Summary: GAO discussed the status of the Navy's development of the V-22 Osprey aircraft. GAO noted that: (1) since October 1990, the Navy made progress in correcting engineering and testing problems, but the project still remained a high production risk; (2) Navy assessments in February and March 1991 indicated continued developmental concerns with such areas as vibration, the flight control system, avionics, weight, slow software development, and the nonavailability or faulty functioning of hardware; (3) the Navy believed that the contractors' resolutions to those problems lessened the aircraft's technical risk to an acceptable level; (4) the Navy further believed that it could start pilot production in fiscal year 1992 if Congress provides long-lead procurement funding by July 1991; (5) the contractors estimated the cost to compete full-scale development at $200 million over the ceiling price, but the Department of Defense (DOD) estimated that the overrun would be $242 million; (6) the Navy believed that continued program uncertainty would reduce contractor motivation to expeditiously complete program development and absorb increasing costs; (7) in 1990, the Navy estimated the average unit recurring fly away cost to be $28.2 million, which was $6 million higher than it had estimated when DOD deleted the program due to a delayed aircraft schedule; (8) the Navy estimated that each aircraft would cost over $40 million; and (9) total V-22 program costs increased from an estimated $22.3 billion, when DOD deleted the program, to $25.4 billion for a combined DOD acquisition of 657 aircraft.
