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GAO discussed the Air Force's acquisition of C-5 aircraft crash damage kits to: (1) examine whether the Air Force adequately justified the acquisition; (2) review the procurement process; and (3) review an allegation that a retired Air Force officer violated conflict-of-interest laws during the procurement process. GAO found that: (1) the Air Force did not have sufficient data to make a proper determination, since it based the kit requirements on two crashes and one lightning strike; (2) the Air Force did not make an economic analysis to evaluate the soundness of the acquisition or alternatives; (3) the Air Force did not achieve expected cost reductions for the parts because delays in ordering precluded a tie-in to C-5 production that would have provided parts at about 50 percent of future costs; (4) in response to an Air Force review of its proposed prices for kit parts, the contractor proposed a $1-million reduction to recognize transfers from excess C-5 production parts; (5) the Air Force believed that ongoing production price reviews would resolve price concerns prior to contract negotiations; and (6) although the retired Air Force officer did not comply with certain provisions of conflict-of-interest statutes requiring him to report future employment with and disqualify himself from procurement functions involving the contractor, there was no evidence that the contractor influenced his actions regarding the purchase of the kits.

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