Fighter Prototype Program/ Senate testimony

Exhibit VF-10. Retyped Statement on the Fighter Prototype Program

STATEMENT OF MR. G. A. SPANGENBERG

BEFORE THE

SENATE ARMED SERVICES SUBCOMMITTEE

ON TACTICAL AIRPOWER

June, 1973

Mr. Chairman, I am here today at your request to give my personal views on the fighter prototype program outlined in the Deputy Secretary of Defense's memorandum dated 7 June 1973 to the Secretary of the Navy. Inasmuch as my conclusions on the wisdom of embarking on a prototype program are at variance with those of Mr. Clements, I would assume that we are operating on a different set of facts. The data on which I base my conclusions are estimates made by the Naval Air Systems Command (NavAir) on various alternative fighter programs during the past year or so. I have been involved to some degree in most of the NavAir studies on this subject, have prepared some of the conclusions, and some of the forwarding letters, but rely on price, schedule, and technical estimates made by others in our organization. Those on whom I rely I consider to be the best available source in each particular field. Our cost analysts are responsible for producing estimates for all naval aircraft and their record is excellent. Unfortunately, the quality of their estimating is usually not known outside the Command, since the variances which are publicized are not those between their estimates and actual costs, but between contract or budget figures and actual costs. The same remarks apply to our estimators in other fields, weight, performance, and so on.

From data available, it is clear to me that no money can be saved in following the proposed prototype program, but in fact, more capable airplanes can be produced at a lower total cost using more conventional and proven approaches.

For the record, a brief review of the situation is warranted:

In 1971, after the negotiations surrounding exercise of the Lot 4 option in the original F-14 contract, Mr. Packard, then Deputy Secretary of Defense, directed study of a carrier-based version of the USAF F-15A. In September 1971, McDonnell submitted a proposal via the Air Force for the F-15N, a minimum modification of the basic F-15A retaining its single place arrangement and utilizing the identical fire control system. In January 1972, NavAir forwarded a report which concluded that the design was not an attractive option, as it was estimated to cost about 10% more than continuing to buy F-14s for the then planned total of 313 airplanes, and was much less capable.

At the same time, the Air Force advised the Navy that a study of a two-place, AWG-9/Phoenix version of the airplane was impractical within time and resources available. An in-house Navy study showed that this approach was far more costly than continuing with F-14As.

On 26 March 1973 during hearings before this committee, the Navy was advised that McDonnell had available a modestly priced, Phoenix capable version of the F-15A, involving no major airframe changes. On 30 March 1973, the contractor, in reply to a Navy request, provided the meager data he had available on this design. A NavAir evaluation of the data concluded that the design was at least three years later than the F-14A, was less effective, and would actually cost more through a buy of more than 300 airplanes after the first 131. More detailed study by the contractor appeared unwarranted.

On 20 April 1973, the results of the review were given to the contractor in order that he would be fully aware of the Navy's evaluation prior to his expenditure of more effort. The DepSecDef, Mr. Clements, then requested the contractor to submit data to him on a multiplicity of design and program alternatives,

On 4 May, the contractor responded by providing technical and cost information on three single seat designs:

F-15N, the Sparrow only design, as proposed in 1971, a minimum modification of the F-15A

F-15 (N-PHX), a new avionic configuration with a multi-shot Phoenix capability. The system traced 12, displayed 6, and shot 4. Overload carriage of 6 missiles was proposed as an option.

F-15 (N-SP), a follow-on to (N-PHX) but with the specific Phoenix auxiliaries and launchers deleted to provide a minor cost saving and a major loss in capability.

As requested by Mr. Clements, the program plans provided for buying either 179 Phoenix carriers followed by Sparrow only models, or for buying only Sparrow versions.

On 7 May, Mr. Clements appointed an ad hoc group, headed by Dr. Flax, to conduct a parallel study of the F-14/F-15 alternatives and to report back to him on 22 May 1973, The Navy Fighter Study was also tasked by the Navy to respond specifically to the request for alternatives, NavAir provided technical and cost analyses to both the Flax group and to the Naval Fighter Study (NFS).

On 21 May 1973, NavAir reported the results of its analysis of the McDonnell proposals to the Chief of Naval Operations, concluding with the paragraph,

"It is clear that on the basis of price alone, versions of the F-15 are not attractive as alternatives of the F-14A. The many other significant disadvantages of the airplane then need not be considered, including even the fact that a single-place fighter is considered by the Navy to be totally unacceptable in today's combat environment. The F-14A is more capable, more available, and less costly than the versions of the F-15. Further study of this issue is not warranted."

On 22 May 1973, NavAir forwarded technical evaluation data to supplement the cost analysis. On about this date, the Flax committee report was also completed.

On 7 June, Mr. Clements issued his directive to the Navy to submit by 13 June for his approval, management, test, production, and funding plans for implementing a program to produce non-Phoenix prototype versions of the F-15, F-4, and F-14 for a competitive fly-off culminating in a production choice in mid 1976. In compliance with the request, the two contractors were given proposals on 11 June. On 13 June, the completed development plans were forwarded to the Deputy Secretary of Defense by a memorandum which included schedules, prototype costs, total development costs, and funding requirements.

Production price estimates were also made by NavAir in order to complete the price picture. Summaries of total costs were then developed, but were not forwarded officially.

Mr. Clements deleted the F-4 from the prototype program before presenting the plan to your committee.

From this background you can see that many of the recent examinations of alternatives have been done under very short deadlines. The final exercise could not have been priced in the time available without the background of the previous proposals. The designs, fortunately, were similar to others already evaluated, albeit under different assumptions as to schedules, development plans, etc. The splitting of the development into two phases, one through the prototype flyoff and the other following it, is a major complicating factor in making the estimates. The price of the prototype portion can obviously be reduced by deferring development tasks until the second phase if one is willing to accept a time extension and the associated increase in cost. However, if a full operational flyoff is to be performed, most of the development tasks should be done in the first phase.

In brief, the schedules forwarded by the Navy to Mr. Clements on 13 June attempted compliance with his 7 June directive. With an immediate go-ahead, prototypes could be flying in about 2 years allowing six months of contractor flight tests prior to a six-month flyoff, and a full production go-ahead in mid 1976. First production flight occurs in the second quarter of 1978 with a rapid build up to a 5/month rate through 1979 and 6/month thereafter. Overall the schedule is tight and probably not realistic, but as noted before, any extensions would increase total price.

NavAir estimates of the prototype costs are shown in the attached "Chart 2" as forwarded to Mr. Clements in the Navy's 13 June 1973 response. Examination of this chart will reveal an estimated cost of the F-15, F-4, and F-14 prototype programs at 221.4, 106.0, and 146.4 million, respectively for a total of 473.8 million. Also to be noted on the chart are the costs required to complete engineering development prior to production expenditures. These figures are 214.7, 39.0, and 51.8 million, again respectively. These values should not be totaled, since only one of the three programs would be continued through that phase.

"Chart 3" from the 13 June 1973 memorandum is also attached showing NavAir estimates of the funds required by fiscal years. In 1974, the total estimate for the three programs is 224.5 million.

I have excluded the contractor quotations for their part of the prototype program from this statement, although they were included in the 13 June memorandum. In my opinion, contractor quotes, particularly planning figures to as yet undefined specifications, should not be used in making program decisions. The quotations are used by our cost estimators in arriving at their figures, but are not accepted, necessarily, as a valid indicator of the final price. Inasmuch as no production price estimates were required by Mr. Clements in his 7 June 1973 memorandum, none were included in the Navy's 13 June response. In my opinion, these are necessary in arriving at a proper overall decision on the prototype program. The production prices used in preparing our summary position are again 'best estimates', and are consistent with information provided in the 21 May letter to the Chief of Naval Operations and also to the Flax ad hoc study group.

In Table 1, attached, is a summary of the total program price associated with the various fighter alternatives under considerations. The summary is based on the program as it was proposed on 13 June 1973, viz.:

Three prototype programs would be followed with a choice to produce one of them or to continue F-14As.

F-14As would be bought at a rate of 50 per year for FY 74 through FY 76. A half year's buy of 24 F-14As was added for delivery in the first half of calendar 1978 to match the introduction of the production choice.

For comparison purposes, two F-14A choices were noted, the first of which followed the 50 per year plan through the 174 airplane buy, but then shifted to the 72 per year rate which the other program choices attained. The second F-14A program was one which shifted to 72 airplanes per year starting in FY 75.

In all cases, 400 airplanes were priced after the 174 F-14As, making a total of 574 airplanes for comparison.

As can be seen, there is virtually no difference in price between the F-15, the F-14A, and the F-14D with a TF30 engine, following the basic procurement plan. The F-14D with the F401 engine is slightly more expensive, and the F-4 about 25% less expensive. A continuation of the F-14A at a reasonably economical rate of 72 per year is seen to be over a billion dollars less expensive than embarking on the prototype and F-15N route.

The figures presented are as they existed on 13 June 1973. Minor adjustments in the program will, of course, change individual figures, but the overall conclusion will remain that significant savings cannot be expected by shifting to alternatives which require large development and support expenditures.

The price picture so dominates this particular issue that other factors need not be discussed in depth, but a few may be of interest.

The capability of the multi-shot AWG-9/ Phoenix may not be required to win every engagement, but it is required to win some. The agenda for engagements with the enemy is seldom available, and never before have we considered it inadvisable to increase our margin of superiority.

The ground attack capability of the current AWG-9 fire control system should not be ignored, nor its capability for future development.

The necessity for a two-man crew became apparent to the Navy when the F-4 was finally configured in 1955. It was the principal reason for its choice over the F8U-3 in 1958. Recent combat experience has strengthened my conviction that the requirement cannot be relaxed.

Despite the emphasis on the fleet air defense mission, one should remember that the F-14A was designed primarily as an air superiority weapon. Its basic flight design gross weight corresponds to the escort mission with Sparrows and accommodates the Phoenix missiles and ground attack weapons as alternate loads. The pilots now flying the airplane are convinced that it is capable of engaging successfully with any known threat in either close-in or long-range engagements.

Before closing, I feel obligated to advise you that many consider me biased in my viewpoint on many of the OSD proposed solutions to our very real problems in weapons procurement. In particular:

I'm opposed to fly-before-buy and prototyping in general because of the higher costs involved. We stopped the practice because we couldn't afford it, not because it was not technically desirable. Prototyping saves money only when projects are failures and must be terminated. Today, the state of the art adequately permits the prediction of failure, it need not be demonstrated.

Extensive operational testing prior to production release falls in the same category, it increases the price of our systems without apparent reason.

"Design to Cost" is an overstated cliche. Cost has been a primary consideration in all of our new naval aircraft for at least the last 20 years. Cost must be controlled in the initial concept, but cannot be treated as a design variable during development. Change has been the primary reason for cost increases. Good programs have held them to a minimum.

High low mixes as a solution to cost problems are not always viable. As this study has indicated, small buys of each may be more expensive than a large buy of the better product.

In summary, my opinion is that we must seek solutions to the F-14 price problem within the program. The preferred solution is to buy the airplanes at a higher rate. If development funds are to be spent they should be applied to the airplane in a way to reduce total program price, and not to develop less capable alternatives.