C-17 Aircraft: Comments on Air Force Request for Approval of Multiyear Procurement Authority
Abstract
The C-17 military transport, being produced for the Air Force by the McDonnell Douglas Corporation, is designed to airlift substantial payloads over long ranges without refueling. The Air Force intends the C-17 to be its core airlifter and the cornerstone of its future airlift force. Through fiscal year 1996, the Congress had appropriated about $20.5 billion for the C-17program, including $5.9 billion for research and development, $14.6 billion for procurement, and $170 million for military construction. The Congress had approved the acquisition of 40 C-17s. Multiyear procurement can benefit the government by saving money and improving contractor productivity through a more stable production run. A significant source of multiyear savings results from larger lot buys from vendors and suppliers, or economic order quantities (EOQ). However, multiyear procurement contracts decrease annual budget flexibility. If DODs budget is reduced and multiyear contracts are maintained, those programs not under multiyear authority would have to be reduced disproportionately. A multiyear procurement contract also entails certain risks if it is changed or terminated. The C-17 proposal is unique because it requests authority for a 7-year multiyear contract. The current statutory limit is 5 years. In the past, it was not uncommon for multiyear candidates to request even shorter terms, such as 3 or 4 years. It is also unique because it is being proposed out of the normal authorization cycle and the offer expires on June 1, 1996.
Document Details
- Document Type
- Technical Report
- Publication Date
- Mar 28, 1996
- Accession Number
- AD1166691
Entities
People
- Louis J. Rodrigues
Organizations
- United States Government Accountability Office