Selected Acquisition Report (SAR)

RCS: DD-A&T(Q&A)823-474

F-22 Increment 3.2B Modernization (F-22 Inc 3.2B Mod)

As of FY 2017 President's Budget

Defense Acquisition Management

Information Retrieval
(DAMIR)

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Table of Contents

Common Acronyms and Abbreviations for MDAP Programs 3

Program Information 5
Responsible Office 5
References 5
Mission and Description 6
Executive Summary 7
Threshold Breaches 8
Schedule 9
Performance 10
Track to Budget 12
Cost and Funding 13
Low Rate Initial Production 20
Foreign Military Sales 21
Nuclear Costs 21
Unit Cost 22
Cost Variance 25
Contracts 28
Deliveries and Expenditures 31
Operating and Support Cost 32

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Common Acronyms and Abbreviations for MDAP Programs

Acq O&M - Acquisition-Related Operations and Maintenance

ACAT - Acquisition Category
ADM - Acquisition Decision Memorandum
APB - Acquisition Program Baseline
APPN - Appropriation
APUC - Average Procurement Unit Cost
$B - Billions of Dollars
BA - Budget Authority/Budget Activity
Blk - Block
BY - Base Year
CAPE - Cost Assessment and Program Evaluation
CARD - Cost Analysis Requirements Description
CDD - Capability Development Document
CLIN - Contract Line Item Number
CPD - Capability Production Document
CY - Calendar Year
DAB - Defense Acquisition Board
DAE - Defense Acquisition Executive
DAMIR - Defense Acquisition Management Information Retrieval
DoD - Department of Defense
DSN - Defense Switched Network
EMD - Engineering and Manufacturing Development
EVM - Earned Value Management
FOC - Full Operational Capability
FMS - Foreign Military Sales
FRP - Full Rate Production
FY - Fiscal Year
FYDP - Future Years Defense Program
ICE - Independent Cost Estimate
IOC - Initial Operational Capability
Inc - Increment
JROC - Joint Requirements Oversight Council
$K - Thousands of Dollars
KPP - Key Performance Parameter
LRIP - Low Rate Initial Production
$M - Millions of Dollars
MDA - Milestone Decision Authority
MDAP - Major Defense Acquisition Program
MILCON - Military Construction
N/A - Not Applicable
O&M - Operations and Maintenance
ORD - Operational Requirements Document
OSD - Office of the Secretary of Defense
O&S - Operating and Support
PAUC - Program Acquisition Unit Cost

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PB - President’s Budget
PE - Program Element
PEO - Program Executive Officer
PM - Program Manager
POE - Program Office Estimate
RDT&E - Research, Development, Test, and Evaluation
SAR - Selected Acquisition Report
SCP - Service Cost Position
TBD - To Be Determined
TY - Then Year
UCR - Unit Cost Reporting
U.S. - United States
USD(AT&L) - Under Secretary of Defense (Acquisition, Technology and Logistics)

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Program Information

Program Name
F-22 Increment 3.2B Modernization (F-22 Inc 3.2B Mod)

DoD Component
Air Force

Responsible Office

Col Anthony Genatempo Phone: 937-713-7001

2725 C Street Fax: 937-656-7511
Building 553
Wright-Patterson Air Force Base, OH 45433 DSN Phone: 713-7001
DSN Fax: 986-7511
Date Assigned: July 19, 2014
[email protected]

References

SAR Baseline (Development Estimate)

Defense Acquisition Executive (DAE) Approved Acquisition Program Baseline (APB) dated June 24, 2013

Approved APB
Defense Acquisition Executive (DAE) Approved Acquisition Program Baseline (APB) dated June 24, 2013

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Mission and Description

The F-22’s combination of stealth, supercruise, maneuverability, Intra-Flight Data Link (IFDL), sensor fusion coupled with
improved supportability provides an exponential leap in warfighting capabilities and allows full realization of operational
concepts vital to the 21st Century Air Force and joint warfighting anti-access area denial environment. As a critical
component of the Global Strike Concept of Operations, the F-22 provides unmatched air-to-air and air-to-ground
capabilities.

F-22 Increment 3.2B Modernization (F-22 Inc 3.2B Mod) integrates the Air Intercept Missiles AIM-9X and AIM-120D into the F
-22, adds Electronic Protection techniques, incorporates new hardware, enhances Geolocate capability, and expands IFDL
functionality.

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Executive Summary

The F-22 Inc 3.2B Mod is on-track to meet APB parameters, and the EMD effort is progressing as planned. Full hardware
qualification is complete. Final software Critical Design Review completed on October 29, 2015. Developmental software
coding is on-going and five Developmental Test aircraft are modified. Laboratory and flight tests are proceeding on
production representative hardware.

There are no significant software-related issues with this program at this time.

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Threshold Breaches

APB Breaches
Schedule
Performance
Cost RDT&E
Procurement
MILCON
Acq O&M
O&S Cost
Unit Cost PAUC
APUC

Nunn-McCurdy Breaches
Current UCR Baseline
PAUC None
APUC None
Original UCR Baseline
PAUC None
APUC None

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Schedule

Schedule Events
SAR Baseline Current APB
Current
Events Development Development
Estimate
Estimate Objective/Threshold
Materiel Development Decision Dec 2011 Dec 2011 Jun 2012 Dec 2011
Milestone B Mar 2013 Mar 2013 Sep 2013 Jun 2013
Milestone C Mar 2016 Mar 2016 Sep 2016 Jun 2016
Full Rate Production Jan 2018 Jan 2018 Jul 2018 Jul 2018
Required Assets Available (RAA) Mar 2019 Mar 2019 Sep 2019 Sep 2019

Change Explanations
None

Notes
RAA is defined as six aircraft and associated support equipment.

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Performance

Performance Characteristics
SAR Baseline Current APB
Demonstrated Current
Development Development
Performance Estimate
Estimate Objective/Threshold
Materiel Availability (Am)
Do not degrade aircraft Do not degrade aircraft (Threshold = Objective) TBD Do not degrade aircraft
Am below current Am below current Do not degrade aircraft Am below current
baseline performance. baseline performance. Am below current baseline performance.
Baseline performance Baseline performance baseline performance. Baseline performance
KPP: By the end of: FY KPP: By the end of: FY Baseline performance KPP: By the end of: FY
2011: 61.2% FY 2012: 2011: 61.2% FY 2012: KPP: By the end of: FY 2011: 61.2% FY 2012:
62.6% FY 2013: 65.8% 62.6% FY 2013: 65.8% 2011: 61.2% FY 2012: 62.6% FY 2013: 65.8%
FY 2014: 67.6% FY FY 2014: 67.6% FY 62.6% FY 2013: 65.8% FY 2014: 67.6% FY
2015: 70.6% 2015: 70.6% FY 2014: 67.6% FY 2015: 70.6%
2015: 70.6%
Reliability, MTBCF
Do not degrade aircraft Do not degrade aircraft (Threshold = Objective) TBD Do not degrade aircraft
MTBCF below current MTBCF below current Do not degrade aircraft MTBCF below current
baseline performance. baseline performance. MTBCF below current baseline performance.
baseline performance.
Weapons Integration
The F-22A shall be The F-22A shall be (Threshold = Objective) TBD The F-22A shall be
modified as required to modified as required to The F-22A shall be modified as required to
enable employment of enable employment of modified as required to enable employment of
the AIM-120D and the the AIM-120D and the enable employment of the AIM-120D and the
AIM-9X Block II. AIM-9X Block II. the AIM-120D and the AIM-9X Block II.
AIM-9X Block II.

Classified Performance information is provided in the classified annex to this submission.

Requirements Reference
Capability Production Document (CPD) dated January 4, 2007, as clarified by Joint Requirements Oversight Council
Memorandum (JROCM) 052-11 dated April 19, 2011 and JROCM 134-12 dated September 4, 2012 (weapons integration
performance criteria are contained in F-22A Increment 3.2B Operational Capabilities Development Document Revision A
dated November 15, 2011; availability and reliability performance criteria are contained in Air Force Requirements Oversight
Council Memorandum (AFROCM) 11-10-02 dated November 19, 2010 and JROCM 052-11)

Change Explanations
None

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Acronyms and Abbreviations

AIM - Air Intercept Missile
MTBCF - Mean Time Between Critical Failure

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Track to Budget

RDT&E

Appn BA PE
Air Force 3600 07 0207138F
Project Name
674785 F-22 (Shared) (Sunk)
Air Force 3600 07 0207163F
Project Name
673777 AIM-120D (Shared)
Air Force 3600 05 0605213F
Project Name
654785 F-22 Increment 3.2B (Shared)

Procurement

Appn BA PE
Air Force 3010 06 0207138F
Line Item Name
000999 Initial Spares/Repair Parts (Shared)
Air Force 3010 05 0207138F
Line Item Name
F2232B Increment 3.2B
F2232BC Advanced Procurement

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Cost and Funding

Cost Summary

Total Acquisition Cost

BY 2013 $M BY 2013 $M TY $M

Appropriation SAR Baseline Current APB SAR Baseline Current APB

Current Current
Development Development Development Development
Estimate Estimate
Estimate Objective/Threshold Estimate Objective
RDT&E 1199.4 1199.4 1319.3 1156.2 1207.3 1207.3 1158.6
Procurement 338.2 338.2 372.0 345.3 376.8 376.8 384.0
Flyaway -- -- -- 325.1 -- -- 361.8
Recurring -- -- -- 325.1 -- -- 361.8
Non Recurring -- -- -- 0.0 -- -- 0.0
Support -- -- -- 20.2 -- -- 22.2
Other Support -- -- -- 6.7 -- -- 7.3
Initial Spares -- -- -- 13.5 -- -- 14.9
MILCON 0.0 0.0 -- 0.0 0.0 0.0 0.0
Acq O&M 0.0 0.0 -- 0.0 0.0 0.0 0.0
Total 1537.6 1537.6 N/A 1501.5 1584.1 1584.1 1542.6

Confidence Level
Confidence Level of cost estimate for current APB: 53%

The Life-Cycle Cost Estimate (LCCE) reflects the expected value, or mean, of the cost estimate distribution. It takes into
consideration relevant risks, including ordinary levels of external and unforeseen events, aiming to provide sufficient
resources to execute the program under normal conditions encountering average levels of technical, schedule, and
programmatic risk and external influence.

Total Quantity
SAR Baseline
Current APB
Quantity Development Current Estimate
Development
Estimate
RDT&E 9 9 9
Procurement 143 143 143
Total 152 152 152

Quantity Notes
The unit of measure is modified aircraft.

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Cost and Funding

Funding Summary

Appropriation Summary
FY 2017 President's Budget / December 2015 SAR (TY$ M)
To
Appropriation Prior FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Total
Complete
RDT&E 941.9 146.4 70.3 0.0 0.0 0.0 0.0 0.0 1158.6
Procurement 28.5 67.1 82.8 151.4 13.1 20.4 20.7 0.0 384.0
MILCON 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Acq O&M 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
PB 2017 Total 970.4 213.5 153.1 151.4 13.1 20.4 20.7 0.0 1542.6
PB 2016 Total 980.2 218.6 156.1 152.6 13.1 20.6 0.0 0.0 1541.2
Delta -9.8 -5.1 -3.0 -1.2 0.0 -0.2 20.7 0.0 1.4

Quantity Summary
FY 2017 President's Budget / December 2015 SAR (TY$ M)
FY FY FY FY FY FY To
Quantity Undistributed Prior Total
2016 2017 2018 2019 2020 2021 Complete
Development 9 0 0 0 0 0 0 0 0 9
Production 0 0 35 36 72 0 0 0 0 143
PB 2017 Total 9 0 35 36 72 0 0 0 0 152
PB 2016 Total 9 0 35 36 72 0 0 0 0 152
Delta 0 0 0 0 0 0 0 0 0 0

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Cost and Funding

Annual Funding By Appropriation

Annual Funding
3600 | RDT&E | Research, Development, Test, and Evaluation, Air Force
TY $M

Fiscal Non End

Quantity End Item Non
Year Item Total Total Total
Recurring Recurring
Recurring Flyaway Support Program
Flyaway Flyaway
Flyaway
2004 -- -- -- -- -- -- 6.4
2005 -- -- -- -- -- -- --
2006 -- -- -- -- -- -- 16.5
2007 -- -- -- -- -- -- 33.0
2008 -- -- -- -- -- -- 31.4
2009 -- -- -- -- -- -- 40.8
2010 -- -- -- -- -- -- 131.0
2011 -- -- -- -- -- -- 129.5
2012 -- -- -- -- -- -- 127.5
2013 -- -- -- -- -- -- 129.0
2014 -- -- -- -- -- -- 109.1
2015 -- -- -- -- -- -- 187.7
2016 -- -- -- -- -- -- 146.4
2017 -- -- -- -- -- -- 70.3
Subtotal 9 -- -- -- -- -- 1158.6

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Annual Funding
3600 | RDT&E | Research, Development, Test, and Evaluation, Air Force
BY 2013 $M

Fiscal Non End

Quantity End Item Non
Year Item Total Total Total
Recurring Recurring
Recurring Flyaway Support Program
Flyaway Flyaway
Flyaway
2004 -- -- -- -- -- -- 7.6
2005 -- -- -- -- -- -- --
2006 -- -- -- -- -- -- 18.5
2007 -- -- -- -- -- -- 36.0
2008 -- -- -- -- -- -- 33.6
2009 -- -- -- -- -- -- 43.1
2010 -- -- -- -- -- -- 136.5
2011 -- -- -- -- -- -- 132.5
2012 -- -- -- -- -- -- 128.1
2013 -- -- -- -- -- -- 127.6
2014 -- -- -- -- -- -- 106.5
2015 -- -- -- -- -- -- 181.3
2016 -- -- -- -- -- -- 139.3
2017 -- -- -- -- -- -- 65.6
Subtotal 9 -- -- -- -- -- 1156.2

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Annual Funding
3010 | Procurement | Aircraft Procurement, Air Force
TY $M

Fiscal Non End

Quantity End Item Non
Year Item Total Total Total
Recurring Recurring
Recurring Flyaway Support Program
Flyaway Flyaway
Flyaway
2015 -- 28.5 -- -- 28.5 -- 28.5
2016 35 62.1 -- -- 62.1 5.0 67.1
2017 36 76.8 -- -- 76.8 6.0 82.8
2018 72 140.7 -- -- 140.7 10.7 151.4
2019 -- 13.0 -- -- 13.0 0.1 13.1
2020 -- 20.0 -- -- 20.0 0.4 20.4
2021 -- 20.7 -- -- 20.7 -- 20.7
Subtotal 143 361.8 -- -- 361.8 22.2 384.0

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Annual Funding
3010 | Procurement | Aircraft Procurement, Air Force
BY 2013 $M

Fiscal Non End

Quantity End Item Non
Year Item Total Total Total
Recurring Recurring
Recurring Flyaway Support Program
Flyaway Flyaway
Flyaway
2015 -- 26.9 -- -- 26.9 -- 26.9
2016 35 57.4 -- -- 57.4 4.7 62.1
2017 36 69.7 -- -- 69.7 5.5 75.2
2018 72 125.3 -- -- 125.3 9.5 134.8
2019 -- 11.3 -- -- 11.3 0.1 11.4
2020 -- 17.1 -- -- 17.1 0.4 17.5
2021 -- 17.4 -- -- 17.4 -- 17.4
Subtotal 143 325.1 -- -- 325.1 20.2 345.3

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Cost Quantity Information

3010 | Procurement | Aircraft Procurement, Air Force
End Item
Recurring
Fiscal Flyaway
Quantity
Year (Aligned With
Quantity)
BY 2013 $M
2015 -- --
2016 35 79.6
2017 36 81.8
2018 72 163.7
2019 -- --
2020 -- --
2021 -- --
Subtotal 143 325.1

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Low Rate Initial Production

Item Initial LRIP Decision Current Total LRIP

Approval Date 6/26/2013 6/26/2013
Approved Quantity 71 71
Reference Milestone B ADM Milestone B ADM
Start Year 2016 2016
End Year 2017 2017

The Current Total LRIP Quantity is more than 10% of the total production quantity due to an opportunity to capture economic
order quantity efficiencies. This strategy was approved as part of the Milestone B review.

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Foreign Military Sales

None

Nuclear Costs

None

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Unit Cost

Unit Cost Report

BY 2013 $M BY 2013 $M

Item Current UCR % Change

Current Estimate
Baseline
(Dec 2015 SAR)
(Jun 2013 APB)
Program Acquisition Unit Cost
Cost 1537.6 1501.5
Quantity 152 152
Unit Cost 10.116 9.878 -2.35
Average Procurement Unit Cost
Cost 338.2 345.3
Quantity 143 143
Unit Cost 2.365 2.415 +2.11

BY 2013 $M BY 2013 $M

Item Original UCR % Change

Current Estimate
Baseline
(Dec 2015 SAR)
(Jun 2013 APB)
Program Acquisition Unit Cost
Cost 1537.6 1501.5
Quantity 152 152
Unit Cost 10.116 9.878 -2.35
Average Procurement Unit Cost
Cost 338.2 345.3
Quantity 143 143
Unit Cost 2.365 2.415 +2.11

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Unit Cost History

BY 2013 $M TY $M
Item Date
PAUC APUC PAUC APUC
Original APB Jun 2013 10.116 2.365 10.422 2.635
APB as of January 2006 N/A N/A N/A N/A N/A
Revised Original APB N/A N/A N/A N/A N/A
Prior APB N/A N/A N/A N/A N/A
Current APB Jun 2013 10.116 2.365 10.422 2.635
Prior Annual SAR Dec 2014 9.848 2.321 10.139 2.592
Current Estimate Dec 2015 9.878 2.415 10.149 2.685

SAR Unit Cost History

Current SAR Baseline to Current Estimate (TY $M)

Initial PAUC Changes PAUC
Development Current
Estimate Econ Qty Sch Eng Est Oth Spt Total Estimate
10.422 -0.036 0.000 0.000 0.000 -0.232 0.000 -0.005 -0.273 10.149

Current SAR Baseline to Current Estimate (TY $M)

Initial APUC Changes APUC
Development Current
Estimate Econ Qty Sch Eng Est Oth Spt Total Estimate
2.635 -0.010 0.000 0.000 0.000 0.066 0.000 -0.005 0.051 2.685

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SAR Baseline History

SAR SAR SAR
Current
Item Planning Development Production
Estimate
Estimate Estimate Estimate
Milestone A N/A N/A N/A N/A
Milestone B N/A Mar 2013 N/A Jun 2013
Milestone C N/A Mar 2016 N/A Jun 2016
RAA N/A Mar 2019 N/A Sep 2019
Total Cost (TY $M) N/A 1584.1 N/A 1542.6
Total Quantity N/A 152 N/A 152
PAUC N/A 10.422 N/A 10.149

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Cost Variance

Summary TY $M
Item RDT&E Procurement MILCON Total
SAR Baseline (Development 1207.3 376.8 -- 1584.1
Estimate)
Previous Changes
Economic -1.1 +1.3 -- +0.2
Quantity -- -- -- --
Schedule -- -- -- --
Engineering -- -- -- --
Estimating -35.6 -7.1 -- -42.7
Other -- -- -- --
Support -- -0.4 -- -0.4
Subtotal -36.7 -6.2 -- -42.9
Current Changes
Economic -2.9 -2.8 -- -5.7
Quantity -- -- -- --
Schedule -- -- -- --
Engineering -- -- -- --
Estimating -9.1 +16.5 -- +7.4
Other -- -- -- --
Support -- -0.3 -- -0.3
Subtotal -12.0 +13.4 -- +1.4
Total Changes -48.7 +7.2 -- -41.5
CE - Cost Variance 1158.6 384.0 -- 1542.6
CE - Cost & Funding 1158.6 384.0 -- 1542.6

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Summary BY 2013 $M
Item RDT&E Procurement MILCON Total
SAR Baseline (Development 1199.4 338.2 -- 1537.6
Estimate)
Previous Changes
Economic -- -- -- --
Quantity -- -- -- --
Schedule -- -- -- --
Engineering -- -- -- --
Estimating -34.4 -6.1 -- -40.5
Other -- -- -- --
Support -- -0.2 -- -0.2
Subtotal -34.4 -6.3 -- -40.7
Current Changes
Economic -- -- -- --
Quantity -- -- -- --
Schedule -- -- -- --
Engineering -- -- -- --
Estimating -8.8 +13.4 -- +4.6
Other -- -- -- --
Support -- -- -- --
Subtotal -8.8 +13.4 -- +4.6
Total Changes -43.2 +7.1 -- -36.1
CE - Cost Variance 1156.2 345.3 -- 1501.5
CE - Cost & Funding 1156.2 345.3 -- 1501.5

Previous Estimate: December 2014

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RDT&E $M
Base Then
Current Change Explanations
Year Year
Revised escalation indices. (Economic) N/A -2.9
Revised estimate to reflect Air Force reprogramming of funds. (Estimating) -11.1 -11.5
Adjustment for current and prior escalation. (Estimating) +2.3 +2.4
RDT&E Subtotal -8.8 -12.0

Procurement $M
Base Then
Current Change Explanations
Year Year
Revised escalation indices. (Economic) N/A -2.8
Revised estimate to reflect Congressional reductions in FY 2016. (Estimating) -4.6 -4.9
Revised estimate to reflect baseline extension. (Estimating) +17.4 +20.7
Adjustment for current and prior escalation. (Estimating) +0.6 +0.7
Adjustment for current and prior escalation. (Support) +0.1 0.0
Decrease in Initial Spares (Support) -0.3 -0.3
Increase in Other Support. (Support) +0.2 0.0
Procurement Subtotal +13.4 +13.4

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Contracts

Contract Identification
Appropriation: RDT&E
Contract Name: F-22 Mod, DO 0004 REDI II, Incr 3.2B Ph C&D
Contractor: Lockheed Martin Aeronautics
Contractor Location: 1 Lockheed Blvd
Ft. Worth, TX 76108-3619
Contract Number: FA8611-13-D-2850/3
Contract Type: Cost Plus Incentive Fee (CPIF), Cost Plus Fixed Fee (CPFF)
Award Date: June 26, 2013
Definitization Date: June 26, 2013

Contract Price
Initial Contract Price ($M) Current Contract Price ($M) Estimated Price At Completion ($M)
Target Ceiling Qty Target Ceiling Qty Contractor Program Manager
328.8 N/A 9 329.8 N/A 9 290.3 295.7

Target Price Change Explanation

The difference between the Initial Contract Price Target and the Current Contract Price Target is due to the addition of one
Engineering Change Proposal (ECP) and two Contract Change Proposals (CCPs) in CY 2015:

Contract Modification 000412 added ECP 0661 - Addition of 7th Dual Computing Engine (DuCE) and Global Inertial
Navigation System (GINS) 09 to Increment 3.2B; as a result, the Delivery Order (DO) 0004 price increased by $.9M.

Contract Modification 000417 added CCP 438 - Credit for stop work of maintenance training courseware activities; as a
result, the DO 0004 price decreased by $.3M.

Contract Modification 000419 added CCP 0452 - Partial stop work and addition of new work due to Air Force Operational
Test and Evaluation Center (AFOTEC) providing new threat model requirements beyond the scope of DO 0004 and deleted
threat model requirements previously identified; as a result, the DO 0004 price increased by $3.1M.

The total net value of DO 0004 contract changes in CY 2015 amount to $3.7M.

Contract Variance
Item Cost Variance Schedule Variance
Cumulative Variances To Date (12/27/2015) -3.6 -4.3
Previous Cumulative Variances +3.8 -4.2
Net Change -7.4 -0.1

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Cost and Schedule Variance Explanations

The unfavorable net change in the cost variance is due to additional unplanned efforts due to delays of predecessor F-22
software programs.

The unfavorable net change in the schedule variance is due to schedule delays of predecessor F-22 software programs.

Notes
Delivery Order (DO) 0004 was issued under the overarching F-22 Raptor, Enhancement, Development, and Integration II
Indefinite Delivery Indefinite Quantity Contract (FA8611-13-D-2850). Definitization date is same as award date and does not
indicate this DO was issued as a letter contract or Undefinitized Contractual Action.

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Contract Identification
Appropriation: RDT&E
Contract Name: D.O. 009 Test Execution CLIN 0301
Contractor: Lockheed Martin (Aeronautics)
Contractor Location: 1 Lockheed Blvd
Ft. Worth, TX 76108-3619
Contract Number: FA8611-13-D-2850/4
Contract Type: Cost Plus Fixed Fee (CPFF)
Award Date: January 01, 2015
Definitization Date: January 01, 2015

Contract Price
Initial Contract Price ($M) Current Contract Price ($M) Estimated Price At Completion ($M)
Target Ceiling Qty Target Ceiling Qty Contractor Program Manager
54.6 N/A N/A 54.6 N/A N/A 54.6 54.6

Contract Variance
Item Cost Variance Schedule Variance
Cumulative Variances To Date (12/27/2015) +2.2 -0.5
Previous Cumulative Variances -- --
Net Change +2.2 -0.5

Cost and Schedule Variance Explanations

The favorable cumulative cost variance is due to less effort required due to delays in predecessor F-22 software programs.

The unfavorable cumulative schedule variance is due to delayed start of flight testing due to delays in predecessor F-22
software programs.

Notes
This is the first time this contract is being reported.

This effort is for 3.2B System Integration and Test efforts only; deliveries, as such, are not anticipated.

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Deliveries and Expenditures

Deliveries
Percent
Delivered to Date Planned to Date Actual to Date Total Quantity
Delivered
Development 5 5 9 55.56%
Production 0 0 143 0.00%
Total Program Quantity Delivered 5 5 152 3.29%

Expended and Appropriated (TY $M)

Total Acquisition Cost 1542.6 Years Appropriated 13
Expended to Date 894.8 Percent Years Appropriated 72.22%
Percent Expended 58.01% Appropriated to Date 1183.9
Total Funding Years 18 Percent Appropriated 76.75%

The above data is current as of February 09, 2016.

Total funding years reflect development executed in support of the F-22 Inc 3.2B Mod program. Beginning in FY 2011 the
program was rescoped into smaller increments of capability (e.g. 3.2A, 3.2B) to adjust to financial constraints, facilitate
improved baseline control/management, and meet capability delivery needs. F-22 Inc 3.2B Mod officially started in FY 2013
with approval of Milestone B.

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Operating and Support Cost

Cost Estimate Details

Date of Estimate: May 31, 2013
Source of Estimate: SCP
Quantity to Sustain: 149
Unit of Measure: Modified Aircraft
Service Life per Unit: 15.00 Years
Fiscal Years in Service: FY 2018 - FY 2033

The F-22 Inc 3.2B Mod is a capability upgrade modification program. The program will modify 152 F-22A aircraft (9
RDT&E and 143 Procurement). Of the 152 aircraft, 3 are development test assets, and 149 will be sustained with O&S
funds.

Sustainment Strategy
Given the low hardware risk of the F-22 Inc 3.2B Mod upgrade, sustainment requirements will be managed within the
baseline F-22 sustainment concept with minimal impact on O&S cost estimates or achievement of materiel availability
goals. The F-22 sustainment strategy is to sustain F-22 readiness and availability at the lowest cost over the life of the
weapon system. The F-22 sustainment strategy employs Performance-Based Logistics contracts with Public/Private
Partnering for depot repair capabilities to meet Air Force Core requirements.

Antecedent Information
No Antecedent

Annual O&S Costs BY2013 $K

F-22 Inc 3.2B Mod
Cost Element Average Annual Cost Per Modified No Antecedent (Antecedent)
Aircraft
Unit-Level Manpower 0.000 0.000
Unit Operations 0.000 0.000
Maintenance 33.000 0.000
Sustaining Support 0.000 0.000
Continuing System Improvements 0.000 0.000
Indirect Support 0.000 0.000
Other 0.000 0.000
Total 33.000 --

Average Primary Aircraft Assigned (PAA): 163 (entire F-22 fleet)

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Total O&S Cost $M

F-22 Inc 3.2B Mod
Item No Antecedent
Current Development APB (Antecedent)
Current Estimate
Objective/Threshold
Base Year 80.9 89.0 80.9 N/A
Then Year 104.5 N/A 104.5 N/A

The F-22 Inc 3.2B Mod O&S costs will not be tracked separately as directed by the June 26, 2013 ADM. The total Inc
3.2B Mod O&S costs, estimated to be $80.9M (BY 2013), will be reported as part of the estimated $67.1B overall F-22
baseline program O&S costs.

The Air Force expects F-22 Incr 3.2B Mod O&S costs to be budgeted in the baseline F-22 PE (27138F) and expended
along with baseline program O&S funds, so the PAA value used in the calculation includes all F-22s, not just the aircraft
receiving the Increment 3.2B modification.

Total O&S costs were estimated for initial "steady state" year, 2022.
- Cost were then applied for the years 2018 (1st modified aircraft is fielded) through 2033 (15 years)

Equation to Translate Annual Cost to Total Cost

Unitized cost estimate is calculated:
Total O&S / estimated service life / Average PAA; ($80.9M/15/163) = $.033M
The average annual cost per modified aircraft represents the additional O&S cost of the 149 modified aircraft spread over
the entire fleet of F-22 aircraft (163 PAA). This is necessary since the modified aircraft will be reported as part of the
overall F-22 baseline program.

O&S Cost Variance

BY 2013
Category Change Explanations
$M
Prior SAR Total O&S Estimates - Dec 80.9
2014 SAR
Programmatic/Planning Factors 0.0
Cost Estimating Methodology 0.0
Cost Data Update 0.0
Labor Rate 0.0
Energy Rate 0.0
Technical Input 0.0
Other 0.0
Total Changes 0.0
Current Estimate 80.9

Disposal Estimate Details

Date of Estimate:

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Source of Estimate:
Disposal/Demilitarization Total Cost (BY 2013 $M):

Disposal costs for this modification are included in the F-22 platform.

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