The Air Force and the Navy plan to use the JPATS aircraft to train entry level Air Force and Navy student pilots in primary flying to a level of proficiency from which they can transition into advanced pilot training. The JPATS aircraft is designed to replace the Air Force’s T-37B and the Navy’s T-34C primary trainer aircraft and other training devices and courseware. It is expected to have a life expectancy of 24 years and provide better performance and improved safety, reliability, and maintainability than existing primary trainers. For example, the JPATS aircraft is expected to overcome certain safety issues with existing trainers by adding an improved ejection seat and a pressurized cockpit. The JPATS aircraft is expected to be more reliable than existing trainers, experiencing fewer in-flight engine shutdowns and other equipment failures. It is also expected to be easier to maintain because it is to use more standard tools, and common fasteners. To calculate the number of JPATS aircraft required, the Air Force and the Navy in 1993, used a formula that considered such factors as the aircraft utilization rate, annual flying hours, mission capable rate, attrition rate, sortie length, working days, and turnaround time. The Air Force calculated a need for 372 JPATS aircraft, and the Navy calculated a need for 339, for a total combined requirement of 711 JPATS aircraft. In December 1996, the two services reviewed these requirements. At that time, the Navy approved an increase of 29 aircraft, increasing its total to 368 aircraft. This increased total requirements from 711 to 740 JPATS aircraft. The Air Force’s Air Education and Training Command—responsible for pilot training—determined that the Air Force would need 441 aircraft instead of 372 aircraft. However, the Air Force did not approve this increase. The JPATS aircraft shown in figure 1, the T-6A Texan II, is to be a derivative of the Pilatus PC-9 commercial aircraft. Raytheon Aircraft Company, the contractor, plans to produce the aircraft in Wichita, Kansas, under a licensing agreement with Pilatus, the Swiss manufacturer of the PC-9. The JPATS aircraft will undergo limited modification to incorporate several improvements and features that are not found in the commercial version of the aircraft, but are required by the Air Force and the Navy. Modifications involve (1) improved ejection seats, (2) improved birdstrike protection, (3) a pressurized cockpit, (4) an elevated rear (instructor) seat, and (5) flexibility to accommodate a wider range of male and female pilot candidates. These modifications are currently being tested during the qualification test and evaluation phase, which is scheduled to be completed in November 1998. Initial operational capability is planned for fiscal year 2001 for the Air Force and fiscal year 2003 for the Navy. The Air Force and the Navy competitively selected an existing commercial aircraft design to satisfy their primary trainer requirements instead of developing a new trainer aircraft. This competitive acquisition strategy, according to Air Force officials, resulted in original program estimates of about $7 billion being reduced to about $4 billion upon contract award. The Air Force, as executive agent for the program, awarded a contract to Raytheon in February 1996 to develop and produce between 102 and 170 JPATS aircraft with the target quantity of 140, along with simulators and associated ground based training system devices, a training management system, and instructional courseware. The contract included seven production options. Through fiscal year 1997, the Air Force has exercised the first four options, acquiring 1 aircraft for engineering and manufacturing development and 23 production aircraft. A separate contract was awarded to Raytheon for logistics support, with options for future years’ activities. Production is scheduled to continue through 2014. In 1996, the Air Force and the Navy calculated the number of JPATS aircraft required using several factors, including projections of JPATS mission capable rates and projected attrition rates based on historical experience. However, the data they used in their calculations contained various inconsistencies. For example, the projections of JPATS aircraft mission capable rates of 91 percent and 80 percent used by the Air Force and the Navy, respectively, to calculate the requirements differed substantially from each other and from the 94-percent rate included in the contract for procurement of the aircraft. The result of using lower mission capable rates to calculate aircraft quantities is that more aircraft would be needed to achieve annual flying hour requirements for training than if higher rates were used. Furthermore, the Air Force’s projected attrition rates were not consistent with historical attrition experience with its existing primary trainer, and the Navy used a rate that differs from the rate that DOD now says is accurate. Until these inconsistencies are resolved, it is unclear how many JPATS aircraft should be procured. Although the Air Force and the Navy are procuring the same JPATS aircraft to train entry level pilots and the aircraft will be operated in a joint training program, they used different mission capable rates to calculate aircraft requirements. Specifically, the Air Force used a 91-percent mission capable rate and the Navy used an 80-percent rate. Neither of these rates is consistent with the JPATS contract that requires Raytheon to build an aircraft that meets or exceeds a 94-percent mission capable rate. Therefore, we recalculated the Air Force and the Navy total JPATS aircraft requirements using the same formula as the Air Force and the Navy, and substituting the 94-percent contract mission capable rate in place of the rates used by the Air Force and the Navy. Table 1 shows how higher mission capable rates could decrease JPATS aircraft quantity requirements by as many as 60 aircraft—10 for the Air Force and 50 for the Navy. The attrition rate used by the Air Force to calculate the number of JPATS aircraft needed was more than twice the attrition rate of its current primary trainer that was placed in service in the late 1950s. The Air Force estimated that 1.5 JPATS aircraft would be lost or damaged beyond repair for every 100,000 flying hours. However, the historic attrition rate for the current primary trainer is 0.7 per 100,000 flying hours. Although DOD advised us that single-engine trainers such as JPATS are expected to have higher attrition rates than two-engine trainers such as the T-37B, we note that important JPATS features are increases in safety and reliability, including fewer in-flight engine shutdowns and other equipment failures. In addition, use of an advanced ground based training system, being acquired as part of the JPATS program, is expected to result in greater pilot familiarity with the aircraft’s operation prior to actual flights. Data provided by the Navy and DOD regarding attrition rates are conflicting. For example, the Navy’s calculations in 1996 used an attrition rate of 1.5 aircraft per 100,000 flight hours to calculate the required quantity of JPATS aircraft. To derive this rate, the Navy factored in the attrition experience of the existing T-34C trainer, using a lifetime attrition rate of 0.4 per 100,000 flight hours. However, in commenting on a draft of this report, DOD stated that the lifetime attrition rate for the T-34C is 2.1 aircraft per 100,000 flying hours and the Navy provided data that it believed supported this rate. However, our analysis showed that the data supported a rate of 3.6 aircraft per 100,0000 flying hours, which differs from both the Navy and DOD figure. The JPATS aircraft procurement plan does not take advantage of the most favorable prices provided by the contract. The contract includes annual options with predetermined prices for aircraft orders of variable quantities. Procurement of fewer than the target quantity can result in a unit price increase from 1 to 52 percent. Procurement above the target quantity, or at the maximum quantity, however, provides very little additional price reduction. The contract contains unit price charts for the variation in quantities specified in lots II through VIII. The charts contain pricing factors for various production lot quantity sizes that are used in calculating unit prices based on previous aircraft purchases. The charts are designed so that the unit price increases if the number of aircraft procured are fewer than target quantities and decreases if quantities procured are more than target quantities. As shown in table 2, lots II through IV have been exercised at the maximum quantities of 2 (plus 1 developmental aircraft), 6, and 15. According to the procurement plan, 18 aircraft are to be procured during fiscal year 1998 and 12 aircraft during fiscal year 1999, resulting in a total of 30 aircraft. All of these aircraft are being procured by the Air Force. In fiscal year 2000, the Navy is scheduled to begin procuring JPATS aircraft. Our analysis shows that DOD can make better use of the price advantages that are included in the JPATS contract. For example, as shown in table 3, 30 aircraft can be procured more economically if 16, rather than 18, aircraft are procured in fiscal year 1998 and 14, rather than 12, aircraft are procured in fiscal year 1999. If as few as 16 aircraft were procured in fiscal year 1998, they could be acquired at the same unit price as currently planned because the unit price would not increase until fewer than 16 JPATS aircraft were procured in fiscal year 1998. Deferring 2 aircraft from fiscal year 1998 to fiscal year 1999 would increase the quantity in fiscal year 1999 from 12 to 14, resulting in a reduction of the unit price for fiscal year 1999, from $2.905 million to $2.785 million. This deferral would not only save $1.360 million over the 2 years but also reduce the risk of buying aircraft before the completion of operational testing by delaying the purchase of two aircraft and permitting more testing to be completed. DOD could also save money if it altered its plans to procure 26 aircraft in fiscal year 2000, which is a quantity lower than the target of 32 aircraft. The unit price could be reduced by $104,212, or 4 percent, if DOD procured the target quantity.