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The ARC-164 radio is used in Air Force, Army, and foreign military aircraft. The initial production contract and subsequent contracts awarded to Magnavox since 1974, have totaled about $99 million, and 20,000 radios have been produceed as of April 1980. In 1977, the Air Force purchased a procurement data package under an option in the initial production contract, which should have provided sufficient detail for other firms to produce the radio and parts and compete for ARC-164 requirements. GAO was requested to determine why certain ARC-164 components and parts are procured from the prime contractor instead of competitively.

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