Program documents predict that, although flight testing is behind schedule, decisions to reduce test points will enable the Navy to regain lost time. The documents state that the Navy anticipates completing development testing in November 1998 and begin operational testing in May 1999, as originally planned. On the other hand, the Navy’s Program Risk Advisory Board stated in July 1997 that the Navy’s Operational Test and Evaluation Force may find that the E/F is not operationally effective or suitable. However, the report concluded that the F/A-18E/F is potentially operationally effective and potentially operationally suitable. Efforts to correct these problems are ongoing. F/A-18E/F Cost Estimate

The Navy has consistently maintained that the F/A-18E/F will be developed and produced within the cost estimates established for the program. However, certain key assumptions on which the F/A-18E/F cost estimates were based have been overcome by events. It will be a challenge for the Navy to stay within this cost because, according to Navy documents, that amount is adequate to fund the program based on the assumption that problems would not occur during testing. However, the program has experienced deficiencies; the development flight test program still has about 1 more year, and additional deficiencies may be identified during that time; and EMD funding reserves have nearly all been used. Program management has stated that the development flight test program is normally the most risky portion of the development effort. F/A-18E/F Procurement Cost Estimates Are Understated

The Navy also faces a challenge in procuring the F/A-18E/F within the unit cost originally estimated. Its unit procurement cost estimates have been based on what has become unrealistically high quantities of E/F aircraft that will be bought, a lack of factoring in the cost effect of the Navy’s decision to buy more of the higher cost F models than was factored into the original cost estimates, and an unrealistically low inflation factor for purchases in later years of the program. Conclusions and Recommendations

The ongoing test program has identified numerous deficiencies with the F/A-18E/F aircraft. A Navy board established to identify risks to the F/A-18E/F program has stated that, until several of the deficiencies have been resolved, the Operational Test and Evaluation portion of the F/A-18E/F program, scheduled to begin in May 1999, might slip or that the F/A-18E/F will have an unsuccessful Operational Test and Evaluation. The issue is how much time and money will be required to satisfactorily resolve these deficiencies. GAO Comments

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Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the F/A-18E/F development program, focusing on the: (1) status of the E/F development flight test program; (2) deficiencies that have been identified to date and corrective actions planned; and (3) current cost estimate for the program.

What GAO Found

GAO noted that: (1) the Navy has revised the F/A-18E/F flight test program by decreasing the data collection requirements that were originally planned; (2) program documents state that, although flight testing is behind schedule, program decisions to reduce test points will enable the Navy to regain lost time and complete development testing in November 1998, as originally planned; (3) F/A-18E/F program documents identified numerous deficiencies relative to the aircraft's operational performance; (4) the most challenging technical issue is wing drop; (5) until these issues are resolved through software or hardware changes that have been adequately tested, the cost, schedule, and operational performance impact of resolving these deficiencies cannot be determined; (6) the Navy remains confident that it can correct these deficiencies; (7) in addition, a Navy board that assesses risk areas in the E/F program stated in July 1997, that operational testing may determine that the aircraft is not operationally effective or suitable; (8) a December 1997 preliminary operational assessment report, which is classified and based on limited data and analysis, identified 16 major deficiencies with the E/F aircraft but concluded that the F/A-18E/F is potentially operationally effective and suitable; (9) the Navy has consistently stated that the F/A-18E/F will be developed and produced within the cost estimates established for the program; (10) certain key assumptions on which the cost estimate was made have been overtaken by events; (11) program documents state that the current development effort is funded based on the assumption that problems would not occur during testing; (12) unanticipated aircraft deficiencies have occurred, and most of the program's management reserve has been depleted; (13) since the flight test program has about 1 year remaining, it is probable that additional deficiencies will develop; (14) correcting current and potential future deficiencies could result in the development effort exceeding the congressional cost cap; (15) the Navy's F/A-18E/F unit procurement cost estimates are understated; (16) these cost estimates were based on what has become unrealistically high quantities of E/F aircraft that will be bought; and (17) more realistic assumptions indicate that, although the total procurement cost will decrease, the F/A-18E/F unit cost will be more than the Navy currently estimates.