Tactical Aircraft: DOD Needs to Better Inform Congress about Implications of Continuing F/A-22 Cost Growth
Published: 2003-02-28T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In 1991, the Air Force began developing the F/A-22 aircraft with advanced features to make it less detectable to adversaries and capable of high speeds for long distances. After a history of program cost increases, Congress limited the cost of F/A-22 production to $37.5 billion in 1997. Congress has remained interested in the potential cost of production. As requested, we (1) identified the latest production cost estimate and assessed the planned offsets from cost reduction plans, (2) identified areas where additional cost growth is likely to occur, and (3) determined the extent that DOD has informed Congress about production costs.
section_title: What GAO Found
paragraphs: The Department of Defense (DOD) has identified about $18 billion in estimated production cost growth over the last 6 years. Even though the Air Force has designed cost reduction plans to offset a significant amount of this estimated cost growth, DOD still estimates that the cost of production will exceed the cost limit established by Congress in 1997. Furthermore, the Air Force has not fully funded certain cost reduction plans called production improvement programs (PIPs), and as a result, these PIPs may not achieve their estimated $3.7 billion in offsets to cost growth. In addition to the cost growth estimated by DOD, GAO identified areas where, in the future, F/A-22 production cost growth is likely to occur. First, the Office of the Secretary of Defense's current production cost estimate does not include about $1.3 billion in costs that should be considered in future cost estimates. Second, schedule delays in developmental testing could delay the start of a multiyear contract designed to control costs. These delays could also result in additional costs owing to the expiration of an Air Force agreement with the contractor designed to help control production costs in fiscal year 2005. Last, other risk factors may increase future production costs, including the dependency of certain cost reduction plans on the availability of funding and a reduction in funding for support costs. DOD has not fully informed Congress (1) about what the total cost of the production program could be if cost reduction plans do not offset cost growth as planned or (2) about the aircraft quantity that can be procured within the production cost limit. If the cost limit is maintained and estimated production costs continue to rise, the Air Force will likely have to procure fewer F/A-22s.

section_title: Letter
paragraphs: The Air Force is developing the F/A-22 aircraft with advanced features  designed to allow it to be less detectable to adversaries, capable of high  speeds for long ranges, and able to provide the pilot with improved  awareness of the surrounding situation. Development of the aircraft,  which started in 1991, is expected to be completed in early 2004. The  Air Force approved the start of low-rate production in August 2001.
Congress established a production cost limitation in the National Defense  Authorization Act for Fiscal Year 1998 following a history of program  cost increases. The limitation, which allows for inflation adjustments,  is currently $37.5 billion. The act does not specify the total number of  aircraft to be procured for this amount. During a high-level review by the  Department of Defense’s (DOD) Defense Acquisition Board in August  2001, the Department of Defense estimated that production program costs  would be $43 billion and therefore exceed the production cost limit of  $37.5 billion.
As requested, we reviewed the Air Force’s F/A-22 production program and  the service’s efforts to offset estimated production cost growth through  various cost reduction plans. Specifically, we (1) identified the F/A-22’s  latest production cost estimate acknowledged by DOD, including an  assessment of the planned offsets from cost reduction plans; (2) identified  areas where additional cost growth is likely to occur; and (3) determined  the extent to which DOD has informed Congress about the effect of not  achieving cost reduction plans, particularly on the number of aircraft that  can be procured within the existing production cost limit.
subsections: section_title: Background
paragraphs: The F/A-22 is an air superiority aircraft with advanced features to make  it less detectable to adversaries (stealth characteristics) and capable of  high speeds for long ranges. It is being developed under contracts with  Lockheed Martin Corporation for the aircraft and Pratt & Whitney  Corporation for the engine.
Because of potential cost increases, the Air Force established a team—the  Joint Estimating Team—to review the total estimated cost of the F/A-22  program in 1996. This team reported that the cost of the F/A-22 production  program could grow by $13.1 billion from the amount planned. In response  to identified cost growth, Congress, in the National Defense Authorization  Act for Fiscal Year 1998 established cost limits for the development and  production phases of the F/A-22 program. The current production cost  limit is $37.5 billion. “Air superiority” is the degree of air dominance that allows the conduct of operations by  land, sea, and air forces without prohibitive interference by enemy aircraft.
Defense (OSD) and the Air Force, disagreed over how many aircraft could  be purchased for $43 billion. OSD believed that only 297 aircraft could be  purchased for $43 billion while the Air Force believed 333 aircraft could be  purchased for the same amount. DOD informed Congress of these  divergent viewpoints in September 2001. The F/A-22 President’s Budget for  fiscal year 2004 would transfer $876 million in production funding and  reduce the number of aircraft to 276 to help fund estimated cost increases  in development. As a result, the current production cost estimate is $42.2  billion, an amount that still exceeds the cost limit of $37.5 billion.
To fully offset the $13.1 billion in estimated cost growth, the Air Force  and contractors designed cost reduction plans. Since 1997, the Air Force  has been identifying and implementing these plans. (See appendix IV for a  list of the major categories of cost reduction plans designed to offset the  cost growth estimated in 1997.) A direct relationship cannot be established  between the cost reduction plans and specific areas of cost growth. The  reason is that the plans generally offset cost growth in broad areas by  enhancing production technology, improving manufacturing techniques,  and improving acquisition practices.
F/A-22 cost reduction plans are categorized as either “implemented” or  “not yet implemented.” The Air Force’s and contractors’ criteria for  determining if a cost reduction plan is implemented include whether  the contractor has submitted a firm, fixed price proposal that recognizes  the impact of the cost reduction;  the impact of the reduction has been reflected in a current contract price  or negotiated in an agreement; or  the contractor has reduced the number of hours allocated to a task.
Currently, $14 billion in cost reduction plans is considered “implemented.”
Cost reduction plans are categorized as “not yet implemented” if the plans  are well defined but none of the criteria listed above are met. Table 3 in  appendix II shows the amounts the Air Force currently considers  “implemented” and “not yet implemented.”
section_title: DOD’s F/A-22 Estimated Production Costs Exceed Cost Limitation
paragraphs: Over the last 6 years, $17.7 billion in estimated production cost growth  has been identified during the course of two program reviews. As a result,  the estimated cost of the production program currently exceeds the  congressional cost limit despite the establishment of cost reduction plans  designed to offset a significant amount of this estimated cost growth. The  effectiveness of these cost reduction plans has varied.
subsections: section_title: DOD’s Estimates of Production Costs Have Risen
paragraphs: During a review in 1997, the Air Force estimated cost growth of  $13.1 billion. The major contributing factors to this cost growth were  inflation, increased estimates of labor costs and materials associated with  the airframe and engine, and engineering changes to the airframe and  engine. These factors made up about 75 percent of the cost growth  identified in 1997. (See appendix III for a complete list of cost growth  categories identified in 1997.)
In August 2001, DOD estimated an additional $5.4 billion in cost growth  for the production of the F/A-22, bringing total estimated production costs  to $43 billion. The major contributing factors to this cost growth were  again due to increased labor costs and airframe and engine costs. These  factors totaled almost 70 percent of the cost growth. According to  program officials, major contractors’ and suppliers’ inability to achieve  the expected reductions in labor costs throughout the building of the  development and early production aircraft has been the primary reason for  estimating this additional cost growth. (See appendix VI for a complete list  of the categories and sources of cost growth identified in 2001.)
section_title: Cost Reduction Plans Achieve Varied Results
paragraphs: The effectiveness of cost reduction plans has varied. The Air Force  was able to implement cost reduction plans and offset cost growth in the  first four production lot contracts awarded. Air Force projections for  cost reduction plans show that expected offsets are also planned for the  future production lot contracts to enable the production program to  be completed within the current production cost estimate. However,  the Air Force has not fully funded production improvement programs  (PIPs), which are designed to offset cost growth by improving production  processes. Consequently, planned offsets may not be achieved in the  amount expected.
subsections: section_title: Implemented Cost Reduction Plans Are Offsetting Cost Growth
paragraphs: The Air Force was able to implement cost reduction plans and offset  cost growth in the first four production contracts awarded. The total  offsets for these contracts slightly exceeded earlier projections by about  $0.5 million. Table 1 compares previous planned offsets with implemented  cost reduction plan offsets in the first four production contracts.
Cost reduction plans exist but have not yet been implemented for  subsequent production lots planned for fiscal years 2003 through 2010  because contracts for these production lots have not yet been awarded.  If implemented successfully, the Air Force expects these cost reduction  plans to achieve billions of dollars in offsets to estimated cost growth  and allow the production program to be completed within the current  production cost estimate of $43 billion. However, as we noted earlier in  this report, this amount exceeds the congressionally imposed production  cost limit of $37.5 billion.
section_title: Not Fully Funding Production Improvement Programs May Reduce Expected Offsets
paragraphs: A production improvement program is a type of cost reduction  plan whereby the government must make an initial investment to realize  savings. The earlier the Air Force implements PIPs, the greater the impact  on the cost of production. Examples of PIPs previously implemented by  the Air Force include manufacturing process improvements for avionics,  improvements in the fabrication and assembly processes for the airframe,  and the redesign of several components to enable lower production costs.
The Air Force reduced the funding available for investment in PIPs  because of cost growth in production lots 1 and 2. The Air Force  subsequently used funding that it planned to invest in PIPs to cover the  cost growth in production lots 1 and 2. As a result, there has not been as  much funding available for investment in these PIPs as planned. Figure 1  shows that funding was reduced $61 million in fiscal year 2001 and $26  million in fiscal year 2002.
It is unlikely that the Air Force will achieve the estimated $3.7 billion in  cost growth offsets from the implementation of these PIPs if investment  continues to be less than planned. Figure 2 shows the remaining planned  investment in PIPs through fiscal year 2006 and the $3.7 billion in  estimated cost growth that can potentially be offset through fiscal year  2010 if the Air Force invests as planned in these PIPs.
In the past, Congress has been concerned about the Air Force’s practice of  requesting fiscal year funding for these PIPs but then using part of that  funding for F/A-22 airframe cost increases. Recently, Congress directed  the Air Force to submit a request if it plans to use PIP funds for an  alternate purpose.
section_title: Estimated Production Costs Are Likely to Increase
paragraphs: We found indications that, in the future, F/A-22 production costs are  likely to increase more than the latest $5.4 billion in cost growth recently  estimated by the Air Force and OSD. First, the current OSD production  estimate does not include all costs. Second, schedule delays in  developmental testing could delay the start of a multiyear contract  designed to help control production costs. Third, as a result of schedule  delays that have already occurred, the Air Force has already delayed the  awarding of this contract to fiscal year 2006. As a consequence, the aircraft  planned for fiscal year 2005 are not currently included in any agreements  with the contractor that are designed to help control production costs.  Last, we found several risk factors that may increase future production  costs, including the dependency of certain cost reduction plans on  congressional action and a reduction in funding for support costs.
subsections: section_title: Current OSD Production Cost Estimate Does Not Include All Costs
paragraphs: OSD’s latest cost estimate does not include costs identified by the  Air Force during the development of the Air Force’s current F/A-22  acquisition plan. The Air Force developed this acquisition plan after  OSD completed its estimate. Table 2 shows some areas of additional costs  that the Air Force believes the program will incur.
According to an OSD official, these additional costs should be considered  in any future OSD production cost estimate, which would increase OSD’s  estimate by $1.29 billion.
section_title: Additional Program Delays May Further Delay Multiyear Procurement
paragraphs: If the F/A-22’s developmental testing program experiences additional  delays, there is a greater risk that operational testing, full-rate  production, and multiyear procurement will be delayed as a result.  Delays in production and multiyear procurement would likely increase  production costs. The Air Force has not addressed ongoing problems with  the developmental testing and therefore remains at high risk for further  schedule delays.
For example, in March 2002, we reported that the Air Force’s plan to  complete the developmental airframe testing necessary for the start of  operational testing was at high risk because (1) the planned number of test  objectives per flight-hour was not being achieved and (2) most of the  planned flight-test program was essentially being performed by only one  test aircraft rather than the three originally planned. Air Force officials  told us they understood that completing the tests as scheduled with only  one development test aircraft was high risk. As a result of this strategy, in  late 2001, the Air Force delayed the F/A-22’s schedule, including the start  of a multiyear contract designed to save production costs.
section_title: Acquisition Plan Contains Gap in Methods to Control Costs
paragraphs: The cost of the fiscal year 2005 production lot could increase because it  is currently not included in plans to help control production costs. In late  1996, as part of a major program review, the Air Force and major F/A-22  contractors entered into a Target Price Curve agreement designed to  help reduce production costs and ensure production affordability. The  agreement established production cost goals for the first five production  lots (fiscal years 1999-2003) and provided the contractors with incentives  if they achieved these cost goals. Previously, the Air Force planned to  transition directly to multiyear procurement starting with the next  production lot. However, since the Air Force delayed the start of multiyear  procurement from fiscal year 2004 to fiscal 2006, fiscal 2005 is now not  covered by either the agreement with the contractor or the planned  multiyear procurement contract. Therefore, there is less assurance that  the cost of the fiscal year 2005 production lot will match the current  estimate for this production lot. If a method to help control costs is not  implemented for the fiscal year 2005 production lot, the cost of this  production lot could increase more than expected.
section_title: Other Factors Could Increase Future Production Costs
paragraphs: We found several additional risk factors that may increase production  costs in the future. As we have also previously reported, the Air Force  is depending on both multiyear procurement and the Joint Strike  Fighter initiatives to achieve offsets to estimated cost growth. Multiyear  procurement, because of the cost reductions available through long-term  commitments such as a 5-year contract, make it possible for the  contractors and subcontractors to charge lower prices for the aircraft  being procured. Joint Strike Fighter-related savings are planned  because the Air Force plans to use many of the same contractors and  subcontractors as with the Joint Strike Fighter in the F/A-22 program,  thereby lowering overhead rates and increasing buying power.
Even though the Air Force is depending on both the multiyear  procurement and Joint Strike Fighter initiatives to achieve offsets to  estimated cost growth, approval to proceed with multiyear procurement is  determined from the availability of funding. Thus, if entry into a multiyear  procurement contract does not occur as planned, offsets from the  implementation of multiyear procurement cannot be achieved. Similarly,  the success of the Joint Strike Fighter cost reduction plan is dependent on  the schedule of the Joint Strike Fighter program and the quantity of the  aircraft procured, which are determined by Congress and OSD. In an  earlier report, we cautioned that if the Joint Strike Fighter program were  not approved or were delayed, then the F/A-22 production program would  not achieve the estimated cost reductions.
Furthermore, the Air Force reduced estimated funding for F/A-22 support  costs by $1.8 billion in its latest production cost estimate. Support costs  are for such items as spare components for the aircraft and engines, spare  engines, and equipment used to support and maintain aircraft. F/A-22  program officials explained that the latest support costs estimate is a  detailed, requirements-based estimate that is more accurate than previous  estimates, but they could not provide us with the detailed rationale for this  new estimate. At the same time, we also observed that the Air Force added  about $1.8 billion to the estimated production costs associated with the  aircraft and engine. If it is determined the F/A-22 program will require the  same level of support cost funding identified by the Defense Acquisition  Board’s review, the production cost estimate will increase.
section_title: DOD Has Not Fully Informed Congress about Potential Impact of Reduced Offsets to Estimated Cost Growth
paragraphs: DOD has not fully informed Congress about specifics related to the total  cost of the F/A-22 production program or the quantity of aircraft that  can be purchased within the cost limitation. DOD uses selected acquisition  reports and the President’s budget submissions to inform Congress  about weapon systems programs. Since 1999, neither the F/A-22 selected  acquisition reports nor the President’s annual budget submissions to  Congress have included details about the amount of cost reduction plans  identified to offset cost growth. More importantly, these documents have  not included the potential cost of the F/A-22 production program if cost  reduction plans do not offset cost growth as planned. From 1996 to 1998,  selected acquisition reports did inform Congress about the potential cost  of production if cost reduction plans did not offset cost growth as planned.  If cost growth is not offset as planned, the cost of F/A-22 production could  be several billion dollars higher than currently estimated.
Furthermore, recent documentation, including the latest selected  acquisition report (December 2001) and Fiscal Year 2003 President’s  Budget submission have also not provided Congress with information  about the quantity of aircraft DOD believes can be procured under the  existing production cost limitation. Even though the production cost  limitation remains, as adjusted, at $37.5 billion, the official documentation  provided to Congress to date has not provided the number of aircraft that  can be purchased for this amount. Even at the higher cost estimate of  $43 billion, OSD and the Air Force have not been able to agree on the  aircraft quantity that can be purchased. In July 2001, we projected that the  Air Force would have to buy 85 fewer F/A-22s rather than the 333 that it  planned to buy to stay within the cost limit.
section_title: Conclusions
paragraphs: Despite the success of early cost reduction plans, we identified estimated  cost growth beyond the amounts recognized by the Air Force and DOD.
Therefore, it is important for the Air Force to take advantage of every  opportunity to offset cost growth. PIPs can be an important mechanism  for offsetting this cost growth. However, the Air Force is not investing  funding as planned in F/A-22 PIPs designed to offset estimated cost  growth. The failure to invest in PIPs at the planned level will likely not  allow estimated cost growth to be offset as planned and therefore may  affect the quantity of aircraft that can be acquired.
The F/A-22 production program has experienced a number of schedule  delays and problems that have increased the estimated costs of a program  that already requires a significant investment. DOD has not fully informed  Congress about the amount of cost reduction plans identified to offset cost  growth, the potential cost of production if cost reduction plans are not as  effective as planned, or the quantity of aircraft that can be produced  within the production cost limit. Congress would be able to utilize this  information to help exercise proper program oversight.
section_title: Recommendations for Executive Action
paragraphs: For the Air Force to achieve planned offsets to estimated cost growth, we  recommend that the Secretary of the Air Force make the funding of PIPs  at the planned level a priority.
To ensure proper congressional oversight of the F/A-22 program, we  also recommend that the Secretary of Defense provide Congress with  documentation    showing that funding for PIPs is being invested at the planned level  each fiscal year, and if not, explaining the reasons why and the potential  consequences of not fully investing and potentially not offsetting cost  growth as planned;  reflecting the potential cost of F/A-22 production if cost reduction plans do  not offset cost growth as planned; and  reflecting the quantity of aircraft DOD believes can be procured with the  existing production cost limit.
section_title: Agency Comments and Our Evaluation
paragraphs: In written comments on a draft of this report, DOD stated that it did  not concur with either of our recommendations. Regarding our first  recommendation on making investments in PIPs a priority, DOD said  that while it believes that PIP investments in general are a good idea,  the Department intends to implement PIPs on a case-by-case basis, using  expected return-on-investment criteria. DOD also commented that our  report does not provide evidence that investments in PIPs reduce costs.
Our recommendation that the Air Force make the funding of PIPs at  the planned level a priority is based on evidence from both the Air Force  and OSD that investment in PIPs at the planned level will generate a  significant return-on-investment. In addition, during the course of our  review, Air Force officials told us they planned to make up for not fully  investing in PIPs during the last 2 fiscal years by investing more in  subsequent years in order to achieve the planned savings. The Air Force’s  plan appears to recognize that it has moved beyond a case-by-case  approach. Our recommendation would support such a plan. Finally, the  reluctance to embrace PIPs in DOD’s comments appears to be contrary to  the position taken within the Department. The potential benefits of  investing in PIPs continue to be highlighted in high-level F/A-22 meetings  and correspondence to Congress. A September 2001 letter to Congress  from the Under Secretary of Defense for Acquisition, Technology and  Logistics estimates that the quantity of F/A-22 aircraft will need to be  reduced, but more aircraft can be procured if cost reduction plans  (which include PIPs) prove more successful than OSD’s estimates. We  believe our recommendation to make the funding of PIPs at the planned  level a priority puts DOD in a better position to enhance the affordability  of the F/A-22. Conversely, by not funding PIPs at the planned level, DOD  may lose opportunities to create greater production efficiencies and as a  result, have to acquire fewer aircraft.
Regarding our second recommendation related to providing  documentation to Congress on cost reduction plans, the implications of  not investing in PIPs as planned, and the aircraft quantities that can be  acquired within the existing production cost limit, DOD stated that our  recommendation is inconsistent with its decision to use a “buy-to-budget”  approach for the F/A-22 (buying the highest quantity of aircraft possible  each year on the basis of appropriated funding each year). DOD also  stated that providing this information to Congress would not provide a  reliable projection of the number of aircraft possible because (1) there are  other factors that affect cost and (2) the projected savings are uncertain  and may not materialize as the estimator expects.
We continue to believe that the Secretary of Defense should provide  Congress with this documentation. As we have discussed in this and  several earlier reports, we agree that there are indeed many factors that  can cause F/A-22 production costs to rise. And, as we have also noted,  projected offsets generated by PIPs and other cost reduction plans are  uncertain and may not all materialize, even if investments are made as  planned. Shifts in these realities are frequent and create a constantly  changing picture of F/A-22 production costs, offsets, and aircraft  quantities. This is particularly the case when PIP investments are not made  as planned. Hence, it is important that updated and accurate information  be regularly and routinely made available to Congress as the picture  changes. DOD’s argument that it is implementing a “buy-to-budget”  approach makes our recommendation more compelling because aircraft  quantities planned each fiscal year can change in the few months between  when fiscal year funding is appropriated and when a production contract  is negotiated with the prime contractor and awarded. Providing visibility  to the projection of how many aircraft can be acquired within the cost  limitation would enhance program oversight.
DOD has several extant reporting options that can be used to provide this  information. A new report is not required. For example, DOD could return  to its former practice of using annual selected acquisition reports to  inform Congress about the potential cost of production if cost reduction  plans do not offset cost growth as planned. This information was included  in these reports from 1996 to 1998. In addition, the President’s Budget  submission could be used as a vehicle to provide Congress with updated  information about the quantity of aircraft DOD believes can be acquired  under the existing production cost limitation. Finally, requests to  reprogram PIP investment funds could be expanded to include this  information along with justification for PIP reprogramming.
section_title: Scope and Methodology
paragraphs: To identify the F/A-22 production cost growth, we examined documents  related to the Joint Estimating Team’s review completed in January 1997  and received clarification on some review conclusions from the F/A-22  program office. We also reviewed documentation and discussed with  program officials the results of the 2001 F/A-22 Defense Acquisition  Board’s review that estimated $5.4 billion more in production cost growth.
To evaluate the planned effectiveness of cost reduction plans designed to  offset production cost growth, we assessed the reliability of a contractor’s  and the Air Force’s database on cost reduction plans to ensure that the  data were complete, sufficient, and relevant to our work. We reviewed  information from this database on implemented and not yet implemented  cost reduction plans. We compared estimated cost reduction plan offsets  from fiscal years 2000 and 2002 to determine current versus planned  estimated offsets for F/A-22 production lots. We also analyzed cost  information from the Air Force to determine the amount of planned and  actual funding invested in PIPs designed to offset estimated cost growth  by improving production processes.
To identify areas where additional production cost growth has occurred  and may occur, we reviewed several aspects of the F/A-22 program that  were likely to contribute to future cost growth. We examined previous and  current OSD and Air Force production cost estimates, expected delays in  the F/A-22 program’s completion of operational testing, aircraft unit price  estimates and controls, and funding for support costs.
To evaluate the degree to which DOD has informed Congress about the  potential cost of F/A-22 production, we examined the content of recent  official documentation (selected acquisition reports and President’s  budgets) provided to Congress and compared them with required content  and content that would be expected considering the congressionally  imposed F/A-22 production cost limitation.
In performing our work, we obtained information or interviewed officials  from the Office of the Secretary of Defense, Washington D.C.; the F/A-22  Program Office, Wright-Patterson Air Force Base, Ohio; and the Defense  Contract Management Agency, Marietta, Georgia. We performed our work  from March 2002 through February 2003 in accordance with generally  accepted government auditing standards.
As agreed with your office, unless you publicly announce the contents of  this report earlier, we plan no further distribution of it until 30 days from  the date of this report. At that time, we will send copies to interested  congressional committees; the Secretary of Defense; the Secretary of the  Air Force; and the Director, Office of Management and Budget. We will  also make copies available to others upon request. In addition, the report  will be available at no charge on the GAO Web site at http://www.gao.gov.
Please contact me at (202) 512-4841 or Catherine Baltzell at (202) 512-8001  if you or your staff have any questions concerning this report. Major  contributors to this report are listed in appendix VII.
section_title: Appendix I: Comments from the Department of Defense
section_title: Appendix II: Amounts Associated with Cost Reduction Plan Categories
paragraphs: F/A-22 cost reduction plans are categorized as either “implemented”  or “not yet implemented.” The Air Force and contractors’ criteria for  determining if a cost reduction plan is implemented include (1) whether  the contractor has submitted a firm-fixed price proposal that recognizes  the impact of the cost reduction, (2) whether the impact of the reduction  has been reflected in a current contract price or negotiated in an  agreement, or (3) whether the contractor has reduced the number of hours  allocated to a task.
Cost reduction plans are categorized as “not yet implemented” if the plans  are well defined but none of the criteria listed above are met.
section_title: Appendix III: F/A-22 Estimated Production Cost Growth in 1997
paragraphs: Based on a plan to procure 438 aircraft.
section_title: Appendix IV: Cost Reduction Plan Categories and Planned Offsets to Estimated Cost Growth
subsections: section_title: Dollars in billions
section_title: Appendix V: Estimated F/A-22 Production Cost Growth in 2001
paragraphs: Cost growth as a  percentage $4.60  0.95  0.50  0.25  0.20  69 14 8 4 3 0.14  $6.64  (0.80)
section_title: Appendix VI: Estimated Cost Reduction Plan Offsets for Future Production Lot Contracts
section_title: Appendix VII: GAO Staff Acknowledgments
subsections: section_title: Acknowledgments
paragraphs: Catherine Baltzell, Marvin Bonner, Edward Browning, Gary Middleton,  Sameena Nooruddin, Robert Pelletier, and Don M. Springman made key  contributions to this report.
section_title: Related GAO Products
paragraphs: Tactical Aircraft: F-22 Delays Indicate Initial Production Rates Should  Be Lower to Reduce Risks. GAO-02-298. Washington, D.C.: March 5, 2002.
Tactical Aircraft: Continuing Difficulty Keeping F-22 Production Costs  within the Congressional Limitation. GAO-01-782. Washington, D.C.:  July 16, 2001.
Tactical Aircraft: F-22 Development and Testing Delays Indicate Need  for Low-Rate Production. GAO-01-310. Washington, D.C.: March 15, 2001.
Defense Acquisitions: Recent F-22 Production Cost Estimates  Exceeded Congressional Limitation. GAO/NSIAD-00-178.  Washington, D.C.: August 15, 2000.
Defense Acquisitions: Use of Cost Reduction Plans in Estimating  F-22 Total Production Costs. GAO/T-NSIAD-00-200. Washington, D.C.:  June 15, 2000.
Budget Issues: Budgetary Implications of Selected GAO Work for  Fiscal Year 2001. GAO/OCG-00-8. Washington, D.C.: March 31, 2000.
F-22 Aircraft: Development Cost Goal Achievable If Major Problems Are  Avoided. GAO/NSIAD-00-68. Washington, D.C.: March 14, 2000.
Defense Acquisitions: Progress in Meeting F-22 Cost and Schedule Goals.  GAO/T-NSIAD-00-58. Washington, D.C.: December 7, 1999.
Fiscal Year 2000 Budget: DOD’s Procurement and RDT&E Programs.  GAO/NSIAD-99-233R. Washington D.C.: September 23, 1999.
Budget Issues: Budgetary Implications of Selected GAO Work for  Fiscal Year 2000. GAO/OCG-99-26. Washington, D.C.: April 16, 1999.
Defense Acquisitions: Progress of the F-22 and F/A-18E/F Engineering  and Manufacturing Development Programs. GAO/T-NSIAD-99-113.  Washington, D.C.: March 17, 1999.
F-22 Aircraft: Issues in Achieving Engineering and Manufacturing  Development Goals. GAO/NSIAD-99-55. Washington, D.C.: March 15, 1999.
F-22 Aircraft: Progress of the Engineering and Manufacturing  Development Program. GAO/T-NSIAD-98-137. Washington D.C.:  March 25, 1998.
F-22 Aircraft: Progress in Achieving Engineering and Manufacturing  Development Goals. GAO/NSIAD-98-67. Washington, D.C.: March 10, 1998.
Tactical Aircraft: Restructuring of the Air Force F-22 Fighter Program.  GAO/NSIAD-97-156. Washington, D.C.: June 4, 1997.
Defense Aircraft Investments: Major Program Commitments Based on  Optimistic Budget Projections. GAO/T-NSIAD-97-103. Washington, D.C.:  March 5, 1997.
F-22 Restructuring. GAO/NSIAD-97-100BR. Washington, D.C.:  February 28, 1997.
Tactical Aircraft: Concurrency in Development and Production of F-22  Aircraft Should Be Reduced. GAO/NSIAD-95-59. Washington, D.C.:  April 19, 1995.
Tactical Aircraft: F-15 Replacement Issues. GAO/T-NSIAD-94-176.  Washington, D.C.: May 5, 1994.
Tactical Aircraft: F-15 Replacement Is Premature as Currently Planned.  GAO/NSIAD-94-118. Washington, D.C.: March 25, 1994.