“This afternoon the Air and Land Forces Subcommittee meets to receive testimony regarding Department of the Air Force modernization programs.  We welcome our witnesses: Mr. David G. Ahern, Director, Portfolio Systems Acquisition in the Office of the Secretary of Defense; Lieutenant General Daniel J. Darnell, Air Force Deputy Chief of Staff for Air, Space and Information Operations, Plans and Requirements; Lieutenant General Mark D. Shackelford, Military Deputy in the Office of the Assistant Secretary of the Air Force for Acquisition; Lieutenant General Raymond E. Johns, Jr., Air Force Deputy Chief of Staff for Strategic Plans and Programs; and Mr. Michael Sullivan, Director for Acquisition and Sourcing Management in the Government Accountability Office (GAO).

 “I would first note that we just recently received some of the detail of the fiscal year 2010 budget request.  The request did not include any information or data on fiscal year 2011 and beyond plans, programs, or budgets.

 “Overall, the Air Force has faced a number of challenges in executing its modernization programs, particularly the F-22, the F-35, the Combat Search and Rescue-X (CSAR-X) helicopter, the KC-X tanker, and the Next Generation Bomber programs. 

 “The current F-22 program of record is 187 F-22s.  Yesterday the Air Force Chief of Staff, General Schwartz, testified that 243 aircraft is the right number, but 187 is quote ‘the affordable number,’ unquote.  The budget request does not include any more F-22s and line shutdown activities are proposed to begin in fiscal year 2010.

 “The Air Force has just taken the lead of the Joint Strike Fighter (JSF) Program Office.  That program continues to have cost and schedule problems, with testing further delayed and greater development and procurement concurrency being incurred. 

 “Yesterday the Secretary of the Air Force, Michael Donley, was quoted regarding the JSF, quote ‘we need to stay on cost and schedule’ unquote.  We have heard that refrain before on other major programs. 

 “Let me start with the first line of the recent GAO report:  Quote, ‘JSF development will cost more and take longer to complete than reported to Congress in April 2008,’ unquote.

 “The facts as provided by the GAO are that the JSF development program in 2001 was estimated to cost $34 billion with an aircraft average aircraft procurement unit cost of $69 million.  The December 2007 estimated development cost was $44 billion -- a 30 percent increase -- and an aircraft average unit cost of $104 million -- a 50 percent increase per aircraft over 2001.  And the initial operation capability date has slipped at least two years, to 2012.

 “Last year’s projection for JSF research and development was $2.1 billion.  This year the request is $3.6 billion -- a 67 percent increase.  That is without the cost of an alternate engine program. 

 “I would also note that under the current procurement plan 273 JSFs will be procured before flight testing is projected to be complete.

 “Also yesterday, General Schwartz was quoted as saying that he would prefer a more rapid production rate for the JSF.  Yet, the Air Force request for JSF this year is two aircraft fewer than projected last year for this year.

 “Regarding other Air Force programs, the CSAR-X helicopter program that would have procured 141 helicopters has been canceled in favor of a new, undetermined CSAR-X program that Secretary Gates believes will have more realistic requirements and if acquired, be a joint service program.

 “The KC-X program, that would procure 179 aerial refueling tankers to replace the 48-year old KC-135 tankers, was canceled last year after the attempted acquisition failed following a GAO protest.  A new request for proposal will be issued this summer, with a source-selection planned for the spring of next year.  It has not yet been announced whether OSD or the Air Force will execute the source selection.

 “The Next Generation Bomber program, which would have replaced the aging B-52 fleet has also been delayed.  We are told that a new program may be started, pending a review of the requirement and technology during the Quadrennial Defense Review, later this year. 

 “Facing funding challenges in 2010 and in the future years defense program, the Air Force has decided to propose the accelerated retirement of about 250 fighter aircraft.  The Air Force indicates this will save $351 million in fiscal year 2010 and $3.5 billion across the future years defense program. 

 “In the aggregate, the Air Force is facing significant changes in fiscal year 2010 to its modernization programs. 

 “Regarding the specific issue of the Joint Strike Fighter competitive or alternate engine program:

 “Overall, as I mentioned, the Joint Strike Fighter testing schedule continues to slip to the right while the Pentagon insists on maintaining the current production schedule.  This creates more development and production concurrency -- much like what was experienced in the Army’s Armed Reconnaissance Helicopter program.

 “The current Joint Strike Fighter baseline engine has barely begun flight testing; has yet to even fly in the most stressing, vertical flight and landing modes; and will not have its first flight in that flight regime until September.  Aircraft design and engine testing problems have thus far caused over a two year slip in the F-35B’s first vertical landing.

 “The baseline engine for the Joint Strike Fighter had two turbine blade failures within the past two years, requiring redesign, remanufacture, and delaying the flight test program.

 “In April, the former Air Force Assistant Secretary for Acquisition, Sue Payton, cited the Joint Strike Fighter baseline engine cost growth as quote, ;an ongoing concern.’  Continuing the quote – ‘from fiscal year 2007 to 2008, the Joint Strike Fighter engine costs have grown causing a $3 million increase to the short-takeoff vertical landing aircraft’s unit fly away costs,’ unquote.

 “Without an alternate engine program, current Air Force plans call for approximately 90 percent of all Air Force manned fighters and a substantial percentage of all of the other service manned fighters to be dependent on one engine type, from one manufacturer, by 2030.

 “The last time the Air Force proceeded with such a plan was the acquisition of the F-15 and F-16 aircraft.  That resulted in dependence on one engine type for a large proportion of the Air Force fighter fleet.  Because of engine reliability and durability problems in the 1970s, the Air Force ended up with a large percentage of its F-15 fleet grounded. 

 “As a result, in Europe, to keep up with the demands for refurbished engines due to much lower engine life than planned, the Air Force bought a small fleet of cargo aircraft and shuttled F-15 engines back and forth between bases and a centralized engine depot.

 “The engine problems that resulted in an alternate engine program in the late 70s were not discovered until two years after initial operational capability was achieved for the F-15.  Currently, initial operational capability will not be achieved for the F-35B until 2012 -- 5 years after the Pentagon quit funding the alternate engine.

 “The Pentagon fully funded the alternate engine program in the Pentagon’s annual budget request for ten years, fiscal year 1997 through 2006.  Cost overruns in other areas of the Joint Strike Fighter program caused the Pentagon to discontinue its budget requests for the alternate engine.

 “Three studies the committee asked to have done in 2007 were inconclusive with regard to the financial benefits of competition for engine development, procurement and operations and support.

 “However, all three reports cited numerous likely non-financial benefits of engine competition, including insurance against fleet grounding, contractor responsiveness, technological innovation, force readiness, and industrial base breadth.

 “We look forward to our witnesses’ opening remarks.”