Procurement

In response to a congressional request, GAO reviewed: (1) technical problems in the Air Force contract to develop a simplified munitions lift trailer; and (2) the impact of those problems on cost and schedule.

GAO found that: (1) the Air Force's firm fixed-price contract with the contractor provided $3.9 million for development of the trailer, completion of a critical design review, and delivery of three trailers for testing; (2) the contract also included three options to produce 90 trailers, but did not establish a maximum price for these options; (3) when the Air Force conducted its review, it found that the contractor's design did not meet two requirements; (4) contractor cost reports indicated that development costs exceeded the contract price by $1.2 million and projected that an additional $4.3 million would be needed to complete development of the trailer design; (5) the contractor was about 7 months behind schedule due to parts shortages and design deficiencies; (6) the contractor submitted a new trailer design to correct the deficiencies found in the review; (7) the Air Force recommended that the contractor complete development based on the original design and prepare for production if it could accomplish it without change to the original contract price and on an acceptable schedule; and (8) as of August 29, 1986, the contractor had not responded to these directions.