The F/A-18E/F program is the successor to prior unsuccessful attempts to modernize the Navy’s tactical aviation fleet. The Navy’s initial focus was on replacing its high-end A-6 attack aircraft. The programs that were initiated in that regard—the A-12 and then the A/F-X—were eventually canceled. The Navy also initiated studies to upgrade its multirole F/A-18 low-end tactical aircraft. The upgraded F/A-18 effort was designated the F/A-18E/F. At a projected total program cost of $63.09 billion (fiscal year 1996 dollars)/$89.15 billion (then-year dollars) the F/A-18E/F program is one of the Department of Defense’s (DOD) most costly aviation programs. In January 1988, the Navy awarded a fixed-price incentive contract to McDonnell Douglas Aerospace and General Dynamics Corporation to develop the Advanced Tactical Aircraft, later designated the A-12. In June 1988, the Navy and McDonnell Douglas also completed a study, known as Hornet 2000, to study upgrade options to the F/A-18 because of the long development cycle of planned future fighter aircraft. The A-12 was to begin replacing A-6Es in the mid-1990s. The Air Force was also considering a version of the A-12 to replace its high-end F-15E, and F-111 strike aircraft. On January 7, 1991, after making almost $2.7 billion (then-year dollars) in progress payments, the Navy terminated the A-12 program because of technical and cost reasons. Almost immediately after terminating the A-12 program, the Navy requested funding to modernize the F/A-18. A new joint Air Force and Navy program—designated A-X and later A/F-X—was also initiated to replace their high-end attack/strike aircraft with more advanced stealthy aircraft. The A/F-X was to begin fielding a more affordable Navy A-6E replacement aircraft around 2008. The A/F-X program office estimated it would cost $22.8 billion (then-year dollars) to develop the A/F-X and $50 million to $100 million to procure each aircraft. In 1993, DOD’s Bottom-Up Review concluded that DOD had too many new aircraft programs and that future defense budgets would not support both the F/A-18E/F and the A/F-X program. Therefore, in accordance with the review’s recommendations, the Secretary of Defense announced that the A/F-X advanced tactical aviation program would be canceled, the F/A-18E/F program would continue, and the services’ efforts to field a next generation joint strike fighter aircraft would be pursued through a Joint Advanced Strike Technology (JAST) program. The family of three common aircraft that is to ultimately result from the JAST effort is called the Joint Strike Fighter (JSF). The three JSF variants are intended to be (1) a first-day-of-the-war, survivable strike fighter aircraft to complement the F/A-18E/F for the Navy, (2) an advanced short-takeoff and vertical-landing aircraft to replace the AV-8B and F/A-18 for the Marine Corps, and (3) a multirole aircraft (primary air-to-ground) to replace the Air Force F-16 and A-10 aircraft. In May 1992, the Under Secretary of Defense for Acquisition approved the Navy’s Milestone IV, Major Modification F/A-18E/F. A $5.783 billion (fiscal year 1996 dollars)/$5.803 billion (then-year dollars) F/A-18E/F development estimate was based on the combined cost to develop the airframe and the engine and to pay other government costs. The airframe development contract was awarded to McDonnell Douglas Aerospace, with Northrop Grumman Corporation as the prime subcontractor. McDonnell Douglas makes the forward fuselage, the wings, and the aft wing/horizontal stabilizers. Northrop Grumman makes the forward center fuselage, the aft center and aft fuselage sections, and the aft fuselage vertical tail sections. The Navy has contracted with General Electric Corporation to develop the F/A-18E/F’s engine. The engine will be provided to McDonnell Douglas Aerospace as a government-furnished item. Most of the avionics development costs for F/A-18E/F are not included in the E/F’s development cost estimate. As of December 31, 1995, the Navy had spent about $3.75 billion on the development phase of the F/A-18E/F program. Initial operational capability of the F/A-18E/F is scheduled for 2000, and fielding of the first operational carrier-based squadron is scheduled for 2003. Procurement of 1,000 aircraft for the Navy and the Marine Corps is planned through 2015. We initiated this review because of the magnitude of funds involved in the F/A-18E/F program. We included the F/A-18C/D, F/A-18E/F, and JSF in our review to determine whether continued development of the F/A-18E/F is the most cost-effective approach to modernizing the Navy’s tactical aircraft fleet. In conducting our work, we evaluated data used to justify the F/A-18E/F program. We reviewed various documents, including the Hornet 2000 study; Navy documents such as acquisition reports; the Operational Requirements Document; and related cost, engineering, and test data supporting the decision to develop the F/A-18E/F. This data showed that the F/A-18E/F was approved to correct deficiencies in current F/A-18s that the Navy said existed or were projected to materialize. The F/A-18 deficiencies cited were in range, carrier recovery payload, and survivability. Improvements in F/A-18E/F growth space and payload over the F/A-18C/D were also cited by the Navy in seeking E/F approval. Our specific objectives were to determine whether the operational deficiencies in the F/A-18C/D that the Navy cited in justifying the E/F program have materialized and, if they have, the extent to which the F/A-18E/F would correct them; ascertain whether the F/A-18E/F will provide an appreciable increase in operational capability over the F/A-18C/D; and review the reliability of the cost estimates for the F/A-18E/F and compare those estimates with the costs of potential alternatives to the E/F program. To accomplish these objectives, we acquired data on the current operational capabilities of the F/A-18s and the status of the F/A-18E/F development effort from the Naval Air Systems Command (NAVAIR) and the builders of the F/A-18s: McDonnell Douglas Aerospace, Northrop Grumman Corporation, and General Electric Corporation. We obtained various studies, test results, performance data reports and interviewed Navy and contractor officials. Using these data, we conducted various analyses and calculations, which are explained in the appropriate sections of our report, to verify the deficiencies in range, carrier recovery payload and survivability predicted for the C/D, and to ascertain the probability that the E/F would correct those deficiencies. To ascertain whether the F/A-18E/F will provide an appreciable increase in operational capability over the F/A-18C/D we focused on payload capacity and growth potential. These areas were also cited by the Navy in justifying the E/F program. We interviewed Navy and contractor officials and reviewed data from contractor studies, system specifications, and Navy reports. We evaluated the Navy’s projections that indicated that the C/D would have no growth potential to accommodate future avionics requirements. We also compared the weapons capacity of the C/D with the potential capacity of the E/F. Additional information concerning F/A-18C/D operational deficiencies and the need for the E/F was obtained from documents and interviews with officials from the Center for Naval Analysis and the Defense Intelligence Agency. To evaluate the validity of the F/A-18E/F procurement cost estimates, we examined the assumptions on which the estimates were based in terms of numbers of aircraft to be procured and the number of aircraft to be produced each year. We made these analyses because the Congress and DOD have expressed concerns in the past that the Navy’s assumptions were not realistic, given the probable limited availability of annual funding. To make this evaluation, we acquired data and interviewed officials in the Naval Warfare’s Aviation Requirements and Aviation Inventory directorates, and the Office of the Deputy Chief of Staff For Aviation within the Marine Corps. We obtained procurement cost data provided to the Congress in the annual Selected Acquisition Report and aircraft inventory data used by the Navy to calculate the E/F’s projected procurement cost, which is based on a combined Navy and Marine Corps buy of 1,000 aircraft. From this data, we developed and then compared F/A-18C/D and E/F recurring flyaway cost projections. We also compared projected E/F operational and cost projections with those of the JAST JSF. This information was acquired from the JAST program office, the Advanced Research Projects Agency (their Marine Corps Short-Takeoff Vertical Landing Strike Fighter effort was combined with JAST), and the contractor teams working on the JSF effort.