Audit Practices for the C-17 Globemaster III Sustainment Partnership Contract
Abstract
This audit was initiated in response to two Defense Hotline allegations. One allegation claimed that the C-17 program officials provided inaccurate and misleading information to the Secretary of the Air Force, leading to a misinformed decision to award the $4.9 billion Globemaster III Sustainment Partnership contract to The Boeing Company. An additional allegation claimed that the C-17 program officials took action to prevent the formulation of information that may have contradicted the reasonableness of the Globemaster III Sustainment Partnership negotiated price. The C-17 is a jet-powered strategic airlifter with a cabin offering large-volume capacity and a rear-loading assembly to accommodate wheeled or tracked vehicles. The aircraft was designed to airlift and airdrop loads, including armored vehicles, directly into a combat zone. It was developed by McDonnell Douglas Corporation, a wholly owned subsidiary of The Boeing Company. The Air Force reached a negotiated agreement with McDonnell Douglas Corporation to sustain the fleet of C-17 aircraft on November 25, 2003, in the amount of $4.9 billion for FY 2004-FY 2008. However, the contract was not definitized until July 22, 2004. Prior to contract definitization, C-17 program officials took action to revalidate the negotiated contract to ensure the price was still fair and reasonable. The IG/DoD did not substantiate the allegations. However, the C-17 program officials' decision to definitize the C-17 Globemaster III Sustainment Partnership contract was based on a revalidation effort that may have produced unreliable results. In addition, C-17 contracting officials continue to exercise priced options based, in part, on the results of the revalidation effort. As a result, the Air Force may not have achieved the best price for the Government when it awarded the C-17 sustainment contract, valued at $4.9 billion (of which $3.2 billion was fixed-priced).
Document Details
- Document Type
- Technical Report
- Publication Date
- Apr 09, 2007
- Accession Number
- ADA472313
Entities
People
- Bruce A. Burton
- Chad J. Evans
- Deborah L. Carros
- Gloria A. Young
- Kimberly A. Christensen
- Lebarron A. Durant
- Meredith H. Johnson
- Richard B. Jolliffe
- Tamonie D. Denegall
Organizations
- Office of the Inspector General, U.S. Department of Defense