DEPARTMENT OF THE AIR FORCE
PRESENTATION TO THE COMMITTEE ON GOVERNMENT REFORM
SUBCOMMITTEE ON NATIONAL SECURITY, VETERANS AFFAIRS AND INTERNATIONAL RELATIONS
UNITED STATES HOUSE OF REPRESENTATIVES
SUBJECT: F-22 Program
STATEMENT OF: MRS. DARLEEN A. DRUYUN
Principal Deputy Assistant Secretary of the Air Force
For Acquisition and Management
June 15, 2000
NOT FOR PUBLICATION UNTIL RELEASED
BY THE COMMITTEE ON GOVERNMENT REFORM,
UNITED STATES HOUSE OF REPRESENTATIVES
Mr. Chairman and members of the Committee, thank you for this opportunity to appear before you to discuss the Air Force’s F-22 program and the cost controls that we have in place. I personally review the F-22 program on a monthly basis and can assure you that the F-22 Government/Contractor team understands the desire and need for close control of F-22 costs. In addition to providing you with information on our anticipated production costs and the Production Cost Reduction Plans (PCRPs), I would also like to provide the committee with an update on the F-22’s test program, avionics development, and progress towards meeting the CY2000 program criteria.
Control of the vertical battlespace has been, is, and will remain a major element of United States national security policy. DoD’s Joint Vision 2010 envisions the U.S. military dominating all aspects of a conflict—Full Spectrum Dominance. Control over what moves through air and space provides a fundamental benefit to joint forces. Full spectrum dominance depends on the inherent strengths of aerospace power: speed, range, flexibility, stealth, precision, lethality, global/theater situational awareness, and strategic perspective.
Air Dominance is key to the successful employment of military power. Protection of U.S. and allied joint forces is the number one priority--their protection requires the Air Force to quickly control the vertical battlespace. Air Dominance prevents our adversaries from using air and space to attack, maneuver, or perform reconnaissance that could interfere with the operations of our air attack, land, or surface forces. Air Dominance provides the freedom from attack, the freedom to maneuver, and the freedom to attack at a time and place of our choosing. While the US and our allies had Air Dominance during Operation Desert Storm, newer and more effective weapon systems are emerging, our forces must be modernized to maintain the edge over our potential adversaries which we now enjoy.
Control of the 21st century air battle requires a combination of low observability, supercruise, integrated avionics, and high maneuverability to defeat the emerging fighter and surface-to-air missile threats. The F-22 combines all of these features into an affordable portion of the Air Force’s modernization program. The F-22 and the complementary Joint Strike Fighter (JSF) provide the Air Force with a comprehensive and complementary modernization plan to exploit our nation’s ability to control the vertical dimension well into the 21st Century. The F-22 will enable the United States to obtain Air Dominance--the total denial of the airspace to the enemy.
The multi-mission F-22 Raptor is a key element in the Air Force’s modernization program and highest acquisition priority. The F-22 brings a revolutionary capability to the battlespace in replacing the aging F-15. In the hands of Air Force aviators, the F-22 will dominate the aerial arena of the 21st Century. We appreciate your concern, support, and funding for our efforts to modernize and sustain the world’s most respected Aerospace Force.
US TACTICAL AIR FORCE MODERNIZATION
To maintain its viability, our Air Force needs to modernize as the threat evolves and to avoid technical obsolescence. The Air Force’s ongoing time-phased modernization effort is based on developing the Air Force’s core competencies and striking an affordable balance between readiness and modernization of the aerospace force. Within our total force modernization efforts, the tactical aviation modernization program envisions an evolution of the current F-15/F-16 high-low mix to a high-low mix of the F-22 and Joint Strike Fighter (JSF) aircraft to provide the most combat capable, efficient, and lethal air forces possible. The proper mix of the high capability F-22 and the lower cost JSF provides the Air Force with the necessary combat aircraft to defeat the full spectrum of potential threats in the first decades of the 21st century at a minimum risk to the lives of our aviators. Within our strategy, the F-22 is the high capability force designed to destroy enemy aircraft and attack highly defended, high-value targets. The lower cost JSF, purchased in large numbers, will provide the bulk of the attack force once the air-to-air threat has been eliminated by the F-22. The low cost design of the JSF relies on the F-22 for air superiority.
I am pleased to provide an update on the progress of the F-22 Air Dominance Fighter program. This update will include: recent challenges in the test program, progress in avionics development, assessment of the Calendar Year (CY) 2000 program criteria, and progress in production affordability initiatives. I will also highlight program successes thus far in 2000 and the challenges ahead as we prepare for the Low Rate Initial Production (LRIP) Defense Acquisition Board (DAB) review in December 2000.
The Fiscal Year (FY) 2000 Appropriations Act directed a delay in the LRIP decision while allowing the procurement of additional test aircraft for Follow-on Operation Test and Evaluation. This action preserved the overall F-22 development and production schedules while retaining the program affordability within the cost caps. In December 1999, the Under Secretary of Defense for Acquisition and Technology approved the award of a contract for six additional aircraft as Production Representative Test Vehicles (PRTVs). On 30 December, the Air Force, pursuant to the FY2000 Appropriation Law, awarded contracts for these aircraft as well as a long lead contract for ten additional aircraft to be purchased following a successful LRIP decision. The PRTV aircraft will support tactics and training development at Nellis AFB as operational test assets. This acquisition strategy balances the risk associated with concurrent EMD and production and avoids significant program cost increases which would have resulted from a break in the manufacturing process.
At the December 2000 DAB, the F-22 team will demonstrate the technical performance of the F-22 weapon system through completion of critical test milestones and marked progress in meeting program affordability goals. The overarching program goals for this year are the completion of the program criteria, progression of integrated avionics development to the F-22 weapon system testing level, and the continuation of comprehensive program cost control initiatives.
ACCOMPLISHMENTS IN TESTING
CY2000 is the year of the F-22 test team. With the acceptance of four new Raptors, our flight test fleet will more than double in size to include a dedicated Block 2 flight loads test aircraft (aircraft capability of sustaining 100% of the F-22’s predicted flight loads) and three avionics test aircraft. The program will also achieve significant performance milestones in sustained flight speed, altitude, and angle of attack. Finally by the end of CY2000, more than 25 percent of the total flight test program will be completed including the following program criteria:
First flight of 4003 was completed at the Lockheed Martin Marietta GA plant on 6 Mar 2000. The aircraft was delivered to the USAF Flight Test Center at Edwards AFB on 15 Mar 2000. Delivery of 4003 is significant because as the most heavily instrumented test aircraft, it will be used to clear the remaining flight test envelope, conduct weapons separations, and complete a majority of the remaining flight sciences testing. The contractor is currently completing the surface finishes on aircraft 4004 in preparation for a planned first flight in July. This aircraft will be the first avionics test aircraft. The remaining aircraft slated for a CY2000 delivery date is in final assembly.
In addition to the flight testing at Edwards AFB, the F-22 aircraft static and fatigue testing is also being conducted at the contractor’s Marietta GA facility to determine the aircraft’s strength and durability under simulated flight loads. During ultimate strength testing of the aircraft aileron, data from the adjacent flaperon indicated that a structural component had failed. An investigation revealed that the composite part had been subjected to a load in excess of its strength, leading to the failure. An inspection of the test aircraft revealed no similar failures and flight restrictions were put in place until the part could be redesigned/replaced. The contractor team used data from the static test to design and fabricate a titanium replacement part. Flaperons from the flight test and ground test aircraft were quickly repaired and testing resumed without a significant schedule impact.
More recently an issue was found in the aircraft’s canopy. Small cracks initiating at the transparency bolt holes were found during an inspection of a high-time flight test canopy. Subsequent inspections of the remaining transparencies from flight and ground testing found additional small cracks. The program suspended use of the cracked canopies in flight testing to determine the cause and growth rate of the cracks through a detailed investigation. The lack of available flight worthy canopies caused a delay in flight testing beginning on 9 May. This delay lasted until 5 June when test was resumed with an inspected canopy assembly. Additional replacement transparencies are being expedited and flight tests have resumed. The program made productive use of this down time to perform required aircraft maintenance and logistics tests while awaiting the delivery of new canopies.
In addition to aircraft ground testing, engine and aircraft subcomponent testing is also used to verify performance and durability. The amount of subcomponent testing and modeling completed easily makes the F-22 the most tested aircraft system ever developed by the Air Force (Figure 1). This includes more than 45,000 hours of wind tunnel testing, 12,000 plus hours of flight control simulation, over 10,000 hours of radar testing and more than 4,000 hours of signature testing.
Figure 1. F-22 Testing to Date
In summary, F-22 government/contractor team continues to execute a remarkably successful test program.
Integrated avionics has been recognized as the critical technical challenge for the F-22. The combining of inputs from on and off-board sensors into a single comprehensive display, which is a first in any tactical aircraft, will provide the pilot with an unprecedented level of situational awareness and a key advantage in a tactical engagement. To meet this development challenge, the F-22 program plan employs a variety of ground and flight test hardware in order to incrementally achieve maturity on the integrated avionics software. While the current integrated avionics program is technically challenging, the development team continues to meet all critical avionics software and hardware delivery milestones. The current software development schedule, commonly referred to as R-20, was established in February 1999. This plan provides a logical sequence of software development release for (from design through) flight testing on the FTB and F-22. While minor schedule adjustments to the R-20 plan have been made, no major milestones such as Block 3.0 and 3.1.0 software availability dates have been changed. An updated schedule, referred to as R-21, will be released in early-to-mid June. The R-21 schedule aligns avionics software delivery dates with aircraft need dates, maintaining the logical sequence of software development present in the R-20 plan.
The disciplined development approach for the F-22 avionics first uses the Avionics Integration Laboratory (AIL) located at Boeing in Seattle, Washington to verify software functionality and qualify the software release for flight. The AIL incorporates actual F-22 hardware in a ground test environment to determine software and hardware operability and compatibility. The software is tested next in the F-22 Flying Test Bed (FTB) – a modified Boeing, 757 incorporating an F-22 forward section housing an APG-77 radar and a roof mounted F-22 sensor wing - to verify in-flight performance prior to delivery to the test aircraft. A simulated F-22 cockpit is installed in the aft cabin of the 757 in order to evaluate the software with the actual controls and displays. The aft cabin has workstations for 30 software engineers and technicians who evaluate avionics, identify anomalies and, in some cases, even address anomalies in flight.
The current test status of the F-22 software is shown in Table 1.
Block 0 software is currently flying on the flight test aircraft today. This software provides the basic flight controls for the aircraft and is performing as projected.
Table 1. F-22 Avionics Milestones
Block 1 software, consisting of approximately 900K lines of code, represents approximately 45 percent of the total avionics software. Block 1 introduced radar and enhanced communications, navigation, and identification (CNI) capabilities to the test team. The initial release of Block 1.1 software was made to the production line May 26, 1999--seven weeks ahead of the first "power-on" testing of aircraft 4004. An enhanced version of the Block 1 software, version 1.2, was delivered to aircraft 4004 on time, in December 1999, in preparation for the planned first flight of the aircraft in July 2000.
Block 2 and Block 3S software, which were delivered on or ahead of schedule, are currently being tested in the FTB. These software blocks complete the radar, CNI and EW integration, and sensor tasking, all of which are key to the F-22’s performance. This software load will complete testing in the FTB in August 2000. Block 2/3S software consists of approximately 1.4 million lines of code representing approximately 94 percent of the total avionics software effort.
The Block 3.0 software, delivered on schedule and currently in AIL testing, provides the full sensor fusion and weapons integration for the F-22. This software block will consist of 1.7 million lines of code. Congressional direction prevents the awarding of an LRIP contract prior to first flight of the Block 3.0 software in an F-22. Our Team was able to accelerate this schedule by 140 days to accommodate this direction by Congress. First flight of this software is currently scheduled for November 2000 following initial testing in the FTB beginning in August.
Again, avionics is our key remaining technological challenge. The team has done a magnificent job in supporting critical FTB and aircraft need dates and maintaining critical program milestones. Continued diligent use of the disciplined, phased software development
approach provides an unmatched level of software maturity at first flight while
optimizing both cost and schedule for avionics development. Performance over the past year clearly demonstrates the team is taking the necessary actions to protect critical avionics need dates in the development program and ensuring avionics testing proceeds on schedule.
ASSESSMENT OF THE CY2000 PROGRAM CRITERIA
In addition to the flight test criteria mentioned above, the program has a number of other criteria outlined in the 22 Dec 99 Acquisition Decision Memorandum to demonstrate the program’s maturity to the DAB decision maker. These include:
A 38-day strike by engineers and technicians at Boeing Aerospace Corporation impacted the schedules of many of these activities and increased the schedule pressure to complete them prior to the December DAB date. Since the conclusion of the strike on 20 March, the program has reviewed each of the milestones and determined that all can still be completed within CY2000 with appropriate mitigating management actions.
Completion of the DAB criteria is paced by the aircraft assembly process and avionics software development. As part of my monthly reviews of the program, I examine the progress towards meeting these criteria and personally believe that we will be able to complete them prior to the end of the year.
PROGRESS IN AFFORDABILITY INITIATIVES
Cost control is a critical focus with the F-22 team. The Air Force and F-22 contractors are committed to delivering the F-22 within the Congressionally-mandated cost caps. The Air Force and contractor team initiated cost reduction programs in both the development and production phases of the program in 1997 at the conclusion of the Joint Estimating Team (JET). These efforts have already achieved significant cost reductions, which have been documented in contract negotiations and the most recent cost estimates.
In December 1998 the Undersecretary of Defense for Acquisition and Technology approved an Air Force plan to accommodate the projected future development risks, estimated at $667M, within the EMD cost cap—currently set at $20.5B. The Air Force plan involved a combination of development cost reduction initiatives, scrubbing development costs, application of existing management reserves, and deferral of non-essential combat capability. Since the approval of these initiatives, the Air Force program office and contractor teams continue to closely monitor the realization of cost risks as well as realization of savings initiatives. As of March 2000, $283M of the $667M in cost risks had been realized.
To develop the Air Force Cost estimate for the F-22, we made use of the Air Force Cost Analysis Improvement Group (AFCAIG) process. The AFCAIG chairman is the Deputy Assistant Secretary (Cost and Economics) who reports to the Assistant Secretary Financial Management and Comptroller. Thus, the process is conducted under the auspices of the Air Force Financial Management organization, which is separate from the Air Force Acquisition Management organization. The membership of the AFCAIG includes Headquarters Air Force management and experts from logistics, operations, planning, and acquisition. The AFCAIG chairman is also the Executive Director of the Air Force Cost Analysis Agency (AFCAA) whose personnel are experts in cost estimating and analysis. AFCAA reviewed and separately estimated the cost of major components of the F-22. A team of cost estimators from the F-22 program office and AFCAA reconciled their respective estimates to arrive at the Service Cost Position (SCP). This effort commenced in March 1999 and culminated in mid-November. Approximately 150 man months were expended to develop the Air Force Cost estimate.
We believe the resulting Air Force cost estimate, which was developed using the AFCAIG process, is a high quality cost estimate. The cost estimate is based on F-22 actuals to date and costs are projected using all relevant historical fighter aircraft (F-14, F-15, F-16, F-18, AV-8B).
The review of the EMD program concluded that despite the realization of cost risks since March 1998, the EMD program could be completed within the cost cap. This appraisal is consistent with the General Accounting Office (GAO) assessment in their Mar 2000 report titled "F-22 Aircraft – Development Cost Goal Achievable if Major Problems are Avoided". This report concluded "the Air Force has identified sufficient cost offsets to more than cover all identified cost increases and is aggressively managing the program."
Key to this positive evaluation has been aggressive leadership to control EMD costs and a very effective campaign to implement development cost reduction initiatives. In March 1999, I reported that the F-22 team hoped to achieve $80M in development cost reduction initiatives. To date the actual savings from these initiatives are $150M. The increase in development cost savings offset development cost risks as we complete EMD within the congressionally mandated cost cap.
In using our AFCAIG process to develop a production cost estimate, we estimated the cost of production at $40.8B. This estimate includes $10.2B for the Production Cost Reduction Plan (PCRP) and approximately $1.0B to cover risk associated with the production program and the PCRP. Without the $1.0B for risk, the cost estimate for production is $39.8B, which is at the congressional cap for production. Therefore the AFCAIG’s recommended Air Force production cost position is to budget at the congressional cap of $39.8B (Since then adjusted to $37.6B for inflation).
Within the FYDP years there is a high degree of confidence the budget will be met. In fact, the recommended Air Force cost position includes approximately $540M to cover risk in these years (FY00 – FY05). Because there is little difference between the production estimate and the cap in the FYDP years and because there is higher estimating uncertainty in the outyears, the AFCAIG did not recommend changing the current AF cost position from the congressional cap on production at this time.
Accepting this $39.8B production estimate means we are accepting some risk in the estimates beyond the FYDP years. Although we are accepting some risk beyond the FYDP, we believe it supports and reinforces our management efforts to reduce and control production costs.
The Air Force estimate includes most of the $20 billion in PCRP savings. The PCRPs include a variety of cost savings initiatives such as producibility improvements, process changes, adoption of new manufacturing techniques, and the implementation of Acquisition Reform principles. Both the airframe and engine contractors have programs to continue defining new cost savings opportunities. The dynamic set of cost savings plans are tracked by the Air Force and the contractors in established information systems that identify and measure savings potential and achievement. Air Force and contractors jointly manage the cost savings programs using defined tracking and measurement procedures. Our methodology is quite simple: confirm the required investments have been made, ensure scheduled milestones have been met, and revalidate the basis of estimate. Program cost savings status is also reviewed at periodic meetings between the Air Force and the contractor and briefed quarterly to the Under Secretary of Defense for Acquisition and Technology. The latest PCRP status is shown in Figures 2 and 3.
Figure 2. Air Frame Production Cost Reduction Plan Status
Figure 3. Engine Production Cost Reduction Plan Status
The definitions of the PCRPs categories are:
Lean training has and continues to encourage idea generation at all levels within the program. Suppliers are demonstrating a strong interest in integrating the Lean principles into their operations.
The Air Force assessment is that approximately one half of the airframe ($16.9B (TY$)) and engine ($4.1B) PCRPs can be considered mature and have been rolled into the production cost baseline. The remaining PCRPs are continuing to be worked and we anticipate that they will meet or exceed the total level of anticipated production cost savings. During the latest cost estimate, the Air Force evaluated the ability of the contractor to meet these savings projections. Table 2 provides our current assessment of the remaining PCRPs to be incorporated.
This analysis concluded that while a few initiatives have not achieved the projected level of savings and have been discontinued in favor of projects offering even greater savings potential, the team also has many examples where the actual savings have exceeded the initial projections. The F-22 has a dynamic production cost savings program and the team does terminate or redirect efforts if they fail to yield sufficient savings or the business case otherwise
fails to develop. Overall this assessment concluded that the production cost reduction
* (Trico = Lockheed Martin and the Boeing Corporations)
Table 2. Remaining PCRPs to be incorporated.
initiatives are performing according to plan and will achieve the total level of savings anticipated.
Another technique we have implemented on the F-22 to incentivize cost reduction is the establishment of a target price curve (TPC). The TPC established a set of "stretch" price goals for the PRTV through Lot 4 buys, along with financial incentives for the contractors to make investments in cost reduction projects and earn a return on their investments. The TPC provides up to $151M in incentives to the contractors to reduce the average cost per unit during this timeframe, and establishes an optimal starting point for affordable high-rate production of 36 aircraft per year in the future.
I conduct a monthly execution review to examine cost, performance, and schedule, and the Undersecretary of Defense for Acquisition and Technology holds a quarterly review as we proceed to the LRIP DAB in December 2000. In addition, all our information is available for oversight by the GAO and all responsible oversight agencies.
In the end, the most important performance measure is the final negotiated contract price. In this case, we have very encouraging results from the PRTV I and II contracts for aircraft and engines. In each case, we not only met the goals established for contract prices and agreed to firm fixed price contracts for these procurements, but our review of the contractor’s actual cost performance shows that he is performing at a lower cost which is indicative of the lean thinking adopted by this program back in 1997. Our ability to reach these agreements relates directly to the contractor’s confidence to deliver a product that meets the Air Force and DoD affordability objectives.
THE NET RESULT
The Air Force’s tactical aviation modernization program is only a part of our overall efforts to build the world’s most respected Aerospace Force. We are enhancing our expeditionary capabilities by balancing investments across our core competencies. Our focus is improving the Air Force’s ability to project power rapidly, precisely, and globally. The Air Force’s unique aerospace superiority, global attack, and precision engagement capability, supported by information superiority, rapid global mobility, and agile combat support, will produce a force capable of delivering decisive combat power whenever and wherever needed.
Not everyone agrees the F-22 team can meet the technical, cost, and schedule challenges ahead. However in 1999, the team had a clear yardstick by which to measure its performance and once again met every challenge. This year we take head-on the challenge of avionics development, demonstrated producibility, and continuing cost control. The F-22 team is committed and working hard to again succeed in meeting the challenge.
The F-22 program is on track to meet all cost and performance parameters including the cost caps. The program continues to meet or exceed all critical technical requirements. Senior Air Force and industry leaders are confident the F-22 program will meet its production cost targets and remain within its cost cap, provided program funding remains stable. The warfighter will receive the F-22’s revolutionary capabilities on-time at an affordable cost, thus ensuring air dominance in future conflicts.
The American people expect the Air Force to dominate the sky. This is based in large part to the reality that there has not been any American service soldier killed by enemy aircraft in over 40 years. As long as the United States is able to dominate its enemies, the United States can achieve its objectives with minimal casualties. While some have said that the cost of current fighter modernization programs is too high, the cost of not having air dominance is unaffordable. The F-22's true value must be measured in American lives saved through dominance of the skies in future combat and also by conflicts prevented because other nations understand and fear our unmatched combat power. In order for the United States to maintain aerospace superiority in the next century we must field the F-22 and JSF.