Mrt 30 2011

GAO: new record highs in the cost of US weapons; F-35 on top

Gepubliceerd door JSFNieuws.nl om 18:55 onder Aanschaf JSF

Since 2008, U.S. Department of Defence’s portfolio of major defense acquisition programs has grown from 96 to 98 programs, and its investment in those programs has grown to $1.68 trillion. The total acquisition cost of the programs in US DOD’s 2010 portfolio has increased by $135 billion over the past 2 years, of which $70 billion cannot be attributed to quantity changes.

US Government Accountability Office (US GAO) continues to find that newer programs are demonstrating higher levels of knowledge at key decision points, but most are still not fully adhering to a knowledge-based acquisition approach, putting them at a higher risk for cost growth and schedule delays.

For the programs GAO assessed in depth, GAO found that a lack of technology maturity, changes to requirements, increases in the scope of software development, and a lack of focus on reliability were all characteristics of programs that exhibited poorer performance outcomes.

Last year GAO reported that DOD had begun to incorporate acquisition reforms that require programs to invest more time and resources at the beginning of the acquisition process refining concepts through early systems engineering and building prototypes before beginning system development. Many, but not all, planned acquisition programs are adopting these practices.

As GAO has previously recommended, more consistently applying a knowledge-based approach, as well as improving implementation of acquisition reforms, can help DOD achieve better outcomes for its portfolio of major weapon system programs.

JSF Highest-Cost Acquisition Program - Performance

Total Research and Development cost: 2001 estimate: US$ 38,4 billion
Total Research and Development cost: 2010 estimate: US$ 53,6 billion
Total Research and Development cost: Change over last 9 years = 39,7%

Total acquisition cost: 2001 estimate: US$ 210,6 billion
Total acquisition cost: 2008 estimate: US$ 249,7 billion
Total acquisition cost: 2010 estimate: US$ 283,7 billion
Total acquisition cost: Change over the last 9 years: US$ 73,1 billion = 34,7%
Total acquisition cost: Change over the last 2 years: US$ 33,98 billion = 13,6%

Total planned production quantity (US forces): estimate 2001: 2.866 units
Total planned production quantity (US forces): estimate 2010: 2.457 units
Percent change: -14.3%.

Program acquisition unit cost: 2001 estimate: US$ 73,5 million
Program acquisition unit cost: 2008 estimate: US$ 101.7 million
Program acquisition unit cost: 2010 estimate: US$ 115.5 million
Program acquisition unit cost: change last 9 years + 57.2%.
Program acquisition unit cost: change last 2 years + 13.6%.

(all amounts in FY2011 US$ in millions)

GAO comments on JSF Program Performance

Latest cost data do not fully account for cost and schedule changes resulting from the program’s critical Nunn-McCurdy unit cost breach.

The JSF is in production but three critical technologies are not mature, manufacturing processes are not proven, and testing is not complete. Continuing manufacturing inefficiencies, parts problems, and technical changes indicate that the aircraft’s design and production processes may lack the maturity needed to efficiently produce aircraft
at planned rates.
With most of developmental and operational flight testing still ahead, the risk of future design changes is significant. DOD restructured the JSF program in February 2010 to address development challenges. The projected cost growth triggered a Nunn-
McCurdy unit cost breach of the critical threshold. According to program officials, the JSF is tracking well against its new, less aggressive test schedule despite late deliveries of test aircraft and lower than expected availability rates for short take-off/vertical
landing test aircraft.

Technology Maturity

The JSF program entered system development in 2001 with none of its eight critical technologies fully mature. According to the program office, five of these technologies are now mature and three technologies–mission systems integration, prognostics and health
management, and radar–are nearing maturity. However, significant development risks remain as the program integrates and tests these technologies.

Design Maturity

The JSF program did not have a stable design at its critical design reviews. The program has now released over 99 percent of its total expected drawings; however, the program continues to experience numerous design changes. With most of developmental and operational flight testing still ahead, the risk of future design changes and their potential effect on the program are significant.

Production Maturity

Despite beginning production in 2006 and procuring 58 aircraft to date, the JSF program’s manufacturing processes are still not mature and only 12 percent of its critical processes are in statistical control. DOD has reduced near-term production quantities. However,
continuing manufacturing inefficiencies, parts problems, and technical changes indicate that the aircraft’s design and production processes may lack the maturity needed to efficiently produce aircraft at planned rates. Managing an extensive, still-maturing global network of suppliers adds another layer of complexity to producing aircraft efficiently and on-time. The prime contractor is implementing manufacturing process improvements. However, due to the extensive amount of testing still to be completed, the program could be required to make alterations to its production processes, changes to its supplier base, and costly retrofits to produced and fielded aircraft, if problems are discovered.

Other Program Issues

After an extensive programwide review, DOD restructured the JSF program in February 2010 to address development challenges. The restructure increased time and funding for system development, added more aircraft to support flight testing, reduced near-term procurement quantities, and incorporated additional software resources. The projected cost growth–including almost $104 billion since 2007–triggered a Nunn-McCurdy unit cost breach of the critical threshold. A milestone review was scheduled for November 2010 to update cost and schedule estimates.

According to program officials, the JSF is making progress when measured against its new, less aggressive test schedule and all three variants have had their first flights. However, several issues could affect testing. The program had only delivered eight aircraft to test
sites as of December 2010, and short take-off/vertical landing test aircraft have experienced lower than expected availability rates. The program also continues to experience challenges in developing and integrating the very large and complex software requirements needed to achieve JSF capabilities. Further delays in either flight testing or
software development could jeopardize the Marine Corps’ planned initial operating capability date. Finally, the uncertain fidelity of test results is a risk because the program relies on an unaccredited network of test laboratories and simulation models to evaluate system performance.

JSF Program Office Comments

In commenting on a draft of this assessment, the program office noted that JSF is undergoing a technical baseline review of requirements to complete the development effort as part of the consideration for recertification of the development milestone. Eight aircraft of the 10 anticipated in 2010 have been delivered to the test sites. An additional 4 are projected to be delivered by June 2011. The test program has slightly exceeded the overall test flight and test point metrics planned for 2010; testing of the Marine Corps variant is behind plan while testing of the Air Force variant has exceeded plans.
Mission systems testing is underway with Block 1.0 on both Air Force and Marine Corps mission systems test aircraft. Over half of the projected airborne system software is in testing including the foundational sensor fusion architecture. Survivability testing has begun (live fire testing and radar cross section signature ground testing) and results thus far are matching predictions. The first airborne dynamic signature test with aircraft AF-3 will begin December 2010.

Source: US GAO; 30-mar-2011; Report GAO-11233

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