Some 2,900 fighter aircraft in the inventories of the U.S. Air Force and Navy carry radar-guided missiles. These planes currently carry the Sparrow missile, which homes in on radar signals beamed out from the employing aircraft toward the target aircraft. The Sparrow is an old missile, initially deployed in 1956. Though Sparrow has been upgraded many times since then it still lacks many capabilities that the services feel are important. In the late 1970s, the Department of Defense (DoD) began a joint Air Force/Navy project to develop a new missile -- the Advanced Medium-Range Air-to-Air missile, or AMRAAM. Because AMRAAM has its own radar transmitter, the employing aircraft can break away to defend itself or attack other targets once it has launched the missile. The AMRAAM is scheduled to enter low-rate production in fiscal year 1987, some two years after its original production date. Even after adjusting for inflation, it is now projected that AMRAAM will cost about 120 percent more than estimated in 1979. This delay in schedule and cost growth led the Congress to contemplate canceling the program last year. Since then, the program has been restructured and the Secretary of Defense has certified that costs will not grow further nor will capabilities be diminished below current estimates. Nonetheless, ongoing concerns about cost increases and testing delays have prompted discussions of alternatives to the Administration's plan that would delay AMRAAM production. It appears unlikely, however, that the Congress will cancel the program this year. Thus, this paper considers only two alternatives in detail -- the Administration's plan and a one-year delay in procurement to allow more time for testing. Two other alternatives -- a reduction in procurement levels and program cancellation -- are discussed in general terms. These might become relevant in future years if the test program goes poorly or if costs rise significantly.


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