The Air Force’s F-22A Raptor is the only operational fifth-generation tactical aircraft, incorporating a low observable (stealth) and highly maneuverable airframe, advanced integrated avionics, and a supercruise engine capable of sustained supersonic flight. The F-22A acquisition program began in 1991 with an intended development period of 12 years and a planned quantity of 648 aircraft. The system development and demonstration period eventually spanned 14 years, during which time threats, missions, and some requirements changed. In particular, the F-22A was originally designed to fly primarily air-to-air missions; however, since that time the Air Force has decided to add air-to-ground capabilities to the F-22A. Development costs substantially increased and total quantities were eventually decreased to 188 aircraft. When the final aircraft is delivered in May 2012, the F-22A acquisition program will be complete at a cost of $67.3 billion. In 2003, the Air Force established a modernization program to develop and insert new and enhanced capabilities considered necessary to meet the threat. According to Air Force officials, modernization is defined as a process of upgrading and modifying aircraft with a focus on adding new capabilities. The modernization is now proceeding in four related increments, each with multiple projects: the initial phase of modernization, addressed some Increment 2,requirements deferred from the acquisition program and added some new ground attack capability. It has been fielded. Increment 3.1 began fielding in November 2011 and adds enhanced radar and enhanced air-to-ground attack capabilities. Increment 3.2A is a software upgrade to increase the F-22A’s electronic protection, combat identification, and Link-16 communications and data link capabilities. Increment 3.2B will increase the F-22A’s electronic protection, geo- location, and Intra Flight Data Link (IFDL) capabilities, and adds AIM- 9X and AIM-120D missiles. In addition to these efforts, in 2006, the Air Force began a Reliability and Maintainability Maturation Program (RAMMP). Although the Air Force does not consider this part of the modernization program, it is integral to making the F-22A weapon system more available, reliable, and maintainable. Since the F-22A’s initial fielding in 2006, maintenance issues have prevented it from achieving reliability and availability requirements, and fleet operating and support (O&S) costs are much higher than projected earlier in the program. Total projected cost of the F-22A modernization program has more than doubled since it started. While the program has completed and fielded some of its planned capabilities, the overall schedule to complete integration and testing of planned capabilities and deliver them to the warfighter has slipped by nearly 7 years. The content, scope, and phasing of planned capabilities also shifted over time with changes in requirements, priorities, and annual funding decisions. Visibility and oversight of the program’s cost and schedule is hampered by a management structure that does not directly track and account for the full cost of specific capability increments. The Air Force plans to separately break out and manage the fourth increment as a major defense acquisition program, which should improve management and oversight. The Air Force is now expected to spend around $11.7 billion to modernize and improve the reliability of the F-22A, compared with the $5.4 billion projected soon after the start of development. Officials underestimated the scope of the total program and the time and money that would eventually be needed to develop and field new capabilities. Contributing factors to this cost growth include (1) changed and added requirements; (2) unexpected expenses for building a support infrastructure; and (3) unplanned efforts to improve aircraft reliability and maintainability. Program officials also said that instability in modernization funding contributed to some of the cost growth by stretching the time required to complete projects. Figure 1 shows increased cost estimates over time for the modernization program and other related costs. Modernization increments include development and procurement costs directly tied to one of the four increments for acquiring upgraded capabilities. These include infrastructure costs for lab support, test operations, program management, retrofit to bring all aircraft to a common configuration, and other efforts integral to supporting modernization increments. Other improvement costs principally include the RAMMP reliability and maintainability projects and making structural repairs needed for the aircraft to achieve its required 8,000 hour service life. At this point, an estimated $5.5 billion of the $11.7 billon has been spent. A future investment of around $6.2 billion remains: $1.3 billion for Increment 3.2B, $3.6 billion for other modernization and support activities, and $1.3 billion for completing the RAMMP and structural repairs. When the F-22A modernization development program began, the Air Force expected to have all current planned capabilities integrated and fielding started by 2010. Now, the final increment is not expected to begin fielding until 2017, 7 years later than initially planned. Air Force officials stated that they underestimated the sheer magnitude of the modernization effort, both in the amount of time required to develop and integrate the capability, and costs to complete the modernization. According to program officials, contributing factors to delays include (1) additional requirements, (2) unexpected problems and delays during testing, and (3) research, development, testing, and evaluation funding fluctuations. Figure 2 compares the initial and latest schedules. According to Air Force officials, the program currently intends to upgrade 143 aircraft with the full complement of modernized capabilities by fiscal year 2020 and retain 36 aircraft with only Increment 2 capabilities to be used in training. Increment 3.1 is being fielded in fiscal years 2011 to 2016 and Increment 3.2A from fiscal years 2014 to 2016. Increment 3.2B, the last currently planned increment, is expected to field from fiscal years 2017 and 2020. Future capability enhancements are expected to follow the current modernization program, but have not been defined. The content, scope, and phasing plan changed over time, contributing to cost and schedule problems. Figure 3 illustrates the changing nature of modernization projects, particularly in the later increments. Some capabilities, such as the Multifunction Advanced Data Link, have been eliminated because of changes in requirements and immature technology. Some, like the AIM-9X missile, have been added to the program to meet emerging threats. Some required capabilities have been reduced, such as the Geolocate project, which will now field a less- capable version than initially planned. Air Force officials stated that potential new capabilities are analyzed and vetted by evaluating technical maturity and applying cost as independent variable principles to determine which to include in the F-22A modernization program. As a result of this evaluation process, certain capabilities have been modified, deferred, added, or eliminated. Most changes affect the final two increments. For example, MADL, which was intended to provide communications interoperability with the F-35 Joint Strike Fighter, was removed from Increment 3.2B. MADL and other deferred efforts, such as the full Small Diameter Bomb capability, may eventually be delivered in future increments yet to be defined. Tracking and accounting for the full and accurate cost of each modernization increment, and individual projects within each increment, are limited by the way the modernization program is structured, funded, and executed. As depicted in figure 4, only 26 percent of total projected costs can be traced directly to the four modernization increments. About 57 percent of total costs go to fund activities that support all the modernization efforts and the overall F-22A program but are not charged to specific increments. These activities include test operations, the building and use of government labs, management activities, retrofit efforts to bring the fleet to a common configuration, and other infrastructure accounts. The remaining 17 percent funds the RAMMP program and structural repairs. While Air Force officials do not consider these efforts as part of the funded modernization program, we note that these efforts are needed to improve fleet affordability and achieve desired aircraft life and thus integral to justify future modernization investments. Program accountability and oversight have been hampered by how the modernization program was established, managed, and funded. As we reported in March 2005, the Air Force embarked on the modernization program without a knowledge-based business case to support the multibillion dollar investment to significantly change the aircraft’s capabilities and missions.should have been established as an entirely separate acquisition program with a new business case because of the magnitude of the proposed changes. A sound business case would have matched requirements with resources—proven technologies, sufficient engineering capabilities, time, We stated that the modernization program and funding—when undertaking new product development.information about the schedule and funding was not adequately known at the start of modernization. Rather than making the new business case to justify and manage the modernization program as a separate major defense acquisition, Air Force officials incorporated it within the existing F-22A acquisition program and comingled funds. Their rationale was their belief that breaking modernization efforts out as a separate program would have delayed the capability. As a result, development funding and infrastructure expenses were added to the existing acquisition program’s baseline. The modernization program proceeded without establishing its own set of acquisition milestones and has not been subject to the same level of scrutiny by senior defense leaders or the performance reporting required of major defense acquisition programs as provided for in DOD acquisition policy. At their discretion, DOD chose to execute it within the baseline F-22A program. In November 2004, defense leaders recognized that the size and importance of the modernization program warranted a higher level of scrutiny. The acting Under Secretary of Defense for Acquisition, Technology and Logistics directed the Air Force to hold separate milestone reviews for the future stages of the modernization program to be consistent with DOD acquisition policy.