Presidential Helicopter Acquisition: Program Established Knowledge-Based Business Case and Entered System Development with Plans for Managing Challenges

What GAO Found

In the past year the acquisition program for a new presidential helicopter, known as VH-92A, continued to make progress by establishing a knowledge-based business case for entry into system development that included an approved cost, schedule and performance baseline. GAO found that the program's actions were substantively in line with acquisition best practices. The Navy, which is responsible for the program, had previously completed assessments that found no immature critical technologies and had made trade-offs to achieve affordability with accepted requirements. The Office of Secretary of Defense (OSD) deferred a system-level preliminary design review (which ensures the design and basic system architecture are complete, and that there is technical confidence the capability needed can be satisfied within cost and schedule goals), until after the start of development. The program's reliance on mature technologies, selection of an existing aircraft for use in the program, and award of a fixed-price type contract reflect reduced risk in the deferral. The Navy completed a cost estimate for the program, and the OSD completed an independent cost estimate for the acquisition. GAO found that the methodology the Navy used to derive its cost estimate was consistent with GAO's cost estimating guidance and either fully or substantially met the criteria for being comprehensive, well documented, accurate, and credible.

In April 2014, the Under Secretary of Defense for Acquisition, Technology, and Logistics approved the program's entry into the system development phase of acquisition with an estimated cost of $2.8 billion for research, development, test and evaluation and $2.4 billion for procurement of 23 aircraft, including two training aircraft. In May 2014, the Navy awarded Sikorsky Aircraft Corporation a fixed-price incentive development contract for this effort, to help reduce overall program risk, by limiting the government's exposure to contract cost overruns. As of December 2014, no significant cost, schedule, performance deviations are apparent, based on GAO's examination of the contractor's cost report data. As the program progresses, it faces what appear to be manageable challenges, such as the design and integration of subsystems on the aircraft, keeping on schedule, and controlling system requirements so as to not risk having to renegotiate the contract. The Navy has plans in place and has undertaken actions to meet those challenges.

Why GAO Did This Study

The Navy's VH-92A (formerly designated the VXX) program provides replacement helicopters for executive transport of the President, Vice President, heads of state, and others. The VH-92A is the successor to the VH-71 program, terminated for significant cost growth, schedule delays and lower than expected performance. Given the VH-71 program experience and the importance of developing a helicopter to replace the current fleet of presidential helicopters in a timely manner, since 2011, Congress has repeatedly mandated GAO to monitor and report on the program. Most recently, the National Defense Authorization Act for Fiscal Year 2014 mandated that GAO continue to review and report on the program annually to the congressional defense committees. This is GAO's sixth report on the program. This report discusses the cost, schedule, and performance status of the program, challenges it will face in system development, and the program's adherence to acquisition best practices.

To conduct this work, GAO identified acquisition best practices based on its extensive body of work in that area, statutory requirements such as the Weapon Systems Acquisition Reform Act of 2009, as amended, and on Department of Defense policy and guidance. GAO analyzed program documents and plans to determine how the program is progressing in terms of its cost, schedule, and performance and how well the program is adhering to best practices. GAO examined the OSD independent cost estimate and the service cost position. GAO compared the Navy's cost estimating methodology to the GAO Cost Estimating and Assessment Guide to determine if the Navy produced an estimate that met the criteria for being comprehensive, well documented, accurate, and credible. To understand potential program challenges, and steps taken to address those challenges, GAO examined DOD's risk management planning guidance and reviewed a copy of the program's draft risk management plan and the contractor's latest risk assessment. GAO also met with officials from the program office, Navy cost department, OSD, Defense Contract Management Agency and the contractors involved, to discuss the status of the program. To learn more about the planned design, assembly, and integration effort, GAO visited the prime contractor's headquarters facility in Stratford, Connecticut and its Coatesville, Pennsylvania facility.