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Military Airlift: C-17 Settlement Is Not a Good Deal

NSIAD-94-141 Published: Apr 15, 1994. Publicly Released: Apr 15, 1994.
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Highlights

Pursuant to a legislative requirement, GAO reviewed the Department of Defense's (DOD) C-17 aircraft program, focusing on: (1) whether the proposed settlement with the contractor is in the government's best interest; and (2) alternatives to the C-17 program.

Recommendations

Matter for Congressional Consideration

Matter Status Comments
Congress should not endorse any settlement until DOD has provided information on the minimum number of C-17 aircraft needed to meet its specialized airlift requirement and the criteria DOD intends to use to evaluate contractor performance under the settlement.
Closed – Not Implemented
Congress endorsed the C-17 settlement.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense The Secretary of Defense should determine immediately the minimum number of C-17 aircraft needed to provide specialized military airlift capabilities.
Closed – Not Implemented
DOD is conducting a number of studies related to determining the number of C-17s needed for unique military capabilities. These studies are to serve as part of the information to be considered at the Milestone IIIB decision in November 1995. DOD will not make a determination of the number of C-17s needed until that time.
Department of Defense The Secretary of Defense should establish specific cost, schedule, and performance criteria to evaluate improvements in the contractor's performance in order to make an informed decision on whether to continue the program.
Closed – Implemented
DOD developed criteria to serve as the basis for a decision on the number of C-17s to be acquired. This criteria was used to support the milestone IIIB decision to acquire 120 C-17s. However, those criteria were not as specific as intended in the recommendation. As a result, DOD's action is not fully responsive to the recommendation.

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Topics

Claims settlementContract administrationContract performanceCost effectiveness analysisCost overrunsDefense contingency planningDelivery termsDepartment of Defense contractorsMilitary aircraftAircraft acquisition program