Tactical Aircraft: Recapitalization Goals Are Not Supported by Knowledge-Based F-22A and JSF Business Cases
Published: 2006-03-16T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Department of Defense's (DOD) F-22A and Joint Strike Fighter (JSF) programs aim to replace many of the Department's aging tactical fighter aircraft--many of which have been in DOD's inventory for more than 20 years. Together, the F-22A and JSF programs represent a significant investment for DOD--currently estimated at almost $320 billion. GAO has reported on the poor outcomes in DOD's acquisitions of tactical aircraft and other major weapon systems. Cost and schedule overruns have diminished DOD's buying power and delayed the delivery of needed capabilities to the warfighter. Last year, GAO testified that weaknesses in the F-22A and JSF programs raised questions as to whether DOD's overarching tactical aircraft recapitalization goals were achievable. At the request of this Subcommittee, GAO is providing updated testimony on (1) the extent to which the current F-22A and JSF business cases are executable, (2) the current status of DOD's tactical aircraft recapitalization efforts, and (3) potential options for recapitalizing the air forces as DOD moves forward with its tactical aircraft recapitalization efforts.
section_title: What GAO Found
paragraphs: The future of DOD's tactical aircraft recapitalization depends largely on the outcomes of the F-22A and JSF programs--which represent about $245 billion in investments to be made in the future. Both programs continue to be burdened with risk. The F-22A business case is unexecutable in part because of a 198 aircraft gap between the Air Force requirement and what DOD estimates it can afford. The JSF program, which has 90 percent of its investments still in the future, plans to concurrently test and produce aircraft thus weakening DOD's business case and jeopardizing its recapitalization efforts. It plans to begin producing aircraft in 2007 with less than 1 percent of the flight test program completed. DOD's current plan to buy about 3,100 new major tactical systems to replace its legacy aircraft represents a 33-percent reduction in quantities from original plans. With reduced buys and delays in delivery of the new systems, costs to keep legacy aircraft operational and relevant have increased. While the Secretary of Defense maintains that continued U.S. air dominance depends on a recapitalized force, DOD has not presented an investment strategy for tactical aircraft systems that measures needs, capability gaps, alternatives, and affordability. Without such a strategy, DOD cannot reasonably ensure it will recapitalize the force and deliver needed capabilities to the warfighter within cost and schedule targets. As DOD moves forward with its efforts to recapitalize its tactical aircraft, it needs to rethink the current business cases for the F-22A and JSF programs. This means matching needs and resources before more F-22A aircraft are procured and ensuring the JSF program demonstrates acceptable aircraft performance before it enters initial production.

section_title: Letter
paragraphs: I am pleased to be here today to participate in the subcommittee’s hearing  on the Department of Defense’s (DOD) tactical air forces, including two of  its major tactical aircraft fighter programs—the F-22A and the F-35, also  known as the Joint Strike Fighter (JSF). Both programs are intended to  replace aging tactical fighter aircraft with highly advanced, stealthy  aircraft. These two programs together represent a significant investment— currently estimated at almost $320 billion—for DOD. To date nearly   $75 billion has been appropriated for these programs, and based on  current plans, they represent a potential future investment of about   $245 billion over the next 20 years. In fiscal year 2007 alone, the budget  request under consideration for these programs represents over $8 billion.  Given the large potential investment that the F-22A and JSF programs  represent, decisions based on fact and knowledge about needs and  resources are key to ensure that sound program investments are made.
Any discussion of the significance of DOD’s investment in these two  weapon systems demands that they be placed in the larger context. Fiscal  imbalances and competing national needs will continue to constrain  discretionary spending for years to come. Over the past 5 years, the  department has doubled its planned investments in new weapon systems  from about $700 billion in 2001 to nearly $1.4 trillion in 2006. At the same  time, research and development cost growth on new weapons continues to  be about 30 to 40 percent. This is how one must view major new  investments, such as the F-22A and JSF, because more money may not be  an option for the future. Rather, the key to getting better outcomes is to  make individual programs more executable.
We have reported and testified in the past on the disappointing outcomes  of DOD’s acquisitions of tactical aircraft and other major weapon systems  (see GAO Related Products). DOD’s budgeting plans and the reality of the  costs of its systems have been vastly different. Performance—if defined as  the capability that actually reaches the warfighter—tends to fall short of  expectations, as cost increases often result in late deliveries of smaller  quantities of weapon systems. DOD has lost opportunities and buying  power in the process. Last year, we testified that weaknesses in the F-22A  and JSF programs raised questions as to whether DOD’s overarching  tactical aircraft recapitalization goals were achievable.
My testimony today focuses on (1) the extent to which the current F-22A  and JSF business cases are executable, (2) the current status of DOD’s  tactical aircraft recapitalization efforts, and (3) potential options for  recapitalizing the air forces as DOD moves forward with its tactical  aircraft recapitalization efforts. We performed our work in accordance  with generally accepted government auditing standards.
subsections: section_title: Background
paragraphs: Over the past 20 years, DOD has been engaged in an effort to modernize its  aging tactical aircraft force. The F-22A and JSF, along with the F/A-18E/F,   are the central elements of DOD’s overall recapitalization strategy for its  tactical air forces. The F-22A was developed to replace the F-15 air  superiority aircraft. The continued need for the F-22A, the quantities  required, and modification costs to perform its mission have been the  subject of a continuing debate within DOD and the Congress. Supporters  cite its advanced features—stealth, supercruise speed, maneuverability,  and integrated avionics—as integral to the Air Force’s Global Strike  initiative and for maintaining air superiority over potential future  adversaries. Critics argue that the Soviet threat it was originally designed  to counter no longer exists and that its remaining budget dollars could be  better invested in enhancing current air assets and acquiring new and  more transformational capabilities that will allow DOD to meet evolving  threats. Its fiscal year 2007 request includes $800 million for continuing  development and modifications for aircraft enhancements such as  equipping the F-22A with an improved ground attack capability and  improving aircraft reliability. The request also includes about $2.0 billion  for advance procurement of parts and funding of subassembly activities  for the initial 20 aircraft of a 60-aircraft multiyear procurement.
JSF is a replacement for a substantial number of aging fighter and attack  aircraft currently in the DOD inventory. For the Air Force, it is intended to  replace the F-16 and A-10 while complementing the F-22A. For the Marine  Corps, the JSF is intended to replace the AV-8B and F/A-18 A/C/D; for the  Navy, the JSF is intended to complement the F/A-18E/F. DOD estimates  that as currently planned, it will cost $257 billion to develop and procure  about 2,443 aircraft and related support equipment, with total costs to  maintain and operate JSF aircraft adding $347 billion over the program’s  life cycle. After 9 years in development, the program plans to deliver its  first flight test aircraft later this year. The fiscal year 2007 budget request  includes $4 billion for continuing development and $1.4 billion for the  purchase of the first 5 procurement aircraft, initial spares, and advance  procurement for 16 more aircraft to be purchased in 2008.
We have frequently reported on the importance of using a sound,  executable business case before committing resources to a new product  development. In its simplest form, such a business case is evidence that  (1) the warfighter’s needs are valid and can best be met with the chosen  concept and quantities, and (2) the chosen concept can be developed and  produced within existing resources—that is, proven technologies, design  knowledge, adequate funding, and adequate time to deliver the needed  product. At the heart of a good business case is a knowledge-based  strategy to product development that demonstrates high levels of  knowledge before significant commitments of time and money are made.
section_title: F-22A and JSF Acquisition Business Cases Still Include Considerable Risks
paragraphs: The future of DOD’s tactical aircraft recapitalization depends largely on  the outcomes of the F-22A and JSF programs—which represent about $245  billion in investments to be made in the future. Yet achieving expected  outcomes for both these programs continues to be fraught with risk. We  have reported that the F-22A’s original business case is unexecutable and  does not reflect changing conditions over time. Currently, there is a  significant mismatch between the Air Force’s stated need for F-22A  aircraft and the resources the Office of the Secretary of Defense (OSD) is  willing to commit. The business case for the JSF program, which has 90  percent of its investments still in the future, significantly overlaps  production with development and system testing—a strategy that often  results in cost and schedule increases. Both programs are at critical  junctures that require DOD to make important business decisions.
subsections: section_title: Matching F-22A Requirements and Resources Is Crucial to Future Recapitalization Investment Decisions
paragraphs: According to the Air Force, a minimum of 381 modernized F-22A aircraft  are needed to satisfy today’s national strategic requirements—a buy that  is roughly half the 750 aircraft originally planned, but more than double  the 183 aircraft OSD states available funding can support. Since the Air  Force began developing the F-22A in 1986, the business case for the  program has changed radically— threats have changed, requirements have  been added, costs have increased, funds have been added, planned  quantities have been reduced, and deliveries of the aircraft to the  warfighter have been delayed. There is a 198-aircraft capability gap today.  Decisions in the last 2 years have worsened the mismatch between Air  Force requirements and available resources, further weakening the F-22A  program’s business case. Without a new business case, an agreement on  an appropriate number of F-22As for our national defense, it is uncertain  as to whether additional investments in the program are advisable.
The original business case for the F-22A program was to develop air  superiority fighters to counter a projected threat of significant quantities  of advanced Soviet fighters. During the 19-year F-22A development  program, that threat did not materialize to the degree expected. Today, the  requirements for the F-22A have evolved to include what the Air Force has  defined as a more robust ground attack capability to destroy expected air  defense systems and other ground targets and an intelligence-gathering  capability. However, the currently configured F-22A is not equipped to  carry out these roles without further investments in its development. The  F-22As modernization program is currently being planned for three basic  blocks, or spirals, of increasing capability to be developed and delivered  over time. Current Air Force estimates of modernization costs, from 2007  through 2016, are about $4.3 billion. Additional modernization is expected,  but the content and costs have not been determined or included in the  budget.
OSD has restructured the acquisition program twice in the last 2 years to  free up funds for other priorities. In December 2004, DOD reduced the  program to 179 F-22As to save about $10.5 billion. This decision also  terminated procurement in 2008. In December 2005, DOD changed the F- 22A program again, adding $1 billion to extend production for 2 years to  ensure a next-generation fighter aircraft production line would remain in  operation in case JSF experienced delays or problems. It also added 4  aircraft for a total planned procurement of 183 F-22As. As part of the 2005  change, aircraft previously scheduled in 2007 will not be fully funded until  2008 or later.
OSD and the Air Force plan to buy the remaining 60 F-22As in a multiyear  procurement that would buy 20 aircraft a year for 3 years—2008 through  2010. The Air Force plans to fund these aircraft in four increments—an  economic order quantity to buy things cheaper; advanced procurement for  titanium and other materials and parts to protect the schedule;  subassembly; and final assembly. The Air Force plans to provide Congress  a justification for multiyear procurement in May 2006 and the fiscal year  2007 President’s Budget includes funds for multiyear procurement. The  following table shows the Air Force’s plan for funding the multiyear  procurement. Air Force officials have told us that an additional $400  million in funds are needed to complete the multiyear procurement and  that the accelerated schedule to obtain approval and start the effort adds  risk to the program, creating more weaknesses in the current F-22A  business case.
A 198-aircraft gap between what the Air Force needs and what is  affordable raises questions about what additional capabilities need to be  included in the F-22A program. In March 2005, we recommended that the  Air Force develop a new business case that justified additional  investments in modernizing the aircraft to include greater ground attack  and intelligence-gathering capabilities before moving forward. DOD  responded to our report that business case decisions were handled  annually in the budget decisions and that the QDR would analyze  requirements for the F-22A and make program decisions. However, it is  not clear from the QDR report, issued last month, what analyses were  conducted to determine the gaps in capability, the alternatives considered,  the quantities needed, or the costs and benefits of the F-22A program.  Therefore, questions about the F-22A program remain:    What capability gaps exist today and will exist in the future (air  superiority, ground attack, electronic attack, intelligence gathering)?
What alternatives besides the F-22A can meet these needs?    What are the costs and benefits of each alternative?    How many F-22As are needed?    What capabilities should be included?
Until these questions are answered and differences are reconciled, further  investments in the program—for either the procurement of new aircraft or  modernization—cannot be justified.
section_title: JSF Business Case Still Contains Cost and Schedule Risks
paragraphs: The JSF program appears to be on the same path as the F-22A program.  After being in development for 9 years, the JSF program has not produced  the first test aircraft, has experienced substantial cost growth, has reduced  the number of planned aircraft, and has delayed delivery of the aircraft to  the warfighter. Moreover, the JSF program remains committed to a  business case that invests heavily in production before testing has  demonstrated acceptable performance of the aircraft. At the same time,  the JSF program has contracted to develop and deliver the aircraft’s full  capability in a single-step, 12-year development program—a daunting task  given the need to incorporate the technological advances that, according  to DOD, represent a quantum leap in capability. The business case is a  clear departure from the DOD policy preference that calls for adopting an  evolutionary approach to acquisitions. Furthermore, the length and cost of  the remaining development are exceedingly difficult to accurately  estimate, thereby increasing DOD’s risks in contracting for production.  With this risky approach, it is likely that the program will continue to  experience significant cost and schedule overruns.
The JSF program expects to begin low-rate initial procurement in 2007  with less than 1 percent of the flight test program completed and no  production representative prototypes built for the three JSF variants.  Technologies and features critical to JSF’s operational success, such as a  low observable and highly common airframe, advanced mission systems,  and maintenance prognostics systems, will not have been demonstrated in  a flight test environment when production begins. Other key  demonstrations that will have not been either started or only in the initial  stages before production begins include  testing with a fully integrated aircraft—mission systems and full  software,    structural and fatigue testing of the airframe, and    shipboard testing of Navy and Marine Corps aircraft.
When the first fully integrated and capable development JSF is expected to  fly in 2011, DOD will already have committed to buy 190 aircraft at an  estimated cost of $26 billion. According to JSF program plans, DOD’s low- rate initial production quantities will increase from 5 aircraft a year in 2007  to 133 a year in 2013, when development and initial operational testing are  completed. By then, DOD will have procured more than double that  amount—424 aircraft at an estimated cost of about $49 billion, and  spending for monthly production activities is expected to be about $1  billion, an increase from $100 million a month when production is  scheduled to begin in 2007. Figure 1 shows the significant overlap in  development and testing and the major investments in production.
The overlap in testing and production is the result of a business case and  acquisition strategy that has proven to be risky in past programs like   F-22A, Comanche, and B-2A, which far exceeded the cost and delivery  goals set at the start of their development programs. JSF has already  increased its cost estimate and delayed deliveries despite a lengthy  replanning effort that added over $7 billion and 18 months to the  development program. JSF officials have stated that the restructured  program has little or no flexibility for future changes or unanticipated  risks. The program has planned about 8 years to complete significant  remaining activities of the system development and demonstration phase,  including  fully maturing 7 of the 8 critical technologies;    completing the designs and releasing the engineering drawings for all    manufacturing and delivering 15 flight test aircraft and 7 ground test    developing 19 million lines of software code; and    completing a 7-year, 12,000-hour flight test program.
The JSF program’s latest planned funding profile for development and  procurement, produced in December 2004 by the JSF program office,  assumes annual funding rates to hover close to $13 billion between 2012  and 2022, peaking at $13.8 billion in 2013. If the program fails to achieve its  current estimated costs, funding challenges could be even greater than  that. The Office of Secretary of Defense Cost Analysis Improvement Group  was to update its formal independent cost estimate in the spring of 2005.  The group now does not expect to formally complete its estimate until  spring 2006, but its preliminary estimate was substantially higher than the  program office’s. A modest cost increase would have dramatic impacts on  funding. For example, a 10 percent increase in production costs would  amount to over $21 billion (see fig. 2).
DOD has recently made decisions to reduce near-term funding  requirements that could cause future JSF costs to increase. It had begun to  invest in the program to develop an alternative engine for the aircraft, but  now plans to cancel further investments in order to make the remaining  funds available for other priorities. According to DOD, it believes that  there is no cost benefit or savings with an engine competition for the JSF  and there is low operational risk with going solely with a single engine  supplier. DOD has already invested $1.2 billion in funding for this  development effort through fiscal year 2006. By canceling the program, it  expects to save $1.8 billion through fiscal year 2011. Developing  alternative engines is a practice that has been used in past fighter aircraft  development programs like the F-16 and F-15 programs. An alternative  engine program may help maintain the industrial base for fighter engine  technology, result in price competition in the future for engine acquisition  and spare parts, instill incentives to develop a more reliable engine, and  ensure an operational alternative should the current engine develop a  problem that would ground the entire fleet of JSF aircraft. As result, the  JSF decision should be supported by a sound business case analysis. To  date, we have not seen such an analysis.
Finally, the uncertainties inherent in concurrently developing, testing, and  producing the JSF aircraft prevent the pricing of initial production orders  on a fixed price basis. Consequently, the program office plans to place  initial procurement orders on cost reimbursement contracts. These  contracts will provide for payment of allowable incurred costs, to the  extent prescribed in the contract. With cost reimbursement contracts a  greater cost risk is placed on the buyer—in this case, DOD. For the JSF,  procurement should start when risk is low enough to enter into a fixed  price agreement with the contractor based on demonstrations of the fully  configured aircraft and manufacturing processes.
section_title: DOD’s Tactical Aircraft Recapitalization Goals Are Not Being Met
paragraphs: DOD has not been able to achieve its recapitalization goals for its tactical  aircraft forces. Originally, DOD had planned to buy a total of 4,500 tactical  aircraft to replace the aging legacy force. Today, because of delays in the  acquisition programs, increased development and procurement costs, and  affordability pressures, it plans to buy almost one-third fewer tactical  aircraft (see fig. 3). The delivery of these new aircraft has also been  delayed past original plans. DOD has spent nearly $75 billion on the F-22A  and JSF programs since they began, but this accounts for only 122 new  operational aircraft.
Because DOD’s recapitalization efforts have not materialized as planned,  many aircraft acquired in the 1980s will have to remain in the inventory  longer than originally expected, incurring higher investment costs to keep  them operational. According to DOD officials, these aging aircraft are  approaching the end of their service lives and are costly to maintain at a  high readiness level. While Air Force officials assert that aircraft readiness  rates are steady, they agree that the costs to operate and maintain its  aircraft over the last decade have risen substantially. Regardless, the  military utility of the aging aircraft is decreasing.
The funds used to operate, support, and upgrade the current inventory of  legacy aircraft represent opportunity costs that could be used to develop  and buy new aircraft. From fiscal years 2006 to 2011, DOD plans to spend  about $57 billion for operations and maintenance and military personnel  for legacy tactical fighter aircraft. Some of these funds could be invested  in newer aircraft that would be more capable and less costly to operate.  For example, the Air Force Independent Cost Estimate Summary shows  that the F-22A will be less expensive to operate than the F-15. The F-22A  will require fewer maintenance personnel for each squadron, and one  squadron of F-22As can replace two squadrons of F-15. This saves about  780 maintenance personnel as well as about $148 million in annual  operating and support cost according to the independent cost estimate.
Over the same time frame, DOD also plans to spend an average of $1.5  billion each year—-or $8.8 billion total—to modernize or improve legacy  tactical fighter aircraft (see fig. 4). Further delays or changes in the F-22A  or JSF programs could require additional funding to keep legacy aircraft in  the inventory and relevant to the warfighter’s needs.
In testimony last year, we suggested that the QDR would provide an  opportunity for DOD to assess its tactical aircraft recapitalization plans  and weigh options for accomplishing its specific and overarching goals. In  February 2006, the Secretary of Defense testified that recapitalization of  DOD’s tactical aircraft is important to maintain America’s air dominance.  Despite this continued declaration about recapitalizing tactical aircraft,  DOD’s 2006 QDR report did not present a detailed investment strategy that  addressed needs and gaps, identified alternatives, and assessed costs and  benefits. With limited information contained in the QDR report, many  questions are still unanswered about the future of DOD’s tactical aircraft  modernization efforts.
section_title: DOD Has an Opportunity to Set Its Tactical Aircraft Recapitalization Efforts on Track
paragraphs: As DOD moves forward with its efforts to recapitalize its tactical aircraft  force, it has the opportunity to reduce operating costs and deliver needed  capabilities to the warfighter more quickly. To take advantage of this  opportunity, however, DOD must fundamentally change the way it buys  weapon systems. Specifically, the department must change how it selects  weapon systems to buy, and how it establishes and executes the business  case. Although the F-22A program has progressed further in the  acquisition process than the JSF program, both programs are at critical  decision-making junctures, and the time for DOD to implement change is  now.
Before additional investments in the F-22A program are made, DOD and  the Air Force must agree on the aircraft’s capabilities and quantities and  the resources that can be made available to meet these requirements. A  cost and benefit analysis of F-22A capabilities and alternative solutions  weighed against current and expected threats is needed to determine  whether a sound business case for the F-22A is possible and whether  investing an additional $13.8 billion over the next 5 years to procure or  modernize these aircraft is justified.
With more than 90 percent of investment decisions to develop, test, and  buy JSF aircraft remaining, DOD could implement significant changes in  its business case before investing further in the JSF program. The JSF  program should delay production and investments in production capability  until the aircraft design qualities and integrated mission capabilities of the  fully configured and integrated JSF aircraft variants have been proven to  work in flight testing. Also, an evolutionary acquisition strategy to limit  requirements for the aircraft’s first increment of capabilities that can be  achieved with proven technologies and available resources could  significantly reduce the JSF program’s cost and schedule risks. Such a  strategy would allow the program to begin testing and low-rate production  sooner and, ultimately, to deliver a useful product in sufficient quantities  to the warfighter sooner. Once the JSF is delivered, DOD could begin  retiring its aging and costly tactical aircraft. Capabilities that demand as  yet undemonstrated technologies would be included as requirements in  future JSF aircraft increments that would be separately managed. An  evolutionary, knowledge-based acquisition approach would not only help  significantly minimize risk and deliver capabilities to the warfighter  sooner, it would be in line with current DOD policy preferences.
DOD’s use of an evolutionary, knowledge-based approach is not  unprecedented. The F-16 program successfully evolved capabilities over  the span of 30 years, with an initial F-16 capability delivered to the  warfighter about 4 years after development started. Figure 5 illustrates the  F-16 incremental development approach.
The F-16 program provides a good acquisition model for the JSF program.  For JSF, an evolutionary approach could entail delivering a first increment  aircraft with at least as much capability as legacy aircraft with sufficient  quantities to allow DOD to retire its aging tactical aircraft sooner and  reduce operating inefficiencies. Limiting development to 5-year  increments or less, as suggested in DOD’s acquisition policy, would force  smaller, more manageable commitments in capabilities and make costs  and schedules more predictable. Some of the more challenging JSF  capabilities, such as advanced mission systems or prognostics  technologies, would be deferred and added to follow-on efforts once they  are demonstrated in the technology development environment—a more  conducive environment to maturing and proving new technologies. A  shorter system development phase would have other important benefits. It  would allow DOD to align a program manager’s tenure to the completion  of the phase, which would enable program managers to be held  accountable for decisions. It also would allow DOD to use fixed-price-type  contracts for production, and thereby reduce the government’s cost risk.
Additionally, DOD should do a more comprehensive business case  analysis of the costs, benefits and risks before terminating the alternative  engine effort. A competitive engine program may (1) incentivize  contractors’ to minimize life cycle costs; (2) improve engine reliability and  quality in the future; (3) provide operational options; and (4) maintain the  industrial base.
At a broader level, DOD needs to make more substantive changes to its  requirements, funding, and acquisition processes to improve weapon  system program outcomes. We have recommended these changes in past  reports and DOD has agreed with them. The January 2006 Defense  Acquisition Performance Assessment report, based on a study directed by  the Deputy Secretary of Defense, made some important observations  regarding DOD acquisitions. The report concluded that the current  acquisition process is slow, overly complex, and incompatible with  meeting the needs of DOD in a diverse marketplace. Notably, the report  confirmed that a successful acquisition process must be based on  requirements that are relevant, timely, informed by the combatant  commanders, and supported by mature technologies and resources  necessary to realize development. The report also pointed out that DOD’s  acquisition process currently operates under a “conspiracy of hope,”  striving to achieve full capability in a single step and consistently  underestimating what it would cost to attain this capability. The report  makes a number of key recommendations for changing DOD’s acquisition  process including the following:    develop a new requirements process that has greater combatant  commander involvement and is time-phased, fiscally informed, and  jointly prioritized;    change the current acquisition policy to ensure a time-constrained  development program is strictly followed;    keep program managers from the start of development through  delivery of the “Beyond Low-Rate Initial Production Report”; and    move the start of a development program to the point in time that a  successful preliminary design review is completed.
Our work in weapons acquisition and best practices over the past several  years has drawn similar conclusions. We have made numerous  recommendations on DOD’s acquisition processes and policy—as well as  recommendations on specific major weapon system programs—to  improve cost, schedule, and performance outcomes and to increase  accountability for investment decisions. In 2000, DOD revised its  acquisition policy to address some of our recommendations. Specifically,  DOD has written into its policy an approach that emphasizes the  importance of knowledge at critical junctures before managers agree to  invest more money in the next phase of weapon system development.  Theoretically, a knowledge-based approach results in evolutionary—that  is, incremental, manageable, predictable—development and uses controls  to help managers gauge progress in meeting cost, schedule, and  performance goals. However, DOD policy lacks the controls needed to  ensure effective implementation of this approach. Furthermore, decision  makers have not consistently applied the necessary discipline to  implement its acquisition policy and assign much-needed accountability  for decisions and outcomes. Some of key elements of acquisition that we  believe DOD needs to focus on include the following:    constraining individual program requirements by working within  available resources and by leveraging systems engineering;    establishing clear business cases for each individual investment;    enabling science and technology organizations to shoulder the    ensuring that the workforce is capable of managing requirements  trades, source selection, and knowledge-based acquisition strategies;    establishing and enforcing controls to ensure appropriate knowledge is  captured and used at critical junctures before moving programs  forward and investing more money; and    aligning tenure for program managers that matches the program’s  acquisition time to ensure greater accountability for outcomes.
In conclusion, despite DOD’s repeated declaration that recapitalizing its  aging tactical aircraft fleet is a top priority, the department continues to  follow an acquisition strategy that consistently results in escalating costs  that undercut DOD’s buying power, forces DOD to reduce aircraft  purchases, and delays delivering needed capabilities to the warfighter.  Continuing to follow a strategy that results in disappointing outcomes  cannot be encouraged—particularly given our current fiscal and national  security realities.
Mr. Chairman, this concludes my prepared statement. I will be happy to  answer any questions you or other members of the subcommittee may  have.
section_title: GAO Related Products
paragraphs: Joint Strike Fighter: DOD Plans to Enter Production before Testing  Demonstrates Acceptable Performance, GAO-06-356 (Washington D.C.:  March 15, 2006).
Defense Acquisitions: Business Case and Business Arrangements Key  for Future Combat System’s Success, GAO-06-478T (Washington D.C.:  March 1, 2006).
Defense Acquisitions: DOD Management Approach and Processes Not  Well-Suited to Support Development of Global Information Grid, GAO-06- 211, (Washington D.C.: January 30, 2006).
Defense Acquisitions: DOD Has Paid Billions in Award and Incentive  Fees Regardless of Acquisition Outcomes, GAO-06-66, (Washington D.C.:  December 19, 2005).
Unmanned Aircraft Systems: Global Hawk Cost Increase Understated in  Nunn-McCurdy Report, GAO-06-222R, (Washington D.C.: December 15,  2005)
DOD Acquisition Outcomes: A Case for Change, GAO-06-257T,  (Washington D.C.: November 15, 2005).
Defense Acquisitions: Progress and Challenges Facing the DD(X)  Surface Combatant Program GAO-05-924T. (Washington D.C.:  07/19/2005).
Defense Acquisitions: Incentives and Pressures That Drive Problems  Affecting Satellite and Related Acquisitions. GAO-05-570R. (Washington  D.C.: 06/23/2005).
Defense Acquisitions: Resolving Development Risks in the Army’s  Networked Communications Capabilities is Key Fielding Future Force.  GAO-05-669 (Washington D.C.: 06/15/2005).
Progress of the DD(X) Destroyer Program. GAO-05-752R. (Washington  D.C.: 06/14/2005)
Tactical Aircraft: F/A-22 and JSF Acquisition Plans and Implications  for Tactical Aircraft Modernization. GAO-05-519T. (Washington D.C.:  04/06/2005).
Defense Acquisitions: Assessments of Selected Major Weapon Programs.  GAO-05-301 (Washington D.C.: 03/31/2005).
Defense Acquisitions: Future Combat Systems Challenges and Prospects  for Success. GAO-05-428T. (Washington D.C.: 03/16/2005).
Defense Acquisitions: Changes in E-10A Acquisition Strategy Needed  Before Development Starts. GAO-05-273 (Washington D.C.: 03/15/2005).
Defense Acquisitions: Future Combat Systems Challenges and Prospects  for Success. GAO-05-442T (Washington D.C.: 03/15/2005).
Tactical Aircraft: Air Force Still Needs Business Case to Support F/A-22  Quantities and Increased Capabilities. GAO-05-304. (Washington D.C.:  03/15/2005).
Tactical Aircraft: Opportunity to Reduce Risks in the Joint Strike  Fighter Program with Different Acquisition Strategy. GAO-05-271.  (Washington D.C.: 03/15/2005).
Tactical Aircraft: Status of F/A-22 and JSF Acquisition Programs and  Implications for Tactical Aircraft Modernization. GAO-05-390T  (Washington D.C.: 03/03/2005).
Defense Acquisitions: Plans Need to Allow Enough Time to Demonstrate  Capability of First Littoral Combat Ships. GAO-05-255 (Washington D.C.:  03/01/2005).
Defense Acquisitions: Improved Management Practices Could Help  Minimize Cost Growth in Navy Shipbuilding Programs. GAO-05-183  (Washington D.C.: 02/28/2005).
Unmanned Aerial Vehicles: Changes in Global Hawk’s Acquisition  Strategy Are Needed to Reduce Program Risks. GAO-05-06 (Washington  D.C.: 11/05/2004).
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