Military Airlift:

The C-17 Program Status and Proposed Settlement

T-NSIAD-94-115: Published: Feb 10, 1994. Publicly Released: Feb 10, 1994.

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GAO discussed the status of the C-17 program and the proposed settlement agreement with the prime contractor. GAO noted that: (1) C-17 program procurement costs have significantly increased since the Department of Defense's (DOD) last estimate; (2) Congress may have to invoke a DOD funding restriction unless C-17 aircraft are delivered within 1 month of the contract delivery date; (3) DOD cannot determine C-17 life-cycle costs because flight tests have not been completed and technical and reliability problems continue; (4) DOD found poor contractor performance, unrealistic cost and schedule goals, and increasing program complexity in its review of the C-17 program; (5) in January 1994, DOD and the contractor agreed to a settlement designed to ensure C-17 program viability; (6) DOD needs to develop specific cost, schedule, and performance criteria so that it can evaluate contractor program improvements and make informed decisions on whether to continue the program beyond 40 aircraft; (7) Congress needs more information on C-17 program costs and the reliability of contractor claims before a settlement can be reached; (8) although DOD has identified alternatives that would reduce program costs and meet its airlift requirements, it has delayed action on the C-17 program until 1995; and (9) Congress should ensure that all of the C-17 program requirements remain in effect and the settlement does not commit the government to procure more than 40 aircraft.

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