Retention of Unneeded Government-Owned Special Tooling by Contractors Causes Unnecessary Costs
Abstract
We reviewed the management of Government-owned special tooling in the possession of selected Air Force and Navy aircraft production contractors and found that the Department of Defense (DOD) is incurring unnecessary costs because contractors are being allowed to retain unneeded tooling. This problem has existed for many years and, therefore, should be corrected. We discussed a draft of this report with DOD and have incorporated its comments on page 10. Aircraft production contractors are storing and controlling hundreds of millions of dollars of Government-owned special tooling. For contracts relating to five out-of-production aircraft that we reviewed, we estimate that contractors are incurring costs of $764,000 a year for the storage and control of unneeded tooling. A substantial portion of these costs is being paid by DOD. The Air Force and Navy have more than 280 contracts or agreements under which contractors are holding special tooling. If the conditions found during our limited review are widespread, DOD is incurring millions of dollars in unnecessary costs. To avoid unnecessary retention costs, DOD needs to enforce an; effective system of periodic screening, both during and after completion of aircraft and other types of production contracts, to determine whether contractor-held special tooling should be retained or disposed of.
Document Details
- Document Type
- Technical Report
- Publication Date
- Oct 07, 1981
- Accession Number
- AD1177097
Entities
People
- Donald J. Horan
Organizations
- United States Government Accountability Office