Observations on the Air Force Acquisition of Certain F-16 Support Equipment From General Dynamics

In response to a congressional request, GAO reviewed an Air Force procurement of F-16 aircraft support equipment and determined who was responsible for procuring the items.

GAO found that the Air Force's use of an unpriced contract modification without timely price negotiation to obtain certain items of support equipment for the F-16 aircraft resulted in excessive prices for many of the items. The excessive prices occurred primarily because: (1) the requirements determination process did not ensure that only needed items were authorized and that the authorized items were obtained in the most cost-effective manner; (2) the issuance of an unpriced contract modification put the government in an unfavorable negotiating position when prices were finalized; (3) the contractor did not follow required procedures and recommended items for new development that were already in existence; and (4) the Air Force did not follow its regulations and reviewed and approved the recommendations in a mechanical manner instead of ensuring thoughtful consideration of need, value, and price. In addition, GAO found: (1) errors in the contractor's cost recording procedures such as the commingling of costs of items and erroneous labor and material charges; (2) that two items were defectively priced because of the use of noncurrent purchase orders; (3) that certain items were purchased which were no longer in use; and (4) that the responsibility for the acquisition involved many Air Force officials.