C-5A Wing Modification Program

This report discusses the review of the Air Force's C-5A wing modification program, as to whether the Air Force properly exercised its responsibility for requiring Lockheed-Georgia Company, the C-5A contractor, to assume the financial burden of correcting the wing defect. GAO concluded that Lockheed was legally obligated to perform a substantial portion of the correction and cost reimbursement, no fee basis under the C-5A contract. The Air Force did not recognize this obligation, and Lockheed was awarded new contracts to correct the defect and obligated itself to pay fees of about $150 million. GAO perceived no legal basis on which the fee could be avoided.