V-22 Osprey Aircraft: Assessments Needed to Address Operational and Cost Concerns to Define Future Investments
Published: 2009-06-23T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Since the 1980s, the V-22, developed to transport combat troops, supplies, and equipment for the U.S. Marine Corps and to support other services' operations, has experienced several fatal crashes, demonstrated various deficiencies, and faced virtual cancellation--much of which it has overcome. Although recently deployed in Iraq and regarded favorably, it has not performed the full range of missions anticipated, and how well it can do so is in question. Given concerns about the V-22 program, GAO recently reviewed and on May 11, 2009, reported on MV-22 operations in Iraq; strengths and deficiencies in terms of the capabilities expected of the V-22; and past, current, and future costs. In that report, GAO recommended that the Secretary of Defense require (1) a new alternatives analysis of the V-22 and (2) that the Marine Corps develop a prioritized strategy to improve system suitability, reduce operational costs, and align future budget requests. The Department of Defense (DOD) concurred with the second recommendation, but not the first. GAO believes both recommendations remain valid. This testimony highlights GAO's findings from that report. In speaking of the V-22, we are actually speaking of two variants of the same aircraft. The MV-22 is used by the Marine Corps; and the CV-22 by the Air Force to support special operations. This statement largely focuses on the MV-22, but also refers to the V-22 and CV-22.
section_title: What GAO Found
paragraphs: As of January 2009, the 12MV-22sin Iraq successfully completedall missions assigned in a low-threat theater of operations--using their enhanced speed and range to deliver personnel and internal cargo faster and farther than the legacy helicopters being replaced. However, challenges to operational effectiveness were noted that raise questions about whether the MV-22 is best suited to accomplish the full repertoire of missions of the helicopters it is intended to replace. Additionally, suitability challenges, such as unreliable component parts and supply chain weaknesses, led to low aircraft availability rates. Additional challenges have been identified with the MV-22's ability to operate in high-threat environments, carry the required number of combat troops and transport external cargo, operate from Navy ships, and conduct missions in more extreme environments throughout the world. While efforts are underway to address these challenges, it is uncertain how successful they will be as some of them arise from the inherent design of the V-22. The V-22's original program cost estimates have changed significantly. From 1986 through 2007, the program's Research, Development, Test, and Evaluation cost increased over 200 percent--from $4.2 to 12.7 billion--while the cost of procurement increased 24 percent from $34.4 to $42.6 billion. This increase coincided with significant reductions in the number of aircraft being procured--from nearly 1,000 to less than 500--resulting in a 148 percent increase in cost for each V-22. Operations and support costs are expected to rise. An indication is the current cost per flying hour, which is over $11,000--more than double the target estimate for the MV-22. After more than 20 years in development, the MV-22 experience in Iraq demonstrated that the Osprey can complete missions assigned in low-threat environments. Its speed and range were enhancements. However, challenges may limit its ability to accomplish the full repertoire of missions of the legacy helicopters it is replacing. If so, those tasks will need to be fulfilled by some other alternative. Additionally, the suitability challenges that lower aircraft availability and affect operations and support costs need to be addressed. The V-22 program has already received or requested over $29 billion in development and procurement funds. The estimated funding required to complete development and procure additional V-22s is almost $25 billion (then-year dollars). In addition, the program continues to face a future of high operations and support cost funding needs, currently estimated at $75.4 billionfor the life cycle of the program. Before committing to the full costs of completing production and supporting the V-22, the uses, cost, and performance of the V-22 need to be clarified and alternatives should be re-considered.

section_title: Letter
paragraphs: I am very pleased to be here today to discuss the current status of the V-22  Osprey program. Since the V-22 Osprey began development in the mid- 1980s, it has experienced several fatal crashes, demonstrated a variety of  deficiencies, and faced the virtual cancellation of the program—much of  which it has been able to overcome. There are two variants of the V-22 tilt- rotor aircraft currently being used. The MV-22 variant for the Marine Corps  will replace the CH-46E helicopter as the Marine Corps’ medium-lift  aircraft—to be used along with the heavy-lift CH-53—to fulfill operational  requirements such as transporting combat troops, supplies, and  equipment. The Air Force’s CV-22 variant will augment existing U.S.  Special Operations Command aircraft. Until recently, the MV-22 was  deployed in Iraq. While it accomplished assigned missions there, its usage  did not encompass the full range of tasks anticipated for the aircraft. In  addition, identified operational challenges raise questions concerning how  effectively it can perform the full range of anticipated missions.
My testimony today is based on our recently issued report Defense  Acquisitions: Assessments Needed to Address V-22 Aircraft Operational  and Cost Concerns to Define Future Investments. In view of our past  work and others’ highlighting concerns about the V-22 program, you asked  us to determine whether the V-22 will perform as promised, and if it will, at  what cost. To do this, we reviewed and reported on the system from three  perspectives:  Its operations in Iraq,  Its strengths and deficiencies in terms of the capabilities expected of it,  and  Its past, current, and future costs.
Our work on both this testimony and the report on which it is based was  conducted from June 2008 to May 2009 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 V-22 Osprey is a tilt-rotor aircraft—one that operates as a helicopter  for takeoffs and landings and, once airborne, converts to a turboprop  aircraft—developed to fulfill medium-lift operations such as transporting  combat troops, supplies, and equipment for the U.S. Navy, Marine Corps,  and Air Force special operations. Figure 1 depicts V-22 aircraft in various  aspects of use.
The Osprey program was started in December 1981 to satisfy mission  needs for the Army, Navy, and Air Force. Originally headed by the Army,  the program was transferred to the Navy in 1982 when the Army withdrew  from the program citing affordability issues. The program was approved  for full-scale development in 1986, and the first aircraft was flown in 1989.  A month after the first flight, the Secretary of Defense stopped requesting  funds for the program due to affordability concerns. In December 1989,  the Department of Defense (DOD) directed the Navy to terminate all V-22  contracts because, according to DOD, the V-22 was not affordable when  compared to helicopter alternatives, and production ceased. Congress  disagreed with this decision, however, and continued to fund the project.  In October of 1992 the Navy ordered development to continue and  awarded a contract to a Bell Helicopter Textron and Boeing Helicopters  joint venture to begin producing production-representative aircraft.
Low-Rate Initial Production began in 1997. In 2000, the MV-22 variant  began operational testing, the results of which led the Navy’s operational  testers to conclude that the MV-22 was operationally effective and was  operationally suitable for land-based operations. Later evaluations  resulted in testers concluding that the MV-22 would be operationally  suitable on ships as well. Based on the same tests, DOD’s independent  operational testers concluded that the MV-22 was operationally effective  but not operationally suitable, due in part to reliability concerns. Despite  the mixed test conclusions, a Program Decision Meeting was scheduled  for December 2000 to determine whether the V-22 should progress beyond  low-rate initial production into full-rate production. Following two fatal  crashes that occurred in 2000 and resulted in 23 deaths, the last one  occurring just before the full-rate production decision, the V-22 was  grounded and, rather than proceeding to full-rate production, the program  was directed to continue research and development while low-rate  production continued. Before the V-22 resumed flight tests, modifications  were made to requirements and design changes were made to the aircraft  to correct safety concerns and problems. A second round of operational  testing with modified aircraft was conducted in June 2005. Both Navy and  DOD testers then recommended that the aircraft be declared operationally  effective and suitable for military use. The Defense Acquisition Board  approved it for military use as well as full-rate production in September  2005.
section_title: MV-22 Operations in Iraq Demonstrated Effectiveness for Assigned Missions but the Aircraft Continues to Experience Challenges
paragraphs: The MV-22 deployments in Iraq were considered successful. As of January  2009, the 12 MV-22s deployed in Iraq and utilized by three separate  squadrons had successfully completed all missions assigned to them  including general support—moving people and cargo—in what was  considered an established, low-threat theater of operations. These  deployments confirmed that the MV-22’s enhanced speed and range enable  personnel and internally carried cargo to be transported faster and farther  than is possible with the legacy helicopters the MV-22 is replacing.  According to MV-22 users and troop commanders, its speed and range “cut  the battlefield in half,” expanding battlefield coverage with decreased  asset utilization and enabling it to do two to three times as much as legacy  helicopters in the same flight time. Cited advantages include more rapid  delivery of medical care, more rapid completion of missions, and more  rapid travel by U.S. military officials to meetings with Iraqi leaders. The  MV-22 also participated in a few AeroScout missions and carried a limited  number of external cargo loads.
However, questions have arisen about whether the MV-22 is the aircraft  best suited to accomplish the full mission repertoire of the helicopters it is  intended to replace, and some challenges in operational effectiveness have  been noted. Also, aircraft suitability challenges, such as unreliable parts  and supply chain weaknesses, drove availability significantly below  minimum required levels.
The aircraft’s use in Iraq demonstrated operational challenges. For  example, the introduction of the MV-22 into Iraq in combination with  existing helicopters has led to some reconsideration of the appropriate  role of each. Battlefield commanders and aircraft operators in Iraq  identified a need to better understand the role the Osprey should play in  fulfilling warfighter needs. They indicated, for example, that the MV-22  may not be best suited for the full range of missions requiring medium lift,  because the aircraft’s speed cannot be exploited over shorter distances or  in transporting external cargo. These concerns were also highlighted in a  recent preliminary analysis of the MV-22 by the Center for Naval Analysis,  which found that the MV-22 may not be the optimal platform for those  missions.
Availability challenges also impacted the MV-22. In Iraq, the V-22’s mission  capability (MC) and full-mission capability (FMC) rates fell significantly  below required levels as well as rates achieved by legacy helicopters.  The  V-22 MC minimum requirement is 82 percent, with an objective of 87  percent, compared with actual MC rates for the three squadrons of 68, 57  and 61 percent. This experience is not unique to Iraq deployment, as low  MC rates were experienced for all MV-22 squadrons, in and out of Iraq. In  comparison, the Iraq-based legacy helicopter MC rates averaged 85  percent or greater during the period of October 2007 to June 2008.  Similarly, the program originally had a FMC requirement of 75 percent; but  its actual rate of 6 percent in Iraq from October 2007 to April 2008 was  significantly short of that, due in large part to faults in the V-22’s Ice  Protection System. In areas where icing conditions are more likely to be  experienced, such as in Afghanistan, this may threaten mission  accomplishment.
Repair parts issues and maintenance challenges affected the availability of  MV-22s in Iraq. V-22 maintenance squadrons faced reliability and  maintainability challenges, stemming from an immature supply chain not  always responsive to the demand for repair parts and aircraft and engine  parts lasting only a fraction of their projected service life. The MV-22  squadrons in Iraq made over 50 percent more supply-driven maintenance  requests than the average Marine aviation squadron in Iraq. A lack of  specific repair parts took place despite having an inventory intended to  support 36 aircraft as opposed to the 12 aircraft deployed. However, only  about 13 percent of those parts were actually used in the first deployment.  In addition, many parts that were used were in particularly high demand,  which led to a shortage that caused cannibalization of parts from other V- 22s, MV-22s in the United States, and from the V-22 production line.
Thirteen V-22 components accounted for over half the spare parts  unavailable on base in Iraq when requested. These 13 lasted, on average,  less than 30 percent of their expected life, and 6 lasted less than 10 percent  of their expected life. V-22 engines also fell significantly short of service  life expectancy, lasting less than 400 hours versus the program estimated  life of 500-600 hours.
section_title: Operational Tests and Training Exercises Have Identified Challenges to Accomplishing Full Range of Possible Operations
paragraphs: V-22 missions in Iraq represent only a portion of the operations envisioned  for the aircraft, but operational tests and training exercises have identified  challenges in the V-22’s ability to conduct operations in high-threat  environments, carry the required number of combat troops and transport  external cargo, operate from Navy ships, and conduct missions operating  in more extreme environments throughout the world. While efforts are  underway to address these challenges, success is uncertain since some of  them arise from the inherent design of the V-22.
High-Threat Environments: The Osprey was intended to operate across  a spectrum of high-threat combat situations, facing a broad range of  enemy land- and sea-based weapons. However, its ability to do so is not  yet demonstrated.    The V-22 has maneuvering limits that restrict its ability to perform  defensive maneuvers and it does not have a required integrated  defensive weapon needed to suppress threats while approaching a  landing zone, disembarking troops within the landing zone, or while  leaving the landing zone. Currently, the Marine Corps intends to  employ the aircraft in a manner that limits its exposure to threats—a  change from the original intent that the system would be able to  operate in such environments.
Transporting Personnel and External Cargo: Operational tests and  shipboard training exercises have determined that the capacity of the MV- 22 to transport troops and external cargo is, in some cases, below program  requirements.    The V-22 cannot carry a full combat load of 24 Marines if equipped as  intended. The average weight of each Marine fully equipped with  improved body armor and equipment has risen from 240 to 400 lbs. As a  result, the aircraft can only transport 20 fully loaded combat troops  rather than the 24-troop requirement. Troop-carrying capacity may be  further reduced in other configurations and flight scenarios.
Most external cargo loads have not been certified for high-speed  transport and thus would not enable the V-22’s speed to be leveraged.  Anticipated new and heavier equipment would not be able to be  transported by the Osprey. A 2007 Center for Naval Analysis study  found that the MV-22 will not be able to externally transport heavier  equipment, such as the Joint Light Tactical Vehicle—which is to  replace the Marine Corps’ High-Mobility, Multi-Purpose Wheeled  Vehicle (HMMWV). As a result, the study concluded that there will be  less need for MV-22s for external lifting and an increased need for  heavier lift helicopters.
The weight of the MV-22 with added equipment planned as upgrades to  currently configured aircraft may pose a moderate risk to the program.  The heavier the aircraft is, the less it can carry. Weight growth as a  result of planned MV-22 upgrades could reduce the aircraft’s  operational utility transporting loads in higher altitude regions of the  world, such as Afghanistan.
Operating on Navy Ships: Efforts to ready the V-22 for deployment  onboard Navy ships have identified numerous challenges.    Because it is larger than the helicopter it is replacing, ships can carry  fewer V-22s than the predecessor aircraft. Also, the V-22 cannot fully  utilize all operational deck spots on ships. The MV-22 is only cleared to  take off and land from four of the six operational deck spots of the  LHA- and LHD-class ships usable by CH-46s.
The Osprey’s large inventory of repair parts also constrains hangar  deck space essential for maintenance actions on the V-22 and other  aircraft. The space needed for its repair parts is so large that some  parts may need to be prepositioned ashore.
Safety concerns caused by downwash have been documented. The V- 22’s proprotors create downwash significantly greater than that of the  CH-46s it is replacing. The downwash impacts operations below the  aircraft, including troop embarkation and debarkation, hooking up  external loads, and fastroping. During shipboard exercises, the V-22’s  downwash dislodged equipment such as life raft container securing  bands and was so severe in one instance that another person was  assigned to physically hold in place the sailor acting as the landing  guide. Recently completed tests on the CV-22 found that the significant  downwash also had various negative effects on land-based missions.
Challenges Operating Globally in Extreme Environments: The  Osprey’s ability to conduct worldwide operations in many environments is  limited.    The V-22 had a requirement that its fuselage and cockpit be designed to  restrict the entry of nuclear, biological, and chemical contaminants into  the aircraft. During initial operational tests numerous problems  existed with the seals that maintained cabin pressure, so the system  could not be used. Without it, operational V-22s are forced to avoid or  exit areas of suspected contamination and decontaminate affected  aircraft, likely reducing their availability and sortie capability.
The MV-22 is intended to support diverse mission requirements that  will require it to fly during the day or at night, in favorable or adverse  weather, and across a range of altitudes from close to the ground to  above 10,000 feet above mean sea level. Current V-22 operating  limitations do not support helicopter operations above 10,000 feet. The  MV-22 currently does not have a weather radar and the Osprey’s Ice  Protection System is unreliable, so flying through known or forecasted  icing conditions is currently prohibited.
section_title: V-22 Costs Rose While Performance Requirements Were Modified
paragraphs: The V-22’s original program cost estimates have changed significantly as  research and development, and procurement costs have risen sharply  above initial projections. Operations and supports costs are just beginning  and are expected to rise. This has taken place in spite of the fact that  performance standards and metrics for V-22 were modified throughout the  development effort.
subsections: section_title: V-22 Business Case and Acquisition Strategy Have Eroded as Costs Have Increased Significantly and Are Expected to Continue to Rise
paragraphs: From initial development in 1986 through the end of 2007, the program’s  Research, Development, Test, and Evaluation cost increased over 200  percent—from $4.2 to $12.7 billion—while its procurement cost increased  nearly 24 percent from $34.4 to $42.6 billion. This increase coincided with  significant reductions in the number of aircraft being procured—from  nearly a thousand to less than 500 (most of which will be procured for the  Marine Corps)—resulting in a 148 percent increase in procurement unit  cost for each V-22. Operations and support (O&S) cost are also expected  to rise. Table 1 details key aspects of the V-22 program’s cost and schedule  experience from development start to 2007.
O&S costs—typically the largest portion of a weapon system’s total  costs—are currently reported at $75.41 billion for the life cycle of the  program, but O&S costs for the program are just beginning and are  expected to rise. One indication they may rise is the current cost per flying  hour, which is over $11,000—more than double the target estimate for the  MV-22 as well as 140 percent higher than the cost for the CH-46E. The  Osprey’s Iraq experience demonstrated that the rise in cost is due in part  to unreliable parts, the cost of some parts, and required maintenance.
As illustrated in figure 2, the program’s estimated future funding needs are  approximately $100 billion (then-year dollars)—nearly $25 billion in  procurement and around $75 billion in O&S.
According to Marine Corps officials, the presence of unreliable parts  contributed to reliability and maintainability issues for MV-22 deployed in  Iraq, and a program is in place to address underperforming components.  However, program management does not consider the current reliability  and maintainability strategy to be coherent. Problems with parts reliability  have resulted in more maintenance activity than expected, and if there is  no improvement, overall cost and maintenance hours may remain high.  Changes to the current engine sustainment contract with Rolls Royce—the  V-22’s engine manufacturer—could also affect the program’s already rising  O&S costs.
section_title: Key Performance Standards and Other Performance Metrics for MV-22 Modified
paragraphs: Initially, the Marine Corps’ proposed performance parameters for the V-22  were focused on speed, range, and payload. However, the Joint  Requirements Oversight Council deferred consideration of system  requirements until completing the 1994 Cost and Operational Effectiveness  Analysis that validated the V-22 over other alternatives. While reports  indicate that the MV-22 is meeting all its key performance parameters,  program officials said modifications were made to balance aircraft  operational requirements against technical risks and program costs. In  2001, for example, modifications consolidated 14 key performance  parameters into 7 for the MV-22 variant.
While the office of the Director, Operational Test and Evaluation (DOT&E)  found the MV-22 operationally effective in 2000, it did not find it  operationally suitable, due in part to reliability concerns. Mission  capability, one of the metrics used to measure suitability, was modified in  2004 such that the mission capability rate does not now have to be met  until the aircraft reaches system maturity (60,000 flight hours), whereas  the requirement previously specified no minimum required number of  flight hours. According to Marine Corps Headquarters officials, the aircraft  currently has over 50,000 hours and may reach the 60,000 hour threshold  within a year.
Concerns about V-22 weight increase and how it may affect aircraft  performance have continued. In 2005, a DOT&E report on the second  operational test of the MV-22 predicted a drop in performance due to a  projected weight increase. However, according to Navy operational testers  who tested the aircraft in 2007, performance did not decrease. DOT&E did  not report on the 2007 test. The program office is currently tracking weight  increase in the newest version of the aircraft as a potential risk to the  achievement of select key performance parameters.
section_title: Concluding Observations
paragraphs: After more than 20 years in development and 14 years since the last cost  and operational effectiveness analysis was developed to reaffirm the  decision to proceed with the V-22 program, the MV-22 experience in Iraq  demonstrated that the Osprey can complete missions assigned in low- threat environments. Its speed and range were enhancements. However,  challenges may limit its ability to accomplish the full repertoire of  missions of the legacy helicopters it is replacing. If so, those tasks will  need to be fulfilled by some other alternative. Viewed more broadly, the  MV-22 has yet to fully demonstrate that it can achieve the original required  level of versatility. To be useful to the warfighter in a variety of climates  and places, its ability to address and resolve a range of operational  challenges must be re-evaluated. Furthermore, suitability challenges that  lower aircraft availability and affect the operations and support funding  that may be required to maintain the fleet need to be addressed. Based on  the Iraq experience, the cost per flight hour is more than double the target  estimate. DOD is therefore faced with the prospect of directing more  money to a program, the military utility of which in some areas remains  unproven. Now is a good time to consider the return on this investment as  well as other less costly alternatives that may fill the current requirement.
The V-22 program has already received or requested over $29 billion in  development and procurement funds. The estimated funding required to  complete the development and procure additional V-22s is almost $25  billion (then-year dollars). In addition, the program continues to face a  future of high operations and support cost funding needs, currently  estimated at $75.4 billion for the life cycle of the program. Before  committing to the full costs of completing production and support the V- 22, the uses, cost, and performance of the V-22 need to be clarified and  alternatives should be reconsidered. Questions to consider include: To  what degree is the V-22 a suitable and exclusive candidate for the  operational needs of the Marine Corps and other services? How much will  it cost? How much can DOD afford to spend? To what degree can a  strategy be crafted for ensuring control over these future costs? If the V-22  is only partially suitable, to what degree can another existing aircraft or  some mixture of existing aircraft (including V-22s) or a new aircraft  perform all or some of its roles more cost effectively? Some consideration  should be given to evaluating the roles such aircraft play in today’s  theaters of war and whether their performance warrants their cost.
Failure to re-examine the V-22 program at this point risks the expenditure  of billions of dollars on an approach that may be less effective than  alternatives. Furthermore, if the suitability challenges facing the program  are not adequately addressed, the future cost of the program could rise  significantly requiring funds that might otherwise be made available to  satisfy other needs. This is why we recommended in our May 11 report  that the Secretary of Defense (1) re-examine the V-22 by requiring a new  alternatives analysis and (2) require the Marine Corps to develop a  prioritized strategy to improve system suitability, reduce operational costs,  and align future budget requests. DOD concurred with our second  recommendation, but not the first. In non-concurring with our  recommendation for a new V-22 alternatives analysis, DOD stated that it  supports validating required MV-22 quantities and the proper mix of  aircraft, but not by means of a new V-22 alternatives analysis. Rather, DOD  stated that planning for all elements of Marines Corps aviation (including  required quantities, location, and employment of medium-lift assets) and  total force affordability are reviewed and updated annually in the Marine  Aviation Plan. We maintain our recommendation for a new alternatives  analysis as a means of providing a comparison of a fuller range of  alternatives, including their costs, operational suitability, and operational  effectiveness under varying scenarios and threat levels. Furthermore,  development of a V-22 alternatives analysis could assure congressional  decision-makers that a reasoned business case exists that supports the  planned acquisition of an additional 282 V-22s and an expenditure of  almost $25 billion in procurement funds in fiscal years 2010 and beyond.
Mr. Chairman, this concludes my prepared statement. I would be pleased  to answer any questions that you or other Members of the Committee may  have at this time.
section_title: GAO Contact and Staff Acknowledgments
paragraphs: For further information about this testimony, please contact Michael J.  Sullivan at (202) 512-4841 or sullivanm@gao.gov. Individuals making key  contributions to this testimony include Bruce H. Thomas, Assistant  Director; Jerry W. Clark; Bonita J.P. Oden; Bob Swierczek; Kathryn E.  Bolduc; Jonathan R. Stehle; Johanna Ayers; Jason Pogacnik; Hi Tran;  William Solis; and Marie P. Ahearn.
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