The Javelin is a man portable, fire-and-forget, antitank weapon system composed of two major components—a command launch unit and a round, which is a missile sealed in a disposable launcher container. (See fig. 1.) For operation of the system, the round is mated with the launch unit, but the launch unit may also be used in a stand-alone mode for battlefield surveillance and target detection. The Army expects Javelin to defeat armored targets out to distances of 2,000 meters, during the day or night and in adverse weather. The Army completed development of the Javelin system in December 1993. However, operational testing showed that the system’s design did not meet operational suitability requirements. As a result, the Army made numerous design changes to the launch unit and round before the contractor initiated low-rate production in June 1994. The Javelin system has experienced significant cost increases since it was first approved. In the early 1990s, the Army made budget decisions that stretched Javelin’s procurement phase from 6 to 14 years. In addition, the end of the cold war caused the Army and Marine Corps to reduce Javelin’s procurement quantities. Combined, these actions increased the average cost of the launch unit to about 4.5 times its originally estimated cost and more than doubled the average cost of the round. To mitigate these cost increases, the Army is attempting to shorten the system’s procurement phase. Initially, the Army planned to shorten procurement from 14 to 11 years by using production, logistics, and multiyear savings to purchase Javelin systems earlier than planned. On February 13, 1996, the Army announced that Program Budget Decision 104 added $993 million of additional procurement funds for fiscal years 1999 through 2001 to reduce Javelin’s procurement phase to 9 years. As the program is currently planned, these funds allow the Army to complete fielding by fiscal year 2004. The Army also hopes to reduce Javelin’s cost by awarding two multiyear contracts—one in 1997 and another in 2000. Multiyear procurement is a method of acquiring up to 5 years’ requirements of a system with a single contract. The procurements help the government reduce costs and provide incentives to contractors to improve productivity by investing in capital facilities, equipment, and advanced technology. However, multiyear contracts decrease annual budget flexibility. The Congress and the Department of Defense (DOD) commit themselves to fund multiyear contracts through completion or pay any contract cancellation charges, which may be substantial. According to the President’s 1997 Budget, the Army and the Marine Corps plan to purchase 31,269 Javelin rounds and 3,264 command launch units. The Army’s share of the purchase is 26,600 rounds and 2,800 command launch units. The Marines Corps plans to acquire 4,669 rounds and 464 launch units. The Army has not demonstrated that Javelin’s design is sufficiently stable for a multiyear production contract. By awarding a multiyear production contract before the design has stabilized and the system has been thoroughly tested, the Army risks cost overruns and/or schedule delays that could more than offset the savings produced by the contract. Pursuant to 10 U.S.C. 2306b, a military service is authorized to award multiyear contracts for the purchase of weapon systems if certain criteria are met. These criteria include the requirement that the design of the system remain substantially unchanged during the period covered by the multiyear contract. If the government awards a multiyear contract for a weapon system with an unstable design, the government could lose its budget flexibility without corresponding cost savings because contract changes or termination costs may substantially increase the cost of the weapon system. Between the end of development in 1993 and the beginning of low-rate production in 1994, the Army made 39 design changes to correct reliability problems. Since 1994, the Army has made a number of changes to the system’s design to reduce production and logistics costs and expects to continue making changes through the beginning of full-rate production in 1997. Most of these changes are being incrementally incorporated into hardware produced under three low-rate production contracts. The contractor is continuing production while changes are developed and qualified. As changes are approved, the contractor incorporates them into units in the production process. The Army estimates it will spend approximately $49.4 million from fiscal year 1994 through fiscal year 1997 while Javelin is in low-rate production to redesign various Javelin components. These changes are expected to reduce production and logistics costs by $329 million. However, because redesigned components are added to the production line as they are developed and qualified, the contractor will produce at least one and sometimes two variations of the Javelin system during each of the three low-rate production runs. According to current schedules, the last planned changes will not be incorporated into the production line until after full-rate production begins in 1997 under the planned multiyear contract. Javelin tests conducted to date have identified the need for additional design changes. During the first 8 months of Javelin round assembly, the round contractor stopped final assembly twice so engineers could redesign components that failed during testing. In January 1996, warheads in missiles undergoing production verification tests failed to function properly. Engineers said the failures occurred after they made minor changes to the fuzing device’s electronics. However, the warhead failures stopped production for 4 weeks until a remedy could be identified and implemented. In April, the contractor stopped round assembly for 2 weeks when electrical problems in the restraint pin mechanisms of two missiles occurred during a limited user test. The problems prevented one missile from leaving the launch tube after the gunner pulled the trigger and caused another to dive into the ground shortly after launch. During this test, a third missile failed when a short occurred in a transistor. This missile also failed to leave the launch tube. Army officials said the restraint pin assembly has been modified to remedy the problems that occurred during the limited user test. The contractor is retrofitting already produced missiles with the new assembly. Other unscheduled design changes could also be necessary as the Army continues to test the Javelin system. Even though it is making over 50 separate changes to Javelin’s original design, the Army does not plan to conduct any operational tests of missiles with all of the design changes until after full-rate production begins under a multiyear contract. In the opinion of Army officials, technical tests and a limited user test provide adequate information on Javelin’s operational capability. However, technical tests are conducted under controlled conditions and the limited user test does not test hardware that incorporates all design changes. The military services are statutorily required to operationally test each major weapon system under realistic combat conditions to determine if the system is operationally effective and suitable for combat prior to entering full-rate production. The military services are also required by DOD regulation to retest equipment if the design changes materially after initial operational testing. Therefore, we believe the Army must ensure that the redesigned Javelin works as intended prior to any commitment to full-rate production. In our view, the best way to accomplish that would be to conduct additional operational tests using fully redesigned systems. The Javelin system that will enter full-rate production will be significantly different from the Javelin that the Army operationally tested in 1993. To correct reliability failures recognized during full-scale development, and to reduce the cost of producing and supporting Javelin, engineers are changing many major components of the system. Between the end of the early operational testing and the beginning of low-rate production, the Army made changes to the round’s guidance unit, fuzing mechanism, propulsion unit, control system, battery coolant unit, and launch tube assembly, as well as the launch unit’s detection device, optics, display screen, and software. The Army will make additional round and launch unit changes during low-rate production. According to project office estimates, about 35 percent of the command launch unit’s components and 23 percent of the round will be redesigned during low-rate production. While Javelin’s Chief Engineer agreed that the command launch unit the Army plans to produce during full-rate production will be significantly different from the original configuration, he said that the round changes will not be significant. However, tests of warheads and rounds from the first low-rate production line have already identified potentially serious problems. Before low-rate production began, engineers made changes to electronic components in the warhead fuzing device. When missiles incorporating the changes were fired, the warheads failed to function properly. Army officials considered this problem so serious that they stopped round assembly until engineers identified and implemented a solution. Another post-development change—buying a liner for the main charge warhead from a second source—also caused problems. The liner should collapse and form a jet capable of perforating armor. However, the new vendor’s liner formed a jet that was not compatible with other Javelin components. Project office engineers believe the jet would have degraded Javelin’s lethality. The engineers modified Javelin components to correct the problem. Army officials told us that technical tests will provide sufficient proof that Javelin is suitable for combat. However, these tests—which determine if redesigned hardware (1) performs its intended function, (2) is compatible with other components of the system, and (3) can withstand various environmental stresses—are conducted under controlled conditions. Some technical tests are planned by the contractor and conducted at its facility. Even if tests are controlled by the government, test officials try to control as many variables as possible. For example, an Army operational test official said that during technical tests, trained technicians handle the equipment and follow precise guidelines. According to one DOD systems analyst, hardware may be sufficiently reliable to pass required technical tests, but still lack the endurance needed for battlefield conditions.