Presidential Helicopter: Program Progressing Largely as Planned
Published: 2016-04-14T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The mission of the presidential helicopter fleet is to provide safe, reliable, and timely transportation for the President, Vice President, foreign heads of state, and other official parties as directed by the White House Military Office. The Navy plans to acquire VH-92A helicopters to replace its aging fleet. Initial delivery of VH-92A presidential helicopters is scheduled to begin in fiscal year 2020 with production ending in fiscal year 2023. Total program acquisition cost is estimated to be $5.1 billion.
This is GAO's seventh report on the program since 2011. The National Defense Authorization Act for Fiscal Year 2014 included a provision that GAO report annually on the acquisition of the VH-92A aircraft. This report discusses (1) the program's cost, schedule, and performance status; (2) challenges it faces in system development; and (3) its adherence to acquisition best practices. To conduct the review, GAO examined program documents, including Navy, contractor, and on-site government program monitor reports. GAO also interviewed officials, reviewed the earned value management system, and assessed the integrated master schedule against GAO best practices.
section_title: What GAO Found
paragraphs: Since 2014, the VH-92A presidential helicopter program has generally progressed as planned. Through November 2015, the contractor accomplished approximately $239.0 million (22 percent) in development work—leaving about $863.9 million (78 percent) in estimated work over the next 5 years. As of December 2015, the prime contractor had accomplished nearly all of the expected developmental tasks at only slightly greater cost than anticipated. The program is currently on track to accomplish key development milestones as planned. In the past year, the program successfully conducted its preliminary design review and carried out a number of other significant development activities, including: continued development of the mission communications system, delivery and initial testing of aircraft for risk-reduction activities, and initiation of the conversion of Sikorsky S-92A helicopters into VH-92A developmental models.
As expected with a major system development effort, the program faces a number of design and technical challenges, some preexisting and others realized during the course of development. Those challenges include designing passenger doors, incorporating titanium framing in the two initial aircraft, meeting requirements relating to electromagnetic environmental effects, and cybersecurity. The program took advantage of capability and testing trades that produced cost and schedule savings. For example, the program was able to reduce physical testing by relying on existing information about the aircraft's performance, supplemented by additional information collected during testing and through modeling.
When assessed against best practices, GAO found that the contractor's earned value management system, a project management tool for investment planning and control, fully or substantially met the three characteristics for a reliable earned value management system. Similarly, in assessing the program's integrated master schedule against best practices, GAO found that it substantially met all four of the characteristics required for a reliable schedule.
section_title: What GAO Recommends
paragraphs: GAO is not making recommendations in this report. In commenting on a draft of this report, DOD stated that it believes its efforts on this program are aligned with GAO's best practices and it will continue to monitor the program and ensure that mitigations are in place to address potential risk areas. GAO will also continue to monitor the program as it moves forward.

section_title: Letter
paragraphs: The mission of the presidential helicopter fleet is to provide safe, reliable,  and timely transportation for the President, Vice President, foreign heads  of state, and other official parties as directed by the White House Military  Office. The VH-92A Presidential Helicopter program is to replace existing,  aging aircraft with a modern aircraft utilizing advanced technologies that  provide capability improvements. The Navy’s acquisition strategy is based  on the integration of mature technologies and an executive interior into an  existing helicopter while minimizing aircraft modifications in order to avoid  costly airworthiness recertification. The Navy plans to acquire a VH-92A  fleet of 23 helicopters to replace the existing fleet of 23 legacy  helicopters. Initial delivery of VH-92A Presidential Helicopters is  scheduled to begin in fiscal year 2020 with production ending in fiscal  year 2023. Total program acquisition cost is estimated to be $5.1 billion  (then-year dollars).
We have reported on this program since 2011. In 2013, the House  Armed Services Subcommittee on Tactical Air and Land Forces  requested that we continue to monitor the VH-92A presidential helicopter  acquisition through a series of reviews, with each review tailored to where  the program is in the acquisition process. The National Defense  Authorization Act for 2014 subsequently included a provision that we  continue reporting on the program annually to the congressional defense  committees. This report discusses (1) the cost, schedule, and  performance status of the program, (2) challenges it faces in system  development, and (3) its adherence to acquisition best practices.
To determine how the program is progressing in terms of its cost,  schedule, and performance, we analyzed program documents (including  the acquisition strategy and contractor progress reports) and plans. To  understand potential program challenges, and steps taken to address  those challenges, we examined the Department of Defense’s (DOD) risk  management planning guidance and reviewed a copy of the program’s  draft risk management plan and the contractors’ latest risk assessment.  We discussed risk management with VH-92A program officials as well as  officials from Sikorsky Aircraft Corporation and Lockheed Martin (the  prime contractor and principal subcontractor, respectively, for the  program). We reviewed the program’s Integrated Master Schedule (IMS)  and compared it against best practices criteria in the GAO Schedule  Assessment Guide. We also reviewed Sikorsky’s earned value  management (EVM) system and compared it to the GAO Cost  Estimating and Assessment Guide. Our research has identified a  number of best practices, which result in reliable and valid data that can  be used for making informed decisions. To learn more about Sikorsky’s  EVM system we met with officials from the Defense Contract  Management Agency, the government agency responsible for, among  other things, ensuring the integrity of the contracting process, and  reviewed their reports on the program to determine if it produced reports  that met the criteria establishing a comprehensive EVM system, ensuring  the data from the EVM system are reliable, and ensuring that the program  management team is using the earned value data for decision making  purposes. We interviewed program officials from the Navy’s Presidential  Helicopter Program Office, as well as officials from the offices of the  Director of Operational Testing and Evaluation and Deputy Assistant  Secretary of Defense for Developmental Test and Evaluation to better  understand the test and evaluation aspects of the program. Appendix I  contains additional details about our scope and methodology.
We conducted this performance audit from July 2015 to April 2016 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 program’s acquisition approach involves the conversion of Sikorsky  S-92A helicopters into VH-92A presidential helicopters by incorporating a  unique mission interior that accommodates government-provided  equipment such as, communications and mission systems. The program  is limiting modifications to the aircraft to avoid a costly airworthiness  recertification and reduce investment costs, delivery timelines, and  execution risks. As we reported in March 2015, the Navy’s approach is to  use mature technology; however, a fully configured mission  communication system has yet to be tested in an aircraft.
We reported last year that the VH-92A program continued to make  progress by establishing a knowledge-based business case for entry into  system development that included an approved cost, schedule and  performance baseline based on actions substantively in line with  acquisition best practices. Demonstrating technology maturity, making  trade-offs, having reasonable cost and schedule estimates, and holding a  system-level preliminary design review (PDR) by the start of system  development are all best practices. While the Navy’s deferral of a system- level preliminary design review until after the start of system development  deviated from acquisition best practices, we reported last year that a  number of factors, such as the program’s reliance on mature  technologies, selection of an in-production aircraft, and award of a fixed  price incentive type contract reflect reduced risk in the deferral. A  significant risk mitigation factor the Navy has in its favor is its contract  with Sikorsky which includes a ceiling price that would limit how much the  Navy would have to pay under the contract. To maintain this advantage,  the Navy will have to ensure that no requirements changes are made that  would require it to negotiate a supplemental agreement for equitable  adjustment to the contract. In the past, DOD has typically used cost- reimbursement contracts in which the government generally pays all  allowable costs incurred by the contractor. Recent legislation and defense  policy now emphasize the use of fixed price development contracts,  where warranted, to limit the government’s exposure to cost increases.
section_title: Development Has Generally Progressed as Planned
paragraphs: Since the start of development in 2014, the VH-92A program has  generally progressed as planned. Through November 2015, Sikorsky has  accomplished approximately $239.0 million (22 percent) in development  work–leaving about $863.9 million (78 percent) in estimated work to go  over the next 5 years. As of December 2015, Sikorsky indicated that,  nearly all of the developmental tasks expected to be accomplished by that  point had been accomplished at only slightly greater cost than  anticipated.
The program’s current estimates for total program cost suggest shows no  overall cost growth. Table 1 compares the program’s current estimated  quantities and total costs (fiscal year 2016 dollars) to the program’s  estimates at the start of development.
The contractor’s November 2015 estimate of the most likely cost at  completion for its development efforts, which represent a portion of the  program’s total research and development cost, suggest a final contract  price slightly over the contract’s target price (by less than 2 percent) but  below its ceiling price. We evaluated the contractor’s data through  October 1, 2015 and found that the contractor’s most likely estimate at  completion based on the data at that time was not overly optimistic. In  fact, it was slightly higher than our highest estimate.
In addition, the program is currently on schedule. In the past year, the  program successfully conducted its PDR and carried out a number of  other significant development activities including continued development  of the mission communications system, prime contractor taking custody of  two S-92A aircraft, initial testing of one engineering and developmental  model (EDM) aircraft, and initiation of S-92A to VH-92A developmental  model helicopter conversions. Though the program is early in  development with significant system integration and testing ahead, it  currently is on track to accomplish key milestones including completion of  a critical design review in July 2016, making an initial production decision,  and establishing an initial operational capability as planned, see figure 1.
The program passed a significant schedule milestone in August 2015  when it conducted its system-level PDR. The purpose of the PDR was  to evaluate the VH-92A preliminary design, assess the likelihood of that  design to meet requirements and readiness to move forward into detailed  design. The PDR occurred 16 months after development start–1 month  ahead of the contractual date for the event. Among other issues, there  were 12 requests for actions identified during the review, for example the  need to achieve complete alignment in weight management processes  between the Naval Air Systems Command and the contractor. All of those  requests were subsequently deemed successfully closed after review by  Naval Air Systems Command personnel and concurrence of the  submitters of those requests. On January 26, 2016 the PDR chairman  closed the event stating that PDR was successful in presenting the  program status and identifying areas of concern.
During the past year, the program continued development of the VH-92A  Mission Communications System (MCS), an executive communications  suite utilizing existing off-the-shelf components that is to provide  passengers and crew with access to on-board and off-board  communications services. The government is developing and providing  the MCS design and some government furnished equipment to the  contractor for integration into the presidential helicopters. Hardware  components and architecture were previously defined and the ongoing  MCS efforts principally relate to developing communications and  monitoring software and integration of the system into the aircraft. Last  year, version 0.6 of MCS software was provided to the Navy’s systems  integration lab and to Lockheed Martin for use in setting up MCS wiring.  The program subsequently released version 0.8 of MCS software that  includes nearly full functionality (except for that relating to an inter- communications subsystem) and in December 2015, contractor engineers  started loading the software at the contractor’s system integration lab for  testing. Two more MCS software releases are currently anticipated:  version 1.0, which is to provide full functionality including the inter- communications subsystem, is expected in April 2016 and at least one  follow-on release that will address and incorporate subsequently identified  corrections.
In addition, the first of two EDM aircraft, arrived at the subcontractor  Lockheed Martin’s Owego, New York facility in December 2014,  underwent subcontractor-led, risk-reduction efforts, including installation  of antennas and interference testing and planning for the placement of  the wiring needed for the government-furnished mission communications  system. The subcontractor used radios and antennas for the mission  communications system, power supplies, and instrumentation in support  of contractor testing. According to Sikorsky, the testing validated  capability predictions. This testing consisted of 89.6 flight test hours and  44.6 ground test hours. Table 2 provides a profile of the total, to date,  anticipated test effort that is to utilize the two EDM aircraft and four  subsequently developed system demonstration test article aircraft.
In September 2015, the program’s first S-92A aircraft, which was utilized  by Lockheed Martin in its risk reduction efforts, and a second S-92A  aircraft were transferred to Sikorsky’s Stratford, Connecticut for  modifications to become the two planned EDM aircraft. The modification  process was started ahead of schedule, reducing schedule risk.
section_title: Program is Managing Design, Integration, and Technical Challenges
paragraphs: As to be expected with a major system development effort, as the  program has progressed it has faced a number of design, integration, and  technical challenges, some preexisting and others realized during the  course of development. Examples of the challenges the program is  currently managing include design of the passenger doors, incorporation  of titanium framing in the two initial aircraft, and meeting requirements  relating to electromagnetic environmental effects (E3) and  electromagnetic pulse (EMP), and cybersecurity.
Aircraft Door Design: Design of the VH-92A forward and rear doors has  proven more challenging and taken longer than the contractor anticipated.  For the VH-92A, the forward passenger door in Sikorsky’s S-92A  helicopter’s configuration is being modified to include dual hand rails and  timed entry lights. In addition, the VH-92A aircraft requires a second  entrance and exit, requiring the design of a new passenger door and  stairs in the aircraft to replace the current S-92A rear ramp. Realization of  the head clearance requirement for that door necessitated a larger door,  increasing its weight. In addition, the weight of both doors went up in the  process of redesigning the aircraft to meet other requirements. The  increase in the doors’ weight in combination with a requirement for a  single-person manual open and close capability necessitated an  unanticipated redesign of the doors’ counterbalance systems and also  complicated latch design. Extensive design and structural analysis for the  door efforts were needed to resolve those design issues and ensure the  new design would not affect the overall airworthiness certification for the  aircraft. According to Sikorsky, as of February 2016, 90 out of 105 design  drawings for the doors were completed and improvements to the  schedule have begun and should continue as the drawings continue to be  released.
Titanium Framing: The two EDM aircraft are being retrofitted with  titanium frames and the remainder of the VH-92A fleet will come with the  titanium frames incorporated as part of the Sikorsky S-92A production  process. This will improve aircraft performance and fatigue life. As of  January 2016, the machining of titanium frames for the first EDM aircraft  had been completed and installation had begun. The frames for the  second EDM aircraft are in the machining process and are expected to be  completed by the end of the second quarter of 2016. The machining  process, which involves drilling critical alignment holes into the titanium,  has taken longer than anticipated. The contractor realized that this effort  would cause schedule delays and worked to mitigate this schedule risk by  approving additional engineering and shop hours to insure that the frames  were properly machined, finished, and can fit the aircraft upon installation.
E3 and EMP: VH-92A aircraft must comply with both commercial and  military standards pertaining to electromagnetic environment effects.  Achieving those standards involves consideration of the electromagnetic  compatibility of equipment used on the aircraft and mitigation of  electromagnetic interference caused by that equipment. In addition,  developers of military systems, such as the presidential helicopters, may  face additional requirements relating to the ability to survive the effects of  an electromagnetic pulse. A number of techniques exist to harden aircraft  from the effects of an EMP, for example, increasing shielding on  equipment and wiring, which are being considered and utilized by the VH- 92A program. As the program has progressed a greater understanding  of the effort required to meet the level of EMP survivability required has  resulted in increased EMP-related efforts. According to an official from the  office of the Director of Operational Testing and Evaluation, the program  has been working to help identify what additional measures are needed  for EMP survivability. EMP related testing is underway to determine the  exact additional measures needed, such as increased shielding or use of  EMP limiters that protect electronics from EMP resulting power surges.  As of December 2015, one area of concern relating to these efforts was  that some of the initially identified EMP limiters may not have provided the  needed level of protection. However, the program has continued to work  on this issue and believes it has identified workable solutions. According  to the program office, they believe these efforts have now resulted in a  compliant design for protecting critical systems.
Cybersecurity: VH-92A aircraft and systems must meet cybersecurity  requirements. In 2014, after the program’s initial (June 2013) Test and  Evaluation Master Plan was approved, a revised DOD cybersecurity  policy and risk management framework were released. The program  has subsequently been working to address the changes necessitated by  the revised policy and framework including actively pursuing a contract  change to migrate from the certification required under the contract to the  current certification standard. In addition, changes have been made to the  program’s Test and Evaluation Master Plan to reflect the changed policy  and framework. In his January 2016 PDR closeout assessment, the PDR  Chairman stated a cost and scope analysis of the needed migration has  occurred and the change will be incorporated into the program baseline  with minor impact. He further noted, however, that future evolution in the  definition of cyber threats will remain a risk to the program as additional  mandates are defined.
The program’s efforts relating to a sub-component of the government  developed VH-92A MCS, the Inter-Communication System (ICS), reflect  the challenges associated with meeting updated requirements in support  of airworthiness certifications. The ICS supplier is in the process of  addressing a Federal Aviation Administration (FAA) standard on software  considerations in airborne systems and equipment certifications that  changed. The standard is the primary means for meeting airworthiness  requirements and obtaining approval of software used in civil aviation  products. In November 2015, the Navy, contractor and subject matter  experts focused on possible approaches for the ICS supplier to  successfully meet the updated standard. In this case, it was determined  that the supplier’s previous efforts demonstrated the ability to provide the  needed capability and additional issue papers that covers the difference  between the old and revised standard would be sufficient. The ICS  supplier revised their development schedule and the ICS baseline  software delivery to Sikorsky and the Navy’s MCS system integration  laboratory is now set for March 2016.
Cost and Performance Trades: The program has been helped looking  for opportunities to save cost and schedule to offset increased efforts  such as those discussed above. For example, program officials explained  that they’ve identified an opportunity to remove a contractually-required  capability as the Marine Corps decided it provided no appreciable  advantage. That capability is not inherent in the S-92A aircraft and would  have needed to have been designed and integrated into the aircraft. It  was a requirement that existed prior to the selection of the replacement  helicopter. Subsequent consideration of the requirement based on the  operators’ concept of operations and the capabilities of the S-92A aircraft  led to a determination that the requirement did not provide an appreciable  benefit. They explained that given the desire to maximize the overall  performance of the aircraft (range, power, etc.), and decrease the overall  risk associated with integrating the associated capability, the requirement  was removed from the contract. The contractor estimated that dropping  this requirement resulted in the elimination of about 20 percent of the total  testing for the affected subsystem. Additionally, the Navy and contractor  are currently in discussions on a downward adjustment to the contract  price to reflect elimination of the requirement.
Similarly, the contractor identified an opportunity to save time and money  through a change in planned contractor testing. The VH-92A must be  certified by the FAA and approved by the Navy for flight in moderate icing  conditions, a certification the S-92A baseline aircraft already holds. It was  originally thought, though, that icing-related flight testing would be needed  to reflect changes made to the baseline aircraft’s outer body such as the  addition of antennas. However, based on the existing S-92A certifications  and data gathered during testing done with the antennas on the first EDM  aircraft at Lockheed Martin’s Owego facility, Sikorsky and FAA  representatives subsequently determined that analysis would suffice  toward obtaining FAA certification. This revised approach resulted in a  savings of approximately 2 months of schedule and $3 million in cost— both of which will be applied to other activities within the contract.
section_title: Earned Value Management System and Master Schedule Met Best Practices
paragraphs: An earned value management (EVM) system is a project management  tool that integrates the technical scope of work with schedule and cost  elements for investment planning and control. A well-planned schedule is  another management tool that can help government programs use public  funds effectively by specifying when work will be performed in the future  and measuring program performance against an approved plan. During  our review of the program, we compared the prime contractor’s EVM  system and its Integrated Master Schedule (IMS) to best practices. We  found that Sikorsky’s EVM system and IMS substantially or fully met best  practices.
To determine if a contractor is executing the work planned within the  funds and time budgeted, the prime contractor produces monthly reports  detailing cost and schedule performance in an EVM system. Our research  has identified a number of best practices and characteristics that are the  basis of effective earned value management and which should result in  reliable and valid earned value management data that can be used for  making informed decisions. We examined Sikorsky’s EVM system in the  context of the best practices from the GAO Cost Estimating and  Assessment Guide, and overall found that it that it fully or substantially  met the three characteristics identified for a reliable EVM system.  Specifically, that the EVM system was comprehensive, that data resulting  from the system was reliable, and that program management utilized that  data for decision-making purposes. See appendix III for a summary  assessment of the Sikorsky’s EVM practices compared to best practices.
We also found that the program’s IMS substantially met the best practices  for a reliable schedule. The success of programs depend, in part, on  having an integrated and reliable master schedule that defines when and  how long work will occur and how each activity is related to the others.  Such a schedule is necessary for government acquisition programs for  many reasons. It provides not only a road map for systematic project  execution but also the means by which to gauge progress, identify and  resolve potential problems, and promote accountability at all levels of the  program. An IMS provides a time sequence for the duration of a  program’s activities and helps everyone understand both the dates for  major milestones and the activities that drive the schedule. A program’s  IMS is also a vehicle for developing a time-phased budget baseline.  Moreover, it is an essential basis for managing tradeoffs between cost,  schedule, and scope. Among other things, scheduling allows program  management to decide between possible sequences of activities,  determine the flexibility of the schedule according to available resources,  predict the consequences of managerial action or inaction on events, and  allocate contingency plans to mitigate risks. Our research has identified  10 best practices associated with effective schedule estimating that can  be collapsed into 4 general characteristics (comprehensive, well- constructed, credible and controlled) for sound schedule estimating.  Overall, we found the program’s IMS is reliable as it substantially met all  four of the characteristics. See appendix IV for a more detailed  assessment of the VH-92A program’s schedule estimate compared to  best practices.
While the program had made good progress, it is still early in  development with significant system integration and testing ahead. We  will continue to monitor the presidential helicopter acquisition as it  progresses.
section_title: Agency Comments
paragraphs: We are not making any recommendations in this report. DOD provided  written comments on a draft of this report, which are reprinted in appendix  V. In its written comments, DOD stated that it believes its efforts on this  program are aligned with our best practices and it will continue to monitor  the program and ensure that mitigations are in place to address potential  risk areas. We will also continue to monitor the program as it moves  forward. DOD also provided technical comments that were incorporated,  where appropriate.
We are sending copies of this report to the appropriate congressional  committees; the Secretary of Defense; the Under Secretary of Defense  for Acquisition, Technology, and Logistics; and the Secretary of the Navy.  In addition, this report will be available at no charge on GAO’s Web site at  http://www.gao.gov.
If you or your staff have any questions on concerning 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. GAO staff contributing to this report are  listed in appendix VI.
section_title: Appendix I: Scope and Methodology
paragraphs: To conduct this work, we analyzed program documents (including the  acquisition strategy and contractor progress reports) and plans to  determine how the program is progressing in terms of its cost, schedule,  and performance, and how well the program is adhering to best practices.  We interviewed program officials from the Navy’s Presidential Helicopter  Program Office, as well as officials from the office of the Director of  Operational Testing and Evaluation and the office of the Deputy Assistant  Secretary of Defense for Developmental Test and Evaluation to discuss  the status of the program. To develop the numbers on the cost and cycle  time of the VH-92A program in table 1, we obtained and analyzed cost,  quantity, and schedule data from the program’s Selected Acquisition  Report and other information provided by the program. We converted all  cost information to fiscal year 2016 dollars using conversion factors from  the Department of Defense (DOD) Comptroller’s National Defense  Budget Estimates for Fiscal Year 2016. Through discussions with DOD  officials responsible for the database and confirming selected data with  the program office, we determined that the information obtained was  sufficiently reliable for the purposes of this report.
To understand potential program challenges and steps taken to address  those challenges, we examined program and contractor documents and  other reports relating to the development effort. We also examined DOD’s  risk management planning guidance and reviewed a copy of the  program’s draft risk management plan and the contractors’ latest risk  assessment. We discussed development challenges and risk  management with VH-92A program officials and officials from the  Sikorsky Aircraft Corporation and Lockheed Martin.
To learn more about the program’s earned value management (EVM)  system we met with officials from the Defense Contract Management  Agency, the government agency responsible for, among other things,  ensuring the integrity of the contracting process, and reviewed their  Program Assessment Reports on the program to determine if the prime  contractor’s (Sikorsky), EVM system produced reports that met the  criteria for reliable and valid EVM data. Our EVM analysis focused on  Sikorsky’s Integrated Program Management Report data from September  2014 through October 2015 and the Integrated Master Schedule (IMS)  dated October 2015, as well as interviews with the program office, and  supporting documentation. Specifically, we compared project  documentation with EVM best practices as identified in GAO’s Cost  Estimating and Assessment Guide.
Our research has identified a number of best practices that are the basis  of effective earned value management and should result in reliable and  valid earned value management data that can be used for making  informed decisions. These best practices have been collapsed into three  high level characteristics of a reliable earned value management system  which are:
Establish a comprehensive EVM System: If the EVM data is to be  used to manage a program, the contractor’s (and subcontractors’)  EVM system should be certified to ensure that it complies with the  agency’s implementation of the American National Standards Institute  guidelines. In addition to a certified system, an integrated baseline  review must be conducted to ensure that the performance  measurement baseline accurately captures all of the work to be  accomplished. In order to develop the performance measurement  baseline, an integrated network schedule should be developed and  maintained. This schedule should reflect the program’s work  breakdown structure, clearly show the logical sequencing of activities,  and identify the resources necessary to complete the activities in  order to develop the time-phased budget baseline. Lastly, there  should be a rigorous EVM system surveillance program in place.  Effective surveillance ensures that the contractor is following its own  corporate processes and procedures and confirms that the  contractor’s processes and procedures continue to satisfy the  American National Standards Institute guidelines.
Ensure that the data resulting from the EVM system are reliable:  To ensure the data are reliable, it is important to make sure that the  Integrated Program Management Report data make sense and do not  contain anomalies that would make them invalid. If errors are not  detected, then the data will be skewed, resulting in bad decision- making. In addition to checking for data anomalies, the integrated  program management report data between the different formats  should be consistent. Reliable EVM data is important in order to  generate estimates at completion. Managers should rely on EVM data  to generate estimates at completion at least monthly. Estimates at  completion are derived from the cost of work completed along with an  estimate of what it will cost to complete all unaccomplished work.
Ensure that the program management team is using earned  value data for decision-making purposes: For EVM data to be  useful it must be reviewed regularly. Cost and schedule deviations  from the baseline plan give management at all levels information  about where corrective actions are needed to bring the program back  on track or to update completion dates and estimates at completion.  Management should focus on corrective actions and identify ways to  manage cost, schedule and technical scope to meet program  objectives. Management also needs to ensure that the performance  measurement baseline is updated accordingly as changes occur.  Because changes are normal, the American National Standards  Institute guidelines allow for incorporating changes to the performance  measurement baseline. However, it is imperative that changes be  incorporated into the EVM system as soon as possible to maintain the  validity of the performance measurement baseline.
See appendix III for our summary assessment of the VH-92A program’s  EVM data and practices compared to best practices. EVM data are  considered reliable if the overall assessment ratings for each of the three  characteristics are substantially or fully met. If any of the characteristics  are not met, minimally met, or partially met, then the EVM data cannot be  considered reliable.
We reviewed the program’s IMS and compared it to the GAO Schedule  Assessment Guide. Our research has identified 10 best practices  associated with effective schedule estimating that can be collapsed into 4  general characteristics for sound schedule estimating:
Comprehensive: A comprehensive schedule includes all activities for  both the government and its contractors necessary to accomplish a  project’s objectives as defined in the project’s work breakdown  structure. The schedule includes the labor, materials, travel, facilities,  equipment, and the like needed to do the work and depicts when  those resources are needed and when they will be available. It  realistically reflects how long each activity will take and allows for  discrete progress measurement.
Well-constructed: A schedule is well-constructed if all its activities  are logically sequenced with the most straightforward logic possible.  Unusual or complicated logic techniques are used judiciously and  justified in the schedule documentation. The schedule’s critical path  represents a true model of the activities that drive the project’s earliest  completion date and total float accurately depicts schedule flexibility.
Credible: A schedule that is credible is horizontally traceable—that is,  it reflects the order of events necessary to achieve aggregated  products or outcomes. It is also vertically traceable: activities in  varying levels of the schedule map to one another and key dates  presented to management in periodic briefings are in sync with the  schedule. Data about risks and opportunities are used to predict a  level of confidence in meeting the project’s completion date. The level  of necessary schedule contingency and high priority risks and  opportunities are identified by conducting a robust schedule risk  analysis.
Controlled: A schedule is controlled if it is updated periodically by  trained schedulers using actual progress and logic to realistically  forecast dates for program activities. It is compared against a  designated baseline schedule to measure, monitor, and report the  project’s progress. The baseline schedule is accompanied by a  baseline document that explains the overall approach to the project,  defines ground rules and assumptions, and describes the unique  features of the schedule. The baseline schedule and current schedule  are subject to a configuration management control process.
For our evaluations of the schedule estimates, when the tasks associated  with the leading practices that define a characteristic were mostly or  completely satisfied, we considered the characteristic to be substantially  or fully met. When all four characteristics were at least substantially met,  we considered a schedule estimate to be reliable. In addition, we  interviewed agency and contractor officials to determine the methodology  used to develop the IMS. To assess the schedule, we obtained and  reviewed documentation, including the work breakdown structure.
See appendix IV for our summary assessment of the VH-92A program’s  schedule estimate compared to best practices.
We conducted this performance audit from July 2015 to April 2016 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: GAO Reports on the Presidential Helicopter Replacement Program
paragraphs: Presidential Helicopter Acquisition: Program Established Knowledge- Based Business Case and Entered System Development with Plans for  Managing Challenges (GAO-15-392R, April 14, 2015)
Presidential Helicopter Acquisition: Update on Program’s Progress toward  Development Start (GAO-14-358R, April 10, 2014)
Department of Defense’s Waiver of Competitive Prototyping Requirement  for the VXX Presidential Helicopter Replacement Program  (GAO-13-826R, September 6, 2013)
Presidential Helicopter Acquisition: Program Makes Progress in  Balancing Requirements, Costs, and Schedule (GAO-13-257, April 9,  2013)
Presidential Helicopter Acquisition: Effort Delayed as DOD Adopts New  Approach to Balance Requirements, Costs, and Schedule  (GAO-12-381R, February 27, 2012)
Defense Acquisitions: Application of Lessons Learned and Best Practices  in the Presidential Helicopter Program (GAO-11-380R, March 25, 2011)
section_title: Appendix III: Summary Assessment of the VH-92A Program’s Earned Value Management (EVM) Data and Practices Compared to Best Practices
subsections: section_title: Overall assessment Met
paragraphs: Best practice  The program has a certified EVM system   Substantially Met: The contractor’s EVM  An Integrated Baseline Review was  conducted to ensure the performance  measurement baseline captures all of the  work  The schedule reflects the work  breakdown structure, the logical  sequencing of activities, and the  necessary resources  EVM surveillance is being performed  system has been rated acceptable,  indicating that it generally complies with  EVM system guidelines.   Met: An Integrated Baseline Review was  conducted in November 2014 that assessed  the technical, schedule, resource, and cost  risk associated with the program’s various  control accounts.   Substantially Met: The schedule has a  consistent and well-defined work breakdown  structure and is complex with few missing  logic links; however, the schedule is not fully  resource loaded.   Met: The Defense Contract Management  Agency performs monthly reports regarding  the prime contractor and their major  subcontractor to the program office.
section_title: Substantially Met
section_title: Met
paragraphs: EVM data, including cost and schedule  variances, are reviewed on a regular  basis   Management uses EVM data to develop  corrective action plans  performance data is consistent between  reporting formats, there are many data  anomalies that are not explained in the  Integrated Program Management Report  narrative (Format 5).   Met: There are no inconsistencies between  the cost and schedule performance data and  between the Integrated Program  Management Report formats reported.  Substantially Met: The contractor estimate  at completion is not overly optimistic; in fact,  it is greater than the GAO estimate at  completion range.   Met: The program office and contractor  review the cost and schedule and variances  and use that information to determine  corrective actions for potential cost and  schedule overruns.   Met: The program office uses the EVM data  and variances as a basis to request  additional resources.
Substantially Met: While the performance  management baseline change process is  clearly defined and changes are  documented in the contractor’s monthly  reports, there is no explanation for the  change in the budget at complete in January  2015.
section_title: Appendix IV: Summary Assessment of the VH-92A Program’s Schedule Estimate Compared to Best Practices
subsections: section_title: Characteristic Comprehensive
paragraphs: Individual assessment  Substantially Met: While the work  breakdown structure has a dictionary that  defines all the tasks and is consistent  between the program management  documents and reports, there are cases of  tasks that do not have unique names.   Partially Met: While the schedule contains  some resources, the program office stated  that the IMS is not fully resource loaded since  this is not a requirement of the Integrated  Program Management Report instructions.  However, the program office stated that they  assess the resources (labor and materials) at  the weekly integrated product team meetings.   Substantially Met: The durations were  established taking into account available  resources, productivity and past experience.  Additionally, the schedule accounts for  holidays and the contractor and subcontractor  non-work periods.   Substantially Met: The schedule is complex  with few missing logic links. For the most part,  extensive documentation of the logic  anomalies exists; however, any dangling logic  can interfere with network analysis and the  forecasting ability of the schedule. Thus, the  small relative number of dangling logic, but  high absolute number precludes a fully met  score.  Substantially Met: Clear waterfalls of driving  paths to engineering development model  (EDM) 1 and EDM 2 deliveries as well as  Milestone C and program finish exist within  the schedule. Detailed documentation of how  the critical path is derived is also discussed in  the program reviews. However, long duration  testing activities are present in the EDM 1 and  Milestone C paths and there are some  dangling activities that keep this best practice  from being fully met.
Partially Met: The IMS does not have any  negative float and all float values are  calculated as days. Although the schedule  reflects many activities with high float values,  valid justification exists for many. In some  cases, it is clear why float is so large, such as  high-level program milestones or level of effort  activities not having a successor. However,  there are instances of high float values that  are derived from complete network logic that  the program office ignores; in these cases,  unreasonable float should be documented  and explained.  Partially Met: The schedule aligns vertically  with the contractor integrated program  management reports. However, changes in  dates for specific tasks do not show that the  schedule is horizontally traceable.
Substantially Met: Schedule risk analyses  have been performed. However, logic issues  cause the schedule risk assessment to not be  completely reliable.
Partially Met: While the schedule has no date  anomalies, it does not maintain a document to  track changes in the schedule’s logic or  provide a schedule narrative that includes key  details regarding how the schedule is  updated.
Substantially Met: While the schedule’s  government tasks are baselined and have an  established process for variance  measurement, there is no evidence of a  schedule baseline document.
section_title: Appendix V: Comments from the Department of Defense
section_title: Appendix VI: GAO Contact and Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Bruce H. Thomas, Assistant  Director; Bonita J. P. Oden, Analyst-in-Charge; William C. Allbritton;  Stephanie M. Gustafson; Ozzy Trevino; Jennifer V. Leotta; Juana S.  Collymore; Karen A. Richey; Hai V. Tran; Marie P. Ahearn; and Katherine  S. Lenane made key contributions to this report.