Tactical Aircraft: F-22A Modernization Program Faces Cost, Technical, and Sustainment Risks
Published: 2012-05-02T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Air Force currently plans to spend $11.7 billion to modernize and improve reliability of the F-22A, its fifth generation air superiority fighter. GAO was asked to evaluate (1) cost and schedule outcomes and (2) testing results and risks going forward in the F-22A modernization program and related efforts. To do this, GAO examined the programs budgets and schedule estimates over time and discussed any changes with program officials, and reviewed progress and results from developmental and operational testing, and plans to mitigate risks and resolve system deficiencies. fighter. Originally designed to counter air threats posed by the former Soviet Union, the post-Cold War era spurred efforts to add new missions and capabilities to the F-22A, including improved air-to-air and robust air-to-ground attack capabilities. In 2003, the Air Force established the F-22A modernization program to develop and insert new capabilities in four increments.
GAO was asked to evaluate (1) cost and schedule outcomes and (2) testing results and risks going forward in the F-22A modernization program and related efforts. To do this, GAO examined the programs budgets and schedule estimates over time and discussed any changes with program officials, and reviewed progress and results from developmental and operational testing, and plans to mitigate risks and resolve system deficiencies.
section_title: What GAO Found
paragraphs: Total projected cost of the F-22A modernization program and related reliability and maintainability improvements more than doubled since the program startedfrom $5.4 billion to $11.7 billionand the schedule for delivering full capabilities slipped 7 years, from 2010 to 2017. The content, scope, and phasing of planned capabilities also shifted over time with changes in requirements, priorities, and annual funding decisions. Visibility and oversight of the programs cost and schedule is hampered by a management structure that does not track and account for the full cost of specific capability increments. Substantial infrastructure costs for labs, testing, management, and other activities directly support modernization but are not charged to its projects. The Air Force plans to manage its fourth modernization increment as a separate major acquisition program, as defined in DOD policy and statutory requirements.
Testing of new capabilities to ensure operational effectiveness and suitability is ongoing. Results to date have been satisfactory but development and operational testing of the largest and most challenging sets of capabilities have not yet begun. Going forward, major challenges will be developing, integrating, and testing new hardware and software to counter emerging future threats. Other risks are associated with greater reliance on laboratory ground tests and relocating an F-22A lab needed to conduct software testing. While modernization is under way, the Air Force has undertaken parallel efforts to improve F-22A reliability and maintainability to ensure life-cycle sustainment of the fleet is affordable and to justify future modernization investments. But the fleet has not been able to meet a key reliability requirement, now changed, and operating and support costs are much greater than earlier estimated.
section_title: What GAO Recommends
paragraphs: GAO recommends that DOD evaluate capabilities to determine if future F-22A modernization efforts meeting DOD policy and statutory requirements should be established as separate major acquisition programs.
DOD concurred with our recommendation.

section_title: Letter
paragraphs: The Air Force currently plans to spend about $11.7 billion to modernize  and improve the reliability of the F-22A, the Air Force’s fifth generation air  superiority fighter. About $9.7 billion will be spent on specific  modernization increments and related support costs, and nearly $2 billion  will be used to improve the reliability of the F-22A and make structural  repairs. Originally designed to counter air threats posed by the former  Soviet Union, the post-Cold War era spurred efforts to add new missions  and capabilities to the F-22A, including improved air-to-air and robust air- to-ground attack and capabilities. In 2003, the Air Force established the  F-22A modernization program to develop and insert new capabilities. The  timing and scope of the modernization program has changed over time,  costs have significantly increased, and fielding of some capabilities has  been delayed. In this context, you asked us to evaluate cost, schedule,  and performance outcomes and risks of the F-22A modernization  program.
To determine the extent to which the F-22A modernization program is  meeting cost and schedule goals, we researched the history of the  program, plans and expectations at the start, and tracked budgets and  schedule estimates over time. We identified changes in plans and  estimates and discussed these changes with Air Force and Department of  Defense (DOD) officials. To determine performance outcomes and risks  remaining, we reviewed progress and results from developmental and  operational testing and plans to mitigate risks and resolve system  deficiencies. This included reviewing and discussing annual test reports  from DOD’s Office of the Director, Operational Test & Evaluation  (DOT&E), briefings to defense oversight and requirements offices,  summaries of recent operational test results provided by Air Force test  officials, and program risk information related to testing new capabilities.
We conducted this performance audit from June 2011 to April 2012 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: The Air Force’s F-22A Raptor is the only operational fifth-generation  tactical aircraft, incorporating a low observable (stealth) and highly  maneuverable airframe, advanced integrated avionics, and a supercruise  engine capable of sustained supersonic flight. The F-22A acquisition  program began in 1991 with an intended development period of 12 years  and a planned quantity of 648 aircraft. The system development and  demonstration period eventually spanned 14 years, during which time  threats, missions, and some requirements changed. In particular, the      F-22A was originally designed to fly primarily air-to-air missions; however,  since that time the Air Force has decided to add air-to-ground capabilities  to the F-22A. Development costs substantially increased and total  quantities were eventually decreased to 188 aircraft. When the final  aircraft is delivered in May 2012, the F-22A acquisition program will be  complete at a cost of $67.3 billion.
In 2003, the Air Force established a modernization program to develop  and insert new and enhanced capabilities considered necessary to meet  the threat. According to Air Force officials, modernization is defined as a  process of upgrading and modifying aircraft with a focus on adding new  capabilities. The modernization is now proceeding in four related  increments, each with multiple projects:   the initial phase of modernization, addressed some  Increment 2,requirements deferred from the acquisition program and added some  new ground attack capability. It has been fielded.  Increment 3.1 began fielding in November 2011 and adds enhanced  radar and enhanced air-to-ground attack capabilities.  Increment 3.2A is a software upgrade to increase the F-22A’s  electronic protection, combat identification, and Link-16  communications and data link capabilities.  Increment 3.2B  will increase the F-22A’s electronic protection, geo- location, and Intra Flight Data Link (IFDL) capabilities, and adds AIM- 9X and AIM-120D missiles.
In addition to these efforts, in 2006, the Air Force began a Reliability and  Maintainability Maturation Program (RAMMP). Although the Air Force  does not consider this part of the modernization program, it is integral to  making the F-22A weapon system more available, reliable, and  maintainable. Since the F-22A’s initial fielding in 2006, maintenance  issues have prevented it from achieving reliability and availability  requirements, and fleet operating and support (O&S) costs are much  higher than projected earlier in the program.
section_title: F-22A Modernization Costs Have Increased and Deliveries of New Capabilities to the Warfighter Have Been Delayed
paragraphs: Total projected cost of the F-22A modernization program has more than  doubled since it started. While the program has completed and fielded  some of its planned capabilities, the overall schedule to complete  integration and testing of planned capabilities and deliver them to the  warfighter has slipped by nearly 7 years. The content, scope, and phasing  of planned capabilities also shifted over time with changes in  requirements, priorities, and annual funding decisions. Visibility and  oversight of the program’s cost and schedule is hampered by a  management structure that does not directly track and account for the full  cost of specific capability increments. The Air Force plans to separately  break out and manage the fourth increment as a major defense  acquisition program, which should improve management and oversight.
subsections: section_title: F-22A Modernization Costs Have Risen Sharply Since the Program Began
paragraphs: The Air Force is now expected to spend around $11.7 billion to modernize  and improve the reliability of the F-22A, compared with the $5.4 billion  projected soon after the start of development. Officials underestimated  the scope of the total program and the time and money that would  eventually be needed to develop and field new capabilities. Contributing  factors to this cost growth include (1) changed and added requirements;  (2) unexpected expenses for building a support infrastructure; and (3)  unplanned efforts to improve aircraft reliability and maintainability.  Program officials also said that instability in modernization funding  contributed to some of the cost growth by stretching the time required to  complete projects. Figure 1 shows increased cost estimates over time for  the modernization program and other related costs.
Modernization increments include development and procurement costs  directly tied to one of the four increments for acquiring upgraded  capabilities. These include infrastructure costs for lab support, test  operations, program management, retrofit to bring all aircraft to a  common configuration, and other efforts integral to supporting  modernization increments. Other improvement costs principally include  the RAMMP reliability and maintainability projects and making structural  repairs needed for the aircraft to achieve its required 8,000 hour service  life. At this point, an estimated $5.5 billion of the $11.7 billon has been  spent. A future investment of around $6.2 billion remains: $1.3 billion for  Increment 3.2B, $3.6 billion for other modernization and support activities,  and $1.3 billion for completing the RAMMP and structural repairs.
section_title: Completion of F-22A Modernization Projects Has Been Significantly Delayed as Content, Scope, and Phasing of Capabilities Changed over Time
paragraphs: When the F-22A modernization development program began, the Air  Force expected to have all current planned capabilities integrated and  fielding started by 2010. Now, the final increment is not expected to begin  fielding until 2017, 7 years later than initially planned. Air Force officials  stated that they underestimated the sheer magnitude of the  modernization effort, both in the amount of time required to develop and  integrate the capability, and costs to complete the modernization.  According to program officials, contributing factors to delays include (1)  additional requirements, (2) unexpected problems and delays during  testing, and (3) research, development, testing, and evaluation funding  fluctuations. Figure 2 compares the initial and latest schedules.
According to Air Force officials, the program currently intends to upgrade  143 aircraft with the full complement of modernized capabilities by fiscal  year 2020 and retain 36 aircraft with only Increment 2 capabilities to be  used in training. Increment 3.1 is being fielded in fiscal years 2011 to  2016 and Increment 3.2A from fiscal years 2014 to 2016. Increment 3.2B,  the last currently planned increment, is expected to field from fiscal years  2017 and 2020. Future capability enhancements are expected to follow  the current modernization program, but have not been defined.
The content, scope, and phasing plan changed over time, contributing to  cost and schedule problems.  Figure 3 illustrates the changing nature of  modernization projects, particularly in the later increments.
Some capabilities, such as the Multifunction Advanced Data Link, have  been eliminated because of changes in requirements and immature  technology. Some, like the AIM-9X missile, have been added to the  program to meet emerging threats. Some required capabilities have been  reduced, such as the Geolocate project, which will now field a less- capable version than initially planned.
Air Force officials stated that potential new capabilities are analyzed and  vetted by evaluating technical maturity and applying cost as independent  variable principles to determine which to include in the F-22A  modernization program. As a result of this evaluation process, certain  capabilities have been modified, deferred, added, or eliminated. Most  changes affect the final two increments. For example, MADL, which was  intended to provide communications interoperability with the F-35 Joint  Strike Fighter, was removed from Increment 3.2B. MADL and other  deferred efforts, such as the full Small Diameter Bomb capability, may  eventually be delivered in future increments yet to be defined.
section_title: Visibility and Oversight of the Program’s Cost and Schedule Is Hampered by a Management Structure and Funding Mechanism
paragraphs: Tracking and accounting for the full and accurate cost of each  modernization increment, and individual projects within each increment,  are limited by the way the modernization program is structured, funded,  and executed. As depicted in figure 4, only 26 percent of total projected  costs can be traced directly to the four modernization increments. About  57 percent of total costs go to fund activities that support all the  modernization efforts and the overall F-22A program but are not charged  to specific increments. These activities include test operations, the  building and use of government labs, management activities, retrofit  efforts to bring the fleet to a common configuration, and other  infrastructure accounts. The remaining 17 percent funds the RAMMP  program and structural repairs. While Air Force officials do not consider  these efforts as part of the funded modernization program, we note that  these efforts are needed to improve fleet affordability and achieve desired  aircraft life and thus integral to justify future modernization investments.
Program accountability and oversight have been hampered by how the  modernization program was established, managed, and funded. As we  reported in March 2005, the Air Force embarked on the modernization  program without a knowledge-based business case to support the  multibillion dollar investment to significantly change the aircraft’s  capabilities and missions.should have been established as an entirely separate acquisition program  with a new business case because of the magnitude of the proposed  changes. A sound business case would have matched requirements with  resources—proven technologies, sufficient engineering capabilities, time,   We stated that the modernization program  and funding—when undertaking new product development.information about the schedule and funding was not adequately known at  the start of modernization. Rather than making the new business case to  justify and manage the modernization program as a separate major  defense acquisition, Air Force officials incorporated it within the existing  F-22A acquisition program and comingled funds. Their rationale was their  belief that breaking modernization efforts out as a separate program  would have delayed the capability. As a result, development funding and  infrastructure expenses were added to the existing acquisition program’s  baseline.
The modernization program proceeded without establishing its own set of  acquisition milestones and has not been subject to the same level of  scrutiny by senior defense leaders or the performance reporting required  of major defense acquisition programs as provided for in DOD acquisition  policy. At their discretion, DOD chose to execute it within the baseline     F-22A program.
In November 2004, defense leaders recognized that the size and  importance of the modernization program warranted a higher level of  scrutiny. The acting Under Secretary of Defense for Acquisition,  Technology and Logistics directed the Air Force to hold separate  milestone reviews for the future stages of the modernization program to  be consistent with DOD acquisition policy. Under this Air Force direction,  the current modernization projects would not require formal milestones,  but Office of the Secretary of Defense (OSD) oversight would be provided  by periodic reviews. In 2007, OSD directed the Air Force to update the    F-22A Acquisition Program Baseline to reflect the approved Increments  3.1 and 3.2; however, the Air Force believed that an acquisition strategy  report rather than a baseline would provide better insight into funding and  schedule details for the modernization increments. Not separating the  modernization program from the F-22A program baseline was consistent  with how the Air Force had handled modernization programs for prior  aircraft. However, had the Air Force initiated the program under existing  guidelines established by DOD Instruction 5000.02 for managing and  implementing major acquisition programs, oversight of the program would  have benefitted. Under these guidelines, programs are required to have  an approved minimum set of Key Performance Parameters, included in  the Capability Development Document; an approved Acquisition Strategy;   Acquisition Program Baseline; an Analysis of Alternatives; and an  Independent Cost Estimate, for a Milestone B decision that would allow  them to proceed into the Engineering and Manufacturing Development  phase.
OSD recently reiterated its requirement for the F-22A to be consistent  with DOD policy, and in December 2011, OSD directed the Air Force to  establish increment 3.2B as a separate major defense acquisition  program. According to the Air Force, this increment is expected to cost  around $1.5 billion. Given the significant slips in schedule experienced by  increments 3.1 and 3.2A, the decision to separately oversee increment  3.2B is a late but positive change. Increment 3.2B will be reported as its  own major program with system development starting in fiscal year 2013.  This should improve management, cost visibility, and program oversight.  Air Force officials told us that they expect to manage and report all future  F-22A modernization programs as separate acquisitions, starting with  Increment 3.2B.
section_title: Performance Outcomes Have Been Judged Satisfactory, but Testing and Improving Reliability and Affordability of the Fleet Will be Challenging
paragraphs: Testing how well new capabilities perform is ongoing; results to date have  been satisfactory but development and operational testing of the largest  and most challenging sets of capabilities have not yet begun. Going  forward, major challenges will be developing, integrating, and testing new  hardware and software to counter emerging future threats. Other risks are  associated with availability of unique test assets, greater reliance on  laboratory ground tests, and relocation of a key F-22A lab that is needed  to help support testing of software for the new capabilities. Parallel efforts  to improve F-22A reliability and maintainability are critical to ensure life- cycle sustainment of the fleet is affordable and to justify future  modernization investments.
subsections: section_title: Operational Testing Results on New Capabilities Have Been Mostly Positive to Date, but More Challenging Efforts Are Still Ahead
paragraphs: New F-22A capabilities delivered by the modernization program will be  demonstrated through follow-on operational testing and evaluation to  assess the upgraded F-22A’s effectiveness and suitability. Testing on  the first two increments successfully demonstrated new air-to-ground  capabilities. Testing of the third and fourth increments has not begun and  several technical risks remain for these new capabilities. Successful  mitigation of these risks is critical to keeping F-22A’s planned upgrades  on schedule and within planned costs. Table 1 shows the current status  of F-22A modernization operational testing for each increment.
Follow-on operational testing and evaluation for F-22A fighters  incorporating Increment 2 capabilities, including assessments of  expanded air-to-ground capability and improvements in system suitability,  were successfully completed in August 2007. The F-22A’s configured with  Increment 2 capabilities were found to be operationally effective in  suppressing and destroying fixed enemy air defenses, and also  demonstrated successful fixes of deficiencies and weapons integration  problems that had caused problems in previous testing. Flight testing  demonstrated the ability to employ the Joint Direct Attack Munition  (JDAM) at supersonic speeds in a high- threat anti-access environment  where stealth capabilities are needed. Without this capability, baseline  aircraft were only able to launch JDAMs at fixed targets in lower threat  environments and at slower speeds while using target coordinates from  ground spotters.
Increment 3.1 further enhances F-22A’s air-to-ground capability by  allowing the aircraft to find and locate ground targets with on-board  systems, rather than relying on external personnel and platforms for  targeting. Increment 3.1 completed follow-on operational testing in  November 2011; a significant delay of 4 years from the original plan due  to shortcomings identified with the baseline and upgraded aircraft. In  2009 and 2010, the Director of Operational Test and Evaluation (DOT&E)  reported significant stealth-related maintenance issues that lowered  operational availability and mission capability rates. F-22A program  officials identified technical issues in upgrading radar, navigation, and  software that needed to be addressed to meet operational testing  requirements.
The Air Force began Increment 3.1 operational testing in January 2011,  but soon encountered flight delays that persisted from March to  September 2011. The entire F-22A fleet was ordered to stand-down due  to potential problems with the aircraft’s oxygen generation system.  Unavailability of the test range and technical problems with ground  support equipment also contributed to the lengthy flight delay. The Air  Force completed flight testing for Increment 3.1 in November 2011 and  expects to release the operational test report in late March 2012. In its  2011 annual report, DOT&E did not identify any significant remaining  issues since flights had resumed. DOT&E also approved reducing trials  from 16 to 8 and decreasing simulator test trials from 96 to 64. According  to program officials, hardware and software issues had been identified  and fixed as testing progressed and test pilots provided very positive  feedback on Increment 3.1’s enhancements.
Increment 3.2A development began in November 2011 after significant  delays. This increment involves updating software to enhance electronic  protection and combat identification capabilities, so that F-22A can handle  new threats expected in the future. Developmental testing for this  increment is expected to start in 2012 and be completed in late 2013.  Operational testing and evaluation will follow and is planned to conclude  in 2014.
Program officials assessed the Increment 3.2A schedule as having  moderate risk. Test aircraft have been operating much longer than  planned and were to be replaced by new production aircraft; however,  this has not happened due to the substantial reduction in the size of the  F-22A fleet. Other risks appear lower. For example, some software for  electronic protection and combat identification capabilities has already  been developed for the F-35 Joint Strike Fighter. Also, while the Link-16  upgrade will involve a significant amount of development work, program  officials consider it to be moderate risk.
Increment 3.2B is scheduled to begin Engineering and Manufacturing  Development in December 2012 and the decision to enter into production  is scheduled for January 2016. Key capability upgrades include  integrating the AIM-9X and AIM-120D missiles on the F-22A and  upgrading geolocation and electronic protection subsystems. Early  requirements analysis determined that AIM-9X integration may be more  difficult and take longer than expected and officials have already begun  risk reduction efforts. Overall, software integration is considered to have  the highest risk for Increment 3.2B projects, while hardware development  is rated as a moderate risk. Program officials believe that the full range of  capabilities added in the modernization program can be accommodated  within the weight and space limitations of the F-22A aircraft, but this will  be a critical consideration in any future modernization plans.
The Air Force is seeking ways to reduce the costs of Increments 3.2A and  3.2B by streamlining program activities. Officials want to make more use  of developmental tests to also satisfy operational test requirements,  allowing the program to identify errors for correction earlier and reducing  overall costs by eliminating redundant tests. The program also intends to  increase its use of F-22A ground laboratories to substitute for more  expensive flight tests. The F-22A lab infrastructure is an extensive,  distributed system of dedicated labs that integrate and certify flight  software releases to the field and support F-22A modernization,  production and sustainment activities. However, there are technical risks  if lab tests do not fully replicate the performance of actual F-22A aircraft in  intended environments. Officials are also expecting to save money by  relocating the Raptor Avionics Integration Lab—a critical work site that  stimulates sensors for targeting—from Marietta, Georgia, to Ogden Air  Logistics Center, Utah by the summer of 2012. Program officials  acknowledge there are some risks in this. For example, unique equipment  could be damaged during the move and experienced lab staff could  decide to leave the F-22A program rather than relocate.
section_title: RAMMP Program Addresses Reliability and Maintainability Deficiencies to Improve Affordability and Justify Future Investments
paragraphs: In addition to capability upgrades, the F-22A budget also funds efforts to  address reliability and maintainability deficiencies that have increased  support costs and have prevented the F-22A from meeting a key  performance requirement. RAMMP is to develop and implement  enhancements to increase aircraft availability, make maintenance faster  and less costly, and reduce total life-cycle operating and support costs  and cost per flying hour. While RAMMP is expected to reduce life-cycle  costs over the long term, up-front investments to help realize future cost  reductions have increased. The program had planned to spend about  $258 million between 2005 and 2011, but actual investments through  2011 were about $528 million. The total RAMMP funding requirement  through the year 2023 is now estimated at almost $1.3 billion. Air Force  officials attributed part of RAMMP’s increased costs to additional projects  and increased labor hours to address corrosion.
Keeping the F-22A fleet affordable and meeting required performance  measures is critical to sustaining fleet operations over the long term, and  ensuring it is available in sufficient numbers for required missions.  Projected operational and support costs are much higher than earlier  estimates. For example, a 2007 independent estimate by the Air Force  Cost Analysis Agency projected a $49,549 cost per flying hour in 2015  (by which time the F-22A was expected to reach full maturity), more than  double the $23,282 cost per flight hour estimated in 2005.
Air Force officials gave various reasons for sustainment cost increases  including (1) unrealized savings from the F-22A’s performance-based  logistics contract (2) fixed costs that had to be spread over a smaller  number of aircraft; and (3) higher than expected costs to refurbish or  replace broken parts, including diminishing manufacturing sources.  However, the one common contributing factor—and the most impactful— is the cost and complexity of maintaining stealth characteristics and  restoring aircraft to the required stealth level after flight operations and  maintenance. Our recent report found that the number of maintenance  personnel required to maintain the F-22A’s specialized stealth exterior  has increased, posing a continuing support challenge for this aircraft.
This has important implications for the affordability and life-cycle cost  estimates for the F-35 Joint Strike Fighter.
When it started in 2006, a major goal of RAMMP was to improve F-22A  reliability to meet its key performance requirement by the time the fleet  reached maturity at 100,000 total flight hours. This performance indicator,  known as mean time between maintenance (MTBM), required aircraft in  the F-22A fleet to fly an average of 3 hours between maintenance events,  excluding routine servicing and inspections. This performance standard  was a key performance requirement in the F-22A acquisition contract, but  the fleet has never been able to meet that requirement. Currently, the  MTBM achieved by the operational test aircraft with improvements is 2.47  hours.
In April 2011, the Joint Requirements Oversight Council approved  changing the main reliability metric from MTBM to another performance  indicator, known as material availability. Officials believed the MTBM  indicator was hard to define and measure, was unrealistic, and did not  accurately reflect the fleet’s readiness to perform missions. Material  availability is defined as the percentage of the fleet available to perform  assigned missions at any given time. This standard calls for the F-22A  fleet to achieve increasing levels of availability between 2011 and 2015  toward the final goal of 70.6 percent. Last year, the F-22A fleet achieved  a 55.5 percent materiel availability rate. Stealth-related maintenance,  system component reliability problems, and lack of spare engines were  factors contributing to the fleet not achieving the goal. However, program  officials expect the F-22A fleet to achieve the final availability goal by  2015 after the full fielding of reliability improvements. The Air Force  reported that operational test on aircraft integrated with the current  reliability improvements have achieved 78 percent availability; they  anticipate significant gains by the overall fleet once reliability  improvements are installed on all F-22A aircraft.
section_title: Conclusions
paragraphs: Keeping the F-22A as the world’s most advanced stealth fighter requires  the Air Force to counter changing threats, as well as ensure the F-22A  fleet is affordable, reliable, and sustainable. In response to changing  threats, officials began a Modernization Program to add new missions  and capabilities while fixing problems and deficiencies that were carried  over from the original development program. However, the F-22A  modernization program has not had the management rigor or oversight  on par with the $11.7 billion investment it entails. The program was not  well-defined when it began in 2003, has had fluid scope and cost, and  has been challenging from an oversight perspective as it was blended  into the baseline F-22A program rather than being managed separately.  As early as 2004, OSD began discussing the need to manage future  modernization increments as separate acquisition programs. While  modernization has been underway, the Air Force has found it necessary  to invest in improved reliability and availability of the F-22A through the  RAMMP program. The original reliability requirement was not met and  has since been changed to another indicator. Meanwhile, O&S costs  have been significantly higher than planned, with maintenance of the  aircraft’s stealth levels being particularly demanding. The lessons learned  on the maintenance of the stealthy F-22A may have implications for the  F-35 Joint Strike Fighter.
Splitting out increment 3.2B as a separate major acquisition defense  program indicates that OSD is reasserting its role in the F-22A program.  This is beneficial for oversight in light of the significant decisions and  investments yet to come for the program. Increment 3.2B requires around  $1.3 billion, while completing the RAMMP program, ongoing  modernization projects, and other improvements will require an estimated  $4.9 billion—a total future investment of around $6.2 billion. The program  is highly dependent on a single contractor, whose responsibilities  encompass managing the development and production of the F-22A;  development, production, and retrofit of modernization; execution of the  RAMMP program; and life-cycle support of the F-22A fleet, including  supply and maintenance. Finally, the Air Force informed us that it expects  to manage future modernization increments as separate acquisitions.  However, given the approach the Air Force has taken to date on this and  other modernization programs, there is little assurance that this will occur  without specific OSD direction.
section_title: Recommendation for Executive Action
paragraphs: As new and enhanced capabilities are proposed and vetted beyond  Increment 3.2B in the F-22A modernization program, we recommend that  the Under Secretary for Acquisition, Technology and Logistics evaluate  those capabilities in accordance with DOD policy and statutory criteria to  determine if they should be established as separate major defense  acquisition programs, each with its own milestones, business case, and  cost baseline that includes all applicable direct and indirect support costs  required to complete the program.
section_title: Agency Comments and Our Evaluation
paragraphs: DOD provided us written comments on a draft of this report. The  comments appear in appendix II. DOD also provided technical comments  that were incorporated as appropriate. During the agency comment  period, DOD requested clarification regarding our recommendation. As a  result, we revised the recommendation to more clearly state that the  Under Secretary of Acquisition, Technology and Logistics will evaluate  future planned F-22A modernization capabilities to determine if those  meeting DOD policy and statutory criteria should be established as a  separate major acquisition program.
DOD concurred with the revised recommendation.
We are sending copies of this report to interested congressional  committees, the Secretary of Defense, the Secretary of the Air Force and  the Under Secretary of Defense for Acquisition, Technology and  Logistics. In addition, the report will be available at no charge on GAO’s  website at http://www.gao.gov.
If you or your staff have questions about this report, please contact me at  (202) 512-4841 or SullivanM@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report.
section_title: Appendix I: Scope and Methodology
paragraphs: To determine the extent to which F-22A modernization met cost and  schedule goals and operational requirements, we reviewed  documentation of program plans and status, including cost estimates,  briefings by program office officials to Department of Defense (DOD) and  Air Force oversight officials, annual Selected Acquisition Reports,  Defense Acquisition Executive Summary reports, Director, Operational  Test and Evaluation (DOT&E) annual test result summaries, Defense  Contract Management Agency (DCMA) program assessment reports,  acquisition plans, operational requirements documentation, contract  documentation, schedules and other data. We reviewed documentation of  key decisions made on F-22A modernization, including acquisition  decision memoranda and Joint Requirements Oversight Council  memoranda. We reviewed F-22A cost performance report data, contract  cost data, and budgetary documents. In assessing the achievement of  cost goals by the F-22 modernization and other improvement efforts, we  compared the program cost estimate from 2004, shortly before  development began for Increment 2, with the latest available estimates.  We determined what changes in planned capabilities occurred after  modernization efforts began. In assessing the F-22A modernization’s  achievement of schedule goals and delivery of planned capabilities, we  identified progress made in delivering new capabilities in accordance with  plans, and determined what factors contributed to schedule changes. We  interviewed program office officials having knowledge of factors driving  cost estimate and schedule changes over time. We also interviewed  officials from the F-22A Program Office, DOD test organizations, and Air  Combat Command to obtain their views on progress; ongoing concerns  and actions taken to address them; and future plans to complete F-22A  development procurement and operational testing. We used the latest  cost data available during the period of our review; however the F-22A  program office was preparing a new cost estimate for F-22A  modernization and the estimated costs of increments beyond Increment  3.2B had not yet been determined or added to this estimate.
To determine what progress has been made in completing developmental  and operational testing, and resolving system deficiencies, we reviewed  DOT&E annual test report summaries and briefings to DOD oversight and  requirements officials. We reviewed summaries of recent operational test  results provided by Air Force test officials and program risk information  related to developmental and operational testing for F-22A modernization.  We reviewed documentation of program decisions, including acquisition  decision memoranda. We reviewed data from prior GAO reviews on  operations and support costs for F-22A and other stealth aircraft,  Selected Acquisition Reports, Defense Acquisition Executive Summary  reports, contract documents, and program cost estimates. In assessing  progress made in operational testing, we compared initial and current  operational test plans to determine if significant changes were made after  testing began. We identified relevant factors contributing to testing delays.  In assessing the resolution of system deficiencies, we identified the  number of successful test points flown during operational testing and  identified what changes were made in requirements after operational  testing began. We determined what key risks and issues remain that  could affect developmental and operational testing in the future. We  identified issues contributing to increased operations and sustainment  costs and to decreased aircraft availability, and actions taken by the F- 22A program to mitigate them. We interviewed officials from the F-22A  Program Office, DOD test organizations, and Air Combat Command to  obtain their views on progress, ongoing concerns and actions taken to  address them, and future plans to complete developmental and  operational testing. At the time of our review, the final follow-on  operational test and evaluation results for Increment 3.1 were not yet  available and other test information we had requested was not readily  available within the reporting period for this report due to its high  classification level. Accordingly, our analysis of actual results and data  was somewhat constrained and our reporting limited to providing  summary level observations due to the classification level of some of the  data. Notwithstanding, DOD officials gave us access to sufficient  information to make informed judgments on the matters covered in this  report.
In performing our work, we obtained information and interviewed officials  from the F-22A Program Office, Wright-Patterson Air Force Base, Ohio;  Air Combat Command, Langley Air Force Base Virginia; Office of the  Director, Operational Test & Evaluation, Office of the Secretary of  Defense, Arlington, Virginia; and the Air Force Operational Test and  Evaluation Center, Kirtland Air Force Base, New Mexico. We assessed  the reliability of DOD and F-22A contractor data by (1) obtaining and  reviewing related information from various sources, and (2) interviewing  agency officials knowledgeable about the data. We determined that the  data were sufficiently reliable for the purposes of this report. We  conducted this performance audit from June 2011 to March 2012 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix II: Comments from the Department of Defense
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Bruce Fairbairn, Assistant  Director; Marvin Bonner; Sean Seales; Marie Ahearn; Ana Aviles; Laura  Greifner; Travis Masters; and Roxanna Sun made key contributions to  this report.
section_title: Related GAO Products
paragraphs: Tactical Aircraft: Comparison of F-22A and Legacy Fighter Modernization  Programs. GAO-12-524. Washington, D.C.: April 26, 2012.
Joint Strike Fighter: Restructuring Places Program on Firmer Footing, but  Progress Still Lags. GAO-11-325. Washington, D.C.: April 7, 2011.
Defense Acquisitions: Assessments of Selected Weapon Programs.  GAO-11-233SP. Washington, D.C.: March 29, 2011.
Tactical Aircraft: DOD’s Ability to Meet Future Requirements Is Uncertain,  with Key Analyses Needed to Inform Upcoming Investment Decisions.  GAO-10-789. Washington, D.C.: July 29, 2010.
Defense Management: DOD Needs Better Information and Guidance to  More Effectively Manage and Reduce Operating and Support Costs of  Major Weapon Systems. GAO-10-717. Washington, D.C.: July 20, 2010.
Defense Contracting: DOD Has Enhanced Insight into Undefinitized  Contract Action Use, but Management at Local Commands Needs  Improvement. GAO-10-299. Washington, D.C.: January 28, 2010.
Defense Acquisitions: Measuring the Value of DOD’s Weapon Programs  Requires Starting with Realistic Baselines. GAO-09-543T. Washington,  D.C.: April 1, 2009.
GAO Cost Estimating and Assessment Guide. GAO-09-3SP. Washington,  D.C.: March 2, 2009.
Defense Acquisitions: A Knowledge-Based Funding Approach Could  Improve Major Weapon System Program Outcomes. GAO-08-619.  Washington, D.C.: July 2, 2008.
Tactical Aircraft: DOD Needs a Joint and Integrated Investment Strategy.  GAO-07-415. Washington, D.C.: April 2, 2007.
Tactical Aircraft: DOD Should Present a New F-22A Business Case  before Making Further Investments. GAO-06-455R. Washington, D.C.:  April 26, 2006.
Defense Acquisitions: Air Force Still Needs Business Case to Support  F/A-22 Quantities and Increased Capabilities. GAO-05-304. Washington,  D.C.: March 15, 2005.