B-2 Bomber:

Contract Structure and Selected Provisions

NSIAD-90-230FS: Published: Aug 17, 1990. Publicly Released: Aug 17, 1990.

Additional Materials:

Contact:

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Pursuant to a congressional request, GAO reviewed the contract structure and selected provisions affecting contractor and government risks under the B-2 Bomber low-rate initial production contract.

GAO found that: (1) the Air Force's prime contractor was responsible for ensuring that B-2 met specifications and for managing major subcontracts; (2) federal legislation required that contracts include warranty provisions for design, manufacturing, material, and workmanship; (3) the B-2 test program could affect the government's ability to enforce the contract's performance warranty, since testing was scheduled for completion 10 to 18 months after the initial 5 production aircraft warranties expired; (4) the low-rate initial production contract established a cost-sharing arrangement under which, unless the contractor has a substantial cost overrun, the Air Force will pay 80 percent of allowable warranty costs; (5) the contractor's liability under the warranty provision was limited to $100 million for the 5 aircraft; (6) the Air Force reported that it obtained the B-2 warranty at no additional cost to the government; (7) the Air Force asked the contractor to propose a warranty assuming greater responsibility for corrective action costs for the next 5 aircraft; (8) the low-rate initial production contract included a provision to renegotiate the contract if a prescribed number of aircraft are not purchased and also included termination provisions to protect the contractor's investment and the government's liability; and (9) the Air Force's reduced requirement for B-2 aircraft from 132 to 75 could require further negotiations and increase contract costs.

Sep 22, 2016

Sep 21, 2016

Sep 19, 2016

Sep 12, 2016

Sep 8, 2016

Sep 7, 2016

Sep 6, 2016

Aug 25, 2016

Looking for more? Browse all our products here