  planned new air-to-ground capabilities beyond the Global Strike Enhanced  spiral, they must be replaced.
Rather than start a new development program, the F/A-22 program office  plans to leverage two other ongoing Air Force development or  modification programs for this new processing capability: the new  architecture being developed for the JSF and the new commercial  off-the-shelf general-purpose processors designed for newer versions of  the F-16. According to F/A-22 program officials, they do not expect the  new architecture to be fully developed and ready for installation in the  F/A-22 for at least 5 to 6 years.
Additional risks are likely because the new processor and architecture are  being developed by other major aircraft programs and will require  extensive integration and operational testing to ensure that the F/A-22  program does not encounter similar problems that have delayed  integration and testing of the F/A-22’s current avionics suite. F/A-22  program officials acknowledge that this mass changeover of the F/A-22  computer architecture and avionics processor will be a time-consuming  and costly effort and will likely create additional program risks. Air Force  cost estimates are not yet available, but program officials estimate the  nonrecurring engineering costs alone could be at least $300 million. At the  time of our review, the Air Force had not made a decision about  retrofitting aircraft equipped with the old microprocessor.
section_title: Further Delays in Initial Operational Testing Could Impact Planned Full Rate Production Decision
paragraphs: The Air Force schedule includes plans to make the full rate production  decision in December 2004, but initial operational test and evaluation  (IOT&E) has not started. The Air Force’s efforts to stabilize avionics  software and improve its performance have not been sufficiently  demonstrated to start IOT&E, and the planned entrance criterion was  changed. In addition, the F/A-22 program is not performing as expected in  some other key performance areas like system reliability. These problems  have contributed to the need for a new test schedule and an additional 7- month delay in the start IOT&E. Together these problems increase the  potential for additional development costs and delays in the full rate  production decision. Since our report in March 2003, the Air Force has  corrected some key design problems identified at that time, but others  remain.
section_title: Avionics Do Not Meet Criterion to Start Operational Testing
paragraphs: The stability and performance of F/A-22 avionics has been a major  problem causing delays in the completion of developmental testing and  the start of IOT&E. Because the F/A-22 avionics encountered frequent  shutdowns over the last few years, many test flights were delayed. As a  result, the Air Force Operational Test and Evaluation Center wanted  assurances that the avionics would work before it was willing to start the  IOT&E program. It established a requirement for a 20-hour performance  metric that was to be demonstrated before IOT&E would begin. This  metric was subsequently changed to a 5-hour metric that included  additional types of failures, and it became the Defense Acquisition Board’s  criterion to start IOT&E. In turn, Congress included the new metric,  known as Mean Time Between Avionics Anomaly or MTBAA, in the  National Defense Authorization Act for Fiscal Year 2004. As of January  2004, the Air Force had not been able to demonstrate that the avionics  could meet either of these criteria.
Testing as of January 2004 showed the program had achieved 2.7 hours— 54 percent of the 5-hour stability requirement to begin IOT&E. While the  Air Force has not been able to meet the new criteria, major failures,  resulting in a complete shutdown of the avionics system, have significantly  diminished. These failures are occurring only about once every 25 hours  on average. This is the result of a substantial effort on the part of the  Air Force and the contractor to identify and fix problems that led to  the instability in the F/A-22 avionics software. However, less serious  failures are still occurring frequently.
subsections: section_title: Reliability Requirements Not Being Met
paragraphs: The F/A-22 program is not meeting its requirements for a reliable aircraft,  and it is not using a knowledge-based approach. The Air Force established  reliability requirements to be achieved at the completion of development  and at system maturity. As a measure of the system’s overall reliability,  the Air Force established a requirement for 1.95-hours mean time between  maintenance by the completion of development and 3-hours mean time  between maintenance at system maturity. This measure of reliability  represents the average flight time between maintenance actions. As of  October 2003, the Air Force had only been able to demonstrate a reliability  of about 0.5 flying hours between maintenance actions or about 26 percent  of the development requirement and 17 percent of system maturity  requirement. This has led to test aircraft spending more time than planned  on the ground undergoing maintenance.
In addition to the high level of maintenance required, failures in F/A-22  parts and components also caused reliability problems. During 2003, the  Air Force identified 68 parts that had a high rate of failure causing them to  be removed or replaced and affecting the F/A-22 system reliability. The  contractor has initiated programs to eliminate the high failure rates  experienced by these parts. The canopy has also been experiencing  failures during testing, allowing it to achieve only about 15 percent of its  expected 1,600-hour life. The Air Force is considering using a second  manufacturer for canopies, but until it has passed qualification testing,  it cannot be used as an alternative source for the high-failing canopies.
The F/A-22 program began limited production before demonstrating  reliability. Our work has shown that product development engineers from  leading commercial firms expect to achieve reliability requirements before  entering production. They told us reliability is attained through an iterative  process of design, testing, analysis, and redesign. Commercial firms  understand that once a system enters production, the costs to achieve  reliability through this iterative design change process become  significantly more expensive. The F/A-22 aircraft has been in production  since fiscal year 1999, and the Air Force has on contract 52 production  aircraft, and an additional 22 aircraft on long lead contracts representing  27 percent of the planned buy quantity. With 83 percent of the reliability  requirement yet to be achieved through this iterative design change  process, the Air Force can expect to incur additional development and  design change costs. If the Air Force fails to improve the F/A-22’s  reliability before fielding the aircraft, the high failure rates will result in  higher operational and support costs to keep the aircraft available for  training or combat use.
section_title: Operational Testing Delayed and Divided into Two Phases
paragraphs: Avionics and reliability problems were the major contributors to delays in  F/A-22 flight-testing in 2003. As a result, the start of IOT&E was delayed an  additional 7 months. Realizing the Air Force would not be ready to enter  initial operational testing as previously planned, the Office of the Secretary  of Defense requested the F/A-22 program to establish a new operational  test plan that includes measures to ensure the aircraft and its avionics are  ready before entering operational testing. In response, the Air Force put in  place a two-phase operational test program.
Phase 1, also called an operational assessment, is not the official start of  operational testing. It is intended to assess the F/A-22’s readiness for  IOT&E. Started in October 2003, it calls for testing two F/A-22 aircraft.
Phase 2 testing is considered the actual start of IOT&E. To begin this  phase, the Air Force must meet a number of criteria. Perhaps most  importantly, it must demonstrate that the F/A-22’s integrated avionics will  be able to operate for sufficient lengths of time, without shutting down.  Figure 2 compares the changes in the planned test program since our  March 2003 report.
According to Air Force test officials, results of some phase 1 tests could  be used to satisfy IOT&E requirements if the aircraft and software  configurations do not change for IOT&E testing. This could reduce the  scope of the test effort planned during IOT&E. The Defense Acquisition  Board is scheduled to review the F/A-22’s readiness for IOT&E later  this month.
At the present time, the Air Force expects to complete IOT&E in  October 2004, before the full rate production decision, now expected in  December 2004. The time allotted to complete IOT&E under the new test  plan, however, has been compressed by 4 months, assuming phase 1  testing results are not permitted to be used for IOT&E. This means the Air  Force would have less time than previously planned to complete the same  amount of testing. If the Air Force continues to experience delays in  testing prior to IOT&E, then the full rate production decision would also  have to be delayed until IOT&E is complete and the Beyond Low Rate  Initial Production Report is delivered to Congress.
section_title: Past Design Problems Corrected
paragraphs: The Air Force has corrected design problems discussed in our March 2003  report. To correct the movement or buffeting of the vertical fins in the  tail section of the aircraft, the Air Force designed and implemented  modifications, which strengthen the fin and hinge assemblies. Because of  this problem, the Air Force placed restrictions on flights below 10,000 feet.  Testing was done above and below 10,000 feet, and the flight restrictions  were removed. Likewise, the Air Force modified the aircraft to prevent  overheating concerns in the rear portion of the aircraft by adding thermal  protection and strengthened strategic areas in the aft tail sections. The Air  Force also plans to modify later production aircraft using a new venting  approach to resolve the heat problems. We reported that the Air Force had  also experienced separations in the horizontal tail materials. After  additional testing, the Air Force deemed that the original tails met  requirements established for the life of the airframe. However, the Air  Force redesigned the tail to reduce producibility costs. Tests will be  performed on the redesigned tail in late 2004.
section_title: Business Case Information Did Not Justify Current Aircraft Quantities or Modernization Investment Plans
paragraphs: The business case made to justify the F/A-22 program at its outset is no  longer valid. Since that time, program cost and schedule have grown  substantially and affordable quantities have been reduced by 60 percent.  The expected threat, for which this aircraft was originally designed, never  materialized, and new, more demanding ground threats, like surface-to-air  missile systems, have evolved, requiring expanded capabilities that will  require significant new developmental investments. In addition, technical  problems have not been resolved, and uncertainty about the outcome of  operational testing could lead to additional development costs and further  delays.
Today, the Air Force estimates the total F/A-22 acquisition program will  cost about $72 billion, excluding about $8 billion estimated by the CAIG to  complete modernization activities. Including these costs brings the  estimated total investment for the F/A-22 program to about $80 billion.  Through fiscal year 2004, about one-half of this investment has been  funded, leaving key investment decisions in the near future on the  remaining $40 billion for aircraft production and upgrades in capability.
Last year, in light of the changes in the program and investments that  remained, the Subcommittee on National Security, Emerging Threats, and  International Relations of the House Committee on Government Reform  asked DOD to provide a new business case justifying the Air Force’s  planned number of F/A-22s (276 at that time) as well as how many F/A-22s  are affordable. In its response, DOD did not sufficiently address key  business case questions such as how many F/A-22s are needed, how many  are affordable, and if alternatives to planned investments increasing the  F/A-22 air-to-ground capabilities exist.
Instead, DOD stated it planned to buy 277 F/A-22s based on a “buy to  budget” concept that determines quantities on the availability and efficient  use of funds by the F/A-22 program office. Furthermore, justification for  expanding the capability to a more robust air-to-ground attack capability  was not addressed in DOD’s response. While ground targets such as  surface-to-air missile systems are acknowledged to be a significant threat  today, the response did not establish a justification for this investment or  state what alternatives were considered. For example, the JSF aircraft is  also expected to have an air-to-ground role, as are planned future  unmanned combat air vehicles. These could be viable alternatives to this  additional investment in F/A-22 capability.
While the business case information submitted to the subcommittee called  for 277 aircraft, DOD stated it could only afford to acquire between 216  and 218 aircraft within the congressionally imposed cap on production  costs—currently at $36.8 billion. DOD expects improvements in  manufacturing efficiencies and other areas will provide it with sufficient  funds to buy additional F/A-22 aircraft. However, this seems to be an  unlikely scenario given the program’s history. Previously, DOD, under its  “buy to budget” approach, used $876 million mostly from production funds  to cover increases in development costs, thus reducing aircraft quantities  by 49. With testing still incomplete and many important performance areas  not yet demonstrated, the possibility for additional increases in  development costs is likely.
The analysis and conclusions in our recent report led us to recommend  that DOD complete a new business case that justifies the need for the  F/A-22 and that determines the quantities needed and affordable to carry  out its air-to-air and air-to-ground mission. In preparing the business case,  we also recommended DOD look at alternatives to the F/A-22 for dealing  with the ground threats that were driving the need for an expanded air-to- ground capability. In response to a draft of that report, DOD partially  concurred, stating that it evaluates the F/A-22 business case elements as  part of the annual budget process. Additionally, DOD’s response  acknowledged that this year the department is undertaking a broader set  of reviews under the Joint Capabilities Review process and that the F/A-22  will be a part of that review. In our report, as part of the evaluation of  DOD’s comments, we noted that an independent and in-depth study of the  F/A-22 program has been requested by the Office of Management and  Budget and that such a study provided an opportunity for completing a  business case analysis.
section_title: JSF Joint Strike Fighter Program Is Approaching a Decision Point
paragraphs: The JSF acquisition program is approaching a key investment decision  point in its development as it prepares to stabilize the design for its critical  design reviews. The program has many demands and requirements to  satisfy before it is completed. It is the most expensive acquisition program  in DOD’s history with plans to buy almost 2,500 aircraft for an estimated  acquisition cost of about $200 billion. The design plans are for three  variants for the Air Force, Navy, and Marine Corps, with development  partners and potential customers that span the globe. Upcoming  investment decisions will be a prominent indicator of the risk program  management and senior leadership will assume for this program. The  program’s size—in terms of funding, number of aircraft, and program  participants—will create challenges for decision makers over the next  several years. They will face decisions that need to be guided by a sound  business case and an evolutionary, knowledge-based acquisition process  that will provide more predictable cost, schedule, and performance  outcomes.
The JSF is a joint, multi-national acquisition program for the Air Force,  Navy, Marine Corps, and eight cooperative international partners. The  program’s objective is to develop and deploy an affordable weapon system  that satisfies a variety of war fighters with different needs. The system is  intended to consist of a family of highly common and affordable strike  aircraft designed to meet an advanced threat and a logistics system to  enable the JSF to be self-sufficient or part of a multisystem and  multiservice operation. This family of strike aircraft will consist of three  variants: conventional takeoff and landing, aircraft carrier suitable, and  short take off and vertical landing. The JSF program began in November  1996. After a five-year competitive concept demonstration phase between  Boeing and Lockheed-Martin, DOD awarded Lockheed-Martin a contract  in October 2001 to begin system development and demonstration.
section_title: Current Status of the Joint Strike Fighter Program’s Cost, Schedule, and Funding
paragraphs: We are aware that program managers are contemplating changes to the  program that could delay the schedule and increase costs, but  confirmation and details are not yet available. Nonetheless, current  program office estimates do provide some insights. Since the JSF  acquisition program began in 1996, the cost of development has grown by  about 80 percent. As shown in figure 3, the majority of this cost growth,  from an estimated $24.8 to $34.4 billion, was recognized at the time the  program transitioned from concept development to system development  and demonstration in 2001. The program office cited schedule delays,  implementation of a new block development approach that extended the  program by 36 months, and a more mature cost estimate as the major  causes for the increase. Since the start of system development and  demonstration, the estimate has increased by an additional $10.3 billion  because of continued efforts to achieve international commonality,  optimize engine interchangeability, further refinements to the estimating  methodology, and schedule delays for additional design work.
In both 2000 and 2001, when the program was making the critical decision  to move into system development and demonstration, we reported and  testified that technologies had not been sufficiently demonstrated to  reduce risk to a level commensurate with a decision to commit major  capital and time to product development. While some of these  technologies continue to be troublesome, in March 2003, the program’s  preliminary design review revealed significant issues related to aircraft  design maturity.
Weight has become the most significant design risk for the program as it  approaches its critical design review. The increased weight of each variant  design could degrade aircraft range and maneuverability if not brought  under control. According to the program office, the airframe design has  matured more slowly than anticipated and software development and  integration is posing a significant design challenge. Also, in a 2003 annual  report, the Director of Operational Test & Evaluation stated that weight  growth is a significant design risk for all the variants, that the development  schedule is aggressive, and that efforts to reduce weight have eroded a  large part of the schedule.
We also note that the program’s funding profile assumes almost $90 billion  of funding over the next 10 years, an average of almost $9 billion a year.  This will require the JSF program to compete with many other large  programs for scarce funding during this same time frame. Sustaining this  level of high funding for such a long period will be a challenge. The JSF  program’s latest planned funding profile for development and  procurement—as of December 2002—is shown in figure 4.
section_title: Knowledge-Based Decisions Are Needed for the Road Ahead
paragraphs: The JSF program faces critical decisions over the next 24 months.  Decisions made today will greatly influence the efficiency of the rest of its  funding—almost 90 percent of the total. As a result of current concerns  over system integration risk, the program office is currently restructuring  the development program, which will add significant cost and delay the  development schedule. For example, it is considering delaying its critical  design reviews, its first flights of development aircraft, and its limited rate  production decision to allow more time to mitigate design risk and gather  more knowledge before moving forward with continued major  investments.
While no one wants to delay critical reviews, now is the time to get the  design right rather than later. Going forward with an incomplete review  may cause more problems later in the effort. Indeed, based on our past  best practices work and lessons learned from the F/A-22 development  effort, we have seen many examples where programs moved forward past  their critical design review without gathering the knowledge needed to  verify that their design was stable. This has led to poor cost and delivery  outcomes for these programs. We have also seen the reverse, where  programs have gathered appropriate knowledge before their critical  design review. These programs had much more predictable cost and  schedule outcomes.
The F/A-22 program held its critical design review in 1995 with only about  26 percent of its design drawings complete. Best practice criteria calls for  90 percent of drawings to be complete before a design can be considered  stable enough to commit to additional significant investments of time,  labor, material, and capital. Figure 5 shows the engineering drawing  completion history of the F/A-22 along with changes to development cost  estimates as the program progressed.
An incomplete F/A-22 critical design review contributed to several design  and manufacturing problems that resulted in design changes, labor  inefficiencies, cost increases, and schedule delays. Since the time of its  critical design review, the F/A-22’s development costs have increased by  about 50 percent. The JSF program has the opportunity to avoid a similar  situation. We believe that, given the apparent design challenges at this  point in the program, a delay to gather more knowledge before increasing  the investment is warranted and may help to reduce turbulence later in  development, before the program begins “bending metal” for development  aircraft. The JSF program is at a pivotal point, one in which the effort will  turn from a paper design to actually manufacturing a product, something  that requires considerably more money. While we believe the program  moved forward with too much technology risk up to this point, it has an  opportunity now to achieve critical design knowledge by taking the time to  develop a mature design before moving into manufacturing. The program  can use lessons learned from the F/A-22 acquisition right now to keep on  track and deliver an affordable, high quality weapon system sooner rather  than later.
section_title: Additional Challenges Attendant with International Cooperation
paragraphs: The JSF program is based on a complex set of relationships among all  three services and governments and industries from eight foreign partners.  The program is expected to benefit the United States by reducing its share  of development costs, increasing future aircraft sales, giving it access to  foreign industrial capabilities, and improving interoperability among the  services and allies. For their part, partner governments expect to benefit  from relationships with U.S. aerospace companies, access to JSF program  data, and influence over aircraft requirements. They will also benefit  financially by obtaining waivers of nonrecurring aircraft costs on an  aircraft they could otherwise not afford to develop on their own. The  partners expect a return on their investment through JSF contract awards  for their industries that will improve their defense industrial capability, a  critical condition for their participation. They have agreed to contribute  about $4.5 billion to the JSF development program and are expected to  purchase several hundred aircraft once it enters production.
With these mutual benefits come challenges. Support for the program from  our international partners hinges in large part on expectations for financial  returns, technology transfer, and information sharing. If these  expectations are not met, that support could deteriorate. In addition, a  large number of export authorizations are needed to share information  and execute contracts. These authorizations must be done in a timely  manner to maintain schedule and ensure competition. Finally, transfer of  sensitive U.S. military technologies needed to achieve commonality and  interoperability goals will push the boundaries of U.S. disclosure policies.
section_title: Conclusions
paragraphs: DOD is not immune to efforts to address the fiscal imbalance confronting  the nation and will continue to face challenges based on competing  priorities, both within and external to its budget. This will require  decisions based on a sound and sustainable business case for DOD’s  acquisition programs based on clear priorities, comprehensive needs  assessments, and a thorough analysis of available resources. In addition, it  will require an acquisition process that provides for knowledge-based  decisions at critical investment junctures in order to maximize available  dollars. DOD has instituted a new acquisition policy that embraces  evolutionary and knowledge-based acquisition concepts. However, policy  alone will not solve the problems DOD faces. This will also require  disciplined actions on the part of DOD’s leadership to employ the concepts  established in its new policy.
While it is too late for the F/A-22 to go back and follow these concepts,  there still is time to evaluate the need for additional aircraft; over fifty  F/A-22’s are presently on contract. Because of the nation’s fiscal  challenges, tough choices will need to be made regarding future spending  priorities, including the remaining potential $40 billion investment in the  F/A-22. In light of this substantial investment and the many changes that  have occurred in the F/A-22 program, we believe decision makers would  benefit from a new business case that justifies the need for the full air-to- air and air-to-ground capabilities and the quantities needed and affordable.
The JSF program has a greater opportunity to make critical investment  decisions using a knowledge-based approach. While the program started  off with a high-risk approach by not maturing technologies before starting  system development, it has the opportunity to manage the system  development phase and stabilize the design before committing to large  investments in manufacturing capability—tooling, labor, and facilities—to  build test aircraft. The JSF program is considering a delay in its critical  design review to attain greater design stability in its airframe. In addition  to seeking greater design stability, leadership in DOD can reap the benefits  of its new acquisition policy by actively promoting and maintaining a  disciplined approach throughout the remaining critical decision points  over the next few years. With these activities in place, DOD will be in a  better position to request continued JSF funding and support.
Mr. Chairman, this concludes my prepared statement. I would be happy to  respond to any questions that you or other members of the Subcommittee  may have. If you have future questions about our work on the F/A-22 or  JSF, please call Allen Li at (202) 512-4841.
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