HomeReportsAll DoD OIG Reports

Procurement Quantities of the AH-64E Apache New Build and Remanufacture Helicopter Programs

DODIG-2018-130

PRINT  |  E-MAIL


Objective:

We determined whether the Army justified procurement quantities for the AH-64E Apache new build and remanufacture helicopter programs. We consider the quantity justified when the analysis and rationale for procurement decisions are documented and show that the quantity meets warfighter needs and complies with Army guidance regarding procurement quantity.

Background:

The AH-64E Apache is an Army two-pilot, four‑blade attack and reconnaissance helicopter. The Apache fleet consists of two models, the AH-64D and AH-64E; however, the Army plans to replace the AH-64D with the AH-64E. The AH-64E program consists of two Major Defense Acquisition Programs—one Major Defense Acquisition Program for remanufactured AH-64Es and one for new build AH-64Es. The remanufacturing program upgrades an existing AH-64D to the AH-64E model, while the new build program produces an AH-64E with all new parts.

The five offices that share responsibility for determining the correct required quantities for the AH-64E Apache Program are the Deputy Chief of Staff of the Army, G-8 (Resource Management); the Deputy Chief of Staff of the Army, G-3/5/7 (Operations, Plans, and Training); the Deputy Chief of Staff of the Army, G-4 (Logistics); the Training and Doctrine Command; and the Apache Program Office.

The Army procures quantities of equipment according to its acquisition objective. The AH-64E acquisition objective is broken down into four sub-categories: operating, training, float, and test. The Army uses float helicopters to provide a temporary replacement when AH-64Es need maintenance, modification, or repair.

Finding:

G-8 and G-3/5/7 officials justified planned procurement quantities of the AH-64Es designated for regular Army and Army National Guard operational fleets. However, G-8, G-3/5/7, and G-4 officials could not justify the planned procurement quantities of 85 training, 67 float, and 15 test AH-64Es. This occurred because G-8, G-3/5/7, and G-4 officials did not conduct the analyses required by DoD and Army guidance to determine the necessary training, float, and test quantities before the Deputy Chief of Staff of the Army, G-8, approved the Army Acquisition Objective on June 15, 2017. As a result, G-8 officials cannot ensure that 167 AH-64Es for training, float, and test, valued at $3.5 billion, will meet the needs of the Army. Additionally, G-8 officials have no assurance that the AH-64E program is affordable. If too many AH-64Es are procured, the Army could be wasting DoD funds that could be put to better use. If too few AH-64Es are procured, the Army may not be able to train enough pilots to meet Army operational needs, provide replacements for AH-64Es that cannot be repaired in time to meet readiness objectives, or test and evaluate other weapon systems that are added to the AH-64E.

Recommendations:

We recommend that the Deputy Chief of Staff of the Army, G-8:

  • review and validate that G-3/5/7 and G-4 officials can justify the training, float, and test quantities of AH-64Es before approving;
  • prepare and retain supporting documentation for decisions to approve the Army Acquisition Objective; and
  • coordinate with G-3/5/7 officials to assess affordability and ensure that the planned procurement quantity is a sustainable investment decision.

We recommend that the Deputy Chief of Staff of the Army, G-3/5/7:

  • coordinate with U.S. Army Aviation Center of Excellence and the Apache Program Office to determine the necessary AH-64E training and test quantities;
  • analyze the supportability, affordability, and feasibility of AH-64Es to determine the necessary training and test quantities and submit changes to G-8 for approval; and
  • review and approve the float quantities determined by the G-4 officials to ensure that they are based on mission needs.

We recommend that the Deputy Chief of Staff of the Army, G-4:

  • analyze and determine the AH-64E quantity necessary for float and submit to G-3/5/7 and G-8 officials for approval; and
  • review and determine whether the float calculations in Army Regulation 750-1 should be updated.

Management Actions Taken:

The Vice Chief of Staff of the Army, responding for the Deputy Chiefs of Staff of the Army, G-8, G-3/5/7, and G-4, agreed with all of the recommendations and stated that the Army:

  • conducted a review of Army Acquisition Objective regulations and policies and has updated the methodology to determine the Army Acquisition Objective;
  • developed simplified demand-based formulas for training, Operational Readiness Float and Repair Cycle Float; and
  • determined a baseline quantity of AH-64Es required to support the test fleet, which will be adjusted during the annual revalidation of the Army Acquisition Objective.

In addition, the Vice Chief of Staff of the Army stated that the Army plans to:

  • publish a policy letter requiring annual revalidation of Army Acquisition Objective documents;
  • capture revalidation results in a written execution order that documents the G-8, G-3/5/7, and G-4 analysis; and
  • ensure that affordability assessments of planned procurement quantities are sustainable based on future budget expectations.

However, the Vice Chief of Staff of the Army did not specify how the Army will conduct and review its analysis to ensure that AH-64E quantities for training, float, and test will meet the needs of the Army. Further, the Vice Chief of Staff of the Army partially addressed our recommendation that G-8, G-3/5/7, and G-4 officials prepare and retain supporting documentation for decisions to approve the Army Acquisition Objective, but did not specify that supporting documentation would be retained.

In addition, on May 14, 2018, the G-8 revised the Army Acquisition Objective and determined that the planned procurement quantity for AH-64Es is 188 (100 for training, 81 for float, and 7 for test). However, the Vice Chief of Staff of the Army did not provide any analysis to support that the planned procurement quantity reflects the Army’s actual needs for training, float, and test fleets across the program’s life cycle. Therefore, nine recommendations remain unresolved.

In addition, the Vice Chief of Staff of the Army agreed to update the float calculations in Army regulations. Therefore, the recommendation to update the regulation is resolved but will remain open until we verify that Army Regulation 750-1 has been updated with the new formulas.