United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office National Security and International Affairs Division author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 1999-11-29 monographic deposited born digital 18 p. GA 1.13:NSIAD-00-22 https://www.govinfo.gov/app/details/GAOREPORTS-NSIAD-00-22 P0b002ee18039bd01 f:ns00022 DGPO 2010-08-12 2011-03-28 GAOREPORTS-NSIAD-00-22 machine generated eng fdlp REPORT GAOREPORTS-NSIAD-00-22 NSIAD-00-22 Defense procurement Airline industry Prices and pricing Spare parts Aircraft components Procurement practices Private sector practices Commercial products Sole source procurement Comparative analysis Letter Report NSIAD

Pursuant to a congressional request, GAO provided information on the Department of Defense's (DOD) purchasing and pricing of commercially available spare parts, focusing on: (1) a comparative analysis between the purchasing and pricing practices of selected commercial passenger and freight airline companies and the practices of DOD; and (2) how airlines and DOD ensure that they are obtaining reasonable prices when buying commercial items from sole-source suppliers.<p/>GAO noted that: (1) airlines use a variety of practices to obtain spare parts at reasonable prices; (2) these practices include analyzing prices, procuring competitively, utilizing catalog prices (commonly discounted), negotiating long-term agreements, purchasing new surplus or reconditioned parts, and sometimes asking for justifications of price increases; (3) when faced with a sole-source supplier demanding a price that they believe is unreasonable, some airlines will consider re-engineering the part and establishing a second source; (4) DOD policies call for using similar practices when buying commercial spare parts; (5) contracting officers often rely on competition to ensure reasonable prices--about 42 percent of fiscal year 1998 spending on commercial spare parts for aircraft was awarded through full and open competition; (6) DOD frequently receives discounts on catalog prices from suppliers, including sole-source suppliers; (7) DOD has also begun to negotiate longer-term agreements that set prices; (8) in sole-source situations, contracting personnel perform some price analyses, but GAO's recent review of these analyses indicated they could be very limited in scope; and (9) less commonly, DOD will purchase surplus parts or consider re-engineering a part. https://www.govinfo.gov/content/pkg/GAOREPORTS-NSIAD-00-22/html/GAOREPORTS-NSIAD-00-22.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-NSIAD-00-22/pdf/GAOREPORTS-NSIAD-00-22.pdf GAO/NSIAD-00-22 https://www.govinfo.gov/app/details/GAOREPORTS-NSIAD-00-22 Letter Report GAO/NSIAD-00-22; Contract Management: A Comparison of DOD and Commercial; Defense procurement Airline industry Prices and pricing Spare parts Aircraft components Procurement practices Private sector practices Commercial products Sole source procurement Comparative analysis Title 10 Section 2306a 10 U.S.C. 2306a