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. In 2003, the Air Force established a modernization program to develop  and insert new and enhanced capabilities considered necessary to meet  the threat. F-22A Modernization Costs Have Increased and Deliveries of New Capabilities to the Warfighter Have Been Delayed

Total projected cost of the F-22A modernization program has more than  doubled since it started. 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. F-22A Modernization Costs Have Risen Sharply Since the Program Began

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. Figure 1 shows increased cost estimates over time for  the modernization program and other related costs. The content, scope, and phasing plan changed over time, contributing to  cost and schedule problems. Visibility and Oversight of the Program’s Cost and Schedule Is Hampered by a Management Structure and Funding Mechanism

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. Performance Outcomes Have Been Judged Satisfactory, but Testing and Improving Reliability and Affordability of the Fleet Will be Challenging

Testing how well new capabilities perform is ongoing; results to date have  been satisfactory but development and operational testing of the largest  and most challenging sets of capabilities have not yet begun. Going  forward, major challenges will be developing, integrating, and testing new  hardware and software to counter emerging future threats. Other risks are  associated with availability of unique test assets, greater reliance on  laboratory ground tests, and relocation of a key F-22A lab that is needed  to help support testing of software for the new capabilities. Parallel efforts  to improve F-22A reliability and maintainability are critical to ensure life- cycle sustainment of the fleet is affordable and to justify future  modernization investments. Projected operational and support costs are much higher than earlier  estimates. Recommendation for Executive Action

As new and enhanced capabilities are proposed and vetted beyond  Increment 3.2B in the F-22A modernization program, we recommend that  the Under Secretary for Acquisition, Technology and Logistics evaluate  those capabilities in accordance with DOD policy and statutory criteria to  determine if they should be established as separate major defense  acquisition programs, each with its own milestones, business case, and  cost baseline that includes all applicable direct and indirect support costs  required to complete the program. DOD concurred with the revised recommendation. To determine what progress has been made in completing developmental  and operational testing, and resolving system deficiencies, we reviewed  DOT&E annual test report summaries and briefings to DOD oversight and  requirements officials. We reviewed summaries of recent operational test  results provided by Air Force test officials and program risk information  related to developmental and operational testing for F-22A modernization. GAO-11-325.
Why GAO Did This Study

The Air Force currently plans to spend $11.7 billion to modernize and improve reliability of the F-22A, its fifth generation air superiority fighter. GAO was asked to evaluate (1) cost and schedule outcomes and (2) testing results and risks going forward in the F-22A modernization program and related efforts. To do this, GAO examined the programs budgets and schedule estimates over time and discussed any changes with program officials, and reviewed progress and results from developmental and operational testing, and plans to mitigate risks and resolve system deficiencies. fighter. Originally designed to counter air threats posed by the former Soviet Union, the post-Cold War era spurred efforts to add new missions and capabilities to the F-22A, including improved air-to-air and robust air-to-ground attack capabilities. In 2003, the Air Force established the F-22A modernization program to develop and insert new capabilities in four increments.
GAO was asked to evaluate (1) cost and schedule outcomes and (2) testing results and risks going forward in the F-22A modernization program and related efforts. To do this, GAO examined the programs budgets and schedule estimates over time and discussed any changes with program officials, and reviewed progress and results from developmental and operational testing, and plans to mitigate risks and resolve system deficiencies.

What GAO Found

Total projected cost of the F-22A modernization program and related reliability and maintainability improvements more than doubled since the program startedfrom $5.4 billion to $11.7 billionand the schedule for delivering full capabilities slipped 7 years, from 2010 to 2017. 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 programs cost and schedule is hampered by a management structure that does not track and account for the full cost of specific capability increments. Substantial infrastructure costs for labs, testing, management, and other activities directly support modernization but are not charged to its projects. The Air Force plans to manage its fourth modernization increment as a separate major acquisition program, as defined in DOD policy and statutory requirements.
Testing of new capabilities to ensure operational effectiveness and suitability is ongoing. Results to date have been satisfactory but development and operational testing of the largest and most challenging sets of capabilities have not yet begun. Going forward, major challenges will be developing, integrating, and testing new hardware and software to counter emerging future threats. Other risks are associated with greater reliance on laboratory ground tests and relocating an F-22A lab needed to conduct software testing. While modernization is under way, the Air Force has undertaken parallel efforts to improve F-22A reliability and maintainability to ensure life-cycle sustainment of the fleet is affordable and to justify future modernization investments. But the fleet has not been able to meet a key reliability requirement, now changed, and operating and support costs are much greater than earlier estimated.

What GAO Recommends

GAO recommends that DOD evaluate capabilities to determine if future F-22A modernization efforts meeting DOD policy and statutory requirements should be established as separate major acquisition programs.
DOD concurred with our recommendation.