design to permit installation of the reconnaissance sub-system. This will be accomplished by the use of a removable pallet in the weapons bay which will contain day/night-all-weather improved sensors and reconnaissance equipment. Aircraft changes will be incorporated in the basic F-111D to interface the reconnaissance sub-systems with the aircraft as well as the installation of reconnaissance control and test panels in the crew compartment. A total of $98.4M has been estimated to complete the development program. The production program is estimated at $750M.

Cost to complete contracts

Costs incurred through 31 May 1969 and the estimated cost to completion for RDT&E and Production are shown in Figure 12.

The cost to complete the RDT&E includes:

1. Aircraft structural changes and modifications to the refrigeration system, cabin air and rain removal.

2. Completion of the advanced avionics development including flight test.

3. Procurement of engine spare parts and overhaul services in support of flight test.

4. Pen Aids testing.

5. Systems evaluation testing.

6. Support requirements at government activities supporting flight testing and wind tunnel testing.

7. Advanced engine programs.

8. Flight test and ground testing FB peculiar systems.

9. Completion of FB advanced avionics systems.

10. Design Engineering on reconn pallet for insertion in the Weapons Bay. 11. Advanced Sensor Development.

12. RF testing (Flight, ground and wind tunnel).

13. RF Systems Evaluation.

The cost to completion for production contract represents funding required to complete manufacture and support of 489 aircraft (excluding Initial Spares) with the following configuration mix:

The GD/FW costs to complete include over-target projections as follows:

1 The percentage of cost represents the ratio of estimated cost at completion to the "government share" of over-target.

FORCE REDUCTION IMPACTS

The effects of some form of reduced program (in terms of aircraft or avionics) would certainly depend on the specific reduction. Any reduction of present contract buy, or follow-on buy, would be undesirable from Air Force point of view. The magnitude can be measured in the cost and capability trade depending on the replacement aircraft, if any.

In light of the roles of tactical air:

Counter air.
Interdiction.

Close support.

The force structure is dependent on a balanced mix of inventory aircraft. Without the F-111, tactical air is severely restricted by night and weather. Against complex targets, blind radar delivery accuracy of the F-111D vs. the F-111A at typical low levels and medium to high speed is as follows:

Against difficult, complex targets that are fixed, when the F-111A accuracy degrades to [deleted] the F-111D, due to improved radar, can maintain a [deleted] CEP. Against moving targets on the ground, the F-111D can detect and track, while the F-111A has no capability. Additionally, the F-111D has a unique capability to detect, track and attack a low flying aircraft (look-down). This is achieved without regard to weather or time of day/night, without tanker support, without ECM support, without air cover, without suppression support. Further, it must be recognized that day visual attacks provide the potential enemy with freedom from interdiction attack over 60% of the time (80% in European theater). The capability of the F-111 voids that freedom.

The presently approved F-111 Program is as follows (Sq/VE):

If the FY 70 and subsequent buys were cancelled, force structure would be approximately as follows (Sq/VE) :

The loss would be mainly in the F-111D which would represent a significant loss in capability.

The F-111 is unique among the entire existing and planned tactical fleet with respect to range, payload, night/all-weather strike capability, automatic terrain following, crew envelope and single ship penetration capability. The F-111 surpasses other tactical inventory and production aircraft in the areas of naviga

tion accuracy, weapons employment accuracy, maintainability, air-to-ground attack radar capability, and deployment ferry range. The superiority of the F111 over other tactical inventory or production aircraft is greatest in the interdiction role. The single ship, low level, night/all-weather, deep penetration capability is a tactical requirement which is unique to the F-111.

The F-111D has significant improvements over the basic F-111A/E. An improved engine and advanced avionics substantially increase the margin of superiority over inventory aircraft as well as improving the F-111 unique features. A force reduction/cancellation would affect the F-111D compounding the loss in Air Force capability. Specifically, the additional features of the Mark II avionics system not only substantially increase the capability to strike a target, but provide acquisition, breakout, and re-attack capability that is not available in any aircraft including the F-111A/E.

The F-111D has impressive interceptor capabilities although it does not presently have the aerodynamic maneuvering capability as the F-4E. The F-111D/ P-100 configuration planned for the second wing of F-111Ds will have greatly improved aerodynamic performance. It now has better air-to-air survivability than the A-7D. The multipurpose F-4 forms the core of our tactical force with the F-111D and the A-7D providing specialized attack capabilities to supplement the F-4. None of the aircraft are complete substitutes for each other but they do have some overlapping capabilities. Each aircraft also has unique capabilities which do not lend themselves to even approximate quantification. For example: It is difficult to determine the value to be placed on a capability to bomb at distances of greater than [deleted] nautical miles from bases (importance of targets, increased survivability by rear basing); navigation accuracy; target acquisition; and growth potential. However, the quantifications that are possible do provide insights such as (1) the F-111D is an effective tactical aircraft in any close air support interdiction, or counter-air ground attack role; (2) the A-7D is the next most effective in those roles; (3) the A-7D is the most cost effective at short ranges where escorts are not required (lightly defended environments); and (4) the F-111D is most cost effective at radii of greater than 350 nautical miles in heavily defended environments where escorts are required (daylight visual bombing) and at all radii under blind bombing conditions where normally escorts are not required.

The FB-111 will supplement the B-52 nuclear fleet by replacing earlier model B 52 which are phasing out of service. No other aircraft is planned or could be made available to replace the FB-111A in the next seven to eight years.

The RF-111 is planned to be an essential element of a tactical reconnaissance force designed to support tactical operation and to complement strike forces. It will be the only available tactical reconnaissance aircraft capable of fully supporting the extended range F-111 A&D aircraft. Its all-weather capability, superior penetration aids, advanced sensors, and deep, single-ship penetration capability provide a tactical reconnaissance capability superior to any aircraft in being or planned in the next few years.

targets destroyed per day per dollar relative to A-7D.

**d on Combat Bullseye test of F-4; contractor estimate for A-7D; Combat Lancer results and evaluation of Mark II

x tests for F 111D.

Not capable.

SUMMARY

This presentation has highlighted several major areas of interest in the F-111 Program. The material presented has shown the management concept to be based on the strong centralized operation of the System Program Office. I have covered briefly several management procedures that have the objective of providing the Program Director with necessary tools to control his program within the restraints of his "contract" with higher authority.

The F-111 FPIF contracts are seen to provide the means to restrain cost to a finite percentage of the definitized target costs and to place the contractor in a position of sharing risk with the government. Beyond a specified point the contractor absorbs all cost by losing previously earned profit. At this point, the FPIF contract is analogous to a FFP contract.

In reviewing the financial program from the 1963 baseline, I have attempted to show the drastic impact on cost that results from severe program schedule changes in quantity and rates. There is means of minimizing the cost impacts due to schedule changes since the increased cost of flyaway is not balanced by an increase in capability.

Finally, I have noted that there is no tactical system in being or planned that can be equated to the F-111 in air-ground strike capability. Termination of the F-111 system would necessarily result in a serious void in capability.

The CHAIRMAN. Let me ask you something right there.

General ESPOSITO. Yes, sir.

The CHAIRMAN. Who made all these changes right in the middle of the stream?

General ESPOSITO. Well, the changes that we received are programing actions that initiated, I would say, in the OSD level, and some in the Air Force level.

The CHAIRMAN. OSD level?

General ESPOSITO. Yes, sir.

Mr. BLANDFORD. And some in the Congress.

General ESPOSITO. And some in the Congress; yes.

Over a period of 6 or 7 years we have been underway we have had changes originate at various levels.

The CHAIRMAN. I know, but the OSD is not in the production business. That is left to the Air Force. When you get a systems go-ahead, what does the OSD have to do with the change?

Mr. BLANDFORD. Mr. Chairman, I think this is the whole point. As the aircraft was being produced, and certain performance characteristics were not being attained, then the production schedules were reduced because the mission, presumably, was not to be met by the type of aircraft that you had in mind. And as the costs started to go up OSD started to put the brakes on production because it just got to be too expensive to produce the number they had in mind for this aircraft.

Is that not correct, General? You and General McNickle better get together. One is saying yes and the other is being doubtful about this.

The CHAIRMAN. It looks to me like you are trying to hold back on just about every question we ask you. Why don't you open up.

General ESPOSITO. No, sir. Some of these are really not in my purview to respond.

Mr. BLANDFORD. Let me ask ask General McNickle then.
You are in the performance end of this thing.

General ESPOSITO. Our job is to manage.

Mr. BLANDFORD. You are going to tell us why the British canceled

their order. You are going to tell us why the Australians are going to cancel their order. You will tell us why the Mark II system isn't measuring up to what it is supposed to do. Is that correct? That is what we are told.

General ESPOSITO. I can tell you why the British canceled their order. Mr. BLANDFORD. Was that cost performance or what was it?

General ESPOSITO. Yes, sir. I was directly involved in that. The Britist. canceled their order for their own internal economic problems. The KAF objected strenuously from the point of the system that they were looking for to the cancellation.

Mr. BLANDFORD. What was the cost originally contemplated for the British, and what did it result in had they received the aircraft?

General ESPOSITO. The maximum cost which was part of the arrangement entered into between DOD and the United Kingdom was a maximum price of $5.95 million for the F-111A aircraft as it was configured in July of 1965. And the price also provided, the price rationale also provides that any changes in capability or any peculiar changes would be separately funded by the British.

Mr. BLANDFORD. Then what was the final cost of the F-111A? General ESPOSITO. Based on the pricing arrangements which were entered into by OSD and the United Kingdom their price of 5.95 was predicated on 1,500 F-111A aircraft. When we sat down to start computing the price based on that arrangement, it is our judgment that we will find that we are pretty close to the 5.95. With their peculiar changes they were about $1.2 million over that number. But that was a separately funded requirement.

Mr. BLANDFORD. True, General, but the point is now, would that figure drastically reduce the cost of the 111--but it has gone up a considerable amount; has it not?

General ESPOSITO. Yes, sir.

Mr. BLANDFORD. What is the comparable figure for the $5.95 million? General ESPOSITO. It is about 71 million, sir.

Mr. BLANDFORD. About 71⁄2 million.

How about Australian cancellation?

General ESPOSITO. I have to state my own knowedge of this now before I respond, because I had no knowledge whatsoever of the Australian cancellation, and all of our contact with them at the management level doesn't indicate this to be

Mr. BLANDFORD. Mr. Chairman, I am indicating in answer to Mr. Stratton, General Esposito said he understood it was because of performance. I think we should now know in what way the F-111 A, B, C, D, R—you name it, in all configurations-where has the F-111 not measured up to what the paper said it would do when they signed the contract?

The CHAIRMAN. Who can answer that question?
General ESPOSITO. I can give you an answer, sir.

The CHAIRMAN. Alright.

General ESPOSITO. Technically, the aircraft is bigger. It is larger from the standpoint of weight. It is a heavier aircraft.

I am measuring this against the contract not against the operational requirement. I have to set forth the fact that we, as blue-suiters, are looking at this airplane against our original operational requirement in terms of its utility. That is how we measure it.