Acquisition Lessons of the Stealth Fighter

The F-117 program differed from more conventional procurements across multiple dimensions, but the most notable characteristic was its exceptional management flexibility and responsiveness in decisionmaking. Several aspects of the program structure contributed to that flexibility and responsiveness. The cost-plus-fixed-fee contract structure used in the project's development phase facilitated rapid decisionmaking. Furthermore, system specifications were expressed as goals rather than as hard requirements. This feature enabled program managers to tailor design decisions to overall goals instead of having to satisfy numerous predetermined performance measures. Additionally, the Air Force program management staff was exceptionally small, averaging about three dozen. As the figure shows, this is about one-tenth the size normally involved with procuring an aircraft. Also, each member of this handpicked staff had an unusual amount of authority and was encouraged to act independently.

Figure 1--Air Force Project Staff Size Comparison

Some external characteristics also gave the program its unique character. It was covert, which sharply limited the number of people who could influence the program. Also, no major changes in performance requirements or other program specifications were imposed after the start of development, other than an increase in the total number of aircraft bought. This stability freed both Air Force and contractor staff from the redesign and restructuring that plague many acquisition programs. And, finally, the program was exempted from having to comply with a broad range of acquisition rules and procedures.

Did Program Differences Influence Outcomes?

At first glance, the outcomes of the F-117 program do not appear to differ much from most military aircraft development programs. The development schedule compares with other contemporary programs, as does its total acquisition cost, after adjusting for production quantity and other design differences. However, closer attention reveals two unusual features. First, while performing as well as other, more conventional programs, the F-117 project developed an entirely new technology--stealth--and a new operational concept resulting from the successful combination of stealth and precision weapon delivery. The fact that the Air Force could accomplish what is really a remarkable technological achievement under exceptional security requirements, which add their own cost burden, suggests that the F-117 program cost less than might be expected.

The second feature is the low degree of attention paid to reliability and maintainability (RAM) considerations. The relative lack of emphasis on RAM almost certainly lowered the cost of the development phase and possibly its duration. On the other hand, it almost certainly increased the cost of operating the airplane and likely delayed its full operational capability.

Can F-117 Strategies Apply More Widely?

The key question is whether the F-117 management strategies can apply to other, more conventional programs. The research team concludes that if the special environment that existed for the F-117 program can be recreated, other major programs could be managed with staffs much smaller than those normally associated with major acquisitions. Four aspects of that environment seem especially important:

• Strong and sustained program support from senior Department of Defense and Air Force executives that fosters stability and frees the program staff from constantly fending off critics

• A willingness to delegate authority to a relatively low level, which enables a rapid response to problems based on a thorough understanding of the issues

• Some tolerance for risk and uncertainty about program outcomes, and

• An ability to staff the program with fully qualified people.

It seems unlikely that these circumstances could be recreated for very many programs, nor should they be. Each procurement program differs, and the management and acquisition strategy needs to be tailored for the specific circumstances of that program. That said, the authors believe that two aspects of the F-117 program could and should be applied more broadly. First, the program office should have increased authority to make decisions, and a concomitant reduction in the amount of detailed oversight by and reporting to higher headquarters should occur. Second, contracts should specify only very few key performance requirements and should establish reasonable goals for the rest of the requirements. Project managers also need a clear set of priorities to guide them as they make design decisions.

Applying these initiatives to other programs requires considerable mutual trust among the government agencies involved and between the government and the contractor. The absence of such trust spawned many of the controls specifically waived for the F-117 program.

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RAND research briefs summarize research that has been more fully documented elsewhere. This research brief describes work done for RAND's Project AIR FORCE; it is documented in Application of F-117 Acquisition Strategy to Other Programs in the New Acquisition Environment, by Giles Smith, Hyman Shulman, and Robert Leonard, MR-749-AF, 1996, 72 pp., ISBN 0-8330-2404-3. Abstracts of all RAND documents may be viewed on the World Wide Web (). Publications are distributed to the trade by National Book Network. RAND is a nonprofit institution that helps improve public policy through research and analysis; its publications do not necessarily reflect the opinions or policies of its research sponsors.

RB-42

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Copyright © 1996 RAND

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