Aviation Requirements

DOD Should Reassess the Marine Corps' Helicopter Modernization Decision Gao ID: NSIAD-97-1 October 30, 1996

In deciding to modernize its fleet of utility helicopters, the Marine Corps did not adequately consider the economic benefits of increased commonality that could be achieved by buying an alternative utility helicopter like the Blackhawk. The Marine Corps evaluated a Blackhawk derivative and found it to be a desirable alternative to the upgraded Huey, but concluded that the up-front procurement costs would be a major impediment and the support costs would be too high. GAO found that purchasing the Blackhawk derivative may be the Pentagon's most cost-effective alternative. A May 1996 Defense Department (DOD) study shows that the Blackhawk's life-cycle cost is $200 million more than that of the Huey upgrade, and a September 1996 DOD study determined that the cost to acquire the Blackhawk derivative would be about $450 million more than the Huey upgrade. GAO's analysis, however, indicated that by increasing the total annual buy of Blackhawk derivatives, DOD could save as much as $717 million in research and development and procurement costs. These savings could be used to offset the Marine Corps' increased procurement and life-cycle costs.

GAO found that: (1) in deciding to modernize its fleet of utility helicopters, the Marine Corps did not adequately consider the economic benefits of increased commonality that could be achieved by buying an alternative utility helicopter like the Blackhawk; (2) the Marine Corps evaluated a Blackhawk derivative and found it to be a desirable alternative to the upgraded Huey, but it concluded that the up-front procurement costs would be a major impediment and the support costs would be too high; (3) GAO's analysis shows that purchasing the Blackhawk derivative may be the more cost-effective alternative for DOD; (4) a May 1996 DOD study of the alternatives shows that the life-cycle cost of the Blackhawk derivative is $200 million more than the Huey upgrade, and a September 1996 DOD study determined that the procurement acquisition cost of the Blackhawk derivative would be about $450 million more than the Huey upgrade; (5) however, GAO's evaluation indicated that if DOD were to increase the total annual buy of Blackhawk derivatives, as much as $717 million in research and development and procurement savings could result; and (6) these savings could be used to offset the Marine Corps' increased procurement and life-cycle costs.

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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