B-2 operational requirements specify that the weapon system have “low-observable” (stealth) characteristics and sufficient range and payload capability to deliver precision-guided conventional or nuclear weapons anywhere in the world with enhanced survivability. The B-2 combines conventional and state-of-the-art technology, such as special shaping and radar-absorbing materials, to achieve low-observability characteristics, high aerodynamic efficiency, and a large payload capacity. The blending of these technologies makes the aircraft complex and costly to develop, produce, and in some respects maintain. In the early 1990s, the number of B-2s to be acquired was reduced from 132 to 20 operational aircraft. The 20 aircraft include 15 production aircraft and 5 of 6 test aircraft that are to be modified to a fully capable operational configuration. In March 1996, the President directed that the one remaining test aircraft be upgraded to a fully capable operational configuration, bringing the total operational B-2s to be acquired to 21. B-2 development started in 1981. Production of long lead-time aircraft components began in 1986 and flight testing was initiated in 1989. The lengthy development and test program, which has been implemented concurrently with the production program for about 11 years, required the Air Force to devise a mechanism for initially accepting partially capable aircraft until their full capability could be demonstrated in the test program. Therefore, the Air Force agreed to accept the 15 production aircraft in 3 configurations—10 in a training configuration, 3 in an interim configuration, and 2 in the fully capable configuration known as block 30. The block 30 configuration is planned to be the first fully capable configuration that would meet all the essential employment capabilitiesdefined by the Air Force. All aircraft not delivered in the block 30 configuration, including test aircraft, have to be modified extensively to make them fully capable. Some of the aircraft in a training configuration have been modified to an interim configuration. The modification efforts began in 1995 and are scheduled to be complete in July 2000. The total production period for the 21 aircraft, including modifications to bring all B-2s into the fully capable configuration, is expected to be about 14 years. Flight testing was planned to take 4 years but has taken about 8 years and is not yet completed. The Air Force extended the estimated completion of flight testing from July 1997 to March 1998. The Air Force’s estimate of the total program cost for the B-2 program has changed less than 1 percent since 1994; however, the estimate has been affected by changes made by both Congress and the Air Force. Table 1.1 shows the Air Force’s 1994-96 cost estimates for the development, procurement, and military construction of the B-2 as reported in annual selected acquisition reports. Through fiscal year 1997, the Air Force was appropriated $43,178 million, or 96 percent, of the $44,754 million total program estimate. This leaves $1,576 million to be appropriated for fiscal years 1998-2004. The December 1996 estimate included costs to complete the program for 20 operational B-2s and other changes in the program. In the last 3 fiscal years, Congress added $734 million to the B-2 program—$125 million to preserve the B-2 industrial base, $493 million to upgrade the first test aircraft to operational status, and $116 million to enhance the block 30 capabilities. Enhanced capabilities include making the B-2 capable of launching the Joint Stand Off Weapon and a near-precision conventional penetrating bomb. The Air Force changes decreased various elements of the estimated development and procurement costs. Those decreases exceeded congressional additions, resulting in the overall net reduction in the total B-2 cost estimate. For example, between fiscal year 1997 and 1998, estimates for B-2 spares, support, and nonrecurring air vehicle cost decreased over $900 million. Spare parts estimates were reduced by $358 million because the Air Force now plans to fly fewer and shorter aircraft sorties and because the methodology for computing spare parts requirements changed. Interim contractor support estimates were also reduced by $142 million because parts reliability, according to the Air Force, has been better than anticipated. Other support decreases totaling $170 million covered peculiar support equipment, data, and training items. In addition to changes in the B-2 support estimate, the Air Force decreased its estimate for nonrecurring air vehicle cost by $237 million. According to the Air Force, the estimate of development cost reported in the December 1996 B-2 Selected Acquisition Report (included in table 1.1) and the fiscal year 1998 President’s budget (app. I) is understated by $89 million. Air Force officials said that without these funds, two of the test aircraft would not be upgraded to fully capable aircraft, leaving only 19 fully capable B-2s. B-2 estimated costs could increase if (1) the flight test program is extended beyond March 1998, (2) more B-2 performance deficiencies are identified during the time remaining in the acquisition program, and (3) additional development and procurement activities are initiated to better maintain the low-observable features of the B-2s. The flight test program was not fully completed as scheduled on July 1, 1997, and the Air Force plans to extend flight testing with one test aircraft through March 1998. The Air Force is currently defining detailed testing that will be required and has included $28 million in the fiscal year 1998 budget to cover the extended flight test program. Any additional extension of testing, however, could increase the estimated B-2 cost. Some of the areas to be further tested are terrain-following/terrain-avoidance radar performance in the rain, mission effectiveness tests of the low-observable features, ground and flight tests of the environmental control system and auxiliary certain tests of the defensive management system. We plan to report on the results of B-2 testing after the Air Force issues reports scheduled for late 1997 and early 1998. Working on flight tests, aircraft production, and modifications concurrently has created the need for further corrections of deficiencies after fully capable aircraft are delivered and could cause development costs to increase. As of May 1997, the Air Force officials had identified 13 corrections that cannot be incorporated into up to nine aircraft during production or during the modification process. They estimate another 60 deficiencies could be identified that could impact the B-2s. These officials added that new corrections that cannot be incorporated during the modification process would be incorporated by retrofitting the aircraft at some future time. The cost estimate for production includes over $500 million in reserves (fiscal year 1993 and prior year funds) that are available for cost overruns and other anticipated costs. However, the development estimate includes only $12 million in reserves to correct deficiencies in the test aircraft. Air Force officials said that if significantly more or costly deficiencies are identified, development costs could increase. The Air Force has concluded it could not effectively deploy B-2s to forward operating locations without sheltering the aircraft to preserve and maintain its low-observable features. Accordingly, if permanent or temporary shelters must be developed and built at selected forward operation locations or additional support equipment must be acquired to meet deployment and maintenance requirements, additional costs will be incurred. According to the Air Force, the B-2 achieved initial operational capability on April 1, 1997, with interim aircraft capable of flying nuclear and limited conventional missions. The interim B-2 is supposed to be capable of participating in nuclear or conventional warfare either from its main operating base at Whiteman Air Force Base, Missouri, or from a forward operating location outside the continental United States. While the B-2’s performance met requirements for initial operations, the aircraft are unable to meet intended deployment requirements because some low-observable features require substantial maintenance and the aircraft are more sensitive to climate and moisture than expected. As a result, the Air Force has eliminated the deployment requirement for interim aircraft and is evaluating potential actions to allow deployment when fully capable aircraft are delivered. Full operational capability of the B-2 is planned to be achieved in 1999. The Air Force demonstrated that interim B-2 aircraft can carry and deliver unguided Mk 84 bombs or the precision-guided Global Positioning System (GPS) aided munition (GAM) in the conventional role or B-83/B-61 nuclear weapons in the nuclear role. Reports of flight tests and demonstrations indicated the GAM to be an effective all-weather weapon in attacking fixed targets with near-precision accuracy. In one demonstration, 3 B-2s destroyed 16 targets using 16 GAMs dropped from over 40,000 feet. In addition, the interim aircraft have automatic terrain-following capability as low as 600 feet and some of the capabilities of the planned defensive management system. According to Air Force officials, the demonstrated capabilities are more than adequate to perform the mission defined for the interim configuration when operating from Whiteman Air Force Base, the B-2’s main operating base. The Air Force decided it was unrealistic to deploy the B-2 without shelters, as planned, because some low-observable materials are not as durable as expected and require lengthy maintenance, some in an environmentally controlled shelter after each flight. In addition, B-2s must be kept in shelters because of their sensitivity to moisture, water, and other severe climatic conditions. Air Force operational requirements for the B-2 intended for both the interim and fully capable B-2s to be capable of deploying to forward operating locations, without shelters, in all types of weather and climates. The Air Force is reviewing specific B-2 deployment requirements and working to resolve deployment-related problems by the time the B-2s are scheduled to be fully capable in 1999. The operational test report for the interim aircraft stated the aircraft need frequent and lengthy maintenance and are sensitive to extreme climates and moisture.