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Military Airlift: The C-17 Program Status and Proposed Settlement (Testimony, 02/10/94, GAO/T-NSIAD-94-115)

Mounting cost, schedule, and performance problems continue to plague the
C-17 aircraft program.  Total C-17 program costs are soaring; the
current $43 billion estimate for 120 aircraft now exceeds the last
Pentagon estimate for 210 aircraft by $1.3 billion.  Delivery schedules
have again slipped and aircraft are being delivered with increasing
amounts of unfinished work or known defects that must be fixed after
government acceptance.  Estimates of flight test completion appear to be
optimistic.  Also, C-17 reliability is significantly less than expected
and the plane is having difficulty meeting current payload and range
specifications. Although the contractor is fixing problems with the
wings, flaps, and slats, other problems continue to surface, including
immature mission computer software and inadequate built-in-test
capability. In December 1993, the Pentagon announced that it would stop
the C-17 program at 40 aircraft unless contractor management and
productivity improved significantly.  In January 1994, the Defense
Department (DOD) and McDonnell Douglas agreed to a settlement designed
to ensure a viable 120 aircraft program.  DOD has not, however,
established criteria against which to evaluate improvements in the
contractor's performance, and the ultimate costs to the government
arising from potential contractor claims are unclear under the
settlement.  In GAO's view, DOD should investigate alternative wide-body
planes that can meet its airlift needs in the event the C-17 program is
cancelled.
--------------------------- Indexing Terms -----------------------------
 REPORTNUM:  T-NSIAD-94-115
     TITLE:  Military Airlift: The C-17 Program Status and Proposed 
             Settlement
      DATE:  02/10/94
   SUBJECT:  Air Force procurement
             Research and development contracts
             Cost analysis
             Contract administration
             Military aircraft
             Military cost control
             Aircraft research
             Prime contractors
             Delivery terms
             Military airlift operations
IDENTIFIER:  C-17 Aircraft
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