Darleen Druyun, the principal deputy assistant secretary of the Air Force for acquisition and management, said that the Air Force will use the $1.3 billion in research and development funding provided by Congress to fund the next six test aircraft using an incremental approach.

On Dec. 9, the DoD will hold a Defense Acquisition Executive program review of the F-22. If that review is successful, the Air Force will exercise an option to enter into a contract with Lockheed Martin for production of those six aircraft and advance production of parts for the next 10 aircraft, Druyun said.

Druyun testified before the House Government Reform Committee's Subcommittee on National Security, Veterans Affairs and International Relations. Panel Chairman Rep. Christopher Shays (R-Conn.) said he called the hearing to "revisit the issues of F-22 cost control and development delays."

In her written testimony, Druyun said that the F-22 program performed better than expected in 1999 in meeting its cost goals. Last March, the General Accounting Office reported that the F-22 program was projecting cost increases of $667 million in the aircraft's engineering, manufacturing and development program.

In response to that projection, the service undertook several initiatives to control costs, including scrubbing development costs, using management reserve funding and deferring non-essential combat capability, Druyun said.

As of October 1999, the F-22 program had realized $238 million of the projected $667 million increase in costs, Druyun said.

But, "despite this realization of cost risk, the Air Force Cost Analysis Improvement Group determined that the EMD program could be completed within the cost cap," Druyun said. "Key to this positive evaluation has been the better-than-expected achievement of cost savings."

In March 1999, the F-22 program team proposed $660 million in cost savings initiatives. To date, the program has realized $860 million in savings from those initiatives, according to Druyun's testimony.

Because of this, "Senior Air Force and industry leaders are confident the F-22 program will meet its production cost target and remain within its cost cap, provided program funding remains stable," Druyun said. The cost caps are $18.8 billion on EMD and $39.8 billion on production.

The General Accounting Office is not quite as sanguine on the Air Force's ability to stay within the cost caps. The congressional auditors are in the midst of a review of the F-22's EMD program that they intend to complete in March 2000.

"Preliminary indications" show that "sufficient cost reductions have not been implemented to ensure that EMD activities, as planned, can be completed within the cost limitation," according to testimony submitted by Louis Rodrigues, GAO's director of defense acquisition issues. (Article Courtesy Lockheed Martin Press Release)