C-17 Aircraft

Comments on Air Force Request for Approval of Multiyear Procurement Authority Gao ID: T-NSIAD-96-137 March 28, 1996

This testimony discusses the proposed multiyear procurement of the C-17 aircraft. This is a particularly critical decision because this proposal would require legislation authorizing a seven-year multiyear contract. The short time frame for congressional action--McDonnell's offer expires on June 1, 1996--also places an unusual burden on decisionmakers. In GAO's view, the proposed C-17 multiyear contract presents the Air Force with the opportunity for savings, but the amounts involved are substantially less than the $896 million that has been publicized. Further, these potential savings are not without both costs and risk. GAO believes that Congress should allow the government to have until the fiscal year 1999 authorization and appropriation cycle to assess the contractor's ability to produce the aircraft at the required rate. If the contractor's performance is inadequate, the government could revert to an annual buy contract without renegotiating the not-to-exceed option prices for the remaining lots. Also, the Defense Department should ensure that the contractor is ready to move to the higher production rate.

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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