Information on B-747 and C-5B Aircraft Cost Comparisons

GAO was asked to evaluate the cost of the B-747 and C-5B aircraft, competing alternatives for airlift enhancement.

GAO found that the cost estimates for the B-747 aircraft prepared by the contractor and those prepared by the Air Force vary widely because of differing estimating methods and assumptions. Major differences between the estimates for the B-747 are in the costs associated with operating and supporting a fleet of such aircraft. The contractor's estimates are based on its logistics support system while some of the Air Force estimates assume an organic Air Force support system. Other differences occur because the contractor and the Air Force used different estimating methods for computing fuel usage rates and because the Air Force uses a larger force of B-747's than proposed by the contractor. The cost of alternative airlift proposals has entered the congressional debate on the administration's airlift enhancement decision. According to the Department of Defense, the two major factors in its decision to acquire outsize airlift were the urgency and magnitude of an outsize cargo airlift requirement. In its study of the C-5B aircraft program, GAO found that a reported cost increase is the result of $700 million in underestimated program acquisition costs and a $500 million inflation adjustment due to a slippage in the planned contracting date.