I Llllllll Lllll 1111 Ill11 Lllll Ill11 Lllllllll Llll

developedforthe Navy F-14B and the Aircommon core concept.Whileand utilizecommon core partsbustoridenticaland high pressurefan and afterburner,expectedllpercentlessturbine),a thirdF-15 aircraftare to be similar(includingain designthe compressor,the Navy engineexternalusingcom-is to have a largerdimensions.more maximumafterburnerThe F-1433 enginethrustisand weighaboutthan the F-14A engine.The F-14A engineGrumman flightthe two enginesand largerto produceForceis in productiontestprogramand is beingand Navy PreliminaryflighttestedEvaluationin the(NPE) flighttests.The F-14B enginegram schedulewas revisedsor ,and certainAugustl972,is in the developmentotherPrattstage,In July1971, the pro-?to accommodate a change to an alternatechanges designatedand Whitneyas Serieswas workingon thisIIcompres-engines.revisedAs ofdevelopmentschedule.A separateF-14B productionNavy contractenginesat specifiedThe Navy did not exerciseenginesand as a resultof temberfutureforthe procurementin a series1, 1971, optionoptionsthe F-14B willwere voided.necessitateof theof productionforlots.productionAny procurementthe negotiationof anew contract.Weapon controlsystemTo meet multipleweapon controlrolesof the F-14 aircraftthe capabilitiessystem or AWG-9 were expanded to function-P-withof theotherweapons

,Jin additionto the PHOENIX.These weapons includeand -7F) and SIDEWINDER (AIM-g)variousair-to-groundmissiles,to be provided--Air-to-airor miltiplesearch, detection,targets,--Radar launchingagainst singleand trackingradar launchingmultipletargets.for M-61 gun firing.--Computationsforments throughSeptemberair-to-ground11, 1972,equipment,of 466 million.andby the AWG-9 include:--Computationsassociatedcannon,of singleof PHOENIX, SPARROW, or SIDEWINDER missilestargets.--Near simultaneousmissilesagainstwiththe VULCAN (M-61)ordnance.CapabilitiesAs Of Octoberthe SPARROW(AIM-7Eof up to six PHOENIXweapon delivery,the Navy had orderedspares,servicesThis number is intendedLot V.The fiscalyear136 productionand data,to fulfill1973 optionAWG9'sat a ceilingpricethe aircraftrequire-was exercisedon29, 1972.PHOENIX MissileThe PHOENIX is the largestaboardthe F-14.secondaryItand most sophisticatedis to be the primaryto the SPARROWforprimaryPHOENIX is a long-range air-to-a-singlenear-simultaneousor multipleThe guidancea targetitsmissionmissilelaunchesdata providedindependentcapableof beingagainstsystem when within- 10 -Airsuperiority.by the AWG-9 radar,radarFleetof airsystem can home in on enemy electronicby usingown built-inweapon forweapon to be carriedDefense butTheused inmultipletargets.radar-jammers,or track10 milestrackthe targetwithof the target,

At Octoberproduction11, 1972, the Navy had orderedmissileswithdata at a ceilingfiscalyearinformedassociatedpriceus thatthismissiles,and thatprogresspayments.equipment,of 153 million.1973 optionon or beforeoptionCeilingspares,December 1, 1972.services,anditsThe Navyon December 1, 1972 forwas establishedpriceand regularThe Navy was to exercisewas exercised 52.2 million309 pilotas a limitationis to be established180forupon finalnegotiation.SCOPEWe reviewedthe F-14 testmanagement officesystem forchanges in technicalJune 30, 1972,measuringperformance,Selectedby reviewingplans,interviewingcontractorThe reviewand evaluationthe Navy projectprogram progress,schedule,Acquisitionreports,program,and analyzedand cost reportedReport.Informationcorrespondenceand otherin thewas obtainedrecords,and byand Wavy officials.was conductedat the followinglocations:Naval Air Systems Command, F-14/PHOENIX Weapon System ntativeNavy IEssileCenter,Grumman AerospaceHughes AircraftIn our review,developtechnologicalas they were beingOffice,PointNew YorkMug-u, CaliforniaCorporation,BethpageCompany, Culverno,attemptBethpage,City,and Calverton,New YorkCaJLforniawas made to assess the militaryapproaches,or take partmade.- 11 -in programthreat,decisions

CHAPTER2WEAPONSYSTEMSTATUSProgram statuswhich occurredSelectedand a summary of the major changesduringAcquisitionthe year ended June 30, 1972, andReportingis alsoincludedin thischapter.SYSTEMCOST EXPERIENCEThe estimatedcost of the F-14 program,of the PHOENIXmissileestimatedportion,cost progressionexclusivewas 5,272 million.from inceptionthroughTheJune 30,1972 is as follows:AircraftquantityAt469Estimate(mullions 6,166469 6,166 13.1June 30, 1969469 6,373 13.6June 30, 1970722 8,279 11.5June 30, 1971313 5,212 16.6June 30, 1972313 5,272 16.8PlanningestimateDevelopmentestimateAccordingto the Selectedmost of the totalin the quantityAcquisitionUnit costof dollars) 13.1Report(SAR)cost decrease was due to the reductionof aircraft.- 12 -

1,Developmentcosts- airframeand enginesAs shown in the June 30, 1972,development,and F-14Btestand evaluationairframesandrepresentedforofestimatethe changescostenginesan increase1969 developmentSAR, the estimatedof the F-l&Awas 1,460 486 millionofto June 30,research,million.since 974 million.1971,ThistheJanuaryThe reasonswere previouslyreportedby GAO.In fiscal 67 millionyearfromThe reported1972 the development 1,393changeand decreasesto 1,460was thecostsmillion,resultof variousIncreasedcosts for F401 (F-14B)engine developmentand additionalflighttest enginesF-14A weapon -412of dollarsor (decrease) 3914(F-14A)7Navy reprogrammingNet Increaseincreasesas shown below.MillionsIncreaseAdditionaleng ine sincreasedaction(3) 57- net10as above 67- 13 -

*,Procurement- airframecostsThe 1972 was 3,805of 1,387millionofmillion. 5,192sinceThe procurementJanuaryincreaseto 710 aircraftreductionIn fiscalfromand initialmillion.ThistheJanuaryin the 3,814costestimatesin fiscalto estimateestimateofquantityofthe majorwere the planned1970 and theat June 30,millionata decreasewe showed that1972 the procurementmillionthe larger1969reportincludingrepresenteddevelopmentto 301 aircraftyearF-14A,based on a plannedIn our priorto the s,1969 were reportedly463 nd enginessub-1971.estimatedecreasedSome ofor 9 sfundingElectronicsand changesand communicationsTotaldecreaseOtherchangesNet decrease- airframeof(decrease) 23(151(25) (17)8- netas aboveW)-14-

L,The followingJimtableshows the majorchanges whichoccurredthrough30, 1972,Planned ProductionQuantityEstimatedof aircraftcostpXE%iE)AtUnitcost(ZYiiions)June 30, 1969463 5.4 11.7June 30, 1970710 7.0 9-9'June 30, 1971301 3.8 12.6June 30, 1972301 3.8 12.6MilitaryconstructioncostsThe June 30, 1972,million.Thisestimateis an increaseand was reportedformilitaryconstructionof 1.8 millionas due to changes in locatingsincewas 6.7the priora trainingyearbuilding.Grumman lossesAccordingto itsthe Grumman Corporationsultof a largelossannualloston itsreportforthe year 18 million,F-14A program.- 15 -afterended December 31, 1971,tax credits,as a re-

The estimatedanticipatedpre-taxlossdelivery1974 and certainof theotherwhichwas writtenfurtherstated:on the contractfirst86 aircraftcontractoffchangesagainstup to theby midwas 65 millionGrumman' s report1971 earnings.“The contractcontainsfurtheroptionsfor theGovernmentto procurevaryingquantitiesof aircraftIftheGovernmentat specifiedceilingprices.exercisesany or all of these optionsat those ceilingpricesthe Company would incur substantialadditionallosses.Althoughthe Company is proceedingwith theperformanceof the work *****ithas advisedthe Department of the Navy that it considersthe Government’soptionsto be invalidand that it cannot accept ordersfor additionalF-14A aircraftat the ceilingpricesnow specifiedin the contract.The Company has enteredinto discussionswith the Departmentof the Navy toresolvethese variousproblemsbut it is not possibleto predictthe outcome of this matter”.In November9 monthsmilliontheloss1972,Grummanof 1972 iton ectsexpecteddollaran additionallotsof F-14A’sthatthe netIV was 106 millioninformed us thateffort,thatforthelossofoverfirst 20and abovein 1971.Grumman estimatedthroughannouncedestimatedlossof 85 millionlimitprofitatarelossSeptemberofand spare-16-contract1972. 106 millioncomparableto be realizeditems,on thesinceGrummanand thethelatteron F-14B developmentparts.

In testimonyAirPower,on AprilceilinglosepriceDuringof oragreedpendingwithlotforlongan acceleratedreduceyearLaw 92-436,notschedulethe costof producHngloss.Underthe Navy had untilto buy at least1974.However,the dateSeptember26,of not48 additionalin oberauthorizedthanappropri-48 aircraftonto:increasingin the F-14termsboth1972,effortdeliveryof the requiredthe procurementleadof the potentialoptionappropriationsV subject1)forGrumman to extendfirmPublicationsthe amendmentsitscalendar 36In Novemberof the contract,to exercisethe con-V.to somewhat1, 1972,underlotreflecttermsperformsthe Navy authorizedforand the magnitudethe originalit1972,fundingthatifon Lot V,- SeptemberJulythese 105 millionof 48 aircraftGrumman reportedforon TacticalStatesSenate Committee on Armed Services,.1972, Grumman officialsestimatedthat the17,millionthe Ad Hoc SubcommitteeUnitedCompany wouldtractbeforeofthecontractceilingexceptthe contract,- 17 -priceofthein accordancelotV optionwiththe

2) the Navy exercising1972, terminationthat,such factstogetherthe F-14 program.Grumman publiclyprincipallyto the governmentin the eventthe procurementhe reportin severecostat any date priorto December 31,and withinthe presentand conditions.The act alsodeterminesthe optionwithcannotitfinancialwithinhis recommendationsannounced thatthe Secretarybe met under the termsto the CongressOn December 8, 1972,becausethatregardingsuchthe futurethe Navy exercisedand unenforceablespecified90 days afterthey would not proceedwits invalidof Defenseofthe option.under the optionand would resultlosses.Advance Payment Pool AgreementOn AugustCorporation8, 19'7'2, the Departmententeredintoan advance paymenthad providedfundsto Grummanand the Corporationnumerousformation.salarieswhilean Advance Payment Pool AgreementGrwnman withThe agreementprovidesrequirementsItrestrictsand dividendsprovidinga revolvinglinewas pressedfor money to meet itsforinterestof creditthe Navy withGrumman in areasand the purchasediscontinuedat 6 7/8 percentare outstanding.- 18 -theseobligations.and placesfinancialsuch as the paymentor transferforBanks whichnot to exceed 20 million.on Grumman to furnishalsothe advancesof the Navy and Grumman Aerospaceof fixedassetsinof

The agreement 16 million,additionalNovember 16, 1972, 76 million.1973requestedan increase.ofmakingthe totalauthorizedadditionalSecretaryofofadvance payments 54 million.advancesa need by Grumman of 15 millionindicatedofto a totalby the AssistantauthorizedanA Grumman letter 40 millionand De-terminationDecember 11, 1972,of 18 million,documentof 36 million.a totalFindingsthe Navy dated14, 1972, to providewas amended on Septemberin JanuaryThisand FebruarylOtheractionsDuringthe periodwere agreedtionalto betweenfinancialcreasedfirstrelief 2lmilliontestJulyto September1972,severalGrumman and the Navy whichto the contractor.to reflectpartshouldof the effectsPriceaddiwas in-of the lossotherchangesprovideThe contractin December 1970 and certainaircraftcontractualof thechanges asfollows: Increasedcostsof flighttestprogram 9.2Reinstrumentationof replacementaircraft and change in hydrauliclines05Revision to deliveryschedule(includedin the above)- lotsRevision to deliverychanges - lot IIIand otherscheduleI,II11.3Total 21.0Grumman toldin calculatingMillionsus thatitsithad alreadyloss.- sg -takenthisincreaseintoaccount

Funding- airframeand enginesThe Departmentthatthroughdevelopment,of Defensereportsyear 1972 1,199 millionwas appropriated 1,459millionand 3 millionforor a totalincludingamounts calstructionforon fundinga totalthroughprocurement,of 2,661mi ion. 1,498tillionThe totalforF-14con-fundingto June 30, 1972 was 1,257 millionforprocurementof 2,758 million.June 30, 1972.programforand 3 millionThe following(Figures-2O-1 and 2)chartsforcon-show the

APPROPRIATED AND CURRENT PROGRAMFUNDS BY FISCAL YEARRDT&E FUNDSF-14 AIRCRAFTDollars(In Millions)FIGURE 1'AppropriatedFunds500Current ween Appropriatedand Current Program Fundsin a given fiscalyear are the resultsof reprogrammingfundsto or from another program.-21-

FIGURE 2PROCUREMENTFUNDS - F-l.4 AIRCRAFTAPPROPRZATEDAND CURRENT PROGRAMF-14 AIRCRAF'TDollars(In Millions)FUNDSCURRENTPROGRAMFUNDS

Inflation- airframeThe June 30,ratesand engines1972 SAR statedof approximately4 percentment and developmentof the atethe currentamountescalationforprocure-The airframeabnormalat 151 million.portionescalationThe followingof costsof inflationestimate.Planningestimatea)EscalationCost ionsof dollars) 2254.1%4.2%Planningb)Includes4 percentescalationfor productioncosts and 5 percentescalationfor researchand developmentcosts accordingto Navy officials,totalthe programdevelopmentfiguresnotshown in SARcostsThe estimatedofestimate 256alPHOENIX missileforincludedadditionalAllowanceFor PriceIn Program Acquisitionportionitand 5 percentincludedestimatedsummary shows theincludedcoststhatprogramcostas of June 30,and productionmissiles.- 23 -of the1971,DuringPHOENIX missilewas 1,252the yearendedmillion

June 30, 1972, 1,114the totaldue to the reductionin initialmade to adjustObjectivesparescalledby 138 million,in totalof productionand fleetthe PHOFNIX programsupport.a lessermissilescost isand a re-These reductionsto agree withforprocurementtowerea 1974 Programnwaber of missilestoinventory.- PHOENIX missileAn inflationto portionsdecreasein the quantityMemorandum whichbe in the Navy'sInflationcost decreasedThe 138 millionmillion.ductionprogramof thisfactorof 4 percentcompounded annuallyestimate.- 24 -was applied

AllowanceIn Programfor enta)estimateNoneNoneCurrentestimateb)-millions 12010.8%C)a)Thereeitherb)Amount of inflationaryallowanceincludedin thecurrentestimateof procurementcost.Noinflationaryallowanceis relatedto the development phase of the PHOENIX program since thisphase was essentiallycompleteby June 30, 1970.This amount is based upon a rate of 4 percentcompounded annually,beginningwith fiscalyear1972.ClThis percentageis the ratioof inflationaryallowanceincludedin the estimatedprocurementcost to the totalprogram acquisitioncost ( 120million/ l,ll4million).The ratioof inflationaryallowanceto estimatedprocurementcost ( 120 million/ 948 million)is 12.7 percent.Fundingis no allowancefor inflationthe planningor developmentincludedestimate.in- PHOENIX missileThe programfundingthroughJune 30,1972is asfollows.Amount( millions)Appropriated 713Obligated 661Expended 535The followinghscalchartsshow programyear 1972(Figures 3, 4)- 25.-.fundingthrough

.t-.-.;.-‘.INmI.

--.--.

SYSTEM SCHEDW EXP-EEUENCEAirframeand ionFlightof the losswere citedanotherof the firstwere reporteddelaysdevelopmentwas citedFlightprogramtesttionaldelaysa resultIn addition,6, 1972,the lossofbut no pro-and was completedand Survey(BIS)and were re-scheduledof furtherin December 1970,- F-14ABoard of Inspection2 months,effectsin the SAR.The second iW?Ebegan Julylaircrafton June 30, 1972, was reportedaircraftgram impact1972and continuingas causes of the slippages.testat June 30, 1972.slippagetrialsto beginslippedFebruaryin the F-14 developmentAugust15,an addi1973,flightastestschedule.F-14A scheduleThe firstproductionwas reportedlyductiondeliveredand flightdesignatedaircraftDifferencesaircrafttest2 months laterdelays.as the productwas not scheduledin configurationand the productThe expectedbaselinedate forthe SAR was October1972.as number 13 on the SAR)(citedin May 1972 due to pro-Actually,baselineaircraftto be deliveredbetweentestaircraftin March of 1972.untilHowever,-static28-(up to number 20)and recordedtestsour reviewThisDecember 1972.aircraftare to be identifiedcompletingnumber 21 wasincludedby Grumman.inof Grumman's

groundtesttestprogramwas notshows thatscheduledthestaticto be completedarticleuntilloadNovember1972.The 24,willforactthishaveto maintainwas n,in trainingand maintenancepersonnelthefirstF-14slippedtestor thethe aircraft,didisnottimeJanuaryTheby whichsquadron.when the Navy willincludingchange1973.delays.the dateF-14fleetto Julyprogramdeployabledate,squadron3 monthswe were told,firstforscheduledsquadronto flightdate,The Navy supporting and spareforreportedlyoperationalbe ablethatairwingsquadrons.datedateNavy willand remainedcrewsF-14The SAR he replacementas the replacementThe scheduledfleetlastWe werereplacementtheactivatingsinceprovidingthe priortrainyearand1974.scheduleThe deliveryduringin Aprilfiscal1973.dateyearfortheF-14B prototype1972 and accordingNo schedulemilestones- 29 -to SAR ishad notstillwere includedchangedexpectedforthe

.:engine in the June 30, 1972, SAR. However, as discussedlaterin thischapter,not scheduledJune 1973.for Militarywillber 1973 or justprioruntilof the F-14B protoJune 1973 and thisusing prototypeof F401 enginesthe F-14B isTestingflightnot be made untilbe accomplishedInstallationQualificationthe firstActually,type aircraftwillthe F401 engine for(Y401) engines.is not scheduledto NPE I foruntilNovem-the F-14B prototypeaircraft.PHOENIXmissileAt June 30, 1972, four of the scheduledreportedslippagesin the SAR showed slippages.The milestonesproductionSlippagecontractBegin Navy Technical2 monthsEvaluationBegin Board of InspectionFleetintroductio

ment and publications. Engines The Navy originally planned two versions of the F-14 aircraft. The first, the F-14A, uses the TFSO-P-412 engine which is an outgrowth of the TF30-P-12 engine developed for the F-ill aircraft. The second version, the F-