Navy Contracting:

Status of Plans To Second Source AEGIS Weapon System

NSIAD-88-62FS: Published: Dec 21, 1987. Publicly Released: Jan 12, 1988.

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Pursuant to a congressional request, GAO reviewed the Navy's plans to establish a second source for the AEGIS weapon system, focusing on its procurement plans for system integration and testing.

GAO found that the Navy plans to: (1) use a team approach to establish a competitive second source for manufacturing major AEGIS components; and (2) retain its sole-source agreement for system engineering, integration, testing, and design. GAO also found that the Navy: (1) felt that the possible cost benefits of second sourcing the integration and testing were marginal and would be offset by increased costs due to possible delays in system delivery; and (2) attempted to respond to congressional concerns regarding the Navy's failure to provide a complete analysis of the costs and benefits of the Navy's proposed team-oriented procurement approach.

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