Response to Questions About the Coast Guard's Procurement of Fixed-Wing and Helicopter Aircraft

Gao ID: PLRD-81-70 September 29, 1981

GAO responded to congressional inquiries concerning the Coast Guard's procurement of fixed-wing and helicopter aircraft. The questions raised related to the delivery schedules, the liquidated damage provisions, the requirements for jet engines, and the requirements of the Buy American Act as they pertained to the Coast Guard contracts in question.

There have been eight separate contract reschedulings of delivery dates for the medium range surveillance (MRS) aircraft. In each instance, the contractor notified the Coast Guard in advance and documented that the delays were essentially caused by the subcontractor. Coast Guard officials are not optimistic that the present delivery date will be met, but production is sufficiently advanced to permit the aircraft contractor to go through the process of having the total MRS aircraft certified by the Federal Aviation Administration. GAO stated that the maximum liquidated damages provision of the contract is not low in comparison to other Government contracts and, because of delivery delays, the aircraft contractor is liable for the full amount of liquidated damages. The Coast Guard bought turbofan engines, rather than turboprop engines, for the MRS aircraft because of their speed and altitude capabilities, high visibility potential, size, higher life cycle, and lower maintenance costs. Flight and ground safety were also important considerations. The bid specifications were not drawn to exclude certain aircraft types, but to ensure that the Coast Guard's requirements were met. GAO found that the Buy American Act and applicable implementing regulations were adhered to by the Coast Guard for this procurement. The Coast Guard examined the awardee's bid, facilities, and production plans and concluded that there was nothing to indicate any intention other than full compliance with all the terms of the procurement, including production of domestic source end products.

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