Aviation Requirements:

DOD Should Reassess the Marine Corps' Helicopter Modernization Decision

NSIAD-97-1: Published: Oct 30, 1996. Publicly Released: Oct 30, 1996.

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GAO reviewed the Department of Defense's (DOD) efforts to reduce the number of helicopters in its inventories, focusing on: (1) whether the services were taking advantages of opportunities to increase commonality of helicopters within DOD; and (2) the Marine Corps' plans to modernize its fleet of UH-1 or Huey helicopters.

GAO found that: (1) in deciding to modernize its fleet of utility helicopters, the Marine Corps did not adequately consider the economic benefits of increased commonality that could be achieved by buying an alternative utility helicopter like the Blackhawk; (2) the Marine Corps evaluated a Blackhawk derivative and found it to be a desirable alternative to the upgraded Huey, but it concluded that the up-front procurement costs would be a major impediment and the support costs would be too high; (3) GAO's analysis shows that purchasing the Blackhawk derivative may be the more cost-effective alternative for DOD; (4) a May 1996 DOD study of the alternatives shows that the life-cycle cost of the Blackhawk derivative is $200 million more than the Huey upgrade, and a September 1996 DOD study determined that the procurement acquisition cost of the Blackhawk derivative would be about $450 million more than the Huey upgrade; (5) however, GAO's evaluation indicated that if DOD were to increase the total annual buy of Blackhawk derivatives, as much as $717 million in research and development and procurement savings could result; and (6) these savings could be used to offset the Marine Corps' increased procurement and life-cycle costs.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In October 1996, DOD acted on GAO's recommendations and delayed a final decision on the utility program until the results of a commonality study and assessment of alternatives by DOD were known. DOD directed its Office of Program Analysis & Evaluation (PA&E) to conduct an interim commonality study to be ready in the December 1996 timeframe which PA&E accomplished. In addition, PA&E completed an in-depth commonality study in 1997. However, as of August 12, 1997, the results had not been released. Based on DOD's action to delay the decision to proceed with the 4BN until a study had been done, GAO prepared an accomplishment report for "management improvements" that is still in process.

    Recommendation: In view of the DOD goal of increasing common aircraft among the services and achieving associated savings, the Secretary of Defense should direct the DOD Office of Program Analysis and Evaluation to conduct an in-depth analysis of the economic benefits of increased utility helicopter commonality.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: DOD considered the findings of PA&E's interim commonality study in its deliberations on the 4BN and did not find sufficient interservice commonality savings to offset the additional cost to DOD associated with the introduction of an H-60 utility variant to the Marine Corps. Therefore, DOD allowed the Marine Corps to proceed with the 4BN portion of the H-1 EMD contract. However, according to Bell Officials, GAO's report was the catalyst for Bell Helicopter to revise program costs downward. As a result, the Marine Corps reduced program costs for FYs 1997-2011 by $77.2 million and GAO claimed $3.4 million for FYs 1997 and 1998.

    Recommendation: In view of the DOD goal of increasing common aircraft among the services and achieving associated savings, the Secretary of Defense should consider the results of the commonality study and information in this report in future DOD deliberations on the Marine Corps' helicopter modernization options.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: DOD considered the findings of PA&E's interim commonality study in its deliberations on the 4BN and did not find sufficient interservice commonality savings to offset the additional cost to DOD associated with the introduction of an H-60 utility variant to the Marine Corps. Therefore, DOD allowed the Marine Corps to proceed with the 4BN portion of the H-1 EMD contract. However, according to Bell Officials, GAO's report was the catalyst for Bell Helicopter to revise program costs downward. As a result, the Marine Corps reduced program costs for FYs 1997-2011 by $77.2 million and GAO claimed $3.4 million for FYs 1997 and 1998. In addition, PA&E completed an in-depth commonality study in 1997. However, as of August 12, 1997, the results had not been released.

    Recommendation: If the study and other available data demonstrate that potential savings are sufficient to offset the Marine Corps' increased costs, the Secretary of Defense should consider using these savings for a Marine Corps Blackhawk derivative buy.

    Agency Affected: Department of Defense

 

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