Alternatives Are Available Which Can Reduce Costs of the LAMPS MK III Program

GAO was requested to review the program cost and, because of the inordinate cost growth experienced over the years, examine potential cost reduction alternatives to the Light Airborne Multipurpose System (LAMPS) MK III antisubmarine warfare system. The objective of the review was to determine whether current estimates of the program's total cost were complete or whether additional cost increases could be expected.

Program uncertainties still exist which could result in further cost increases of up to $1 billion. On May 1, 1981, the Navy released a report on the causes of the cost growth and indicated that program costs may still be underestimated. Several management actions which could be taken by the Department of Defense (DOD) offer potential for cost reductions in the LAMPS MK III program. One such action is the use of multiyear contracting, while other actions relate to the consideration of lower cost alternatives to the system at some sacrifice in total mission capability. The LAMPS program exhibits certain characteristics such as large quantity, high cost, and an extended procurement schedule which should make it a candidate for multiyear contracting. Regarding other actions which can be taken to reduce LAMPS MK III program costs, several alternatives were considered, including: (1) purchasing fewer LAMPS MK III weapon systems; (2) purchasing less costly radar and electronic support measures equipment; (3) reducing the number of LAMPS MK III scheduled for retrofitting; and (4) eliminating the LAMPS MK III system from the CG-47 class cruisers. If these alternative actions were implemented, reductions in terms of reduced procurement costs of $970 to $1,850 million could be achieved.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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