The JSF is intended to provide greater capability and  to replace DOD’s aging fighter and attack aircraft. Since the program began in November 1996, it  has experienced technical challenges that have resulted in significant cost  increases and schedule overruns. A New Business Case Is Needed to Justify Continued Investment in the F/A-22 Program

Since its inception in 1986, the F/A-22 aircraft program has encountered  numerous and continuing management and technical challenges. Changing  threats, missions, and requirements have severely weakened the original  business case. The recent budget decision to terminate procurement after  fiscal year 2008, the prospect of additional cuts because of ceilings on  program cost, and upcoming defense reviews have significant implications  for the program’s viability and the future of modernization efforts. In March 2004, we reported that the significant changes in the F/A-22’s  cost, quantity, capabilities, and mission and the persistent problems and  delays in its development and testing schedules called for a new business  case to justify the continued need for the F/A-22. New JSF Business Case and Acquisition Strategy Is Critical for Program Success

Unlike the F/A-22 program, which is near the end of development, the JSF  program is approaching key investment decisions that will greatly  influence the efficiency of the remaining funding—-over 90 percent of the  $245 billion estimated total program costs—-and determine the risk DOD  is willing to accept. DOD has not been able to deliver on its initial promise,  and the sizable investment greatly raises the stakes to meet future  promises. Given continuing program uncertainties, DOD could use more  time to gain knowledge before it commits to a new business case and  moves forward. Any new business case must be accompanied by an  acquisition strategy that adopts an evolutionary approach to product  development—one that enables knowledge-based decisions to maximize  the return on remaining dollars—as dictated by best practices. The cost estimate to  fully develop the JSF has increased by over 80 percent. At the same time, procurement quantities have  been reduced by 535 aircraft and the delivery of operational aircraft has  been delayed. The program plans to have a more  comprehensive cost estimate in the spring of 2005. Implications for the Current Status of Tactical Aircraft Programs

Continuing changes and uncertainties in the F/A-22 and JSF programs  present significant challenges to DOD in achieving its modernization plans  which attempt to blend many factors within affordability constraints. The reduced F/A-22 force size, now fewer than 180 F/A-22 aircraft instead  of 750 aircraft planned at the start of the program, could affect the Air  Force’s force structure and employment strategy. The upcoming Quadrennial Defense Review provides an opportunity for  DOD to assess tactical fixed wing aircraft modernization plans and weigh  options for accomplishing its specific as well as overarching tactical  aircraft goals.
Why GAO Did This Study

The F/A-22 and Joint Strike Fighter (JSF)--two of the Department of Defense's (DOD) major tactical aircraft fighter programs--are intended to replace aging tactical fighter aircraft with highly advanced, stealthy aircraft. The two programs combined have a potential future investment of more than $240 billion. Later this month, GAO plans to issue comprehensive reports on the numerous setbacks each of these programs has experienced since they were initiated and their effect on the F/A-22 and JSF business cases. This testimony highlights key concerns in the F/A-22 and JSF programs and discusses the implications of these concerns on DOD's overall investment strategy for modernizing its tactical fixed wing aircraft.

What GAO Found

Significant changes in the F/A-22 program have severely weakened its original business case. Since the F/A-22 program began in 1986, new threats emerged and mission requirements changed; to keep the F/A-22 viable, the Air Force has planned for large investments in new capabilities. Significant delays and cost increases have affected affordability, reducing planned deliveries from 750 F/A-22 aircraft to fewer than 180. The recent budget decision to terminate procurement of the F/A-22 after fiscal year 2008 and the prospect of additional funding cuts also have significant implications for the program's viability and modernization efforts. JSF's original business case, established when the program began in 1996, is unexecutable. The cost estimate to develop the aircraft has increased 80 percent, operational capability has been pushed out 2 years, and expected acquisition quantities have been cut by 535 aircraft. The JSF program is approaching key investment decisions that will greatly influence the efficiency of the remaining funding--over 90 percent of the $245 billion estimated total program costs. This sizable investment greatly raises the stakes to meet future promises. While DOD has been working to resolve early design and performance problems, continuing program uncertainties suggest DOD could use more time to gain knowledge before it commits to a new business case and moves forward. To reduce the risk of further cost and schedule growth, any new business case must include an acquisition strategy that adopts an evolutionary, knowledge-based approach to product development. Currently, the JSF program plans to make key production decisions before critical knowledge is captured. Taken together, the status and problems in these two programs have broader implications for the DOD tactical fixed wing aircraft modernization program, raising questions as to whether its overarching goals to reduce average aircraft age and ownership costs while maintaining the force structure are now achievable. The 2005 Quadrennial Defense Review provides an opportunity for DOD to assess needs and plans and to weigh options for accomplishing its tactical aircraft goals.