Quick-Reaction Report on Component Breakout of the Advanced Medium Range Air-to-Air Missile Program
Abstract
This is our final report on Component Breakout of the Advanced Medium Range Air-to-Air Missile (AMRAAM) program for your information and use. Comments on a draft of this report were considered in preparing this final report. During our audit of the AMRAAM program, we found that the program office was not studying the potential for purchasing components and providing them to the prime contractors as Government-furnished equipment (GFE). This report is being issued as part of an overall audit of the AMRAAM program, which is examining configuration management, weapon system integration, contracting, integrated logistics support planning, program stability, and applicable internal controls. Supplying components as GFE is known as component breakout, which avoids prime contractors applying a markup on components that they acquire. Our review of nine components showed that the designs and manufacturing processes of the components were sufficiently stable for component breakout, and that an estimated savings of $312.0 million could be achieved during the remaining missile procurement without unduly increasing program risk if the components were provided as GFE. The program office needs to conduct an in-depth component breakout study of the nine components. Also, 26 other components with annual acquisition costs of over $1.0 million may be suitable for component breakout and should be evaluated by the Air Force. Breakout of these components could result in savings of an additional $240.2 million. This report is being provided to alert management that component breakout needs to-be discussed at the Defense Acquisition Board meeting scheduled for April 1991. This Defense Acquisition Board meeting will evaluate the affordability and readiness of the AMRAAM and decide whether the AMRAAM should proceed from low-rate to full rate production.
Document Details
- Document Type
- Technical Report
- Publication Date
- Mar 14, 1991
- Accession Number
- ADA380176
Entities
Organizations
- Office of the Inspector General, U.S. Department of Defense