The aircraft is a  Boeing 767-400ER, the largest 767 variant Boeing makes. OSD is still studying whether the E-10A is the  most cost-effective alternative for the cruise missile requirement and the  extent of battle management command and control needed on board to  satisfy the intended need. OSD officials are also uncertain about the degree of battle management  command and control capability needed onboard the E-10A versus  transmitting the information gathered by the E-10A to other command and  control centers. This strategy  requires significant concurrency among the technology development,  product development, and production phases and places decision makers  at a disadvantage by not knowing if the E-10A can demonstrate it meets  system performance and reliability requirements before transitioning into  production. In fact, the results of operational testing are not scheduled to  be available until four of the six planned E-10As are already in production  in 2011, greatly increasing the risks of costly design changes and schedule  delays later in the program (see fig. 2). The decision to start a  major weapon systems acquisition program for the E-10A requires an  executable business case that demonstrates the E-10A is the best way to  satisfy the gap in warfighter’s capability and that the concept can be  developed and produced within existing resources. Are technologies at a high level of maturity? Additionally, to ensure a greater likelihood of success, if the E-10A  program is approved to begin, we recommend the Secretary direct the Air  Force to revise the acquisition strategy to ensure sufficient time is  included in the schedule to (1) integrate and demonstrate the design  before moving past the critical design review and (2) test a production  representative E-10A prototype before starting production. Nonetheless, DOD stated that it is  restructuring the program with the goal of demonstrating the radar and  battle management technologies in a prototype before starting systems  development and demonstration. We made changes  where appropriate but many of these comments were based on a new  acquisition strategy that plans to delay the E-10A program Milestone B  decision until 2010. To determine the progress the Air Force had made in developing the  business case for the E-10A, we obtained available information on the  system’s requirements and resources. However, because of other related  information, such as the status of the software intensive battle  management command and control subsystem, the significant reduction in  funding for fiscal years 2006 and 2007, and the ongoing studies to answer  OSD concerns, we were able to conclude that at the time of our review key  business case elements were still not mature enough to begin product  development.
Why GAO Did This Study

The Air Force is on the verge of making a major commitment to the multi-billion dollar E-10A Multi-sensor Command and Control Aircraft program. Due to the substantial investment needed and technological challenges in developing the aircraft, the Subcommittee on Tactical Air and Land Forces asked GAO to examine the soundness of the E-10A business case as well as the risks associated with the current acquisition strategy.

What GAO Found

As the E-10A Multi-sensor Command and Control Aircraft program nears its official starting point, questions remain regarding critical elements of its business case, including the need for the aircraft, the maturity level of its technology, and its funding. Plans call for the E-10A to couple a new radar system with a sophisticated and software intensive battle management command and control system aboard a Boeing 767. E-10A is planned to fill a current gap in U.S. capabilities and provide a defense against weapons such as cruise missiles. The Office of the Secretary of Defense is still working on a study to determine whether the E-10A program is the most cost-effective way to fill that gap. E-10A program funding plans changed dramatically in December 2004 when the DOD proposed reducing the total program budget by about 45 percent for the next 2 fiscal years. The business case for starting a development program requires demonstrated evidence that (1) the warfighter need exists and that it can best be met with the chosen concept and (2) the concept can be developed and produced within existing resources--including design knowledge, demonstrated technologies, adequate funding, and adequate time to deliver the product. E-10A requirements and resources are still in flux. GAO found risks associated with the current E-10A acquisition strategy that could lead to costly changes later in the program. The program is set to move into production before critical knowledge is acquired. For example, the first fully assembled E-10A, outfitted with its radar and battle management command and control systems, would not be delivered in time to complete testing before the decision is made to begin production. Testing and production are scheduled to start at the same time in 2010. Furthermore, four of six E-10As are scheduled to begin production before the results of testing are available. By not demonstrating that the system can perform as expected before entering production, the program increases the risk of changes and delays later in the program. This strategy requires significant concurrency among the technology development, product development, and production phases.