1. ENJJPT SC #71 T-38 Programs Mr. Ryan Bruce T-38 Program Office March 2016

2. Topics Overview Financial Outlook Current Programs Summary 2

3. T-38 Overview Structure is primary concern with T-38 retirement extension – Structural modifications and inspections required Diminishing Manufacturing Sources and Material Shortages (DMSMS) is a significant concern – Systems affected: Heads-Up Display, Mission Display Processor, VHF Communication Radio and VHF Navigation Radio Current AETC retirement planned for 2023-2029 – Follow AETC Drawdown plan – Expecting retirement extensions with T-X IOC delays – Extensions manageable with proper lead time 3

4. T-38 Overview Current Programs – Pacer Classic III (PCIII) – Video Data Transfer System/Speed Brake Indicator System Last aircraft inducted September 2015; due out May 2016 – Avionics Component Integration (AvCI) – Automatic Dependent Surveillance-Broadcast (ADS-B) 4

5. SC71 Funding Timeline (FY) Summary Cost subject to change Numbers may not add correctly due to rounding 5 FY11FY12FY13FY14FY15FY16FY17FY18FY19FY20FY21FY22FY23SC71SC70SC69 Quantities: PC III Kits912810 17066 PC III Installs98910 66 ADS-B Kits8043123 ADS-B Installs8043123 AvCI Kits/Installs HUD41 123 MDP41 123 VHF Nav41 123 VHF Com41 123 Costs: PCIII$3.6$5.1$11.8$11.9$13.0$14.1 $11.4$11.0$100.4$94.7$99.3 ADS-B$1.7$1.3$0.2$3.1$4.2 AvCI$8.1 $24.2$64.5 Total Costs ($M)$3.6$5.1 $11.8$11.9$13.0$23.8$23.4$19.7$11.0 $127.7$165.9$170.5

6. PCIII Overview Program objectives – Ensure structural integrity of 160 aircraft at high risk of grounding prior to FY24 Added 10 aircraft (4 Sheppard jets) since SC70 due to T-X IOC extension – Enable execution of AETC mission through FY29 Largest structural mod in T-38 history Entered production Dec 14 – Multiple challenges in early stages – Two Sheppard jets completed to date; next jet due out this week Requirement validation ongoing – Further assess need for more comprehensive/intrusive inspections – Validate ASIP analysis of structural health and then make informed adjustments 6

7. PCIII Program Overview Mod Kit Parts DLA Parts - Parts Replaced All The Time (100% Parts) - Parts Replaced as required, Select Structural Components (SSC) - Parts Removed for Access and also SSC - Parts Removed for Access to other parts, but not replaced (RFOM) 7

8. PCIII Virtual Tour

12. SC71 Funding Timeline T-38C PC III Reduced FY16 inductions due to depot constraints Increased overall Sheppard quantity to 70 with addition of four a/c Costs will be reconciled with individual country cost at the end of each modification period Aircraft quantities and costs subject to change Numbers may not add correctly due to rounding FY11 FY12 FY13FY14FY15FY16FY17FY18 FY19 FY20FY21FY22Total Quantities: Kits9 12 810 170 Installs98910 470 Costs ($M): Kits$3.6 $5.1 $2.5$3.1 $0.4$24.0 Installs $9.3$8.8$9.9$11.0 $4.4$76.4 Total ($M)$3.6 $5.1 $11.8$11.9$13.0$14.1 $11.4$11.0$4.4$100.4 Non-US Cost Estimated$2.7 $1.1 $3.1 $3.4$3.7 $3.0$2.9$1.1$27.6 12

13. PCIII Way Ahead Production Challenges – Maintenance-related Over and Above maintenance exceeding estimates Hiring (qualified workforce, background checks, etc.) Process engineering evolving as mod moves forward – Scheduling Drop in Maintenance requirements Unit aircraft availability Sheppard aircraft are priority for scheduling Challenges result in delayed completions and aircraft in queue – Reduced FY16 inductions to reduce queue 13

14. New T-38 Modification Efforts 14

15. T-38C Avionics Component Integration (AvCI) Resolves obsolescence issues and provides follow-on CLS Primary components affected – Heads-up Display (HUD) – Mission Display Processor (MDP) – VHF Navigation Receiver – VHF Communication Receiver/Transmitter Notional FY16 – FY23 development and integration schedule – Development begins in FY16 – Production and installs begin in FY17 for some components AvCI Contract – Awarded to The Boeing Company (incumbent), 4 January 2016 – Costs and schedule updates 15

16. SC70 Funding Timeline AvCI 16 FY17FY18FY19FY20FY21FY22FY23Total Quantities (Parts): HUD 156246 123 MDP 156246 123 VHF Navigation Receiver18 15123 VHF Communication R/T18 15123 Quantities (Installs): HUD 156246 123 MDP 156246 123 VOR-ILS-RCVR18 15123 VHF COMM18 15123 Costs: HUD $4.6$18.3$13.8 $36.7 MDP $2.9$11.5$8.6 $23.0 VHF Navigation Receiver$0.3 $2.1 VHF Communication R/T$0.4 $0.5 $2.7 Installs$0.0 Total$0.7$8.2$30.5$23.2$0.8 $0.3$64.5 Non-US Cost Estimated$0.2$2.1$7.6$5.8$0.2 $0.1$16.1

17. SC71 Funding Timeline T-38C AvCI 17 Numbers may not add correctly due to rounding FY18FY19FY20Total Quantity (Kits): HUD41 123 MDP41 123 VHF Nav Receiver41 123 VHF Comm R/T41 123 Quantity (Installs): HUD41 123 MDP41 123 VHF Nav Receiver41 123 VHF Comm R/T41 123 Costs ($M): HUD $4.2 $12.6 MDP $1.4 $4.3 VHF Nav/Comm Receiver $2.4 $7.3 Installs---- Total Cost ($M) $8.1 $24.2 Non-US Cost Estimated ($M) $2.1 $6.3

18. Automatic Dependent Surveillance-Broadcast (ADS-B) FAA is transforming air traffic control to a satellite-based system known as the Next Generation Air Transportation System (NextGen) Mandatory for all aircraft operating in CONUS by 2020 – Increases safety and efficiency Airspace requiring ADS-B compliance: – Class A, B, and C – Class E above 10,000 ft – Around those airports identified in 14CFR 91, Appendix D AETC T-38C training syllabi require access to controlled airspace above 10,000 feet Solution included with AvCI contract 18

19. SC70 Funding Timeline ADS- B Numbers may not add correctly due to rounding 19 FY17FY18FY19Total Quantities: Kits123 Installs41 123 Costs ($M): Kits$1.8 Installs$0.8 $2.4 Total ($M)$2.6$0.8 $4.2 Non-US Cost Estimated ($M)$0.7$0.2 $1.1

20. SC71 Funding Timeline (FY) ADS- B Numbers may not add correctly due to rounding 20 FY18FY19FY20Total Quantities: Kits8043123 Installs8043123 Costs ($M): Kits$1.7$0.8$2.5 Installs$0.4$0.2$0.6 Total ($M)$1.7$1.3$0.2$3.1 Non-US Cost Estimated ($M)$0.4$0.3$0.1$0.8

21. 21 Fwd Canopy Development Background – 7 Class A mishaps and 3 pilot fatalities since 1964 from bird strikes to front canopy transparency – Current T-38 front canopy has minimum birdstrike capability of 4 lb. bird at 125 knots – USAF expects to increase minimum birdstrike capability to be consistent with mission profiles without shattering in order to significantly increase pilot safety – Program in early stages of market research and feasibility testing

22. 22 Difficult to predict costs beyond 5 years out for unestablished programs/initiatives Dependent on T-X fielding Required Actions* – Pacer Classic III – modify remainder of fleet (~$70-80M*) – Approximately 6 a/c for every year retirement is extended beyond FY30 – Obsolescence updates ($10-30M over 10 years) – CLS, Depot, Sustaining Engineering, Tech Orders Recommended Actions* – Anti Skid ($13M; 3-5 years to field); – Canopy replacement ($7.6M, FY19 start, 5 years to field) – Engine Replacement ($40-50M, FY20 start, 15 years to field) Other Sustainment Efforts* – Landing Gear ($15M over 5 years) – Wing and tip replacements (~$150M over 5 years; 18 condemned since Apr 15) – Efforts like those ongoing now ($1-2M/year) * Estimates are T-38 Program Office costs only; low fidelity and all Sheppard costs Cost of an Aging Fleet

23. 23 * Estimates are T-38 Program Office costs only; low fidelity and all Sheppard costs Cost of an Aging Fleet FY16 - FY26 Estimates Costs in $M FY16FY17FY18FY19FY20FY21FY22FY23FY24FY25FY26 PCIII11.913.014.1 11.411.04.4 AvCI 0.69.511.72.51.52.0 ADS-B 0.31.81.1 Engine 2.0 ABS 2.5 Canopy 1.5 Wings30.0 Ldg Gear3.0 Misc.4.0 4.5 5.0 Total ($M)48.950.962.468.457.423.517.413.09.07.0

24. 24 Difficult to predict costs beyond 5 years out for unestablished programs/initiatives Cost of an Aging Fleet FY16 - FY26 Estimates $M

25. Summary PCIII schedule is dynamic, but ENJJPT jets remain a priority VDTS Mod will be closed out this Spring AvCI/ADS-B contract awarded – Contract costs drastically less than estimates – Kit buy and install schedules are flexible – Intent for Sheppard is to evenly spread costs across affected years – ADS-B completion is dependent upon AETC install priority; currently expecting to meet FAA mandate Future T-38 costs highly dependent on T-X timeframe – Main mod drivers will remain PCIII, Avionics – Several recommended efforts (canopy, anti-skid, engines) – Difficult to accurately predict beyond 5 years 25

26. Summary Cost figures presented are subject to change due to program delays, installation constraints, DoD funding adjustments, efficiencies gained, contract restructuring/repricing, or other unforeseen circumstances. Information provided is for long range budget planning purposes, and should not be interpreted as a final cost estimate. Goal is to ensure NATO’s future fighter pilot training needs are met and ENJJPT, with new advanced training systems, will continue to produce the world’s best pilots. 26

27. Recommendation Steering Committee approve proposed funding plan 27

28. Questions? 28

29. Backup 29

30. Funding Timeline PCIII O&A/SSC 3400 Funds Numbers may not add correctly due to rounding FY15FY16FY17Total Quantities: O&A99927 SSC99927 Costs ($M): O&A$1.25$1.46 $4.2 SSC$.92$1.08 $3.1 Total$2.17$2.54 $7.3 Non-US Cost Estimated$0.65$0.76 $2.2 * PCIII Program Description in charts 4 through 6 above. These costs are for PCIII Over and Above and Select Structural Component funding requirements 30

31. SC71 Funding Timeline Magnesium to Aluminum Numbers may not add correctly due to rounding FY13FY14FY15FY16Total Quantities: Kits8414330122 Installs8414330122 Costs ($M): Kits*$0.00 $0.0 Installs$0.20$1.60$1.80$1.49$5.04 O&A$0.03$0.16$0.47$0.40$1.06 Total$0.23$1.76$2.23$1.88$6.1 Non-US Cost Estimated$0.07$0.53$0.67$0.56$1.8 * Kit cost included in the install rate 31

32. SC71 Funding Timeline Asbestos Removal Program Numbers may not add correctly due to rounding FY14FY15FY16Total Quantities: Kits424337122 Installs424337122 Costs ($M): Kits*$0.00 $0.0 Installs$1.54$1.61$1.72$4.9 O&A$.38$0.46$0.50$1.3 Total$1.91$2.07$2.22$6.2 Non-US Cost Estimated$0.57$0.62$0.66$1.9 * Material/Kit cost included in the install rate 32

33. 33 Safety Initiatives Forward Canopy Redesign: Improved bird-strike resistance Flap Y Rod Replacement: Approximately 60% complete Rudder Interconnect Crank Replacement: Deliveries Mar 16 Control Stick Bolt Safety Wire: Completed Brake Quadrant Replacement: To complete in May 18

34. Sustainment Efforts 34

35. TCTO 1T-38-837 Control Rods and Magnesium Parts Replacement TCTO 837 addresses two issues in the primary flight control system. Inspections showed that magnesium CSIs contained corrosion damage. They also showed that control rods were bent which induces fatigue damage. To correct these issues the control rods will be replaced with new control rods. To correct the corrosion on the magnesium parts, new parts will be built out of aluminum and replaced. This is a one time change out of 39 flight control parts. Control RodsMagnesium Parts 35

36. TCTO 1T-38-870 Engine Bay Asbestos Removal Effort Asbestos originally used in the production of T-38 aircraft in the engine bays and liquid oxygen system areas as an insulator. It is now recognized asbestos poses a major health risk and field units are being tasked to perform increasing inspections in these areas due to aircraft age and usage. Removing the asbestos at depot creates a single controlled environment for asbestos removal allowing the field perform required inspections more efficiently without work-arounds required to mitigate asbestos exposure.. 36 Pre 870 Post 870 Asbestos Removal

37. 37 Asbestos Removal Background: Asbestos is used to isolate the heat shields from the aluminum structure. Asbestos is considered a carcinogenic and requires Hazmat procedures to be in place when performing maintenance in this area.

38. Cost Saving Measures New LED Beacon Light Increased visibility Increased mean time between failure New Radial Tires Increased Landings New Generator Stator Housing Operates at cooler temperatures Increased mean time between failure Currently implemented Improved P-panel Circuit Cards Testing completed Technical Review Board (TERB) at Tinker TERB and Configuration Control Board at T-38 SPM T-5 Amp Go/No-go Tester Capability to test T-5 Amp before returning to contractor for repair Approximately 60% returned to supply as serviceable 38

39. 39 LED Beacon Light Background: Existing electromechanical rotating beacon light is prone to failure due to age and condition. This light has a mean time between failures of 27,000 hours.

40. 40 Bias vs Radial Tires FEATURES BENEFITS BiasRadial Improved FOD Resistance Mature Technology Low Heat Generation Improved Ride Quality (Reduced Vibration/flat spots) Tire Cooling Time Reduced Less Rolling Resistance Increased Overload & Taxi Durability Marginal Safety Benefit

41. 41 Generator Stator Housing Background: During depot overhaul, stator housings needed to be condemned due to damage to the stator housing. A redesign was initiated and a new stacked housing was approved. Testing proved that a generator operated at cooler temperatures and service life increased. Several test generators are still in service after 1400 hours.

42. 42 Protection Panel Circuit Cards Background: Legacy P-panel circuit cards are 1960s technology. New circuit cards use state of the art technology and are expected to increase service life. Legacy and improved p-panels can be installed on an aircraft with no issues. Operational testing is scheduled soon for final approval.