In the years since, the original business case has been severely weakened  as threats, missions, and requirements have changed. Further, the program  milestones have slipped, the development period lengthened to more than  19 years, development costs more than doubled, and a modernization  program was added. F/A-22 Modernization Program Lacks Business Case and May Not Be Executable as Planned

The Air Force, in the face of significant changes to the F/A-22, has not  prepared a new business case to justify the resources needed to add a  much more robust ground attack capability and to assume new missions. A December 2004 budget decision reduced procurement funding and  quantities but did not cut funding for modernization. This has made the  current modernization plan obsolete as key ground attack and intelligence  gathering enhancements had been slated for aircraft that have now been  eliminated from the F/A-22 procurement program. To enhance the utility of the F/A-22 for  today and the future, the Air Force now plans to develop a robust air-to- ground attack capability to allow the aircraft to engage a greater variety of  ground targets, such as surface-to-air missiles systems, that pose a  significant threat to U.S. aircraft. In March 2003, OSD’s Cost Analysis Improvement Group (CAIG)  estimated that the Air Force would need $11.7 billion for the planned  modernization programs through fiscal year 2018. The Air Force’s latest estimated cost for the modernization  program is about $5.4 billion through 2011. This and other events will reduce the Air Force’s expected buy to  no more than 178 aircraft. Operational Testing Considered Successful by Air Force, but Ground Attack Role Has Not Yet Been Tested

Reports detailing the results from IOT&E were not available for our  review, but Air Force test officials told us that testing showed the F/A-22  was “overwhelmingly effective” as an air superiority fighter and that its  supporting systems were “potentially suitable.” Some deficiencies were  noted, particularly in reliability and maintainability, but Air Force officials  believe these deficiencies can be corrected in time to meet the warfighter’s  needs by the scheduled initial operational capability date in December  2005. The F/A-22 initial operational test and evaluation was conducted by the Air  Force Operational Test and Evaluation Center from April through  December 2004 to support the full-rate production decision planned for  March 2005. We recommend the Secretary of Defense complete a new  business case that determines the continued need for the F/A-22 and that  specifically:  (a) justifies the F/A-22’s expanded air-to-ground capabilities based on an  assessment of alternatives to include both operational assets and  planned future weapon systems;  (b) justifies the quantity of F/A-22 aircraft needed to satisfy requirements  for air-to-air and air-to-ground missions;  (c) provides evidence that the planned quantity and capabilities are  affordable within current and projected budgets and the statutory  funding limitation;  (d) addresses impacts of the recent budget decision on the need for and  cost of future developmental activities, long-term logistical support  and basing decisions, and the ability to take advantage of cost  reduction efforts, such as multiyear contracting and productivity  improvement; and  (e) justifies the need for investments for a new computer architecture and  avionics processor, and F/A-22 infrastructure deficiencies.
Why GAO Did This Study

The Air Force is preparing a modernization plan that expands the capabilities of the F/A-22, which was first designed to serve as an air-to-air fighter aircraft with very limited ability to strike targets on the ground. The Air Force now intends to transform it by adding robust air-to-ground capabilities to attack enemy ground threats and by adding onboard intelligence data gathering capabilities. After the recent budget cut, DOD estimates F/A-22 cost at $63.8 billion for 178 aircraft. It has been in development for more than 19 years, a decade longer than originally envisioned. In the face of significant cost and schedule overruns, Congress mandates that GAO annually assess the F/A-22 program. In this report, GAO addresses (1) the Air Force's business case for the F/A-22 modernization plan and (2) the recently completed initial operational test and evaluation.

What GAO Found

The Air Force has yet to produce a business case for the next-generation F/A-22. Much has changed in the years since the F/A-22 program began nearly 2 decades ago--adversarial threats against U.S. aircraft have evolved, and a plan to modernize the F/A-22 significantly different than the original aircraft is in progress. A DOD cost estimate in 2003 projected the Air Force's modernization plan to cost $11.7 billion through 2018. A December 2004 budget decision reduced procurement funding and quantities but did not cut funding for modernization. The decision to terminate procurement after fiscal year 2008 places the current modernization plan in doubt as key ground attack and intelligence-gathering enhancements had been slated for aircraft now eliminated from the program. Without a new business case for adding a more robust ground attack capability and for new intelligence missions, the Air Force may be at a disadvantage when the time comes to justify the modernization plan in the face of future budget constraints. DOD is set to conduct the 2005 Quadrennial Defense Review to weigh the merits of transformational priorities and investments to determine if the best choices are being made to meet military needs within available funding levels. This may further influence an F/A-22 business case. The F/A-22 program recently underwent initial operational testing, but testing did not include the air-to-ground missions that the Air Force envisions for the aircraft. The Air Force does not expect to conduct testing of these capabilities until after a decision is made to enter full-rate production. Although a final test report was not available for our review, Air Force officials told us that the F/A-22 was extremely effective in performing its air-to-air missions. Evaluation results of capabilities needed to sustain combat operations and maintain aircraft were not as favorable. Additional testing will be required to assess corrective actions for deficiencies identified and to evaluate new ground attack and intelligence-gathering capabilities added by the modernization program.