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 1994-04-19 monographic deposited born digital GA 1.13:T-NSIAD-94-166 https://www.govinfo.gov/app/details/GAOREPORTS-T-NSIAD-94-166 P0b002ee1803a4544 f:tns94166 DGPO 2010-08-12 2011-03-24 GAOREPORTS-T-NSIAD-94-166 machine generated eng fdlp REPORT GAOREPORTS-T-NSIAD-94-166 T-NSIAD-94-166 Military aircraft Defense contracts Claims settlement Contractor performance Contract monitoring Cost effectiveness analysis Life cycle costs Expense claims Department of Defense contractors Contract specifications C-17 Aircraft C-5B Aircraft Testimony NSIAD The recent settlement between the Pentagon and McDonnell Douglas on the troubled C-17 transport plane is not a good deal for the government, which will have to waive all potential financial claims against the aircraft maker, lower the C-17's performance standards, and pay more for fewer aircraft. To acquire 120 aircraft will now cost an estimated $43 billion--$1.3 billion more than the Pentagon's last estimate to acquire 210 aircraft. In an effort to overcome the contentious relationship between the government and the contractor, the government has agreed to waive all of its potential claims arising from the contractor's failure to meet the original contract specifications and delivery schedule, without establishing the value of those claims. The government also agreed to resolve filed and unfiled contractors' claims by adding $237 million to the contract price. Department of Defense (DOD) officials acknowledge that the claims were never subjected to a full legal or price analysis. At the same time, McDonnell Douglas' out-of-pocket expenses are hundreds of millions of dollars less than the agreement implies. GAO urges DOD to determine immediately the minimum number of C-17s needed and pursue a strategy to acquire alternative wide-body aircraft that can meet its needs. DOD, in deciding whether to continue the program, also needs to establish specific cost-schedule, and performance criteria to evaluate improvement in the contract's performance. https://www.govinfo.gov/content/pkg/GAOREPORTS-T-NSIAD-94-166/html/GAOREPORTS-T-NSIAD-94-166.htm GAO/T-NSIAD-94-166 https://www.govinfo.gov/app/details/GAOREPORTS-T-NSIAD-94-166 Testimony GAO/T-NSIAD-94-166; Military Airlift: The C-17 Program Update and Proposed Settlement; Military aircraft Defense contracts Claims settlement Contractor performance Contract monitoring Cost effectiveness analysis Life cycle costs Expense claims Department of Defense contractors Contract specifications C-17 Aircraft C-5B Aircraft