C-17 Aircraft Program:

Improvements in Initial Provisioning Process

NSIAD-94-63: Published: Jan 21, 1994. Publicly Released: Feb 25, 1994.

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Pursuant to a congressional request, GAO reviewed the Air Force's initial provisioning for C-17 aircraft spare parts, focusing on problems that have occurred since January 1992.

GAO found that: (1) as of July 1993, the Air Force had ordered $111.2 million of C-17 spare parts; (2) the Air Force prematurely ordered the spare parts under a Department of Defense (DOD) policy that calls for maximizing the procurement of support items for the provisioning period; (3) the Air Force uses an outdated program checklist and inaccurate lead-time information, buys spare parts in quantities in excess of computed stockage levels, and fails to follow regulations governing the initial provisioning process; (4) the Air Force has ordered expensive durable items before they are needed, items whose design is still evolving, and duplicate inventory items; (5) the Air Force has required its C-17 program managers to recompute their spare parts needs using up-to-date data, assess the impact of program changes on support procurements, and make appropriate adjustments periodically; (6) DOD has revised its guidance to emphasize limiting the procurement of spare parts during the initial provisioning period to minimize costs; and (7) the Air Force has cancelled $39.6 million of the $111.2 million of C-17 spare parts on order, but cancellation costs have not been calculated.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: On June 29, 1994, OSD directed the Air Force to review its policies and procedures to ensure that provisioning policy changes have been incorporated. Specifically, the OSD memo stated that as a result of the GAO audit, "we especially request that the Air Force ensure it is in compliance with the following: (1) prior to design stability, insurance items and spares will not be procured until the end of production and only when all available assets have been considered; (2) initial requirements determination will be based on the most current and accurate information of future need; and (3) documentation will be developed to support all procurements."

    Recommendation: The Secretary of the Air Force should direct the Commander, Air Force Materiel Command (AFMC), to ensure that weapon system managers comply with regulations for ordering: (1) insurance items; (2) spares prior to design stability; and (3) spares after considering all available assets.

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

  2. Status: Closed - Implemented

    Comments: On June 29, 1994, OSD directed the Air Force to review its policies and procedures to ensure that provisioning policy changes have been incorporated. Specifically, the OSD memo stated that as a result of the GAO audit, "we especially request that the Air Force ensure it is in compliance with the following: (1) prior to design stability, insurance items and spares will not be procured until the end of production and only when all available assets have been considered; (2) initial requirements determination will be based on the most current and accurate information of future need; and (3) documentation will be developed to support all procurements."

    Recommendation: The Secretary of the Air Force should direct the Commander, AFMC, to ensure that weapon system managers comply with regulations for using current and accurate information to determine when and how many spare parts to buy--specifically, the latest programming checklist and uninflated lead time estimates.

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

  3. Status: Closed - Implemented

    Comments: On June 29, 1994, OSD directed the Air Force to review its policies and procedures to ensure that provisioning policy changes have been incorporated. Specifically, the OSD memo stated that as a result of the GAO audit, "we especially request that the Air Force ensure it is in compliance with the following: (1) prior to design stability, insurance items and spares will not be procured until the end of production and only when all available assets have been considered; (2) initial requirements determination will be based on the most current and accurate information of future need; and (3) documentation will be developed to support all procurements."

    Recommendation: The Secretary of the Air Force should direct the Commander, AFMC, to ensure that weapon system managers comply with regulations for adequately documenting justifications for decisions to purchase more items than requirement system computations support, that is, management decision items.

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

 

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