Commercial Practices:

Opportunities Exist to Reduce Aircraft Engine Support Costs

NSIAD-91-240: Published: Jun 28, 1991. Publicly Released: Jun 28, 1991.

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Pursuant to a congressional request, GAO compared Department of Defense (DOD) logistics operations with similar commercial logistics practices, focusing on: (1) the Air Force's inventory and maintenance practices for the F-108 engine compared with those used by commercial airlines; and (2) commercial practices the Air Force could adopt to reduce its logistics costs for the F-108.

GAO found that: (1) the Air Force bought millions of dollars of excess engines and spare parts for the F-108 engine, since it underestimated engine reliability, bought engines earlier than necessary to compensate for unforeseen problems, and failed to adjust engine purchases to match the slowed modification program; (2) commercial airlines estimate their requirements to more closely reflect actual experience and rely more heavily on the manufacturer for delivery of parts when needed; (3) commercial airlines kept inventory levels and costs for aircraft engines and parts low by purchasing whole engines for parts, relying on the manufacturer's parts distribution center, and selling excess parts on the secondary market; (4) since the Air Force decided to acquire its own maintenance capability for the F-108 engine due to the high priority of the aircraft's mission and the anticipated high maintenance during wartime instead of using preexisting commercial maintenance facilities, it purchased too much support equipment and prematurely activated F-108 maintenance facilities; (5) to reduce excess quantities of F-108 engines, the Air Force reduced requirements for the F-108 engine and some planned purchases; and (6) since submitting a $325-million budget request for KC-135 aircraft modification, the Air Force accelerated its installation schedule for the modification program and planned to use prior years' funding for other needs.

Matters for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: The FY 1992 request was acted on. This recommendation pertained specifically to the FY 1992 budget, since this appropriation is now past history. The recommendation is no longer applicable.

    Matter: If the schedule submitted by the Air Force to support the fiscal year (FY) 1992 President's budget request is used as a basis for evaluating the FY 1992 request, Congress may want to consider reducing the FY 1992 budget request for KC-135 modifications by $225 million due to premature deliveries of modification kits and engines, and related installation costs.

  2. Status: Closed - Not Implemented

    Comments: The FY 1992 request was acted on. This recommendation pertained specifically to the FY 1992 budget, since this appropriation is now past history. The recommendation is no longer applicable.

    Matter: Congress may want to consider rescinding $10.1 million in prior years' funding for the KC-135 modification program if it does not want the Air Force to use the funds for other purposes.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: DOD has not responded to the report. No action has been taken to date. GAO will put this in its plan for further review.

    Recommendation: To minimize the premature and possibly excessive investment in maintenance facilities when other commercial engines are purchased by the Air Force in future programs, the Secretary of the Air Force should direct the program managers to consider ensuring that the maintenance capability is compatible with the level of aircraft purchases and the actual performance of the engine.

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

  2. Status: Closed - Implemented

    Comments: DOD has not responded to the report. No action has been taken to date. GAO will put this in its plan for further review.

    Recommendation: To minimize the premature and possibly excessive investment in maintenance facilities when other commercial engines are purchased by the Air Force in future programs, the Secretary of the Air Force should direct the program managers to consider using preexisting commercial maintenance capability, where practical.

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

  3. Status: Closed - Implemented

    Comments: DOD has not responded to the report. No action has been taken to date. GAO will put this in its plan for further review.

    Recommendation: The Secretary of the Air Force should consider drawing down the inventory of spare parts and relying on the engine manufacturer's parts distribution center after the inventory is reduced.

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

  4. Status: Closed - Implemented

    Comments: DOD has not responded to the report. No action has been taken to date. GAO will put this in its plan for further review.

    Recommendation: The Secretary of the Air Force should consider using whole engines for spare parts when it is more economical than buying individual parts.

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

  5. Status: Closed - Implemented

    Comments: DOD has not responded to the report. No action has been taken to date. GAO will put this in its plan for further review.

    Recommendation: The Secretary of the Air Force should direct program managers in future purchases of commercial engines in other programs to rely more on demonstrated engine reliability, ensure that adjustments are made in engine buys when schedule delays occur, and more fully utilize commercial practices to acquire and store spare engines and parts.

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

 

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