.
United States General Accounting Office
Testimony
Before the Subcommittee on Military Acquisition,
Committee on Armed Services,
House of Representatives
For Releaseon Delivery
Expectedat
1090 a.m., EST,
Thursday
FebruaryIO,1994
Y
MILITARY AIRLIFT
The C-17 Program Status and
Proposed Settlement
Statement of Frank C. Conahan, Assistant Comptroller General,
National Security and International Affairs Division
OS89Y4/
GAO/T-NSIAD-94-115
I
Mr. Chairman and
I am pleased
program.
for
of the Subcommittee:
Members
to be here today
to
discuss
Based on the continuing
the status
work that
of the C-17
we have been doing
the House and Senate Committees on Armed Services,
provide
updated
performance
Defense's
information
issues
on C-17 cost,
and our observations
(DOD) proposed settlement
Douglas Corporation,
schedule,
we will
and
on the Department
agreement with
the prime contractor
of
McDonnell
on the C-17 aircraft.
RESULTS IN BRIEF
Since last
March when I testified,
experience
cost,
program costs
for
continue
the 120 aircraft
acquire
unit
schedule,
by $1.3 billion.
the C-17 also continues
additional
restriction
after
to increase.
C-17
estimate
DOD estimate
In addition,
Delivery
are being delivered
acceptance.
may be cause for
in the Fiscal
The act prohibits
$43 billion
work or known deficiencies
government
slippage
Total
to
the average
is paying McDonnell Douglas to build
and aircraft
amounts of unfinished
corrected
problems.
to grow; the current
the government
again slipped
and performance
program now exceeds the last
210 aircraft
price
the C-17 program continues
schedules
with
increasing
that
must be
More important,
invoking
a funding
Year 1994 Defense Authorization
DOD from obligating
have
Act.
funds for more than four
to
C-17s in any given
aircraft
in the prior
the contract
Estimates
Also,
of flight
test
Furthermore,
that
rates
while
involving
problems
continue.
software
and inadequate
In addition
1 month of
to our review,
the life
cost-effectiveness.
the wing,
payload/range
is fixing
flaps,
and slats,
immature mission
built-in-test
(BIT)
other
computer
capability.
the Defense Science Board (DSB)
the C-17 program last
summer.
The DSB rightly
recognized
a number of problems which beset the program:
contractor
performance,
poor Air
This
planned
to demonstrate
the contractor
These include
too much concurrency,
all
than expected.
must achieve
is key to its
Finally,
problems
within
less
the C-17 cannot meet current
specifications.
unless
appear to be optimistic.
is significantly
and maintainability
cost advantage
assessed
completion
because the aircraft
reliability
to the act,
date.
C-17 reliability
technical
year subsequent
6 months are delivered
delivery
is important
cycle
fiscal
overly
ambitious
greater
poor
coat and schedule
than anticipated
complexity,
goals,
and
Force management.
In December 1993, the Secretary
of Defense announced a decision
to stop the C-17 program at 40 aircraft
made significant
improvements.
investments
On January
unless
the contractor
in management and productivity
6, 1994, DOD and McDonnell
2
Douglas
r
agreed to a settlement
designed to ensure a viable
120 aircraft
program.
However, DOD has not established
specific
schedule,
and performance criteria
which to evaluate
improvements in the contractor's
against
performance and which will
enable DOD to make an informed decision
on whether to continue
the program beyond 40 aircraft.
In addition,
schedule calls
to be made before
for this
these investments
estimated
that
decision
can be assessed with
these investments
costs by $1.4 billion
cost,
the program's
the effects
any certainty.
The DSB
could decrease total
or, under a worst-case
program cost growth to about $800 m illion
program
scenario,
lim it
for the 120 aircraft
program.
Congress should realize
significantly
deciding
that
the first
from the provisions
whether the settlement
40 C-179 will
in the settlement.
two issues must be addressed,
information
is needed on the details
delay and disruption
the government for revising
its
claims
identify
against
Before
is a good deal for the
government,
potential
not benefit
F irst,
more complete
of the contractor's
claims and the consideration
contract
McDonnell Douglas.
specifications
due
and waiving
Second, analysis
to
the m inimum number of C-17s needed to meet specialized
requirements
should be completed as soon as possible.
The cost to the government may be more than the settlement
specifies.
The DSB estimates
of consideration
3
for changes in
of
payload/range
specifications
of aircraft
ranged from $750 million
hand, the potential
claims
based on the contractor's
$1.25 billion.
settlement
proclaimed
the $237 million
claim
that
contractor
and government
without
Congress to decide
(COEA) sponsored
significantly
strategy
by DOD, there
DOD has acknowledged
that
would
represents
analysis
to execute
difficult
be
requirement
for
analysis
that
can now meet
can get the job done.
a settlement
of C-17's
until
with
the
another
and nondevelopmental
effectively
delay making a
mix of aircraft
for meeting
November 1995.
on the quantity
leave the government with
C-17
the COEA identified
and to launch a new study to determine
for a mixed force
was done.
on both the
effectiveness
that
on the most cost-effective
will
it
cheaper alternatives
a decision
in the
at a lower cost than the full
decision
Delaying
or price
are alternatives
By doing so, DOD will
airlift
recognized
We
to endorse the settlement.
aircraft.
its
could,
at $234 million,
cost and operational
shortfall
On the other
add up to about
information
claims,
However, DOD has decided
contractor
valued
delivery
have been validated.
in claims
additional
whether
Based on a recent
DOD's airlift
estimate,
for which no legal
We believe
late
given up by the contractor
because one claim,
a contractor
for
to $3 billion.
None of these estimates
also question
program.
and waived claims
of C-178 until
another
4
$5 billion
November 1995
invested
in
this
problem-plagued
additional
At that
program
information
time,
upon which
DOD will
the settlement
estimated
program cost
In 1987, we reported1
close
for
costs,
that
routine
its
direct
environment,
costs,
doubts about the C-17's
requirements
airfields
solution
performance,
program,
cost-effectiveness.
strategy
to fill
and
raise
We believe
for
the airlift
shortfall
According
meets DOD's minimum airlift
to provide
certain
such as the ability
and airdrop
these capabilities
uncertainties
acquisition
aircraft
and was used
The changed world
at a lower cost than the full
fleet,
the program came
the C-17 program were terminated.
The C-17 is intended
the airlift
of the total
objectives
pursue an acquisition
would occur if
to the COEA, this
concurrent
wide-body
if
less than anticipated
serious
that
requirements
in wartime.
delays
DOD should vigorously
decision.
about $21.3 billion,
or about 50 percent
airlift
delivery
in this
more
the C-17 was the most cost-effective
lengthy
nondevelopmental
to make an informed
cost and performance
rising
little
for only 40 of the 120 planned C-17s.
to meet U.S.
to meeting
in our opinion,
have obligated
including
alternative
with,
outsized
cargo.
are necessary
in the program,
C-17 program.
unique capabilities
to land on small,
If
it
is decided
to
austere
that
and outweigh the enormous
and, therefore,
the proposed
lMilitarv
Airlift:
Air Force Analysis Suoports Acuuisition
C-17 Aircraft
(GAO/NSIAD-87-97, Mar. 20, 1987).
5
of
settlement
cost,
we believe
goes forward,
and performance
schedule,
criteria
in the contractor's
performance,
to make an informed
decision
beyond 40 aircraft.
legislatively
on whether
existing
that
that
amended or revised
in the settlement
that
specific
improvements
will
to continue
be needed
the program
Congress should
statutory
specify
requirements
to the C-17 program remain in effect
specifically
nothing
(1) all
to evaluate
information
We also believe
that
applicable
DOD should establish
legislatively
unless
and (2) there
is
commits the government to buy more
than 40 aircraft.
BACKGROUND
The C-17 military
Air
transport,
to airlift
substantial
refueling.
The Air
airlifter
payloads
planned
1990, the Secretary
aircraft.
Through fiscal
appropriated
for
the
is being designed
over long ranges without
Force is intending
and the cornerstone
Force originally
of future
the C-17 to be its
airlift
forces.
to buy 210 C-17 aircraft.
core
The Air
However, in
of Defense reduced the program to 120
year 1994, the Congress has
over $15 billion
for the C-17 program,
(1) $5.5 billion
for research,
(2) $9.8 billion
for procurement;
military
and produced
by the McDonnell Douglas Corporation,
Force
April
being developed
development,
test
and evaluation;
and (3) $163 million
construction.
6
including
for
Although
costs,
some of these funds have been used to cover government
such as management and testing,
been for
Douglas.
and provided
parts
of 26 production
scheduled
with
C-17 aircraft
the advance procurement
(P27 through
that
contracts
funds have
of
McDonnell
year 1994, the Congress has authorized
Through fiscal
the procurement
aircraft
and production
development
the majority
P34).
(Pl through
funds for
another
Advanced procurement
need to be ordered
the year before
P26)
eight
involves
production
buying
is
to start.
c
In addition
aircraft
to the development
and low-rate
initial
Force has awarded three
of 14 additional
McDonnell
aircraft
for
for
The Air
and plans
of the test
aircraft.
production
aircraft
remaining
production
to award another
The test
a test
of 6 aircraft,
the Air
contract
The Air
aircraft
and five
eight
contract
P9) of the 20
of the
testing.
have been delivered
7
for
Force has accepted
and 9 (Pl through
Command,
production
advance procurement
are being used in flight
aircraft
initial
Force has also awarded
in March 1994.
aircraft
which included
low-rate
Douglas an advance procurement
production
Mobility
production
contracts
aircraft.
six more aircraft
delivery
contract,
The four
to the Air
UPDATE ON COST, SCHEDULE,
AND PERFORMANCE
ISSUES
Total
C-17 program costs
billion
estimate
for
more than DOD's last
continue
to grow; the current
the 120 aircraft
estimate
schedules
have again slipped
completion
remain optimistic.
$43
program is now $1.3 billion
to acquire
210 aircraft.
and estimates
of flight
Delivery
test
Cost Issues
For the fiscal
total
year 1991 President's
budget,
program costs would be $41.8 billion
aircraft.
estimated
Three years
that
total
later,
inflation
billion
estimated
Budget Office
total
210
budget,
decreases
buy decreased
reduction
the
was offset
program cost would increase
in
program costs
by
by $13.2
The C-17 Program Director
recently
another
billion,
from $39.5 to $43 billion.
estimate
to acquire
120 aircraft
now exceeds the last
estimate
to acquire
210 aircraft
by $1.3 billion.
Thus, the total
8
for
DOD
An August 1993
study showed that
However, this
in cost growth.
that
that
program costs would be $39.5 billion
and the reduced aircraft
$15.5 billion.
to acquire
in the 1994 President's
reduced C-17 program of 120 aircraft.
Congressional
DOD estimated
$3.5
program cost
DOD
Production
Cost Growth Continues
In March 1993, we testified
production
costs
deteriorated.
the value
of cost
for
continued
of
to increase
performed
work
efficiency.
development
Index (CPI),
per dollar
and lot
III
which measures
expended,
is an indicator
decline
contracts.
under the new lot
and
as efficiency
There has been a further
the development
lot
contractor
The Cost Performance
the efficiency
for
that
in the CPI
In addition,
IV contract
is higher,
while
the trend
IV is downward.
Since March 1993, the cumulative
decreased
slightly
decrease,
the Defense Plant
increased
the government's
development
from 0.67 to 0.66.
contract
$1.4 billion
CPI for the development
In part
Representative
due to this
Office
(DPRO)
estimate-at-completion
from $7.9 billion
over the contract
price
about
of $6.7 billion.
CPI for the lot
downward trend
from 0.91 to 0.85 from March to November 1993.
the DPRO increased
contract
another
which approximates
its
$100 million,
showing the same downward
III
III
from $1.1 billion
the contract
than the lot
also showed a
EAC for the lot
ceiling
As of November 1993, the cumulative
was better
contract
the
The cumulative
Again,
III
(EAC) for
to $8.1 billion,
ceiling
contract
CPI for
contract,
trend
since
9
price
production
to $1.2 billion,
of $1.215 billion.
the lot
but the lot
contract
IV contract
IV CPI is
award in May 1993,
Even though the cumulative
is no better
80 percent
will
than the contractor's
expended level,
make a profit
principal
for
$119 million
the government
more to build
IV as compared to lot
that
improved
is paying
III
at the
the contractor
$100 million.
However, the
financial
the contractor
the same number of aircraft
price
at the target
comparison
and ceiling
for the lot
position
about
under lot
I
Unit
III,
IV, and
prices.
Table 1: Price Comparison for Production
(Dollars
in Millions)
I
on lot
and
III.
1 shows the unit
V contracts
IV is decreasing
the DPRO projects
of approximately
IV is that
lot
performance
reason for the contractor's
on lot
Table
CPI trend
price
Lots III,
I
IV and V
Total
price
II
Lot
Number of
aircraft
Target
Ceiling
III'
4
$237.8
$281.5
IV
4
267.4
301.2
1,069.7
1,204.g
V
6
270.7
303.7
1,624.3
1,821.g
29.6
19.7
Price increase
Lot III to IV
Target
Ceiling
$951.2
$1,126.0
118.5
78.9
'Lot III engine prices have been excluded for purposes of
comparison.
Engines are government furnished equipment on lots
IV and V.
10
Normally,
one would anticipate
improve
would
and the
decline
aircraft
1, contract
as the production
matures,
design
from production
shown in table
that
lot
the average unit
to production
aircraft
processes
unit
lot.
prices
prices
However,
as
have increased,
not decreased.
Productivitv
In the past,
Remains Inadeauate
efficiency,
increased
disruptions
but the rate
the C-17 program had experienced
and that
this
needed improvement
work force,
were displaced
quarters
a little
in the learning
of
a recent
this
improvement
bumping.
that
not sufficient
11
on commercial
the C-17 assembly
During
the first
were displaced.
of
II
personnel
curve.
As a
the assembly work force
January
showed improvement
lots
had not
to prevent
in assembly personnel
between production
was still
of
to the program since
turnover
DPRO analysis
curve rate
through
three-quarters
had been newly assigned
effects
or 42 percent
of 1993, 1,567 workers
over
workers
with
objectives.
severe
bumping would continue
1992, 1,448 workers,
result,
was improving
of improvement
because of bumping by senior
achieving
three
aircraft,
curve,
production
enough to meet program cost and schedule
We noted that
During
McDonnell Douglas'
as measured by the learning
each successive
projects
that
we reported
and III,
to achieve
1992.
The
were reflected
in
in the learning
but that
the
cost and schedule
goals
for
lot
declined
not
The displacement
III.
significantly
in the
be a significant
third
obstacle
of C-17 assembly
quarter
of
to improving
workers
1993 and should
the learning
curve in
the future.
In April
that
1992,
we reported
out-of-position
learning
work.
curve.
has since
the aft
fuselage
of the aircraft
five
level,
at
fuselage
and
efficiency,
major assembly tools
to 51 percent
The contractor
of the required
was done out-of-position
the five
in the contractor's
which in the DPRO's
being accomplished
learning
would have been greater
12
if
a
out-of-
are used to
reported
that
for
work to assemble
as the fuselage
major assembly tools.
in the amount of out-of-position
improvement
work on
to 5 percent
of production
fuselage.
assembly moved through
improvement
reduced out-of-position
from 13 percent
indicator
For example,
PlO, 21 percent
than the
to the low
the amount of out-of-position
amount of work is still
manufacture
believed
together).
is a better
posftion,
decrease
was a major contributor
at the major assembly tool
significant
the aft
,at other
(where major sections
wings are joined
opinion
work-- work performed
P4 to PlO decreased
major join
However,
officials
The contractor
For example,
aircraft
contractor
work station--
designated
that
curve reflects
While
a
work at major join,
more work had been
the
completed
in-position
as the major sections
from one assembly tool
Last year,
the impact of assembly quality
measured by off-standard
on cost and schedule
hours (primarily
from approximately
aircraft
delivered,
established
costs
were about $44 million
for all
rate
1993, the Acting
for Production
not being achieved.
that
if
Deputy Assistant
mid-1993 review
the contractor
and quality
assurance
planned production
continued
processes,
schedule
including
Scrap,
assembly,
This adds about $7.3 million
per year.
Secretary
of Defense
a 50 percent
reduction
it
its
current
observed
manufacturing
could not maintain
and at the same time reduce
cost.
13
be tied
decision.
of the C-17 program,
with
per
aircraft
over a 12 month period
to the next major C-17 program funding
The DSB, in its
but the goals
of 6 equivalent
costs
five
on the 10th production
Resources recommended that
in scrap rework and repair
hours have
for the first
departments,
in 1993.
at a production
In August
off-standard
shows improvement,
by the company are still
rework and repair
aircraft
40 percent,
to about 34 percent
This trend
as
for rework and repair)
Since then,
trends.
declined
aircraft.
moved
to the next.
discussed
we
of the aircraft
the
unit
Schedule
Issues
During
1993, the contractor
lot
aircraft,
II
late.
the Air
even after
delivery
schedule
missed the scheduled
aircraft
delivered
for
lot
delivery
III
aircraft,
extended
because the Fiscal
the contractor
lot
(PlO through
Year 1994 Defense Authorization
the Secretary
Act imposed a
of Defense from
subsequent
to the act,
One milestone
is that
to obligating
month of the contract
This requirement
aircraft
unless
acceptance.
missing
with
while
have been
in the 6
must be delivered
P7 through
increasing
that
within
1
P9; however,
the
amounts of unfinished
had to be corrected
For example,
minor inspection
fasteners,
delivered
year
date.
was met for aircraft
work or known deficiencies
on P9 included
aircraft,
new funds,
delivery
were delivered
government
a number of milestones
all
of
This is significant
1 month late.
prohibits
that
P16) is at risk
funds for more than four C-17s in any fiscal
months prior
III
and the DPRO are forecasting
obligating
met.
the
in 1993 by a month,
at least
that
about 5 months
for two of the three
each of the next seven aircraft
being delivered
The last
aircraft.
Force significantly
Both the System Program Office
requirement
five
P5 and P6, were each delivered
Also,
contract
delivered
items,
the uncorrected
deficiencies
such as loose screws and
major deficiencies
14
after
included
a cargo ramp
that
would not unlock
contractor
involved
and open.
At the time of our review,
had not yet quantified
the number of work hours
in completing
this
work.
officer
withheld
million
on P9 for the unfinished
These aircraft
waivers.
$10,000 for P7, $65,000 for P8, and over $3
For example,
defines
officer
contract
other
things,
the Air
with
as acceptance
performance,
that
relatively
required
reliability,
The government
involving,
among
or maintainability.
Both
had hoped to reduce the number
to deliver
the aircraft.
the number of major waivers
constant
for which the
of an item not conforming
requirements
Force and the contractor
however,
a number of major
about $7 million.
or configuration
of major waivers
during
work at the time of delivery.
P9 had 126 major waivers
withheld
a major waiver
with
However, the contracting
were also delivered
contracting
the
We found,
granted
from P5 to P9, the five
remained
aircraft
delivered
1993.
Estimated Date For Completinq
Flicht Test is Optimistic
In March 1993, we reported
slipped
probability
it
will
believe
at
least
13 calendar
of additional
complete
even this
the flight
that
the C-17 flight
months to January
slippage.
test
test
program had
1995 with
a high
The Air Force now estimates
program by March 1995.
is an optimistic
estimate.
15
We
In April
the
1993, the Air
original
month) schedule
ending
believe
that
in March 1995.2
the flight
to the 135 aircraft-month
out that
it
is difficult
test
Air
test
which
(42 calendar
Force and contractor
program is generally
schedule.
to determine
program from
month) program,
1993, to a 135 aircraft-month
tracking
flight
the test
(27 calendar
80 aircraft-month
ended in November
officials
Force rebaselined
However, they point
the exact status
program due to the uncertain
nature
of the
of developmental
testing.
The Air
Force and the contractor
judge the status
flight
hours
milestones.
of the test
{time
about 73 percent
the required
schedule.
The Air
test
Overall,
aircraft
the assumed 40-flight
identified
flight
milestones,
1993, overall
and about
hour average rate
requirement
credit
‘For
test purposes, an aircraft
one aircraft
for one calendar
approximately
test
69 percent
of
flight
for completion
hour efficiency
69 percent
behind schedule.
per aircraft
From April
through
rate
below
per month
of the
December
averaged 51.3
month is defined
month.
16.
credit
which is ahead of
which is slightly
program as scheduled.
flight
and flight
have averaged a monthly
as a necessary
test
hours,
points,
to
Force has completed
points
Force has completed
of key flight
task),
1994, the Air
flight
of indicators
such as test
a specific
of the 6,899 test
1,885 credit
test
program,
to perform
As of January
use a variety
as the use of
percent,
which is below the 62-percent
assumed for the remainder
Force
program.
Additionally,
experiencing
example,
as of January
available
test
test
half
Of the remaining
lost
problems
from completing
17 aircraft-months
to manage the flight
month schedule,
(45 calendar
it
test
has developed
month) schedule
565 days were
conditions
kept the
program at risk.
to increase
program from 135 to 152 aircraft-months.
plans
days,
missions.
The DSB found the 135 aircraft-month
recommended adding
test
test
completion
Although
the Air
January
of Air
Force has identified
believe
may present
Force
the 135 aircraft-
a preliminary
152 aircraft-month
which extends
the flight
test
planned
(In March 1993, we projected
until
July
Force and contractor
1994, show the test
test
program against
program would not be completed
While a series
Air
date.
It
the flight
program to June 1995-- 3 months beyond the currently
flight
For
because the aircraft
test
and other
intended
down time.
(1,315 days) of the
days (2,836 days) were lost
were being worked on.
aircraft
the Air
program is still
amount of aircraft
1994, nearly
because technical
rate
of the 135-month rebaselined
the flight
a significant
efficiency
1995).
reports,
program is generally
the following
a substantial
risk
program as scheduled:
17
areas
the
of
through
on schedule,
concern that
to the completion
of
the
we
the
,
-- Software
immaturity
operationally
-- Paratroop
-- Completion
mission
Air
has restricted
representative
and airdrop
a-pilot
of developmental
testing
systems and some significant
(such as completion
scheduled
at the end of the test
Force operational
concerns
independently
reliability,
not improve.
Air
if
maintenance.
selected
field
landings}
and officials
during
ability
33
have also
able to
be
operational
testing,
estimated
percent
the aircraft
that
of flfght
test
aircraft
BIT system and inadequate
manuals are key contributors
to the Air Force's
regarding
its
maintain
operational
to independently
testing.
18
does
the contractor
technical
during
a
(PM&A) evaluation
to maintain
The lack of a working
ability
are
the Air Force may have to
Force personnel
about
critical
aero performance
and availability
that
schedule.
program.
the aircraft
their
provides
crew.
the Air Force may not
They indicate
a waiver
currently
that
for
of short
reports
maintainability,
requirement.
request
test
maintain
flight
problems could delay the test
milestones
expressed
assessment of the
the aircraft
concern
Performance
Issues
In March 1993, we reported
that
and range specifications.
Since then,
these specifications
contractor
to levels
believe
operational
configured
both the Air
can be achieved.
In addition,
(IOC),
Finally,
values
Force and the
initial
which is scheduled
because the Air
aircraft.
reliability
DOD has proposed relaxing
that
capability
1995, may slip
the C-17 could not meet payload
for January
Force may not have 12 similarly
test
to be about half
results
to date show
of expected
requirements.
SDecifications
In March 1993, we reported
payload
weight,
engines
that
the C-17 could not meet its
and range specifications
aircraft
then,
that
increase
to meet specific
in aircraft
fuel
be fully
Mobility
Command has asserted
proposed
specification
requirement
capability
expected
objectives,
will
and failure
expectations.
that,
of achieving.
although
Since
several
performance
not be significantly
mission.
19
of the
operational
and mission
degraded.
requirement
to levels
The Air
changes do not meet current
aircraft
in
of
the C-17 specifications
capable
to meet the threshold
payload/range
because of growth
drag,
consumption
DOD has proposed relaxing
the C-17 will
primarily
The C-17 is
for the Command's key
Table 2 shows that
current
the proposed specification
C-17 operational
maximum payload,
objectives
heavy
I
Heavy
logistics
Maximum
payload
Medium
II loaistics
Ferry
I
a.,--:-,
range
bAn objective
or
objectiveb
II requirement
-
Threshold
Objective
Objective
110/3,200
.i;:1;&;
.::$,:~,~~{
.'..::.:,.
.:.;'::.'i,
: ,:j:::
...A......
:.:;;;i&
Objective
II
c
Current
130/3 ,200
value
is an acceptable
the basic
aircraft
does not meet contracted
DOD now defines
miles.
miles)
I
I ; Proposed
..>I
~:'~~~:~~~~~J:;~~~
Objective
Although
design
the C-17's
(heavy logistics)
currently
missions.
and Proposed Range and Payload
Requirements
'A threshold
is the minimum acceptable operational
identified
by the Air Mobility
Command.
mile
logistics,
(Thousand pounds/nautical
II
II
the
and ferry
medium logistics,
Table 2: Comparison of Current
Specifications
with Operational
rrr
for
changes do not meet
requires
operational
of the C-17 is nearly
payload/range
primary
mission,
mission
The settlement
proposes
complete,
the
specifications.
specification
130,000 pounds 3200 nautical
revising
20
requirement.
as the 3,200 nautical
The contract
the C-17 to carry
requirement
this
specification
to
120,000 pounds, while
requirement
mile mission
increase,
the C-17's
are still
and failure
consumption
aircraft
expectations.
miles--
below the threshold
The DSB recommended that
and range performance
to an operational
to fuel
miles.
requirement,
are feasible
Differing
consumption
C-17 payload
methodology
assumptions
rates.
for weight
are included
between
While the
growth or reduced
in the more stringent
Using the operational
a 123,330 pound payload
In other
words,
but it would still
specification
and, if
requirement.
any margins
that
C-17 would deliver
performance.
shows how the C-17 would actually
methodology.
traditional
drag
fuel
be changed from a traditional
eliminates
engine performance
aircraft
the method for calculating
methodology
it
for the
101,796 pounds 3200 nautical
carry
methodology.
these methods pertain
operational
growth,
to improve payload/range
the C-17 will
contract
weight
reasons
McDonnell Douglas has proposed several
implemented,
nautical
The primary
to the DSB, these initiatives
still
on the 3200 nautical
of the engine to meet specific
initiatives
According
perform,
Command's threshold
performance
is only 93,345 pounds.
shortfall
low-risk
Mobility
is 110,000 pounds.
The DSB found that
payload
the Air
it
fall
of 130,000 pounds.
21
a distance
would achieve
short
methodology,
the
of 3,200
the threshold
of the current
In agreeing
to these reduced standards,
contractor
to implement
-- Use the Pratt
commercial
the following
DOD directed
initiatives.
& Whitney 94 commercial
improvements
the
to increase
engine that
specific
includes
fuel
consumption
by 0.4 percent.
-- Implement
aircraft
low risk
weight
-- Reduce total
-- Increase
weight
was necessary
gross weight
to allow
been unsuccessful
weight
at reducing
official,
reduction
initiatives
to implement.
Program and contractor
flight
has demonstrated
testing
2 percent.
achieved
These officials
by the additional
while
that
believe
McDonnell
initiatives,
the net aircraft
many of the proposed
payload
the key heavy logistics
to a contractor
Douglas has been pursuing
of these initiatives
to meet even the revised
including
to
fuel.
implementation
for the aircraft
According
by 5,000 pounds,
for additional
successful
and range specifications,
believes
drag by one percent.
maximum takeoff
The DSB found that
to reduce
initiatives
by 1,500 pounds.
aircraft
585,000 pounds,
mission.
reduction
weight
it
has
and
would be too expensive
officials
stated
that
drag can be reduced at least
that
the increased
payload
drag reduction
would offset
any lost
22
payload
capacity
should
the weight
reduction
measures
be
unsuccessful.
Planned IOC May Slip
The current
Mobility
program plan calls
Command to declare
12 similarly
configured
which follows.
during
IOC in Janu,ary 1995.
aircraft
to support
In preparation
1993 will
yet unspecified
for
design.
retrofitted
with
undergo major wfng and fuel
retrofits
are scheduled
The DSB, however,
retrofit
in flight
to provide
evaluation.
5 months,
all
of the design
test,
12 similarly
It,
while
high risk,
believe
agreeing
them into
to keep the January
that
it
the production
aircraft
for
the contractor's
1995 date as a target
23
them
aircraft
IOC and the PM&A
the start
However, Air
is achievable.
time to
evaluate
recommended slipping
that
and
The
was insufficient
changes in the aircraft,
configured
therefore,
and slats
spend
in December 1994.
there
from January to June 1995.
officials,
new flaps
P9) will
system modifications.
that
and incorporate
delivered
them to an as
(P5 through
to be completed
concluded
the RM&A evaluation
to configure
aircraft
Five
This requires
IOC, the aircraft
undergo modifications
up to 3 months being
will
for the commander of the Air
of IOC
Force
retrofit
plan is
plan
They, therefore,
for
starting
IOC.
C-17 Reliabilitv
RMhA is critical
to peacetime
and the ability
budgeted
and Maintainability
to keep operations
levels.
The Air
after
the start
evaluation
The RMhA evaluation
flying
hours.
availability,
wartime
and support
Force plans
costs
to conduct
However, we believe
that
near
an RM&A
of IOC between February
is a 30 day evaluation
utilization,
and July
requiring
if
about 1,750
C-17 reliability
not improve sufficiently
in the next few months, the Air
should
the RM&A evaluation
consider
delaying
until
1995.
does
Force
reliability
improves.
Aircraft
testing
has revealed
expected
based on contractual
maintainability
concluded
likelihood
that
that
C-17 reliability
growth curves,
is less
although
is substantially
better
than expected.
based on current
reliability
values,
of the C-17 successfully
completing
The DSB
the
a mission
does not
meet requirements.
Table 3 shows that
test
actual
aircraft
reliability
hours and 25 hours of initial
substantially
below the expected
at 1,202 flight
squadron operations
reliability.
24
than
is
Table 3: Actual
C-17 Reliability
and Expected Reliability
measure
Ynherent maintenance is unscheduled maintenance
component due to its own internal
failure.
required
on a
bCorrective maintenance is the sum of inherent,
induced and no
defect maintenance actions.
Induced maintenance is unscheduled
maintenance on a component due to some induced condition
rather
than an inherent failure.
No defect maintenance results
from a
false indicator
or isolation
reading.
C-17 reliability
failures
data show that
have occurred
reliability
numbers.
corrective
solutions
improve reliability.
addition,
there
with
a large
variety
no one particular
item driving
This means the contractor
for a substantial
In other
data to track
or operating
with
restrictions.
25
trends
the low
have to find
is no simple
components because they are seldom used, failed
yet installed,
will
number of failures
words1 there
is insufficient
of different
for
to
fix.
In
some
but not fixed,
not
While reliability
performance
maintainability
appears to be substantially
However, some Air
higher
Air
Force flight
than expected
the maintenance
flight
test
that
maintenance
expected.
than
that
believe
the
due to
employees provide
both at
squadron operations
at Charleston
are concerned
given the
These officials
manuals,
aircraft
numbers are partially
contractor
and at the initial
of the aircraft
better
officials
test
maintainability
support
Force Base.
immaturity
is less than expected,
that
BIT system and the incomplete
repairs
by Air
Force personnel
will
take
longer.
Other Technical
As we reported
Issues
last
the C-17 program.
performance,
year,
technical
These problems
increased
problems
continue
may result
program cost,
in
and/or
to occur
decreased
extended
in
aircraft
program
schedules.
Built-in-Test
The C-17 has been experiencing
rates.
BIT provides
line-replaceable
requires
However, the Air
for electronic
units.
a BIT false
excessively
fault
The C-17 air
alarm rate
high BIT false
isolation
vehicle
alarm
to individual
specification
of not more than 5 percent.
Force has experienced
26
BIT false
alarm rates
as
high as 97.9 percent
Charleston
Current
Air
for production
immaturity
operating
at
Force Base.
problems with
maintenance
aircraft
BIT provide
personnel
extremely
troubleshooting
of BIT software
the BIT system itself,
limited
capability
the aircraft.
has limited
and additional
the ability
In addition,
to fully
problems may exist
system that
have yet to be identified,
It also
impacts
maintenance
training
as part
of initial
operations.
to be accomplished
This problem,
if
not corrected,
significant
impact on the ability
operational
testing
The contractor
action
1994.
squadron
have a
to pass
and
plan to reduce the number of BIT false
1994, show the number of false
highest
the
critical
for developing
However, BIT data,
the number occurring
to its
within
x
agreed to take responsibility
alarms by January
with
of the aircraft
test
and RMQA evaluations.
managing a corrective
January
will
to
as of the end of
alarms is still
at Charleston
Air
very high,
Force Base increasing
level,
Wina Failure
In October
1992, both wings on the static
approximately
retrofitting
static
testing
128 percent
the static
in July
during
article's
1993.
test
a 150-percent
wings,
article
failed
load test.
the contractor
In September 1993, the left
27
at
After
resumed
static
wing failed
the outer
again at 144 percent.
part
However, based on an engineering
Douglas and an Executive
was appointed
results,
by Secretary
concluded
test.
The team's
that
Independent
of the Air
final
report
the production
Basically,
Some Air
wings.
and stiffeners
with
this
to various
approach.
the contractor,
the wing to eliminate
stiffeners
by using
the test
is retrofitting
involves
steel
straps
to the wing
and spars on the wing.
however, were not entirely
Therefore,
at its
stronger
load
as a part
own expense,
agreed to redesign
straps
components to build
as soon as possible,
of the proposed
and
the wing.
The new
but not later
than
one-fourth
of the
P29.
120 C-17 aircraft
fleet
ribs
retrofit
the need for supplemental
wing is to be incorporated
If
the contractor
this
Force and DOD officials,
settlement,
aircraft
Force to review
the wing by adding stainless
satisfied
Review Team, which
has not been issued.
wing failure,
stringers
on
analysis,
the wing had passed the 150 percent
Due to the 1992 static
reinforcing
damage occurred
of the wing where the upper spar cap did not meet
specifications.
McDonnell
The initial
will
DOD officials
currently
materials--
are purchased,
have wings using
the supplemental
warn of possible
implemented
stainless
solution
steel
approximately
corrosion
straps
problems with
because of attaching
straps
and stiffeners.
dissimilar
and aluminum stringers.
28
the
They
stated
life
that
potential
corrosion
and Slat
limit
the service
Redesian
In March 1993, we testified
susceptible
the skin
C-17 flaps
and weaken the structure.
the slats
ribs
and slats
and the flaps
The hinge fairings
temperature
composite
skins
aircraft
P2 and are currently
to the weight
retrofit
on the flap
flaps
to titanium
undergoing
will
of the aircraft.
Pll
edge to
are being changed to high
flight
and slats
with
on test
testing.
add approximately
1,100 pounds
will
in-production
both the new flaps
production
has
in the
the trailing
have been installed
and slats
existing
the contractor
Redesigned flaps
and substructures
to receive
by changing
materials.
titanium
The redesigned
the material
were
which can ripple
Since then,
by changing
and skins,
titanium.
aircraft
that
to heat damage from engine exhaust,
redesigned
will
could
of these wings.
Flap
slat
problems
be the first
and slats.
aircraft
with
The contractor
the new flaps
slats,
Main Landina
The C-17 continues
gear.
Gear and Tires
to experience
These problems
interference,
include
and (3) tire
problems with
(1) retraction,
wear.
Testing
29
the main landing
(2) post
has shown that,
on
and
occasion,
level
the main landing
flight
and while
ground maneuvering
allows
gear.
banking.
and braking,
interference
landing
gear has not retracted
the large
during
in
heavy-loaded
shock strut
compression
between the post and axle beam of the main
The Air
Force has also
life
does not meet specification
test
data to reflect
experienced
In addition,
satisfactorily
found that
even after
adjusting
a more normal operational
during
the tire
service
the actual
mission
profile
than
tests.
EVOLUTION OF C-17
SETTLEMENTAGREEMENT
Concern over continuing
problems
resulted
procurement
Fiscal
funds and imposing
the release
reporting
Defense Acquisition
effectiveness,
requirements.
Acts
requirements,
of Defense for Acquisition
the program and report
Defense for Acquisition
DOD
and
cost and
Subsequently,
the
tasked the DSB to
back on what had to be done to put
The DAB conducted
the DAB have not yet been officially
In December 1993, the Secretary
The
required
an extensive
of the program between August and December 1993.
of
of
Board (DAB) review
and affordability.
the C-17 program back on track.
results
various
on the adequacy of the C-17's
Under Secretary
review
and performance
in the Congress restricting
a special
operational
evaluate
schedule,
Years 1993 and 1994 Defense Authorization
to conduct
report
C-17 cost,
The
reported.
of Defense and Under Secretary
announced a decision
30
to stop the C-17
of
program at 40 aircraft
unless
management and productivity
proposal
to resolve
contractor.
proposed
improvements.
C-17 issues
On January
They also outlined
between the government
a
and the
6, 1994, McDonnell Douglas agreed to DOD's
which according
specific
authorizing
provides
for:
-- a provisional
and appropriations
schedule
and at cost,
program,
and (d) satisfy
to deliver
(c) successfully
all
other
of
approval,
which McDonnell Douglas
an ability
RM&A requirements
-- a settlement
enactment
major management and manufacturing
(b) demonstrate
resolving
terms requires
2 year program during
changes,
including
to its
legislation
must (a) introduce
complete
contract
process
aircraft
on
the flight
test
specifications
and
between the government and McDonnell Douglas
all
outstanding
C-17 business
and management
issues
as
the date of the agreement.
The estimated
million.
made significant
settlement.
The.settlement,
of
the contractor
cost to implement
The government's
which is to settle
is shown in table
claims.
the proposed settlement
share is $348 million,
A breakout
4.
31
is $802
$237 million
of proposed settlement
of
costs
Table 4:
Estimated
Settlement
Government
Item
Flight
costs
test
extension
Redesign wing
Computer Aided
Design/Computer
(Dollars
Douglas
$61.5
$61.5
0
32.0
20.0
20.0
15.0
15.0
2.5
2.5
0
100.0
Aided
Manufacturing
Management
Information
System
Advanced Quality
System
Product
improvement
projects
Other
Nonrecurring
engineering
32
in millions
GAO'S ASSESSMENTOF THE SETTLEMENT
The proposed
settlement
recommends changes designed
completion
of a viable
lZO-aircraft
settlement
only makes sense in the context
program and not a 40-aircraft
analysis
First,
program.
program.
of the proposed settlement,
DOD has not established
performance
objectives
that
program is to continue
analysis
claims
of the value
McDonnell
evaluate
claims,
the validity
estimates
specifications
continues
and
without
Also,
and unfiled,
the program,
the
an in-depth
to settle
all
attempting
or to establish
Third,
cannot be realized
to
DOD agreed to pay
without
exposure.
the
and agreed to waive
$237 million
of such claims
improvements
schedule,
and continue
of the claims.
of the government's
productivity
concerns.
Second, in an effort
the contractor
filed
of our
must be met by McDonnell Douglas if
Douglas an additional
outstanding
cost,
beyond 40 aircraft.
against
the
of a 120-aircraft
On the basis
specific
reduced payload/range
potential
We believe
we have several
improve the management environment
government
to ensure
to
realistic
the impact of
unless
the program
beyond 40 aircraft.
DOD Has Not Established
Cost Or Schedule Criteria
The settlement
demonstrate
letter
an ability
states
that
to deliver
McDonnell Douglas must
aircraft
33
on schedule
and at cost,
;
as well
other
as successfully
contract
complete
specifications,
the flight
including
However, DOD has not established
criteria
it
intends
For example,
delivering
aircraft
"at cost.'*
costs
be established
unit
The settlement
aircraft
states
beginning
discussed
Force is accepting
P16--are
told
the delivery
P7 shall
remain the same.
aircraft
with
several
lots.
under contract
for
However, as I
the Air
work or uncorrected
at least
through
1 month late.
DOD
was being given to slipping
months.
settlement
can be implemented,
schedule
may slip.
If
obligation
for
specific
the next seven aircraft--P10
consideration
this
beyond 40
or goals
schedule,
unfinished
being delivered
schedule
year
schedule
to meet delivery
us that
targets
for C-17 production
in order
of
to continue
The DSB recommended that
proposed
from a fiscal
cost or schedule
define
not
the delivery
In addition,
at risk
officials
that
with
earlier,
deficiencies.
any specific
DOD does
program and all
RM&A requirements.
to use to decide whether
aircraft.
target
test
Thus, even before
it
the
appears the delivery
happens, DOD may have to seek relief
1994 congressional
requirement
of funds for C-17 production
aircraft
restricting
referred
the
to
earlier.
DOD officials
proceeds
of criteria
evaluation
told
us a decision
beyond 40 aircraft
pertinent
the C-17 program
would not be based upon any single
or key parameters.
of all
on whether
It will
data,
be a judgement based on an
We believe
34
set
this
situation
1
provides
DOD too much latitude
and undermines
accountability.
new program environment
such, we believe
that
will
in determining
program performance
The DSB reported
there
that
to create
was a need for accountability.
DOD should clearly
spell
out specific
As
criteria
be used to recommend to the Congress whether
program should
a
the C-17
proceed beyond 40 aircraft.
Claims Resolution
to Settlement
Was
A major
objective
of the settlement
claims.
Prior
Kev
filed
to the settlement
12 claims
against
When the settlement
been resolved;
contracting
Contract
states
an additional
disruption
$472 million.
none of these claims
under consideration
or in litigation
that
had
by the
at the Armed Service
Board of
McDonnell Douglas was planning
in claims
to the DSB, these claims
to the program
caused
the $1.25 billion
1993, the Air
Force Principal
said that
against
by the government.
in claims
I want to
before
Subcommittee on Defense,
Deputy Assistant
35
and
was never filed
In testimony
he knew of no basis
to submit
the government.
were based on delay
by any government entity.
Committee on Appropriations,
Contracting
McDonnell Douglas had
totaling
agreement was signed,
$1.25 billion
emphasize that
reviewed
the government,
contractor
Appeals.
The settlement
According
agreement,
they were either
officer
was to resolve
or
the House
in March
Secretary
for
for these claims,
In the DSB's opinion,
the $472 million
provides
that
in claims
DOD will
modifications,
full-scale
the government was liable
filed
contract.
Douglas agrees to release
claims
may have as of January 6, 1994, the
settlement,
whether
$234 million
filed
or not.
requested
components.
The DSB concluded
of this
without
DOD performing
As part
of the settlement,
various
specifications
aircraft.
claim.
Douglas'
that
the decision
and the delivery
for
specifications
and delivery
is difficult
estimated
to estimate.
the value
Members' estimates
effort
government
schedule
for P6 and prior
claims
to these waivers
and contract
We were told
that
36
modifications
assumptions.
to $3 billion.
the magnitude
the contractor.
due the
members of a DSB team
different
ranged from $750 million
against
contract
The consideration
based on several
against
claim
of the claim.
schedule.
was made to establish
claims
should pay 100
to pay this
analysis
to meet the original
failure
agreeing
the
the government also agreed to revise
the contractor
for
that
a package of wing
the government
or price
C-17
settlement,
assertion
The government also agreed to waive all
government
from all
Of the $237 million
We question
a legal
of the
of the
date
the company to subcontract
percent
further
the government
was based on McDonnell
government
prices
for the $237 million,
McDonnell
it
contract
and ceiling
In return
of
The settlement
payment through
the target
development
$237 million
by the contractor.
make this
increasing
for
No
of the specific
DOD officials
told
us
that
avoiding
primary
factor
Officers
rights
protracted
in the claims
the contractor
was a
settlement.
of the government or modify
of
entirety,
existing
the government without
consideration.
Clearly,
e
contracts
obtaining
considering
valid
to the
legal
the settlement
1
in its
both McDonnell Douglas and the government have agreed to
make concessions.
DOD has been unable,
specific
consideration
agreeing
to waive its
the Air
existing
however,
to identify
Force will
receive
in return
contractual
rights
the
for
and to modify
contract.
We believe
contentious
that,
in an overriding
relationship
and to continue
claims
both parties
establish
without
establishing
have against
value
true
cost of this
settlement
that
the contract
specification
methodology
by the C-17's
to maintain
to eliminate
between the government
the realistic
operational
effort
of
the claims
is not known.
revisions
for calculating
current
the 120 aircraft
performance
program.
37
the government
the value
each other.
the
and the contractor
the C-17 program to 120 aircraft,
has made concessions
driven
with
and employees of the government may not waive contract
detriment
this
litigation
of potential
Without
any effort
of both parties,
In addition,
the
we believe
and the change to an
payload
and range were
capabilities
to
in an effort
Benefits From Productivitv
ImDrovements Are Uncertain
According
is antiquated
problems
and lacks
limit
Design/Computer
Information
an effective
the efficiency
DSB recommended that
McDonnell
improvements
these improvements
is $175 million.
of this
could decrease
years before
realized.
projects
completed
The first
until
program cost growth
program.
resulting
specific
from
changes will
product
be
improvement
to be
December 31, 1995, and the second package will
until
any benefit
a year later.
Given these time frames,
from these programs will
the Congress will
production
that
program cost by $1.4
limit
benefits
of
proposes
be faced with
beyond a 40 aircraft
of
The DSB estimated
and management process
installment
costs
to be proposed by McDonnell Douglas is not scheduled
be completed
if
total
other
so as to
The estimated
cost.
scenario,
It
improvements
practices
The settlement
for the 120-aircraft
productivity
the
System along with
business
to about $800 million
could take several
As such,
(CAD/CAM), a Management
to modernize
under a worst-case
These
implement Computer Aided
the government pay $37.5 million
or,
system.
of the C-17 program.
these improvements
infrastructure
of the C-17 program.
Aided Manufacturing
improve the efficiency
billion
quality
System, and an Advanced Quality
productivity
that
corporate
to the DSB, McDonnell Douglas'
occur prior
the decision
not
little
to 1996 when
on proceeding
with
program.
38
1
actions
Similarly,
intended
to modernize
manufacturing
and management structure
impact during
the first
engineering
implementation
Finally,
quality
will
have only
limited
While the CAD/CAM system for
two years.
changes may be fully
McDonnell Douglas'
functional
by 1996, full
of the system is not proposed to start
the Advanced Quality
that
control
will
System will
take several
until
1997.
be a phased change
in
years to implement.
ALTERNATIVES TO THE C-17
DOD's settlement
letter
need to consider
commercial
production
as part
wide-body
of a successful
Based on congressional
direction,
conducted
alternatives
to determine
the Secretary
of Defense,
C-178 and C-5Bs,
the job done.
a combination
This
total
aircraft
In general,
3Primary authorized
aircraft.
to the C-17.
'Total aircraft
inventory
and training
aircraft,
authorized
showed that
wide-body
39
As announced by
a combination
aircraft
For
wide-body
the total
aircraft
backup and training
including
was
aircraft.
of C-17s and commercial
fleet,
of
can get
alternative
aircraft.3
do not include
is the entire
a COEA be
wide-body
and 49 commercial
combination
program.
that
the most cost-effective
47 C-17s
aircraft
airlift
DOD directed
the analysis
primary
Based on this
or new C-58
strategic
of 40 C-173 and 47 commercial
inventory,
are needed.4
aircraft
or C-178 and commercial
represents
the
to McDonnell Douglas also discusses
backup
wide-body
$7
aircraft,
life-cycle
cost savings
when compared to a fleet
billion
In connection
with
were estimated
of 120 C-17s.
the settlement,
DOD announced that
program would not proceed beyond 40 aircraft
Douglas made significant
disconnect
with
based on primary
the analysis
inventory
believe
authorized
of 40 C-17s,
this
assessing
aircraft
the COEA, since
to include
information
the proposed
unless
program improvements.
announcement is based on total
McDonnell
inventory,
aircraft.
the C-17
Because DOD's
the alternatives
there
is a
examined were
As such, DOD needs to update
an alternative
based on a total
or 34 C-17 primary
authorized
is needed to assist
settlement
at about
aircraft.
We
the Congress in
and determining
program should proceed beyond a total
aircraft
aircraft
whether
inventory
the C-17
of 40
aircraft.
Although
DOD has acknowledged
alternatives
that
settlement
with
determine
making a decision
DOD will
settlement
its
airlift
the contractor
aircraft.
program cost
for
are significantly
has decided
cheaper
to execute
and to launch a new study
for a mixed force
By doing so, DOD will
on the most cost-effective
requirement
have obligated
costs,
there
can get the job done, it
the optimum strategy
nondevelopmental
meeting
that
until
or about 50 percent
effectively
mix of aircraft
including
of the total
only 40 of the 120 planned C-17s.
40
to
of C-17s and
November 1995.
about $21.3 billion,
a
At that
the
estimated
delay
for
time,
In 1987, we reported
alternative
close
that
to meet our airlift
to meeting
its
maintainability
delivery
in wartime.
in this
about its
acquisition
schedule,
undermine
commercial
Act made available
procurement
cargo variant
according
to an
procurement
complementary
request
lift
as well
serious
delays
doubts
about
continue,
uncertainties
and in our
credibility.
to acquire
Year 1994 Defense Authorization
to initiate
wide body military
as a complement to the C-17.
Force official,
DOD has determined
C-17 aircraft
than the procurement
wide body aircraft.
Congress to transfer
as
and lengthy
significant
to DOD up to $400 million
Air
and
direct
an update on DOD's plans
of two additional
to intertheater
raise
and performance
The Fiscal
aircraft
routine
environment,
development,
a nondevelopmental
of
especially
Even though the C-17 is 9 years
we provide
aircraft.
program came
planned reliability
performance,
program,
the program's
You also asked that
the
objectives,
its
The changed world
engineering
cost,
if
and was used for
cost-effectiveness.
full-scale
opinion,
through
less than anticipated
concurrent
the C-17's
into
achievable
capability,
costs,
requirements
cost and performance
the cost advantages
rising
the C-17 was the most cost-effective
the C-17 program.
41
Instead,
that
would contribute
of
They told
$300 million
or commercial
the
more
additional
us that
DOD plans
of undesignated
to
funds to
The Air
calls
Force has developed
for
military
spending
up to $100 million
or commercial
been presented
In our opinion,
it
developmental
decision
and cost-effectiveness
these efforts
suggests
that
nondevelopmental
Mr. Chairman,
DOD will
cargo.
An Air
is scheduled
military
that
answer any questions
related
for November 1995.
depend on the outcome of that
assess the operational
utility
in moving military
Force official
estimated
or a small
that
fraction
acquisition
of
plan
to compete the C-17 against
and/or
concludes
which has
on the number of non-
DOD's preliminary
is preparing
that
a nondevelopmental
seems to be closely
cost around $5 million,
available.
it
will
strategy
The strategy,
of wide body aircraft
will
the $100 million
to procure
a decision
aircraft
In the interim,
bulk and oversize
that
appears that
airlift
acquisition
wide body aircraft.
to the Under Secretary,
to the C-17 milestone
decision.
a preliminary
commercial
my statement.
wide-body
I will
aircraft.
be happy to
you or members of the Subcommittee may have.
(707046)
42