Strategic Missiles:

ACM Program, Opportunity for Additional Savings

NSIAD-92-154: Published: May 6, 1992. Publicly Released: May 6, 1992.

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GAO reviewed the status of the Advanced Cruise Missile (ACM) program's acquisition strategy and manufacturing problems.

GAO found that: (1) in January 1992, citing the dissolution of the Soviet Union and the reduced nuclear threat, the President announced an end to ACM production; (2) to implement the President's decision, the Department of Defense (DOD) issued plans to cease procurement of 640 missiles, including the purchase of 120 missiles authorized for fiscal year (FY) 1992; (3) as of April 7, 1992, DOD had not concurred the Air Force's plans to procure no more than 520 ACM; (4) the Air Force limited its procurement to 520 missiles primarily because it lacked funds to cover prior year ACM contract funding shortfalls; (5) the shortfalls, estimated at $121 million, were primarily due to costs incurred by suspended deliveries due to design and quality problems; (6) in early April 1992, the Air Force partially terminated its FY 1987 and FY 1988 ACM missile contracts, since it lacked sufficient prior year funds to cover the shortfalls; (7) the Air Force immediately awarded a new letter contract to continue the partially terminated contracts and used FY 1992 appropriated funds to pay for those services; and (8) as of March 1992, ACM contractors had not demonstrated the ability to consistently deliver quality missiles on schedule.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: The Department of Defense concurred that the Air Force should stop procurement at 520 missiles.

    Recommendation: The Secretary of Defense should direct the Secretary of the Air Force to take no further action to procure FY 1992 ACM until the need for additional missiles is validated. The validation should consider the: (1) reduced Soviet threat; (2) associated realignment of U.S. strategic forces; (3) utility of ACM; and (4) availability of funds appropriated for additional ACM.

    Agency Affected: Department of Defense


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