Detailed Information on the
Rotary Wing Programs Assessment

Developing a DoD "Rotary Wing Roadmap" that reviews the Services' programs as a cumulative whole and establishes a plan for rotary wing capabilities that DoD seeks to develop in the future.

Bringing the Marine Corps' UH-1Y/AH-1Z upgrade program back on cost and schedule by addressing supply chain management and Earned Value Management challenges at Bell Helicopter.

Achieving lower unit costs for each program -- within the scope of existing contracts -- currently in production by the end of fiscal year 2008.

Measure: Total number of aircraft to be produced by the end of Fiscal Year 2011

Explanation:The purpose of DoD's rotary wing aircraft program is to produce an inventory of rotary wing aircraft that meets the needs of Combatant Commanders. Thus, the key measure of the long-term success of this program is whether it meets its production targets over the Future Years Defense Plan (FYDP) laid out in the President's Budget.

Measure: Cost targets for given production quantities

Explanation:These are the cost targets set in the President's Budget for production of the targeted quantity of each aircraft. Dollars are in billions.

Measure: Number of V-22 aircraft programmed/budgeted vs. actual

Explanation:Efficient program execution results in actual contracted aircraft numbers that match the programmed/budgeted quantities.

Measure: Growth in unit costs (PAUC) from original estimate for V-22.

Explanation:This measure evaluates the growth in unit cost for each program from the original baseline estimated unit cost to the most recent unit cost figure. Decreased unit costs reflect program efficiencies, while increased unit costs reflect a combination of decreased program efficiencies and/or decreased unit purchases.

Measure: Growth in unit costs (PAUC) from original estimate for ARH.

Explanation:This measure evaluates the growth in unit cost for each program from the original baseline estimated unit cost to the most recent unit cost figure. Decreased unit costs reflect program efficiencies, while increased unit costs reflect a combination of decreased program efficiencies and/or decreased unit purchases.

Measure: Growth in unit costs (PAUC) from original estimate for CH-47F.

Explanation:This measure evaluates the growth in unit cost for each program from the original baseline estimated unit cost to the most recent unit cost figure. Decreased unit costs reflect program efficiencies, while increased unit costs reflect a combination of decreased program efficiencies and/or decreased unit purchases.

Measure: Growth in unit costs (PAUC) from original estimate for Longbow Apache.

Explanation:This measure evaluates the growth in unit cost for each program from the original baseline estimated unit cost to the most recent unit cost figure. Decreased unit costs reflect program efficiencies, while increased unit costs reflect a combination of decreased program efficiencies and/or decreased unit purchases.

Measure: Growth in unit costs (PAUC) from original estimate for MH-60S.

Explanation:This measure evaluates the growth in unit cost for each program from the original baseline estimated unit cost to the most recent unit cost figure. Decreased unit costs reflect program efficiencies, while increased unit costs reflect a combination of decreased program efficiencies and/or decreased unit purchases.

Measure: Growth in unit costs (PAUC) from original estimate for MH-60R.

Explanation:This measure evaluates the growth in unit cost for each program from the original baseline estimated unit cost to the most recent unit cost figure. Decreased unit costs reflect program efficiencies, while increased unit costs reflect a combination of decreased program efficiencies and/or decreased unit purchases.

Measure: Growth in unit costs (PAUC) from original estimate for UH-1/AH-1.

Explanation:This measure evaluates the growth in unit cost for each program from the original baseline estimated unit cost to the most recent unit cost figure. Decreased unit costs reflect program efficiencies, while increased unit costs reflect a combination of decreased program efficiencies and/or decreased unit purchases.

Measure: Growth in unit costs (PAUC) from original estimate for UH-60 UPGRADE.

Explanation:This measure evaluates the growth in unit cost for each program from the original baseline estimated unit cost to the most recent unit cost figure. Decreased unit costs reflect program efficiencies, while increased unit costs reflect a combination of decreased program efficiencies and/or decreased unit purchases.

Measure: Number of UH-1 aircraft programmed/budgeted vs. actual.

Explanation:Efficient program execution results in actual contracted aircraft numbers that match the programmed/budgeted quantities.

Measure: Number of MH-60R aircraft programmed/budgeted vs. actual.

Explanation:Efficient program execuion results in actual contracted aircraft numbers that match the programmed/budgeted quantities.

Measure: Number of MH-60S aircraft programmed/budgeted vs. actual.

Explanation:Efficient program execution results in actual contracted aircraft numbers that match the programmed/budgeted quantities.

Measure: Number of UH-60M aircraft programmed/budgeted vs. actual.

Explanation:Efficient program execution results in actual contracted aircraft numbers that match the programmed/budgeted quantities.

Measure: Number of ARH aircraft programmed/budgeted vs. actual.

Explanation:Efficient program execution results in actual contracted aircraft numbers that match the programmed/budgeted quantities.

Measure: Number of Apache Blk III aircraft upgrades programmed/budgeted vs. actual.

Explanation:Efficient program execution results in actual contracted aircraft numbers that match the programmed/budgeted quantities.

Is the program purpose clear?

Explanation: The purpose of the Department of Defense's (DoD's) rotary wing aircraft fleet is to develop and procure an inventory of rotary wing aircaft that provides the capabilities needed to satisfy the mission requirements of US forces. Each type of rotary wing aircraft satisfies specific mission requirements to enable US forces to respond effectively to the full spectrum of military operations.

Evidence: The requirement satisfied by each rotary wing aircraft program is specifically described in each program's Operational Requirements Document (ORD). The purpose is also provided in Selected Acquisition Reports, Defense Acquisition Executive Summaries, and each year's budget documentation.

Does the program address a specific and existing problem, interest, or need?

Explanation: Each rotary wing aircraft program provides a specific capability that addresses a specific need, identified and validated by the Joint Requirements Oversight Council.

Evidence: The need satisfied is identified in each program's Operational Requirements Document.

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: The Department of Defense's rotary wing programs are not redundant or duplicative of other Federal or non-Federal efforts. While civilian rotorcraft may offer similar performance, they are not capable of functioning as required within the DoD's joint military operational environment. Military operations may require additional hardening, engine durability and power, weaponization, compatible communications, and other protection.

Evidence: Operational Requirements Documents list requirements that cannot be filled by any other state, local, or private effort.

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: Although the Joint Capabilities Integration and Development System (JCIDS) is designed to avoid duplication of capabilities and to determine when rotary wing aircraft are the best solution for a capability gap, there is no Department-wide "roadmap" that lays out a short and long-term plan for the composition and integration of DoD's entire rotary wing fleet. A plan laying out DoD's vision for where it is going with its entire set of rotary wing capabilities might find areas of duplication or improved efficiencies in a set of programs that the Services currently plan and manage largely independent of one another.

Evidence:

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: DoD allocates and executes its resources through the Planning, Programming, Budgeting and Execution (PPBE) process and the DoD 5000 series, which governs the acquisition of rotary wing aircraft. These two processes aim to ensure that the correct levels of funding are allocated to each program and that the funding is targeted to producing aircraft with the capabilities required by US forces, which are the ultimate beneficiaries of these programs.

Evidence: Annual President's Budget submissions and accompanying justification materials explain the resourcing plans for each rotary wing program. The guidelines and framework for the DoD acquisition system, within which resources are executed, can be found at http://akss.dau.mil/dag/.

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: The long-term measure of rotary wing programs' performance is the extent to which DoD meets its cumulative annual production targets for each type of rotary wing aircraft procured and delivered over the Future Years Defense Plan (FYDP). This measure directly reflects the program's purpose of providing an inventory of rotary wing aircraft with a variety of capabilities that allow U.S. forces to fulfill their assigned missions. Since the purpose of the rotary wing program is to develop and produce an inventory of rotary wing aircraft that suit mission needs, the key measures of this program are output (number of aircraft produced on cost) rather than outcome measures. The FY2007 President's Budget sets forth the following cumulative production targets through FY2011: UH-60 - 273; V-22 - 159; MH-60S - 116; MH-60R - 144; UH-1/AH-1 - 106; ARH - 254.

Evidence: FY2007 President's Budget submission.

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: Targets and timeframes for fielding new rotary wing aircraft have been developed for all programs, and are considered ambitious in light of the engineering challenges associated with developing and building rotary wing aircraft. The heavy use of rotary wing aircraft in the Global War on Terror has increased the need to field new and upgraded aircraft as quickly as possible to support forces in theaters of operations.

Evidence: Annual President's Budget documentation provides delivery and fielding schedules. Services-developed plans (Army Aviation Modernization Plan) and roadmaps also provide long-term plans.

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: The success of each rotary wing program's success is measured by the attainment of annual production quantity and cost targets set in the President's Budget submission. Each program also has milestones within the acquisition life cycle, and unit cost variance targets that measure the program's ability to produce aircraft within budget. Since the purpose of the rotary wing program is to develop and produce an inventory of rotary wing aircraft that suit mission needs, the key measures of this program are output (number of aircraft produced on cost) rather than outcome measures.

Evidence: Annual President's Budget submissions, Selected Acqusition Reports, and Defense Acquisition Executive Summaries.

Does the program have baselines and ambitious targets for its annual measures?

Explanation: Each rotary wing program utilizes an Acquisition Program Baseline and the Performance Measurement Baseline in assessing annual performance. The Acquisition Program Baseline lists the Key Performance Parameter requirements, the major program/decision reviews, schedule and cost performance objectives, and thresholds to which the program is assessed. The Performance Measurement baseline assesses cost, schedule, technical and management performance. Given the current high demand for rotary wing capabilities in the Global War on Terror, rotary wing programs have ambitious baselines and schedules aimed at fielding capabilities to US forces as quickly as possible.

Evidence: Selected Acquisition Reports and Defense Acquisition Executive Summaries contain baselines and targets, and annual President's Budget submissions contain annual production and cost targets for a 5-year period called the Future Years Defense Plan (FYDP).

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: Program managers and contractors on the whole strive to ensure that partners support the overall goals of the program and measure and report on their performance as it relates to accomplishing these goals. However, the prime contractor for the UH-1/AH-1 and Armed Reconnaissance Helicopter programs and co-lead on the V-22 program has lost its accreditation in Earned Value Management (EVM), one of the main methods used to track cost and performance. Until the contractor recitifies this management deficiency, it's ability to work toward the annual and long-term goals of these programs is seriously impaired.

Evidence:

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: The Department has not provided evidence that independent evaluations of sufficient scope and quality are conducted for rotary wing programs on a regular basis.

Evidence: GAO Report 06-391, which includes one-page reviews of three rotary wing programs, was the evidence provided of independent evaluatins.

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: The DoD Acquisition and Planning, Programming, Budgeting and Execution (PPBE) processes work cooperatively to ensure that program goals are adequately funded, and resources and/or goals are adjusted based on each program's performance related to its long-term and annual performance measures. Annually, DoD uses this process to adjust resources based on programs' performance and changes in requirements.

Evidence: The President's Budget documentation shows how resources and schedules have been adjusted based on program performance. Comparison of Selected Acquisition Reports will also reveal adjustments.

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: All program plans, goals and progress are reviewed on a regular basis. Failure of a program to meet cost, schedule or technical commitments requires extensive notification and replanning efforts to correct the deficiency and must be approved by multiple stakeholders outside of the program office. Within the Army, G-3 Aviation Task Force, Aviation Senior Leaders, and Program Executive Officer Aviation periodically discuss the status of the Aviation Modernization Plan and the performance of individual programs. The overall strategic plan and individual program plans are modified as needed.

Evidence: Submitted Program Deviation Reports and updates/modifications to guiding program documentation such as the Acquistion Program Baseline; Selected Acquisition Reports and Defense Acquisition Executive Summaries serve to document program cost/schedule breaches and note steps being taken to correct such problems as they arise.

Has the agency/program conducted a recent, meaningful, credible analysis of alternatives that includes trade-offs between cost, schedule, risk, and performance goals, and used the results to guide the resulting activity?

Explanation: DoD conducts an analysis of alternatives at the start of each rotary wing acquisition program or when there is a fundamental change to the program. The results of these analyses guide decisions on the kinds of capabilities to include in each program, and redundant capabilities that might be dropped.

Evidence: Analyses of Alternatives were conducted for every rotary wing aircraft program before each was initiated.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: It is standard in rotary wing programs that Program Executive Officers and individual rotary wing programs collect performance information on a monthly basis from the Contractors, Systems Commands, the Defense Contract Management Agency and program team members to manage programs and improve performance. However, the prime contractor for two major rotary wing acquisition programs and the co-lead for DoD's most expensive rotary wing program currently lacks an accredited Earned Value Management (EVM) system and has experienced large cost and schedule overruns in the UH-1/AH-1 program. The lack of an accredited EVM system casts doubt on the ability of the Army and Navy to rely on the contractor's data to manage program performance.

Evidence:

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: Acquisition directives assign accountability to program managers for cost, schedule, and performance. Contractual requirements are stated in performance terms. Cost and schedule overruns in current rotary wing acquisition programs are well-documented, and in each case the program manager is working with the prime contractor to rectify the overruns.

Evidence: October 30, 2002 Deputy Secretary of Defense guidance memorandum, The Defense Acquisition System, provides guidance on program manager (PM) accountability. Program Managers receive charters upon assignment, giving authority, responsibility, and accountability. Selected Acquisition Reports and Defense Acquisition Executive Summaries detail ongoing actions being taken to rectify program cost and schedule breaches.

Are funds (Federal and partners') obligated in a timely manner, spent for the intended purpose and accurately reported?

Explanation: Each rotary wing program manager closely tracks the obligation and expenditure of appropriated funds to ensure that funds are obligated and expended to achieve program cost and schedule goals. In addtion, DoD budget reviews include a review of obligation and expenditure data to ensure that funds are obligated in a timely manner, and in accordance with DoD standards.

Evidence: Obligation data from the Department of Defense; Report 1002 on program funding execution; Cost variance data from Selected Acquisition Reports and Defense Acquisition Executive Summaries.

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: Efficiency in rotary wing programs is measured by the reduction of unit costs from the program baseline. Each program publishes an Acquisition Strategy Report (ASR) that must be approved at the Service or OSD level. This document describes the program plan for contracting and competition. All ASRs and contracts include requirements for reporting costs and progress to be measured against the program baseline. The target for all rotary wing programs is to reduce unit costs by 5% below the program baseline.

Evidence: Selected Acquisition Reports, Program level Acquisition Strategy Reports, Earned Value Management data, FAR/contract clauses.

Does the program collaborate and coordinate effectively with related programs?

Explanation: All programs collaborate with related programs through regular working groups, Interface Control Documents, common governing documents. These relationships are usually proven during operational testing and must be deemed operationally suitable and effective before the program can advance to the next phase. The Army has established an office at Headquarters, Department of the Army level to support integration during the transformation process. Program integration is a routine issue for Army aviation programs. These programs typically integrate survivability and communications equipment developed by Communications-Electronics Command vendors, weapons developed by either or both the Aviation and Missile Command and/or the Tank, Armaments, and Automotive Command.

Evidence: Operational Requirements Documents, Interface Control Documents, Test and Evaluation Master Plans. The Army develops and publishes interface control documents as a key function of each program management office and part of this process. These documents support multi-system integration on individual platforms. They are used routinely.

Does the program use strong financial management practices?

Explanation: DoD's financial management system is being improved, but slowly. No audit reports showing that rotary wing aircraft programs are free of internal control or other financial management weaknesses have been provided.

Evidence: There are no reports that specifically cite DoD rotary wing aircraft programs for material financial weaknesses; however, none of the audits specifically looked at that aspect of the programs. Numerous audits document DoD's financial management weaknesses. Because of the magnitude of the problem, DoD is unlikely to obtain an unqualified opinion for some time.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: DoD has recently completed an effort to baseline the value of all military equipment -- including rotary wing aircraft -- a necessary first step in placing military equipment on the DoD balance sheet. The baseline will be developed for inclusion with balance sheets developed to reflect FY 2007. In addition, an action plan has been developed to re-certify Bell Helicopter's Earned Value Management system, and that contractor has also developed an action plan to rectify cost and schedule breaches in the UH-1Y/AH-1Z program.

Evidence: FY 2007 DoD consolidated balance sheet; Bell Helicopter and the UH-1/AH-1 Program identified problems in Bell's supply chain management that resulted in necessary parts not being available when needed on production lines. Bell is taking steps to address and improve its supply chain management so that future programs will not be affected in the same manner.

Is the program managed by maintaining clearly defined deliverables, capability/performance characteristics, and appropriate, credible cost and schedule goals?

Explanation: Each rotary wing aircraft program has specifically defined, credible performance characteristics, cost and schedule timelines and goals, and deliverables. These are identified in Operational Requirements Documents, Selected Acquisition Reports, and annual budget documentation.

Evidence: Selected Acquisition Reports, Operational Requirements Documents, Annual President's Budget Documentation.

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: While rotary wing aircraft are being produced to meet the needs of US forces, many rotary wing programs currently in production have either cost overruns or schedule overruns, and some programs have both. Several programs have had to "rebaseline" -- or shift larger production quantities into later years -- often due to cost concerns or an inability to meet planned production targets. In addition, procurement unit costs in most rotary wing programs have significantly increased over original estimates.

Evidence: Selected Acquisition Reports, President's Budget Submissions.

Does the program (including program partners) achieve its annual performance goals?

Explanation: While rotary wing aircraft are being produced to meet the needs of US forces, many rotary wing programs currently in production have either cost overruns or schedule overruns, and some programs have both. Several programs have had to "rebaseline" -- or shift larger production quantities into later years -- often due to cost concerns or an inability to meet planned production targets. In addition, procurement unit costs in most rotary wing programs have significantly increased over original estimates.

Evidence: Selected Acquisition Reports; Defense Acquisition Executive Summaries; Annual President's Budget submissions.

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: No evidence has been provided that demonstrates consistent achievement of efficiencies across rotary wing programs. In fact, most of the Department's rotary wing programs have experienced significant increases in unit costs over original program estimates.

Evidence: Selected Acquisition Reports; Defense Acquisition Executive Summaries; Annual President's Budget submissions.

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: Defense Department rotary wing aircraft programs compare favorably with similar commercial programs. DoD programs tend to be more expensive than commercial programs with generally similar applications. However, commercial techniques are not necessarily transferable to the development and support of DoD aviation products. Requirements for DoD aviation programs are more stringent than those of commercial aircraft because of the multiple environments the aircraft are expected to operate in and the reliability required to insure the safety of aircrew and the combat effectiveness of aviation systems.

Evidence: Commercial versions of military rotary wing aircraft are procured by other government agencies, state and local governments, police forces, and private companies. These other purchasers would probably not buy a commercial version of a military product unless the DoD program resulted in quality products.

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: The Department has not provided evidence that independent evaluations of sufficient scope and quality are conducted for rotary wing programs on a regular basis.

Evidence:

Were program goals achieved within budgeted costs and established schedules?

Explanation: Certain rotary wing programs have solid records of cost and schedule performance. However, a number of programs suffer from cost overruns, schedule overruns, or both. The most expensive rotary wing program, the V-22, has had to significantly reduce its annual production quantities from its original plan, while the UH-1/AH-1 program is currently experiencing large cost and schedule overruns and other programs have experienced substantial unit cost increases.

Evidence: Selected Acquisition Reports; Defense Acquisition Executive Summaries; Annual President's Budget Submissions.