[Congressional Record Volume 140, Number 61 (Tuesday, May 17, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         COST PERFORMANCE INDEX

 Mr. D'AMATO. Mr. President, Members who went into cardiac 
arrest over $500 million B-2's better start popping nitroglycerin: C-
17's are running at $497.7 million a copy in fiscal year 1995. How, you 
ask, can a transport aircraft cost nearly as much as the most 
sophisticated strategic bomber ever conceived? Therein lies a tale.
  One major reason, maybe the key reason, the C-17 costs so much is 
turmoil on the production line. The best overall measure of line 
efficiency is the cost performance index [CPI], which compares work 
accomplished against the actual dollars spent for that work. Typically, 
CPI improved over time as workers on a production line climb the 
learning curve. In the case of the C-17, however, the CPI for the full 
scale engineering development [FSED] lot and lots I, II, and III is 
actually declining over time. Only lot IV, which showed steady decline 
in the first 6 months, experienced a 1-percent increase in return on 
each dollar invested in the last month in which figures are available.
  The Air Force has attributed much of this miserable performance to 
labor inefficiencies caused by bumping, the practices of senior 
employees displacing junior workers during labor downturns. In the case 
of the Douglas plant in Long Beach, idle commercial airline workers 
have steadily migrated to the C-17 program. The resulting disruption up 
and down the line has played havoc with productivity.
  Now here is a the scary part. The Saudis have just decided to make a 
large purchase of United States commercial airliners, including MD-
11's. It is likely, in order, to meet delivery schedules, that former 
MD-11 employees now working on the C-17 will be moved back to the 
reenergized MD-11 line--in essence, bumping in reverse. The resultant 
gaps on the C-17 shop floor wil have to be filled by new hires, and, 
once again, line efficiency will suffer. Something to consider as we 
contemplate the purchase of six additional C-17's this year.
  I ask that the latest CPI chart be printed in the Record at the 
conclusion of my remarks.
  The chart follows:

                                                  FSED CPI CUM
----------------------------------------------------------------------------------------------------------------
                      Month                         1985   1986   1987   1988   1989   1990   1991   1992   1993
----------------------------------------------------------------------------------------------------------------
Jan..............................................   1.03   1.03   1.01   0.97   0.88   0.79   0.69   0.69   0.69
Feb..............................................   1.03   1.03   1.01    .96    .88    .79    .69    .69    .68
Mar..............................................   1.02   1.03   1.00    .95    .87    .78    .70    .69    .68
Apr..............................................   1.03   1.03   1.00    .93    .86    .76    .69    .69    .68
May..............................................   1.03   1.02    .99    .93    .85    .74    .69    .69    .68
Jun..............................................   1.02   1.01    .98    .93    .85    .71    .69    .65    .68
Jul..............................................   1.03   1.00    .98    .92    .84    .71    .69    .69    .68
Aug..............................................   1.03   1.01    .98    .91    .84    .68    .69    .69    .68
Sep..............................................   1.03   1.01    .97    .91    .83    .67    .69    .69    .68
Oct..............................................   1.03   1.01    .98    .90    .82    .67    .69    .69    .68
Nov..............................................   1.03   1.01    .97    .89    .81    .69    .69    .69    .68
Dec..............................................   1.03   1.02    .98    .89    .80    .69    .69    .69    .68
----------------------------------------------------------------------------------------------------------------


                                                  LOT I CPI CUM
----------------------------------------------------------------------------------------------------------------
                             Month                                1988    1989     1990    1991    1992    1993
----------------------------------------------------------------------------------------------------------------
Jan............................................................  ......    0.89     0.91    0.69    0.66    0.66
Feb............................................................  ......     .92      .92     .69     .66     .66
Mar............................................................  ......     .87      .94     .69     .66     .66
Apr............................................................  ......     .87      .88     .67     .66     .66
May............................................................  ......     .89      .85     .66     .66     .65
Jun............................................................    0.79     .88      .83     .67     .66     .65
Jul............................................................     .81     .89      .84     .67     .66     .65
Aug............................................................     .82     .92      .8      .67     .66     .65
Sep............................................................     .83     .93      .76     .67     .66     .64
Oct............................................................     .87    1.02      .74     .66     .66     .64
Nov............................................................     .87     .99      .66     .66     .66     .64
Dec............................................................     .87     .96      .67     .66     .66     .64
----------------------------------------------------------------------------------------------------------------


                             LOT II CPI CUM
------------------------------------------------------------------------
              Month                1989    1990    1991    1992    1993
------------------------------------------------------------------------
Jan.............................  ......    0.98    0.70    0.70    0.63
Feb.............................  ......     .91     .73     .68     .64
Mar.............................  ......     .67     .73     .69     .64
Apr.............................  ......     .88     .74     .67     .64
May.............................  ......    1.07     .75     .67     .63
Jun.............................  ......    1.07     .73     .67     .63
Jul.............................  ......    1.21     .73     .66     .63
Aug.............................  ......    1.21     .73     .66     .63
Sep.............................  ......    1.04     .72     .65     .63
Oct.............................  ......    1.05     .70     .64     .62
Nov.............................    0.97     .64     .70     .64     .62
Dec.............................     .97     .69     .70     .64     .62
------------------------------------------------------------------------


                             LOT III CPI CUM
------------------------------------------------------------------------
                    Month                        1991     1992     1993
------------------------------------------------------------------------
Jan..........................................  .......     0.97     0.92
Feb..........................................  .......      .95      .92
Mar..........................................  .......      .96      .91
Apr..........................................  .......      .95      .90
May..........................................  .......      .95      .90
Jun..........................................  .......      .95      .89
Jul..........................................  .......      .95      .88
Aug..........................................  .......      .95      .86
Sep..........................................     0.92      .95      .86
Oct..........................................      .94      .95      .85
Nov..........................................      .95      .94      .85
Dec..........................................      .94      .93      .85
------------------------------------------------------------------------

                             LOT IV CPI CUM


        Month                                                      1993
January................................................................
February...............................................................
March..................................................................
April..................................................................
May....................................................................
June...............................................................0.97
July.................................................................97
August...............................................................96
September............................................................95
October..............................................................94
November.............................................................93
.94..........................................................

                          ____________________