Cover: Acquisition Lessons of the Stealth Fighter

Acquisition Lessons of the Stealth Fighter

Published 1996

by Giles K. Smith

Research Brief

The argument is frequently made that special access or "black" programs accommodate more efficient and effective ways to buy weapon systems than do conventional acquisition programs. If so, perhaps some of the characteristics of these covert programs could be transferred to the more conventional procurement programs to enhance their efficiency. That hypothesis is what Project AIR FORCE researchers wanted to test by examining the F-117 Stealth Fighter acquisition program. They concluded that, although it was unlikely that the special set of circumstances surrounding the F-117 procurement could be fully replicated for many other programs, two elements of F-117 program management not only could be but also should be applied more broadly: greater delegation of authority to the program office and requiring only a very few performance requirements by contract.

The Application of F-117 Acquisition Strategy to Other Programs in the New Acquisition Environment by Giles Smith, Hyman Schulman, and Robert Leonard chronicles their analysis of the F-117 program. This program makes an excellent choice for such a study for three reasons. First, it is widely regarded as a success story, in part as a result of the aircraft's impressive performance in the Persian Gulf War. Second, except for the stealth features, the F-117 is a conventional airplane and shares enough features with other aircraft to provide a reasonable basis of comparison. Finally, the Air Force project management staff was about one-tenth the size of comparable programs, and in an era of defense downsizing, any program that can operate with far fewer people merits a careful look.

In analyzing the program, the researchers set three tasks for themselves: (1) to describe the management procedures followed, (2) to define the program outcomes and, and insofar as possible, relate them to the procedures, and (3) to identify desirable management attributes that could transfer to other programs.

Figure 1. Air Force Project Staff Size Comparison

How Was the Stealth Program Different?

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.

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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