Military Airlift:

C-17 Wing Competition Fair, but Savings Lower Than Air Force Estimates

NSIAD-88-3: Published: Nov 13, 1987. Publicly Released: Nov 13, 1987.

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In response to a congressional request, GAO reviewed an Air Force prime contractor's decision to subcontract a major portion of a C-17 wing components procurement rather than make them itself, to determine the: (1) fairness of the competition; and (2) Air Force's analysis of the resulting cost savings.

GAO found that the: (1) prime contractor held a fair and adequate competition using Air Force-approved source-selection procedures; and (2) Air Force overstated its estimates of the savings by $18.8 million because it did not adjust the contractor's costs to account for the winglets and recovery of the material costs incurred prior to competition. GAO also found that the Air Force and the prime contractor agreed that they would: (1) not remove any of the resulting savings from the prime contract; (2) not change contract costs, price, or profits; and (3) place the resulting savings in a separate C-17 account.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: The Air Force considered the GAO adjustment and decided to place into the separate C-17 account its estimate of the savings.

    Recommendation: The Air Force should consider the GAO adjustments in determining the amounts to be placed in the separate C-17 account.

    Agency Affected: Department of Defense: Department of the Air Force

 

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