Tactical Aircraft: Impact of F-22 Production Cost Reduction Plans on Cost Estimates

In 1997, the Air Force and contractors reported that the F-22 production cost could grow substantially and that the contractors should develop cost reductions to offset that cost growth. The Office of the Under Secretary of Defense for Acquisition, Technology and Logistics agreed. Since then, the contractors and the Air Force have been developing and implementing plans to reduce costs by enhancing production technology, improving manufacturing techniques, and improving acquisition practices. Cost reduction plans are categorized as 'challenge", not yet implemented or implemented. This categorization defines the relative progression of these plans toward potentially achieving future cost reductions. Challenge plans are those that are not yet well defined and are not yet close to achieving future cost reductions. Because these challenge plans are not yet well defined, neither Air Force nor Office of the Secretary cost estimators assumed any cost reductions from the challenge plans when formulating their estimates.