Improved Management of Air Force Modification Programs Can Save Millions

PLRD-81-5: Published: Mar 16, 1981. Publicly Released: Mar 16, 1981.

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Air Force policy is to use existing items that may be available in the Department of Defense (DOD) supply system before it purchases new items for modification kits.

GAO found that the Air Force purchases most of its modification kits through contracts without considering the DOD supply system. GAO believes that the lack of screening for the needed items has resulted primarily from: (1) confusion and misunderstanding on the part of the centers' personnel, coupled with vague and sometimes contradictory Air Force regulations; and (2) a lack of faith on the part of the Air Force that the Defense Logistics Agency (DLA) can effectively support the modification programs. GAO believes that significant savings can result from using DOD-managed items. The Air Force has proposed alternative procedures to correct unnecessary costs. However, the Air Force proposal has not been implemented, and GAO believes that it contains weaknesses which should prompt consideration of another alternative. In addition to requiring contractors to perform duties which Air Force personnel are already supposed to be doing, the proposal will require contractors to requisition DLA-managed items on a fill or kill basis. Thus, DLA will have an opportunity to provide needed items only if they are on hand. The proposal will not afford DLA the opportunity to provide items through procurement actions. In its application of the DOD phased procurement policy, the Air Force overlooks opportunities for significant savings. Congress, DOD, and the Joint Logistics Commanders have recognized that the exceptions to the phased procurement policy may result in significant savings. The Joint Logistics Commanders have recommended that the DOD directive be revised to clarify this.

Recommendations for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Defense should require the Secretary of the Air Force to take maximum advantage of existing Air Force capabilities to aggregate and assemble modification kits at lower costs.

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

  2. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Defense should require the Secretary of the Air Force to direct Air Force managers to screen the Defense Logistics Agency inventory to determine what support can be provided before allowing contractors to requisition items on a fill or kill basis.

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

  3. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Defense (DOD) should require the Secretary of the Air Force to amend and clarify current regulations and procedures that deal with modification programs to eliminate confusing and contradictory statements on screening the DOD supply system for items needed in modification kits.

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

  4. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Defense (DOD) should require the Secretary of the Air Force to direct Air Force managers to obtain DOD-managed items through the DOD supply system where savings can be realized.

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

  5. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Defense (DOD) should: (1) adopt the Joint Logistics Commanders' recommendation to clarify the DOD directive permitting advance procurement in situations where good business practices and significant savings can be achieved; and (2) clarify the current DOD policy permitting procurement of modification kits in optimum quantities where significant recurring production costs can be avoided without risking cancelled programs. Additionally, the Secretary should require the Secretary of the Air Force to establish procedures for the air logistics centers to identify, document, and report instances where recurring production costs on modification kit items can be avoided through consolidated and advanced procurements.

    Agency Affected: Department of Defense

 

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