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C-MASAD-83-7 1 (1983-01-26)

handle is hein.gao/gaobabdwc0001 and id is 1 raw text is: This is an unclassified digest furnished in lieu of a report containing classified security information.' REPORT BY THE COMPTROLLER RESULTS OF PRODUCTION TESTING GENERAL OF THE UNITED STATES SHOULD BE CONSIDERED BEFORE INCREASING PATRIOT'S PRODUCTION DIGEST Test results to date provide a basis for opti- mism about the Patriot air defense system's ultimate performance capabilities. Problems disclosed in earlier testing have kept the sys- tem in low-rate production for 3 years. For fiscal year 1983 the Congress approved the Department of Defense request to increase Patriot's production from the previous 9 fire units and 176 missiles to 12 fire units and 376 missiles. The Army plans to request addi- tional production increases in its fiscal year 1984 budget. GAO believes that increases in the production-rate above the present level of nine fire units should await the results of ongoing tests of initial production units, and the operational tests to follow, which are scheduled to be completed in August 1983. The operational tests will be conducted with pro- duction hardware and user personnel under com- bat conditions. Only prototype models have been tested previously. Patriot succeeds Nike Hercules and Improved Hawk as the principal air defense missile against aircraft flying at medium and high altitudes. Patriot was approved for limited production in September 1980. At that time, it was still showing a low reliability and experi- encing performance problems in certain combat environments. Contracts for the first 3 years' production were awarded as cost-plus incentive fee. This type of contract is normally used when a system's design is not yet stable, and the production risk is greatest. It is rare for a major weapon system production contract. Normally, when a system enters production, the design has been sufficiently stabilized and proven to permit awarding a fixed-price con- tract, under which the contractor would assume a share of the cost risk. GAO/C-MASAD-83-7 11111111 11111 iJANUARY 26,1983 120561

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