	Background

The CH-53K helicopter mission is to provide combat assault transport of  heavy weapons, equipment, and supplies from sea to support Marine  Corps operations ashore. CH-53K Cost Growth, Schedule Delays, and Deferred Capabilities Will Affect Delivery to the Warfighter

Primarily because of decisions to increase the number of aircraft and  other issues, the CH-53K program has experienced approximately $6.8  billion in cost growth and a nearly 3-year delay from original schedule  estimates for delivery of IOC. The CH-53K program’s estimates of cost, schedule, and quantity have  significantly grown since development started in December 2005. The majority of this increase is due to added quantities. In 2008, the Marine Corps directed  the program to increase its total quantity estimate from 156 to 200 aircraft  to support an increase in strength from 174,000 to 202,000 Marines. Primarily as a result of the  aircraft quantity increase, the program’s procurement cost estimate has  also increased by over $5 billion, or 35 percent, from nearly $14.4 billion to  over $19.4 billion. CH-53K Program Started Development Before Determining How to Achieve Requirements and with Late Staffing

The program started development before determining how to achieve  requirements within program constraints, which led to cost growth and  schedule delays. CH-53K Program Has Made Progress and Adopted Strategies to Address Future Risk

The CH-53K program has made progress addressing the difficulties it faced  early in system development. The  program has also adopted mitigation strategies to address future program  risk. The program’s new strategy, as outlined in the President’s fiscal year  2012 budget, lengthens the development schedule, increases development  funding, and delays the production decision by 1 year. According to a  program official, the program’s requested budget was reduced by  approximately $30.5 million in fiscal year 2012 (and a total of $94.6 million  between fiscal year 2010 and fiscal year 2015)—funds to be applied to  other DOD priorities. The President’s budget reports that while the CH- 53K program was fully funded to the OSD Cost Assessment and Program  Evaluation Office estimate in the President’s fiscal year 2011 budget, the  funding adjustments made to the program in the President’s fiscal year  2012 budget would result in a net increase of $69 million to the  development cost estimate and a schedule delay of approximately 7  months. The CH-53K program’s new  acquisition strategy addresses previous programmatic issues that led to  early development cost growth and schedule delays. To identify the CH-53K’s current acquisition strategy and determine how  this strategy will meet current program targets as well as the warfighter’s  needs, we reviewed the program’s acquisition schedule and other program  documents, such as Selected Acquisition Reports and test plans. We  analyzed the retirement schedule of the legacy CH-53E fleet and discussed  the impact of these retirements on the Marine Corps’s heavy-lift  requirement with appropriate officials. We met with officials from Headquarters Marine  Corps, the Office of the Chief of Naval Operations, and the Office of the  Secretary of Defense’s Cost Assessment and Program Evaluation Office at  the Pentagon, Arlington, Virginia.
Why GAO Did This Study

The United States Marine Corps is facing a critical shortage of heavy-lift aircraft. In addition, current weapon systems are heavier than their predecessors, further challenging the Marine Corps's current CH-53E heavy-lift helicopters. To address the emerging heavy-lift requirements, the Marine Corps initiated the CH-53K Heavy Lift Replacement program, which has experienced significant cost increase and schedule delays since entering development in 2005. This report (1) determines how the CH-53K's estimates of cost, schedule, and quantity have changed since the program began development and the impact of these changes and (2) determines how the CH-53K's current acquisition strategy will meet current program targets as well as the warfighter's needs. To address these objectives, GAO analyzed the program's budget, schedules, acquisition reports, and other documents and interviewed officials from the program office, the prime contractor's office, the Marine Corps, the Defense Contract Management Agency, and the Office of the Secretary of Defense.

What GAO Found

The CH-53K helicopter mission is to provide combat assault transport of heavy weapons, equipment, and supplies from sea to support Marine Corps operations ashore. Since the program began development in December 2005, its total cost estimate has grown by almost $6.8 billion, from nearly $18.8 billion to over $25.5 billion as a result of a Marine Corps-directed quantity increase from 156 to 200 aircraft and schedule delays. The majority of the program's total cost growth is due to added quantities. Development cost growth and schedule delays resulted from beginning development before determining how to achieve requirements within program constraints, with miscommunication between the program office and prime contractor about systems engineering tasks and with late staffing by both the program office and the contractor. The program has also deferred three performance capabilities and relaxed two maintenance-based technical performance metrics in an effort to defer cost. Delivery of the CH-53K to the warfighter is currently scheduled for 2018--a delay of almost 3 years. The CH-53K program has made progress addressing the difficulties it faced early in system development. It held a successful critical design review in July 2010 and has adopted mitigation strategies to address future program risk. The program's new strategy, as outlined in the President's fiscal year 2012 budget, lengthens the development schedule, increases development funding, and delays the production decision. However, adjustments made to the budget submitted to Congress reduce the program's fiscal year 2012 development funding by $30.5 million (and by a total of $94.6 million between fiscal years 2010 and 2015). According to information contained in the budget, this reduction would result in additional schedule delays to the program of approximately 7 months and a net increase of $69 million to the total development cost estimate. The CH-53K program's new acquisition strategy addresses previous programmatic issues that led to early development cost growth and schedule delays.