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United States Government Accountability Office: 
GAO: 

Report to the Subcommittee on Tactical Air and Land Forces, Committee 
on Armed Services, House of Representatives: 

May 2014: 

F-22 Modernization: 

Cost and Schedule Transparency Is Improved, Further Visibility into 
Reliability Efforts Is Needed: 

GAO-14-425: 

GAO Highlights: 

Highlights of GAO-14-425, a report to the Subcommittee on Tactical Air 
and Land Forces, Committee on Armed Services, House of Representatives. 

Why GAO Did This Study: 

The Air Force's cost estimate for modernizing the F-22 aircraft's 
capabilities and making improvements that address the aircraft's 
reliability and structural problems is $11.3 billion, as of January 
2014. In February 2013, the Air Force awarded a multibillion dollar 
contract for F-22 modernization efforts from 2013 through 2023. The 
National Defense Authorization Act for Fiscal Year 2013 directed the 
Air Force to report annually on improvement efforts. 

GAO was asked to review F-22 modernization and improvement efforts. 
This report assesses (1) the Air Force's new approach to structuring 
its F-22 modernization efforts, (2) the Air Force's management of its 
F-22 reliability and structural improvement efforts, and (3) 
challenges facing efforts to modernize the F-22 and address 
reliability and structural problems moving forward. GAO analyzed 
program management, contracting, and other relevant documents; 
analyzed aircraft availability information; and spoke with Air Force 
officials. 

What GAO Found: 

After a decade of managing its efforts to modernize the F-22 as part 
of the original F-22 program, the Air Force has now begun structuring 
these efforts as distinct incremental programs, and plans to continue 
doing so moving forward. For example, the Department of Defense (DOD) 
recently designated F-22 modernization Increment 3.2B—-intended to 
integrate two types of missiles onto the F-22 and upgrade other 
subsystems—-as a major defense acquisition program with its own 
baseline cost and schedule estimate. This approach is consistent with 
the approach mandated in the National Defense Authorization Act for 
Fiscal Year 2013 and recommended in a May 2012 GAO report, and should 
allow decision makers to see a more precise view of cost and schedule 
changes. Furthermore, the Air Force plans to use individual 
contractual agreements for each modernization effort, a contracting 
approach that should support informed management and oversight of each 
increment by increasing visibility into funds obligated to individual 
efforts. 

In contrast to modernization, the larger of the Air Force's two 
primary F-22 improvement efforts—-the Reliability and Maintainability 
Maturation Program (RAMMP)—-is not managed with its own cost and 
schedule baseline. This approach limits transparency of cost and 
schedule progress. The National Defense Authorization Act for Fiscal 
Year 2013 directed the Air Force to submit an annual report to the 
congressional defense committees on RAMMP and on F-22 structural 
repair efforts, to include baseline cost and schedule estimates. While 
the first report submitted under this requirement in April 2013 
provided some cost and schedule information on the structural repair 
efforts, which could be used as a baseline estimate going forward, it 
did not include such information for RAMMP. Without a comprehensive 
baseline cost and schedule estimate for reliability efforts that 
encompasses the life of the aircraft across all types of funding, it 
is difficult to consistently track cost and schedule progress on 
projects that, to date, have cost almost $1 billion. 

The Air Force faces schedule and performance challenges in its 
management of F-22 modernization and improvement efforts as a result 
of continuing maintenance issues. Delays in completing depot-level 
maintenance have translated into delays in fielding modernization 
increments, which could also affect future increments. Further, the F-
22 fleet will not achieve its availability requirement as scheduled, 
despite substantial investment in RAMMP projects. RAMMP is intended to 
increase the availability of the F-22 to perform its missions, 
primarily through improving reliability—the likelihood that the 
aircraft will operate without failure—and reducing the time required 
to maintain the aircraft. Air Combat Command officials stated that the 
current requirement is based on assumptions that may no longer be 
applicable, and that they expect to revisit this requirement at some 
future point, although they did not specify when that reassessment 
would occur. Thus, continued investment in some projects aimed at 
achieving a requirement that may no longer be valid may be 
unwarranted. Any delay in revisiting this requirement could limit 
funding DOD might be able to make available for other high priority 
activities in a time of austere federal budgets. 

What GAO Recommends: 

To support program oversight and ensure efficient use of future 
funding, GAO recommends that the Air Force include comprehensive cost 
and schedule baselines for reliability projects in its annual report 
to Congress and expedite reassessment of the F-22 availability 
requirement. DOD disagreed with the first recommendation, stating that 
reliability programs cannot be baselined like major defense 
acquisition programs, and agreed with the second. GAO continues to 
believe the first recommendation is valid as discussed in the report. 

View [hyperlink, http://www.gao.gov/products/GAO-14-425]. For more 
information, contact Michael J. Sullivan at (202) 512-4841 or 
sullivanm@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

Air Force's New Approach to Structuring F-22 Modernization Should 
Improve Oversight and Transparency: 

Air Force's Approach to Managing Reliability Improvement Efforts 
Limits Transparency of Cost and Schedule Progress: 

F-22 Modernization and Improvement Efforts Will Continue to Face 
Schedule and Performance Challenges: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Comments from the Department of Defense: 

Appendix III: GAO Contact and Staff Acknowledgments: 

Table: 

Table 1: Features and Key Events of F-22 Modernization Efforts: 

Figures: 

Figure 1: Estimated Cost for F-22 Modernization and Improvement 
(billions of then year dollars): 

Figure 2: Comparison of Required and Actual or Projected F-22 Materiel 
Availability: 

Abbreviations: 

DOD: Department of Defense: 

ID/IQ: indefinite delivery/indefinite quantity: 

NDAA: National Defense Authorization Act: 

RAMMP: Reliability and Maintainability Maturation Program: 

SRP: Structural Repair Program: 

[End of section] 

United States Government Accountability Office: 
GAO:
441 G St. N.W. 
Washington, DC 20548: 

May 15, 2014: 

The Honorable Michael R. Turner: 
Chairman: 
The Honorable Loretta Sanchez: 
Ranking Member: 
Subcommittee on Tactical Air and Land Forces: 
Committee on Armed Services: 
House of Representatives: 

Since 2003, the Air Force has undertaken a number of efforts to 
modernize the F-22 and make improvements that address the aircraft's 
reliability and structural problems. The most recent combined cost 
estimate for these efforts was approximately $11.3 billion, of which 
nearly 60 percent has already been invested. In February 2013, the Air 
Force awarded a contract representing several billion dollars of that 
total to continue to modernize the F-22 from 2013 through 2023. The 
Air Force recently began development on the latest modernization 
effort, and continues significant investment in improvements aimed at 
achieving the F-22's original reliability and service life 
requirements. The National Defense Authorization Act for Fiscal Year 
2013 (NDAA) established managing and reporting requirements for new 
modernization efforts and the aircraft's reliability and structural 
improvement programs.[Footnote 1] 

As billions of dollars continue to be invested in the F-22, you asked 
us to review the acquisition and contracting strategies for the F-22 
modernization and improvement efforts. This report assesses (1) the 
Air Force's new approach to structuring its F-22 modernization 
efforts, (2) the Air Force's management of its F-22 reliability and 
structural improvement efforts, and (3) challenges facing efforts to 
modernize the F-22 and address reliability and structural problems 
moving forward. To assess the Air Force's new approach to structuring 
modernization efforts, we analyzed actual and projected program 
management data for fiscal years 2003 to 2023, from sources including 
acquisition decision memorandums, selected acquisition reports, and 
independent and program cost estimates. These sources were issued in 
2012 or 2013. We also reviewed contracting and budget documents 
relevant to F-22 modernization. To assess the Air Force's management 
of its F-22 reliability and structural improvement efforts, we 
collected and analyzed Air Force reports and briefing materials on 
aircraft availability and reliability and repair projects. To assess 
challenges facing efforts to modernize the F-22 and address 
reliability and structural problems moving forward, we analyzed 
program schedules and actual and projected aircraft availability data 
for fiscal years 2011 to 2018, current as of August 2013, and reviewed 
program documents discussing maintenance issues affecting the 
aircraft. We also discussed progress and plans for modernization and 
improvement efforts with DOD, Air Force, and F-22 program officials. 
We assessed the reliability of DOD data on selected acquisition 
reports, cost estimates, and materiel availability rates and 
projections by reviewing documentation related to the data and 
interviewing agency officials knowledgeable about the data. We 
determined that the data were sufficiently reliable for the purposes 
of this report. Appendix I contains a more detailed description of our 
scope and methodology. 

We conducted this performance audit from July 2013 to May 2014 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

Background: 

The F-22 Raptor is the first operational tactical aircraft fielded by 
the Air Force that incorporates a low observable (stealth) and highly 
maneuverable airframe, advanced integrated avionics, and an engine 
capable of sustained supersonic flight. The F-22 acquisition program 
began in 1991 with an intended development period of 12 years and a 
planned quantity of 648 aircraft. However, F-22 development eventually 
spanned 14 years, during which time costs increased substantially and 
threats, missions, and some requirements changed. As a result, total 
quantities were significantly decreased, with 195 of the 648 planned 
aircraft being delivered to the Air Force. As of March 2014, the total 
number of active F-22 aircraft was 182.[Footnote 2] When the final 
aircraft was delivered in 2012, the F-22 acquisition program was 
completed at a total estimated cost of over $67 billion. 

In 2003, the Air Force established an F-22 modernization program 
primarily to develop and insert new and enhanced ground attack 
capabilities considered necessary to meet current and future threats. 
The Air Force's current total cost estimate for F-22 modernization is 
around $9.4 billion, which includes costs directly attributable to 
modernization, as well as costs to support testing and laboratory 
operations, provide periodic software updates, and ensure compliance 
with military and civilian standards for identifying other aircraft 
and avoiding collisions. According to Air Force officials, 
modernization is defined as a process of upgrading and modifying 
aircraft with a focus on adding new capabilities. The Air Force has 
divided its modernization efforts into a series of increments, each 
with multiple upgrades.[Footnote 3] All of the currently active F-22 
aircraft have been upgraded with Increment 2, and more than 140 of 
those aircraft are expected to be upgraded with subsequent 
modernization increments. Aircraft that are primarily used for 
training are not expected to receive upgrades beyond Increment 2. 
Table 1 lists the current F-22 modernization increments in order and 
identifies the main features and key events associated with each one. 

Table 1: Features and Key Events of F-22 Modernization Efforts: 

Increment: 2; 
Main features: 
* Resolution of problems left over from original development program; 
* Basic air-to-ground capabilities, including Joint Direct Attack 
Munition; 
Key events: 
* Started development in 2003; 
* Currently fielded. 

Increment: 3.1; 
Main features: 
* Enhanced air-to-ground attack capabilities, including Small Diameter 
Bomb; 
* Enhanced radar capabilities; 
Key events: 
* Started development in 2006; 
* Currently being fielded; 
* Expected to complete fielding by 2017. 

Increment: 3.2A; 
Main features: 
* Enhanced electronic protection and combat identification 
capabilities; 
* Software-only modification requiring installation of Increment 3.1 
hardware; 
Key events: 
* Started development in 2011; 
* Currently in testing; 
* Expected to complete fielding by 2017. 

Increment: 3.2B; 
Main features: 
* Integration of AIM-9X and AIM-120D missiles; 
* Upgraded geolocation and electronic protection subsystems; 
Key events: 
* Started development in 2013[A]; 
* Currently in development; 
* Expected to complete fielding by 2020. 

Source: GAO analysis of U.S. Air Force data. 

[A] Development work for Increment 3.2B began in 2008 but a formal 
decision to begin a system development program was not made until 2013. 

[End of table] 

In addition to modernization efforts, the Air Force is also continuing 
to pursue two primary improvement efforts. These fix identified issues 
affecting the aircraft, rather than developing and adding new 
capabilities. One of the efforts, the Structural Repair Program (SRP), 
started in 2006, and involves installation of structural hardware that 
is needed for the aircraft to achieve its originally expected 8,000 
flight hour service life.[Footnote 4] SRP is expected to be completed 
in 2019. The other effort, known as the Reliability and 
Maintainability Maturation Program (RAMMP), started in 2005, and 
consists of a large number of individual projects primarily intended 
to increase the amount of time the aircraft are available for 
operational use. According to program officials, as of January 2014 
there were over 100 RAMMP projects of varying scope and cost under 
way, and over 200 projects had been completed. Program officials have 
noted that new RAMMP projects can be initiated as maintenance issues 
are identified. They also noted that RAMMP is expected to continue 
throughout the life of the aircraft. These two primary improvement 
programs, as well as efforts to enhance engine reliability, are 
currently expected to cost a total of $1.9 billion. 

Figure 1 illustrates how the current cost estimate of $11.3 billion is 
divided between modernization and improvement efforts, as well as the 
amounts invested through 2013 and still to be invested. 

Figure 1: Estimated Cost for F-22 Modernization and Improvement 
(billions of then year dollars): 

[Refer to PDF for image: stacked vertical bar graph] 

Modernization: 
To go: $3.69 billion; 
Invested through fiscal year 2013: $5.67 billion; 
Total: $9.36 billion. 

Improvement: 
To go: $0.85 billion; 
Invested through fiscal year 2013: $1.08 billion; 
Total: $1.93 billion. 

Source: GAO analysis of U.S. Air Force data. 

Note: All data used in this cost estimate are from the F-22 
Modernization Program Office Estimate dated November 16, 2012, or 
subsequent cost data provided by the program reflecting actual costs 
for fiscal years 2012 and 2013, with the exception of those relating to 
Increment 3.2B, which are taken from the F-22 Increment 3.2B 
Modernization Defense Acquisition Executive Summary dated November 26, 
2013. 

[End of figure] 

As illustrated in figure 1, more than half of the current estimated 
funding for both the modernization and improvement efforts has already 
been invested. Total spending to complete F-22 modernization and 
improvement efforts is uncertain as capability needs evolve and 
reliability improvement projects are identified. Program officials 
stated that they intend to issue an updated cost estimate later in 
2014, to include cost projections through the life of the aircraft. 

Air Force's New Approach to Structuring F-22 Modernization Should 
Improve Oversight and Transparency: 

The Air Force's decision to structure new F-22 modernization efforts 
as independent programs should provide greater visibility into each 
individual effort. We found in May 2012 that modernization efforts had 
initially been managed and funded as part of the original F-22 program 
and costs for specific increments were not individually tracked, which 
limited transparency. However, beginning with Increment 3.2B, the Air 
Force plans to manage each modernization effort as a distinct, stand-
alone program with levels of oversight and approval set according to 
the dollar value of the program. Increment 3.2B was designated as a 
major defense acquisition program with an approved cost, schedule, and 
performance baseline in June 2013.[Footnote 5] The Air Force is now 
funding the program as a discrete element within its budget and is 
required to provide periodic reports, known as selected acquisition 
reports, to Congress on its cost and schedule status. Looking ahead, 
the Air Force is planning to begin four smaller increments intended to 
ensure compliance with military and civilian standards for 
identification of other aircraft and avoidance of collisions. This 
incremental approach is consistent with the approach we recommended in 
May 2012 and Congress mandated in the 2013 NDAA, and should provide 
greater transparency into cost, schedule, and performance progress. 
[Footnote 6] 

F-22 modernization efforts are primarily performed under a contracting 
vehicle known as an indefinite delivery/indefinite quantity contract 
(ID/IQ).[Footnote 7] In February 2013, the Air Force awarded an ID/IQ 
contract with a contract ceiling of $6.9 billion to cover F-22 
modernization efforts from 2013 to 2023. Program officials stated that 
about $6.2 billion of the funding under this contract will be used to 
continue work on modernization efforts that began prior to the 
contract award as well as other planned efforts. They noted that the 
remaining $700 million would be used to cover costs associated with 
future requirements that have not yet been defined. According to 
program officials, they plan to complete an updated cost estimate 
later in 2014 that is expected to reflect all modernization costs 
through the life of the aircraft. As of August 2013, less than $500 
million had been obligated under this contract, the majority of which 
is for engineering and manufacturing development work on Increment 
3.2B. As a result, more than $6.4 billion remained available to be 
obligated. 

The Air Force plans to use individual contractual agreements, known as 
delivery orders, which are issued under the ID/IQ contract, for each 
modernization effort. The delivery orders establish, among other 
things, the requirements, cost or price, and schedule for the work to 
be performed under the order. Program officials have stated that they 
intend to issue a separate delivery order for each future 
modernization effort. Issuing delivery orders for each modernization 
effort should support informed management and oversight of each 
increment by increasing visibility into funds obligated to individual 
efforts. 

Air Force's Approach to Managing Reliability Improvement Efforts 
Limits Transparency of Cost and Schedule Progress: 

The larger of the Air Force's two primary F-22 improvement efforts--
RAMMP--is not managed with its own cost and schedule baseline. This 
approach limits transparency of cost and schedule progress. The 2013 
NDAA directed the Secretary of the Air Force to submit an annual 
report to the congressional defense committees on the cost, schedule, 
and performance of RAMMP and SRP.[Footnote 8] That direction required 
the Air Force to identify cost and schedule baselines for these two 
programs, which would provide Congress with visibility into the 
progress of these improvement efforts over time. The Air Force 
submitted its first report in April 2013, but did not explicitly 
identify baseline cost and schedule estimates for RAMMP or SRP. 
[Footnote 9] 

The Air Force's 2013 report included a cost estimate through 
completion for SRP, as well as some schedule information. Although not 
explicitly identified as baselines, these cost and schedule estimates 
may provide the information necessary for use as SRP baseline 
estimates going forward, if the Air Force chooses to do so. However, 
the report lacked information for RAMMP needed to serve as baseline 
cost and schedule estimates going forward. According to DOD guidance, 
program cost baselines should reflect realistic estimates that cover 
the entire program and schedule baselines should include projected 
dates for major decision points, among other things. For RAMMP, the 
report does not provide any schedule information, and it identifies 
projected development and procurement funding through fiscal year 
2017. However, program officials have stated that RAMMP projects will 
continue for the life of the F-22, which is currently expected to 
retire around 2033. Additionally, RAMMP has received operations and 
maintenance funding, but this funding is not reflected in the report. 
Without a comprehensive baseline cost and schedule estimate for 
reliability efforts that encompasses the life of the aircraft across 
all types of funding, it is difficult to consistently track cost and 
schedule progress on projects that to date have cost almost $1 
billion. Air Force officials agreed that the 2013 report did not 
contain a complete cost and schedule baseline for RAMMP. 

In contrast to its approach of contracting for modernization efforts 
under individual delivery orders, the Air Force's approach to 
contracting for RAMMP makes it difficult to track funding obligated to 
individual projects. According to program officials, these projects 
are primarily funded through an F-22 air vehicle sustainment contract. 
Under this contract, work on individual projects can be split across 
multiple line items, making it difficult to manage and oversee cost 
and schedule performance of individual projects. These projects range 
in size and complexity from smaller efforts that cost less than $1 
million to a project to improve the durability of stealth coatings 
that is expected to cost more than $50 million. 

Unanticipated problems with the F-22 can generate additional RAMMP 
projects, which makes it challenging to accurately estimate future 
RAMMP costs. For example, to address concerns with the F-22 life 
support system, an Air Force committee that advises on science issues 
recommended that a back-up oxygen system be incorporated into the 
aircraft. Development of this system has resulted in at least $20 
million of unplanned work being funded through RAMMP. 

F-22 Modernization and Improvement Efforts Will Continue to Face 
Schedule and Performance Challenges: 

The Air Force faces schedule and performance challenges in its 
management of F-22 modernization and improvement efforts as a result 
of continuing maintenance issues. Delays in completing depot-level 
maintenance have translated into delays in fielding modernization 
increments, which could also affect future increments. Despite 
substantial investments in improving F-22 reliability, the aircraft 
does not yet meet its availability requirement, and the Air Force does 
not expect it to meet this requirement. 

Maintenance Delays Are Affecting Schedule for Fielding Modernization 
Efforts: 

Longer than expected time frames for completing depot-level 
maintenance on F-22 aircraft extended the near-term F-22 modernization 
schedule and could affect fielding of future modernization increments. 
Depot-level maintenance refers to major maintenance and repairs, such 
as overhauling, upgrading, or rebuilding parts, assemblies, or 
subassemblies, which is usually performed at a facility known as a 
depot. A contractor-run depot in Palmdale, California performing F-22 
maintenance has returned multiple aircraft back to the fleet months 
later than planned. For example, in 2013 this depot returned one 
aircraft back to the fleet more than 10 months later than originally 
scheduled. Fielding of modernization increments can take place at a 
depot, and program officials noted that the delays at the Palmdale 
depot have affected the schedule for fielding Increment 3.1. As of May 
2012, the Air Force expected Increment 3.1 to be fielded in fiscal 
year 2016. That increment is now not expected to complete fielding 
until August 2017. In addition, the SRP program, which was initially 
planned to complete in late 2017, is now not expected to finish until 
2019 as a result of the depot maintenance delays. 

Further delays may affect the time line for fielding future 
modernization increments because the increments build on each other 
sequentially. Increment 3.2A is a software upgrade that requires 
Increment 3.1 hardware, and delays in the Increment 3.1 schedule have 
caused the expected fielding of Increment 3.2A to move from fiscal 
year 2016 to fiscal year 2018. Similarly, any further delays in 
fielding these earlier increments could affect fielding of Increment 
3.2B. 

According to an Air Force analysis of F-22 maintenance issues, work 
related to maintaining the stealth features of the F-22 accounts for 
almost half of the time that the aircraft are unavailable due to 
maintenance.[Footnote 10] Program officials noted that after repairs 
or modifications that involve removing a panel with stealth coatings, 
those coatings must be restored, which can take several days. As a 
result, minor repairs or modifications that would take a few hours on 
a non-stealth aircraft can require days of maintenance on an F-22. 
Therefore, when an aircraft is scheduled to enter a depot to receive 
modifications that need to be performed at the depot, the Air Force 
often plans to perform other major work that the aircraft is intended 
to receive at the same time, since the stealth coatings will need to 
be restored anyway. For example, when an F-22 aircraft enters a depot 
for SRP modifications, the Air Force may also schedule Increment 3.1 
modifications during that time. However, officials noted that 
modernization efforts can be completed outside of the depot if needed. 

One way the Air Force is attempting to address the depot maintenance 
situation is by consolidating all F-22 depot maintenance at a 
government-operated facility in Ogden, Utah. According to an Air Force 
analysis of F-22 depot operations, management turnover at the 
contractor-run depot in Palmdale and additional workload to address 
aircraft corrosion issues contributed to this depot's delays in 
delivering aircraft back to the fleet. The Palmdale facility has 
higher labor rates than the Ogden facility and has charged more labor 
hours than the Ogden facility when performing modifications. The Air 
Force analysis also found that consolidating all F-22 depot 
maintenance at the Ogden facility should provide better schedule 
performance while reducing costs for F-22 depot maintenance by 
approximately $20 million per year. The Air Force plans to mitigate 
schedule risks related to depot consolidation by retaining a residual 
capacity at Palmdale into 2015. 

Despite Efforts to Improve Reliability and Maintainability, the F-22 
Fleet Will Not Meet Its Availability Requirement: 

The F-22 fleet will not achieve its availability requirement as 
scheduled despite substantial investments in RAMMP projects. RAMMP is 
intended to increase the availability of the F-22 to perform its 
missions, primarily through improving reliability--the likelihood that 
the aircraft will operate without failure--and reducing the time 
required to maintain the aircraft. Cumulative spending on RAMMP 
projects totals about $900 million through the end of fiscal year 
2013, and has had some positive effect on availability over time. 
However, the Air Force has never been able to meet the F-22's aircraft 
availability requirement and does not expect to meet that requirement 
within the next 4 years. The original requirement was expressed in 
average hours of flying time between maintenance events for the F-22 
fleet, excluding routine servicing and inspections, and was set at an 
average of 3.0 hours. The program was not able to meet that 
requirement, and it was officially changed to a requirement for 
overall aircraft availability, set at 70.6 percent materiel 
availability. This is defined as the percentage of the fleet 
operationally capable of performing an assigned mission at any given 
time. The level of availability is required to build over time, from 
61.2 percent by the end of fiscal year 2011 to 70.6 percent by the end 
of fiscal year 2015. This requirement was established to support 
readiness requirements for projected training and contingency 
operations. As shown in figure 2, the Air Force has consistently 
fallen short of its availability requirements. Program projections 
indicate that it will not achieve 70.6 percent availability by fiscal 
year 2018. 

Figure 2: Comparison of Required and Actual or Projected F-22 Materiel 
Availability: 

[Refer to PDF for image: vertical bar graph] 

Materiel availability: 

Fiscal year: 2011; 
Requirement: 
Actual: 

Fiscal year: 2012; 
Requirement: 
Actual: 

Fiscal year: 2013; 
Requirement: 
Actual: 

Fiscal year: 2014; 
Requirement: 
Projected: 

Fiscal year: 2015; 
Requirement: 
Projected: 

Fiscal year: 2016; 
Requirement: 
Projected: 

Fiscal year: 2017; 
Requirement: 
Projected: 

Fiscal year: 2018; 
Requirement: 
Projected: 

Source: GAO analysis of U.S. Air Force data. 

[End of figure] 

Officials from Air Combat Command, which is involved in developing 
requirements for the F-22, said that the current materiel availability 
requirement is based on assumptions that may no longer be applicable. 
According to Air Force guidance on calculating availability 
requirements, these assumptions include maintenance needs and the 
frequency and duration of flights. Command officials noted that they 
expect to revisit this requirement at some future point with the DOD 
office that approves F-22 operational requirements to discuss changing 
the requirement to reflect operational realities, but they did not 
tell us specifically when they plan to do such a reassessment. 
[Footnote 11] Continued investment in some RAMMP projects aimed at 
achieving the current requirement may be unnecessary if it is no 
longer considered valid. Moreover, any delay in revisiting this 
requirement could limit funding that DOD might be able to make 
available for other high priority activities in a time of austere 
federal budgets. 

Conclusions: 

The Air Force's decision to structure F-22 modernization efforts as 
distinct incremental programs should increase transparency and provide 
greater visibility into cost, schedule and performance. It is 
consistent with both GAO's prior recommendation and statutory 
direction. However, opportunities remain for the Air Force to achieve 
greater transparency. In particular, the first annual report to 
Congress on F-22 improvement efforts lacked full baseline cost and 
schedule estimates for RAMMP projects. In addition, the report did not 
include operations and maintenance funding associated with such 
projects. Rather, it provided development and procurement funding 
projections through fiscal year 2017, although the program is expected 
to continue through the life of the aircraft. A more comprehensive 
baseline estimate for RAMMP would make it easier to track changes in 
cost and schedule, supporting better program oversight. 

Although the Air Force has made substantial investment in RAMMP 
projects and seen some improvement in aircraft availability, the F-22 
program has not been able to achieve its availability requirements. 
If, as stated by Air Force officials, the current availability 
requirement is based on assumptions that are no longer valid, then 
spending on some RAMMP projects could be unnecessary. Promptly 
revisiting this requirement would help minimize any such unnecessary 
investment of future funding. 

Recommendations for Executive Action: 

To support program oversight and ensure efficient use of future 
funding, we recommend that the Secretary of Defense direct the 
Secretary of the Air Force to take the following two actions: 

* Incorporate into the Air Force's annual report to Congress on F-22 
improvement projects a comprehensive cost and schedule baseline 
estimate for RAMMP that includes development, procurement, and 
operations and maintenance costs through the expected life cycle of 
the fleet. 

* Expedite reassessment of the F-22 materiel availability requirement 
and determine the necessary changes, if any, to the number and scope 
of RAMMP projects. 

Agency Comments and Our Evaluation: 

We provided a draft of this product to DOD for comment. In its written 
comments, reprinted in appendix II, DOD disagreed with one 
recommendation and agreed with the other. DOD also provided technical 
comments, which were incorporated as appropriate. 

DOD did not agree with our first recommendation to incorporate a 
comprehensive cost and schedule baseline estimate for RAMMP that 
includes development, procurement, and operations and maintenance 
costs through the expected life cycle of the fleet into the Air 
Force's annual report to Congress on F-22 improvement projects. DOD's 
response stated that reliability and maintainability programs cannot 
be baselined like major defense acquisition programs because of cost 
fluctuations based on life cycle issues that arise as the weapon 
system ages. We recognize that RAMMP is not a major defense 
acquisition program and did not intend to imply that it was, although 
we believe that DOD guidance for program cost and schedule baselines 
provides elements of sound baseline estimates that could be used in 
relation to RAMMP. We acknowledge in our report the challenges of 
accurately estimating future RAMMP costs. Nevertheless, the 2013 NDAA 
required comparison of costs and schedules to an appropriate baseline, 
and the Air Force's April 2013 report did not identify a cost or 
schedule baseline for RAMMP. Rather, it used the funding levels 
requested in the fiscal year 2013 President's Budget submission. 
Continuing to use this approach will not provide visibility into the 
extent to which RAMMP projects are being executed efficiently. As 
noted in our report, program officials expect to issue an updated cost 
estimate for F-22 modernization and improvement efforts later in 2014. 
That updated estimate is expected to include cost projections through 
the life of the aircraft, and to the extent that it incorporates RAMMP 
costs, it could provide a starting point for a baseline estimate to be 
included in future reports to Congress. The Air Force's April 2013 
report states that the way it is structuring and managing RAMMP helps 
the Air Force get the most value for its money while making judicious 
use of its time. Inclusion of appropriate cost and schedule baseline 
estimates would support both goals. Therefore, we continue to believe 
the recommendation is valid. 

DOD agreed with our second recommendation to expedite reassessment of 
the F-22 materiel availability requirement and determine any necessary 
changes to the number and scope of RAMMP projects. DOD's response 
stated that the Air Force assesses weapon system materiel availability 
annually during formulation of flying hour programs to sustain 
required levels of readiness, and added that the Air Force will 
continue to reassess the F-22 materiel availability requirement and 
adjust RAMMP priorities accordingly. While DOD's commitment to 
regularly reassessing the F-22 materiel availability requirement is 
commendable, the intent of our recommendation is that DOD should 
formally reassess the requirement with the Joint Requirements 
Oversight Council--the DOD office that approves key weapon system 
requirements. As we noted in our report, Air Combat Command officials 
stated that they intend to do this at some future point, and our 
recommendation is simply that they do so as expeditiously as possible. 

We are sending copies of this report to interested congressional 
committees, the Secretary of Defense, and the Secretary of the Air 
Force. In addition, the report is available at no charge on the GAO 
website at [hyperlink, http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-4841 or sullivanm@gao.gov. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. GAO staff who made key contributions 
to this report are listed in appendix III. 

Signed by: 

Michael J. Sullivan: 
Director: 
Acquisition and Sourcing Management: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

We were asked to review and report on the F-22 modernization and 
improvement efforts. This report assesses: (1) the Air Force's new 
approach to structuring its F-22 modernization efforts, (2) the Air 
Force's management of its F-22 reliability and structural improvement 
efforts, and (3) challenges facing efforts to modernize the F-22 and 
address reliability and structural problems moving forward. 

To assess the Air Force's new approach to structuring modernization 
efforts, we analyzed actual and projected program management data for 
fiscal years 2003 to 2023, from sources including acquisition decision 
memorandums, selected acquisition reports, and independent and program 
cost estimates. These sources were issued in 2012 or 2013. We also 
reviewed contracting and budget documents relevant to F-22 
modernization. To assess the Air Force's management of its F-22 
reliability and structural improvement efforts, we collected and 
analyzed Air Force reports and briefing materials on aircraft 
availability and reliability and repair projects. To assess challenges 
facing efforts to modernize the F-22 and address reliability and 
structural problems moving forward, we analyzed program schedules and 
actual and projected aircraft availability data for fiscal years 2011 
to 2018, current as of August 2013, and reviewed program documents 
discussing maintenance issues affecting the aircraft. 

In performing our work, we obtained information and interviewed 
officials from the F-22 System Program Office at Wright-Patterson Air 
Force Base, Ohio, and Hill Air Force Base, Utah; Air Combat Command, 
Joint Base Langley-Eustis, Virginia; Office of the Secretary of 
Defense, Arlington, Virginia; and the Defense Contract Management 
Agency, Fort Worth, Texas. 

We assessed the reliability of DOD data on selected acquisition 
reports, cost estimates, and materiel availability rates and 
projections by reviewing documentation related to the data and 
interviewing agency officials knowledgeable about the data. We 
determined that the data were sufficiently reliable for the purposes 
of this report. 

We conducted this performance audit from July 2013 to May 2014 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: Comments from the Department of Defense: 

Department of The Air Force: 
Headquarters United States Air Force: 
Washington DC: 

22 April 2014: 

Mr Michael J. Sullivan: 
Director, Acquisition and Sourcing Management: 
U.S. Government Accountability Office: 
441 G Street, NW: 
Washington DC 20548: 

Dear Mr Sullivan: 

This is the Department of Defense (DoD) response to the GAO Draft Report
GAO-14-425, “F-22 Modernization: Cost and Schedule Transparency is 
Improved, Further Visibility Into Reliability Efforts is Needed”, 
dated April 3, 2014 (GAO Code 121163). The Department is providing 
official written comments for inclusion in the report. 

Sincerely, 

Signed by: 

Timothy M. Ray, Maj. Gen. USAF: 
Director, Global Power Programs: 
Assistant Secretary (Acquisitions): 

Attachment: DoD Comments on the GAO Recommendations 

GAO Draft Report Dated April 3, 2014: 
GAO-14-425 (GAO Code 121163): 

“F-22 Modernization: Cost And Schedule Transparency Is Improved, 
Further Visibility Into Reliability Efforts Is Needed” 

Department Of Defense Comments On The GAO Recommendation: 

Recommendation 1: The GAO recommends that the Secretary of Defense 
direct the Secretary of the Air Force to incorporate into the Air 
Force's annual report to Congress on F-22 improvement projects a 
comprehensive cost and schedule baseline estimate for RAMMP that 
includes development, procurement, and operations and maintenance 
costs through the expected lifecycle of the fleet. 

DoD Response: The Secretary of Defense non-concurs with the GAO's 
recommendation because the GAO's recommendation infers the RAMMP 
program should be baselined like a Major Defense Acquisition Program 
(MDAP). Reliability and Maintainability (R&M) programs cannot be 
baselined like MDAPs because there will be fluctuations in the cost 
based on life-cycle issues that arise as the weapon system ages. 
Additionally, the current F-22 Sustainment Projects report does 
outline project costs for kit procurement and installation across the 
Future Years Defense Programs (FYDP), as well as provide rationale for 
increases to the number of kits procured in the current Fiscal Year. 
Furthermore, the report quantifies the annual RAMMP contribution to 
improved aircraft availability and mean-time-between-maintenance--key 
performance metrics for F-22 sustainment. Lastly, prior to the first F-
22 Sustainment Projects report submission to Congress, the Air Force 
worked closely with the House and Senate Armed Services Committees to 
obtain concurrence with the design and content of the report to ensure 
the intent of the Congressional language was met. 

Recommendation 2: The GAO recommends that the Secretary of Defense 
direct the Secretary of the Air Force to expedite reassessment of the 
F-22 materiel availability requirement and determine the necessary 
changes, if any, to the number and scope of RAMMP projects. 

DoD Response: The Secretary of Defense concurs with the GAO's 
recommendation. The AF assesses weapon system materiel availability 
annually during formulation of flying hour programs to sustain 
required levels of readiness. Accordingly, the AF will continue to 
reassess the F-22 materiel availability requirement and continue to 
adjust RAMMP priorities to optimize improved readiness and life cycle 
support costs. 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Michael J. Sullivan, (202) 512-4841 or sullivanm@gao.gov. 

Staff Acknowledgments: 

In addition to the contact named above, key contributors to this 
report were Travis J. Masters, Assistant Director; Marie P. Ahearn; 
Robert P. Bullock; Laura Greifner; Kristine R. Hassinger; Roxanna T. 
Sun; and Christopher D. Zbrozek. 

[End of section] 

Footnotes: 

[1] Specifically, the NDAA requires the Department of Defense to treat 
the F-22A modernization Increment 3.2B (and any future program 
modernizations that would otherwise qualify for treatment as a major 
defense acquisition program) as a major defense acquisition program 
for which selected acquisition reports shall be submitted to Congress 
in accordance with section 2432 of title 10 of the U.S. Code. The act 
also requires annual congressional reports on the costs, schedules, 
and performances of the reliability and maintainability maturation 
program and the structural repair program of the F-22A modernization 
program. Pub. L. No. 112-239, § 144. Increment 3.2B is intended to 
integrate AIM-9X and AIM-120D missiles onto the F-22 aircraft, as well 
as upgrading geolocation and electronic protection subsystems. 

[2] Of the other 13 delivered aircraft currently considered inactive, 
4 are being used by a contractor for testing, 4 were lost, and the 
remaining 5 are no longer flyable. 

[3] The Air Force numbering scheme considers Increment 1 to be the 
baseline capabilities delivered by the F-22 acquisition program. 

[4] The acronym for this effort is defined in a number of different 
ways, depending on the source. For example, it is referred to as 
Structures Retrofit Plan in Air Force budget documents, and Structural 
Retrofit Program in the Air Force's required annual report to Congress 
on its F-22 improvement efforts. For the purpose of this report we 
will use Structural Repair Program, as this is the term used in the 
NDAA. 

[5] While Increment 3.2B received approval to begin system development 
in June 2013, this event had originally been scheduled for the prior 
year. The delay was due to the Air Force not placing Cost and Software 
Data Reporting under contract for Increment 3.1 and Increment 3.2A, 
which delayed preparation of the required Independent Cost Estimate, 
as noted in GAO, Defense Acquisitions: Assessments of Selected Weapon 
Programs, [hyperlink, http://www.gao.gov/products/GAO-14-340SP] 
(Washington, D.C.: Mar. 31, 2014). 

[6] GAO, Tactical Aircraft: F-22A Modernization Program Faces Cost, 
Technical, and Sustainment Risks, [hyperlink, 
http://www.gao.gov/products/GAO-12-447] (Washington, D.C.: May 2, 
2012); Pub. L. No. 112-239, § 144. 

[7] This type of contract is used to acquire supplies or services 
during a specified contract period when the exact times and exact 
quantities of future deliveries are not known at the time of contract 
award. The base contract establishes, among other things, the 
procedures that the government will use in issuing orders. Federal 
Acquisition Regulation (FAR) §§ 16.501-2(a) and 16.504(a)(4)(iv). F-22 
program officials note that these types of contracts have been used by 
the Air Force for previous upgrade programs, such as a performance 
enhancement effort on the C-17 transport aircraft. 

[8] Pub. L. No. 112-239, § 144(c). 

[9] In both 2013 and 2014, the Air Force did not submit this report to 
Congress by March 1, which is the statutory deadline. The 2014 report 
was not available at the time of this review. 

[10] The program is also addressing an issue with the aircraft's 
stealth coatings that may require stripping the coatings from the 
aircraft and replacing them with a different coating. 

[11] Air Force officials noted that the Command has established a 
separate standard for aircraft availability, currently set at 66.7 
percent materiel availability, which takes into account factors such 
as updated requirements and expected funding for a particular year. 

[End of section] 

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