The Army plans to upgrade its AH-64A Apache attack helicopter, already considered by the Army to be the most advanced attack helicopter in the world, into a new version known as the AH-64D Longbow Apache. All 758 helicopters in the Apache fleet will be modernized with new avionics and be capable of firing both the laser-guided Hellfire missile and a radar-aided Longbow Hellfire “fire-and-forget” missile that is under development. These improvements are designed to, among other things, allow the Apache to conduct precision attacks in adverse weather, automatically engage multiple targets, and operate on the digital battlefield of the future. Additionally, 227 of the 758 upgraded Apaches will be equipped with a new mast-mounted, millimeter-wave fire control radar and more powerful engines. The Longbow Apache weapon system is composed of three components—a modernized Apache helicopter, a fire control radar, and a Longbow Hellfire missile. In December 1990, it reached milestone II, the decision point for entering the engineering and manufacturing development phase. A production decision—milestone III—is expected in October 1995, and fielding is planned to begin in 1997. DOD has requested $552.3 million for this system in fiscal year 1996—$354.8 million for the aircraft and $197.5 for the missile. Since its inception, the Longbow Apache program has expanded in scope and size, and program acquisition costs have more than doubled. In 1991, the Army planned to develop and procure only 227 radar-equipped modernized Apache helicopters and almost 11,000 Longbow Hellfire missiles. In May 1993, the program was restructured to include modernizing the entire Apache fleet of 758 helicopters and procuring over 13,000 Longbow Hellfire missiles. Largely because of this restructuring, the estimated cost to develop and procure the Longbow Apache weapon system increased from $5.4 billion to $12.3 billion between 1991 and 1994. Program acquisition costs again increased; this time by about $630 million between 1993 and 1994. As we reported in 1994, in implementing its aviation modernization plan, the Army chose to fund procurement of both the RAH-66 Comanche reconnaissance and attack helicopter and Longbow Apache attack helicopter while deferring or canceling other helicopter modernization programs. Since then, production of the Comanche program has been deferred. The Army plans to equip some of its Comanche helicopters with the Longbow Hellfire missile and a modified version of the Longbow radar. Since the Longbow Apache weapon system entered the engineering and manufacturing development phase in 1990, concerns have been raised by DOD test and acquisition officials about various aspects of the program. These concerns could have a potentially serious impact on the Longbow Apache program and, therefore, should be resolved. For example, the performance of both the Longbow radar and Longbow Hellfire missile are concerns. Poor results during specific segments of early proof-of-principle testing and later testing demonstrated that the radar and missile have had difficulty meeting some important test goals. Radar problems include misidentification and nondetection of some targets and difficulty in developing radar-related software for different terrains. Missile problems include less-than-satisfactory performance against targets defended with multiple countermeasures such as smoke and active jammers. The reliability, availability, and maintainability of the Longbow Apache helicopter are also concerns. In September 1990, we reported on the low availability rates of the basic Apache helicopter due to reliability, availability, and maintainability problems. Because the Longbow Apache is a major modification of the basic Apache helicopter, we also noted that (1) the Apache’s existing logistical support problems may affect the Longbow Apache and (2) the Longbow Apache should clearly demonstrate its logistical supportability before proceeding into production. In July 1994, a DOD test official noted that the logistics reliability of the Longbow Apache was a recurring issue. Also, in its October 1994 Longbow Apache readiness and support assessment for long-lead production, DOD affirmed its concern with logistics reliability when it noted that the logistics reliability parameter for the fire control radar, which was incorporated in the Acquisition Program Baseline in February 1992, was deleted in March 1994. After discussions between DOD and the program office, the logistics reliability parameter was put back into the baseline. Questions have also been raised about the ability to produce the Longbow Hellfire missile’s transceiver in mass quantities. The Army found that the initial transceiver design did not meet all of the specification requirements and was not designed to be compatible with automated production processes. As a result, the transceiver was redesigned, but the Army could not provide us with the qualification test results because the results have not been fully analyzed. While the Army maintains that this problem is not expected to affect missile performance, it does acknowledge that the problem has delayed missile testing and validation. DOD test and acquisition officials told us that resolution of these concerns is important to the overall success of this program and, therefore, DOD needs to make sure they are resolved by milestone III. According to DOD, developmental and operational testing has been completed; however, the classified test results have not been analyzed and authenticated. Therefore, DOD has not issued a report on Longbow Apache testing. According to the program manager, the Longbow Apache weapon system performed so well in its operational testing that the Army was able to conclude testing early. However, a DOD developmental test official informally expressed dissatisfaction with the Longbow Apache’s operational test, specifically that multiple countermeasure testing may not be completed and that missile, radar, and aircraft test results had not been integrated to give a total system picture. According to a DOD operational test official, results may not be as good as the program manager observed, but they are generally good. He noted that (1) there are a few weak points but data had not been synthesized and validated to determine their significance and (2) although the system did not meet every specification exactly and was not tested against all jammers and reactive armor, it performed successfully in the field. As previously discussed, one of the concerns with the Longbow Apache weapon system is the missile’s inability to perform against active countermeasures like jammers. It would seem, therefore, that operational testing would have included tests against all jammers. In June 1995, DOD confirmed that the analysis of test results is currently ongoing and is expected to be a key factor in the milestone III decision. Our review indicated that the Longbow Hellfire missile procurement plan is inadequate because (1) it will procure about 3,200 missiles that are not required at an estimated cost of between $540 million and $750 million and (2) a significant number of the missiles will be produced before Longbow Apache aircraft are available and will lose up to one-half of their shelf life. At DOD’s direction, the Army has developed an $862 million cost-reduction plan, which includes a 5-year production contract that would require congressional notification. However, if the procurement is reduced, the Army will have to renegotiate the contract terms to determine what savings can be achieved. The Army plans to procure about 3,200 more Longbow Hellfire missiles for the Longbow Apache program than are required. While the Army has approved plans to procure 13,311 Longbow Hellfire missiles, a computational error resulted in this requirement being overstated. This error may result in program costs of between $540 million and $750 million, depending upon whether the Army achieves its recently adopted cost-reduction goals. Using corrected data, we calculated that the total procurement objective for the Longbow Hellfire missile program should be 10,108 for the Longbow Apache. The Army approved program of 13,311 missiles for the Longbow Apache is, therefore, overstated by approximately 3,200 missiles. An official in the Office of the Deputy Chief of Staff for Operations and Plans, who is responsible for munitions requirements, confirmed that the procurement objective was overstated. According to him, the overstatement occurred because the Army used the wrong model for calculating the procurement objective. The exact cost of these unneeded missiles is dependent on whether or not the Army achieves the cost reductions expected under the missile cost-reduction plan. If all of the planned cost-reduction initiatives are achieved, the unit cost may be reduced to $169,000 and, therefore, the cost of the approximately 3,200 unneeded missiles could be about $540 million. If none of the reduction initiatives are achieved, the unit cost may remain $234,000 and, therefore, the cost of the unneeded missiles could be about $750 million. The timing for fielding the Longbow Apache helicopter and delivering the Longbow Hellfire missile differs to such an extent that significant portions of the missiles’ shelf life will expire before Longbow Apache helicopters are scheduled to be available to use them. The missiles have a designed shelf life of 10 years and program officials told us that, based on experience with the laser Hellfire missile, it is possible to extend that shelf life to 15 years. In its comments to this report, DOD stated that a 15-year shelf life is reasonable. The Army plans to accept the last Longbow Hellfire missiles in fiscal year 2005 and field the last Longbow Apache helicopter to operational units in fiscal year 2014. We calculated that the Longbow Apache fleet will require 7,168 Longbow Hellfire missiles in fiscal year 2010; however, the missile inventory is projected to be 13,253 missiles in fiscal year 2005. Therefore, by 2010, over 6,000 missiles will have used at least one-half of their designed 10-year shelf life and one-third of their anticipated 15-year extended shelf life waiting to arm a helicopter. Current Army procurement plans call for the Longbow Hellfire missile to be used on the Comanche helicopter.