Controlling Costs On Several Fronts

ersonnel cuts, budget cuts and an ambitious modernization program converged in the skies over Yugoslavia this spring when Air Force pilots flying decades-old aircraft began running low on precision-guided missiles.

In the past 10 years, the Air Force has seen its budget, troop levels and stocks of spare parts dwindle, while deployments have increased. It's proved a difficult combination to deal with as Air Force leaders try to identify their priorities in a budget many believe is too small. The Air Force has shifted money to shore up operations and maintenance accounts that have proved inadequate to manage the service's fourfold increase in deployments since the Persian Gulf war, but modernization efforts have suffered.

"As we began to put money into those other things to fix them, we began to pull money out of modernization," says Lt. Gen. Gregory Martin, the principal deputy in the office of the assistant secretary of the Air Force for acquisition. To continue the modernization programs that service leaders believe are necessary, they've stretched those programs out as far as possible.

"We're not buying some of our weapons and [precision-guided munitions] at the optimum rates," says Martin. "The effect of that is weapons systems aren't as capable as they could be."

Fighter Programs

The Air Force's highest modernization priority is the F-22 tactical fighter, developed by Lockheed Martin. By integrating advanced avionics, stealth and supercruise technologies, the F-22 Raptor will ensure military air superiority well into the next century. Designed to eventually replace the service's fleet of aging F-15 fighters, the F-22 is being developed under an $18.6 billion research and development cost cap. It is expected to be operational in 2005.

But the viability of keeping the F-22 program within the budget is increasingly questionable. Earlier this year, the Air Force acknowledged program costs already had exceeded expectations by several million dollars, and the General Accounting Office projected an additional $667 million in cost growth. Affordability concerns surrounding the Defense Department's pursuit of three expensive fighter programs-besides the F-22 there's the Navy's F/A-18E/F Super Hornet and the multi-service Joint Strike Fighter-already have caused the Air Force to reduce its total planned purchase of F-22s by several hundred aircraft. The Air Force estimates the program eventually will cost more than $60 billion. To date, more than $20 billion has been appropriated.

"When we originally planned to build the aircraft, we were going to buy 750 of them," Martin says. But a series of force structure reviews beginning in the 1990s resulted in reducing the number of planned aircraft to 339. "You can't amortize the developmental costs for an airplane of this magnitude over half as many aircraft and expect the price to be what you had originally hoped. We're not ever going to be able to achieve the kind of economies of scale you get from a program of this size," Martin says.

The Air Force plans to buy the first six low-rate production F-22s later this year and to initiate advance procurement of the next 10 aircraft. This schedule is troubling to some, who believe that more testing is needed before production begins.

At a hearing on tactical aircraft before the air-land forces panel of the Senate Armed Services Committee in March, Louis Rodrigues, director of defense acquisition issues for GAO, said, "Because of delays in the [engineering and manufacturing development] program, the Air Force has substantially reduced or delayed the testing it had planned to accomplish before awarding the contracts. In 1994, the Air Force planned to have 1,400 flight test hours completed before starting production activities. Now the Air Force plans to complete 511 flight test hours."

But even achieving the 511 hours will be difficult, Rodrigues said. "Completing static and fatigue tests on the airframe structures has now been delayed until after contract award. Likewise, early flight testing of an F-22 equipped with its integrated avionics will not be accomplished, as previously planned, before contract award."

Philip Coyle, director of operational test and evaluation at the Pentagon, acknowledges that the F-22 program is ambitious. Flight tests of two test aircraft at Edwards Air Force Base, Calif., have progressed "about as we had predicted," Coyle says. Nonetheless, there have been problems, which will result in program delays. A low-pressure turbine blade failed in the first production-configured flight test engine after only 10 hours of ground testing, forcing a redesign that will delay delivery of production-representative test engines until January, he says. Also, delivery of the first four avionics test aircraft has slipped due to titanium casting problems with the wing attachment fittings and welding problems in the fuselage.

According to Martin, the Air Force has incorporated fixes that will bring the program back on schedule by the end of the year. If the Air Force cannot find savings elsewhere in the program, it may delay certification of the external weapons carriage until after the planes are delivered. "Right now, the program office thinks it will be able to stay within the cap," Martin says.

To address shortfalls in fighter aircraft, the Air Force also will augment its fleet of F-16s. It has requested funds to buy 10 more of the Lockheed Martin fighters next year, bringing the total purchase through 2003 to 30. The plan is an indication of the impact recent military operations have had on the Air Force-last year's budget did not project purchasing any more F-16s.

Other Priorities

The Air Force will continue helping to fund the Joint Strike Fighter, the next-generation fighter being developed jointly with the Navy and Marine Corps. In its fiscal 2000 budget request, the Air Force would contribute $242 million to the program, which is being pursued by Lockheed Martin and Boeing Co. One of those companies, which are building competing prototypes, will be selected to begin the engineering and manufacturing development phase in 2001, with initial production scheduled for 2005. Altogether, the services plan to purchase more than 2,800 aircraft.

The Air Force will boost its airlifter fleet by purchasing 15 new Boeing C-17 Globemaster cargo aircraft. The Air Force plans to buy another 49 C-17s by 2005, some of which will be used by special operations forces. The aircraft are being purchased under an innovative multi-year procurement plan that has been widely praised for keeping aircraft delivered on or ahead of schedule and within budget. As the C-17 fleet is completed, the Air Force will retire the C-141 Starlifter.

To keep more C-5 Galaxy strategic lift aircraft in service, the Air Force has begun upgrading the aircraft's avionics this year and will begin replacing engines and other subsystems next year. The first refurbished C-5 is to be delivered in 2004, 16 years after the first C-5 was flown.

The fiscal 2000 budget request will allow the Air Force to continue upgrading its B-2 bomber fleet. An air power review panel last year recommended against buying more than the 21 bombers already funded but did advocate continued development and improvement of the Northrop Grumman strategic bomber.

The Air Force requested funds to buy another Joint Surveillance Target Attack Radar System (JSTARS), the much-used airborne reconnaissance system, which also is produced by Northrop Grumman.