In general, these reports concluded that during the development stage: the United States was adequately controlling the release of F-16 related technical data to Japan, but U.S. government agencies were not adequately sharing licensing information; the value of technology transfers from Japan to the United States was uncertain; and the program had helped to enhance Japan’s aerospace industry. U.S. Workshare Is Expected to Be Approximately 40 Percent

The F-2 production agreements specify that U.S. industry is to receive approximately 40-percent workshare. If the Japanese fully implement the program, the U.S. workshare will be an estimated $4.1 billion over the life of the program. The agreements identify the contents of U.S. workshare and provide for a 40-percent workshare based on estimates of production costs at the time the agreements were signed. However, the value of the contracts will not be tracked and a workshare percentage will not be calculated based on actual payments. As a result, the Air Force will not have the means to determine whether this approach in fact enabled U.S. companies to receive approximately 40 percent of the production work over the course of the program. Transfers of Technology From Japan Improve but Some Unresolved Issues Remain

Transfers of technology from Japan to the United States have been in accordance with the development agreements but some issues remain unresolved. In 1993, Japan requested that 12 items be recategorized as Japanese indigenous technologies. The United States is to receive free and automatic flowback of F-2 technologies that are derived from U.S. technical data. In 1994, the United States agreed to reclassify 4 of the  12 items as non-derived or Japanese indigenous technologies. However, as our August 1995 report indicated, while this issue is unresolved, the United States is not receiving free and automatic access to these technologies. The production phase agreements contain similar provisions regarding flowback of derived technologies and access to non-derived technologies. At the time of this review, the United States and Japan had not resolved the classification status of the remaining eight technologies. The general consensus among industry participants and U.S. Air Force officials is that it is extremely costly to produce the wing structure by the co-curing process. Lockheed Martin, however, has stated that the use of tooling techniques from the F-2 program has contributed to reducing the cost of manufacturing the composite bulkhead materials for the Joint Advanced Strike Technology program. Although the F-2 program will enhance Japan’s military aircraft capability, exports of military technology continue to be constrained by the country’s long-standing restrictions on exports of military weapon systems and exclusively military technology. Japanese technologies transferred to the United States for the F-2 program are subject to this agreement.
Why GAO Did This Study

Pursuant to a congressional request and a legislative requirement, GAO reviewed the status of the F-2 fighter aircraft program, focusing on the: (1) proportion of production work that will be done in the United States and how the U.S. workshare will be calculated and monitored; (2) status of technology transfers from Japan to the United States and whether these technologies are of interest to the U.S. government and industry; and (3) program's potential contributions to Japan's future aerospace plans.

What GAO Found

GAO found that: (1) under the F-2 production agreements, U.S. industry is expected to receive approximately a 40-percent workshare, currently estimated at $4.1 billion if the Japanese fully implement the planned production of 130 aircraft; (2) the agreements specify the items to be procured by Japan from U.S. industry, which provide for a 40-percent workshare based on estimates of the production costs at the time the agreements were signed; (3) the Air Force plans to verify that contracts for the items identified are awarded to U.S. companies; (4) the value of payment amounts will not be tracked and a workshare percentage will no longer be recalculated based on actual payment amounts as had occurred during the development phase; (5) as a result, the Air Force will not have the means to determine whether this approach enabled U.S. companies to receive approximately 40 percent of the production work over the course of the program; (6) technology transfers from Japan to the United States have generally been in accordance with the development phase agreements, but some issues remain unresolved; (7) in 1993, Japan requested that 12 items be recategorized as Japanese indigenous technologies, i.e., not essentially derived from F-16 technical data; (8) the United States is to receive free and automatic flowback of F-2 technologies that are derived from U.S. technical data while access to non-derived or indigenous technologies is more limited; (9) in 1994, the United States agreed to reclassify 4 of the 12 items as non-derived or Japanese indigenous technologies, however, at the time of this review, the United States and Japan had not resolved the classification issue; (10) while this issue is unresolved, the United States is not receiving free and automatic access to these technologies; (11) the United States conducted several visits to explore the potential benefits of F-2 technologies; (12) two technologies that were initially of interest to the U.S. Air Force and to Department of Defense contractors, the co-cured composite wing and the active phased array radar, are now generally considered too costly to produce; (13) however, Lockheed Martin officials indicated that tooling techniques from the F-2 program are being applied to the Joint Advanced Strike Technology program; (14) the F-2 program enhances Japan's military aircraft industry by improving its overall systems integration capability, according to experts; and (15) however, Japan's exports of military technology and equipment continue to be constrained by the country's policy prohibiting exports of weapons systems or exclusively military technology.