Procurement:

Analysis of Change Orders on Selected F-16 Airframe Contract

NSIAD-88-45BR: Published: Dec 4, 1987. Publicly Released: Dec 16, 1987.

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Pursuant to a congressional request, GAO reviewed changes to an Air Force F-16 aircraft airframe contract, focusing on: (1) the number and cost of changes; (2) reasons for the changes; (3) whether the Air Force negotiated prices before it issued changes; (4) the cost and timeliness of price finalization; (5) how unpriced changes affected negotiations for an advantageous price; and (6) whether the initial justification for the changes was realized.

GAO found that the Air Force: (1) made 518 changes to the initial contract; (2) issued 172 unpriced changes and negotiated the prices later; (3) issued 238 changes with a negotiated price; (4) did not always negotiate unpriced changes within 6 months of order; (5) did not show in its price negotiation memoranda the amount expended before finalization of the prices of individual contract changes; (6) stated that the contractor now maintains cost records for each change proposal; and (7) did not verify that the engineering changes remedied the problems cited as justification for the changes.

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