oversight

Opportunity To Reduce Costs and Improve Aircraft Through Prompt Processing of Engineering Change Proposals

Published by the Government Accountability Office on 1971-01-20.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

Opportunity To Reduce Costs
And Improve Aircraft Through
Prompt Processing Of
Engineering Change Proposals
                        8-152600



Department of Defense




BY THE COMPTROLLER GENERAL
OF THE UNITED STATES
                      COMPTROLLER       GENERAL     OF     THE      UNITED   STATES
                                      WASHINGTON.    DC.         20548




     B-152600




     To the     President      of the Senate     and the
‘,   Speaker      of the    House   of Representatives

               This is our report           on the opportunity           to reduce     costs
     and improve          aircraft    through       prompt      processing       of engineer-
     ing change       proposals       by the Department              of Defense.      Our re-
     view was made pursuant                 to the Budget         and Accounting        Act,
     1921 (31 U.S.C.           53); the Accounting           and Auditing       Act of 1950
     (31 U.S.C.       67); and the authority            of the Comptroller          General
     to examine        contractors!        records,       as set forth      in contract
     clauses      prescribed        by the United        States     Code (10 U.S.C.
     2313(b)).

            Copies    of this       report     are being    sent to the Director,
     Office  of Management             and    Budget;   the Secretary   of Defense;
     and the Secretaries            of the    Army,   Navy,    and Air Force.




                                                            Comptroller               General
                                                            of the United             States
        ,



 COMPTROLLERGENERAL'S                          OPPORTUNITYTO REDUCECOSTSANDIMPROVE
 REPORTTO THE CONGRESS                         AIRCRAFTTHROUGHPROMPTPROCESSINGOF
                                               ENGINEERINGCHANGEPROPOSALS
                                               Department of Defense       B-152600


 DIGEST
 _-----

 WHYTHE REVIEW WASMADE

             Although precise information  is not available,      the General Accounting
             Office (GAO) has estimated that the total cqst.,~f~~~j~~j~~~~g.~~~~?n~s
        i    for the Department of Defense ran betweenwmillionand                    $410 m?llion      '
   ,-        during fiscal years 1967 and 1968. In view of such sizable expenditures,
             GAOhas inquired into the efficiency   and~-=-.
                                                        economy
                                                          =._
                                                            .eir.s._  of _l_
                                                                           thei .practices
                                                                   .~r.,.l_.      -.~^i_-‘;-" __~..and
                                                                                                   .
             procedures followed by the ~h$$eZm%~?$ary servlc~s.,~~n,,_p:~~~~~~~~~.~~~~~~~~gi-
             neerin$*ch%ig~  'hropo-.als+.
                   ,&-~~~&?&&i?%
                               .','.I.
               -TsxzGF

 FINDINGS AND CONCLUSIONS

             Engineering changes are frequently made to military         aircraft  to improve
             their safety, performance reliability,     or maintainability.       The need for
             such changes is usually discovered as a result of experience with some
             of the models that are already in operation or under test.           For example,
             statistics   showed that the flight-crew   escape mechanism for three types
             of Navy aircraft   being used by the operating forces did not work well at
             low speed and zero altitude;     therefore engineering change proposals were
             initiated  to improve the performance.
            Such changes may be originated  by either the Government or the contrac-
            tor; but in either case the plan for a change, in the form of an engi-
            neering change proposal, must be approved by the military    service that
            is responsible for the aircraft  before the contractor   is authorized to
            make the change. (See p. 5.)

            Usually, some aircraft   are in production while the proposed engineering
            change is being evaluated.     Delays in processing the change proposal can
            increase the number of unchanged aircraft     completed and delivered to the
            operating forces.    Once those aircraft  are delivered to the users, the
            change could be delayed for months or years or never be made at all.
            Moreover, making such changes after production is generally more expensive.
            (See p. 6.)
            GAOexamined 547 engineering change proposals implemented on 11 types of
            aircraft  by the military   services during fiscal years 1967 and 1968, to
            see whether extensive delays in processing the changes had occurred.      In
            making its evaluation,    GAO used a standard established by the Department

Tear
- -~--_--Sheet
    of Defense. That standard allows 45 days for evaluating routine change
    proposals.   GAO found that the length of time for processing the 547 en-
    gineering changes avera ed 131 days, or nearly three times as long as
    the standard allowed.   4See P- 8.)
    From the 547 change proposals, GAO selected for further review 784 on
    which it appeared most likely   that delays had served to increase costs.
    Partly because contractors'   records were often incomplete or inaccurate9
    GAO could not determine the significance    of the delays for many of the
    184 changes. GAOestimated,     however, that in 42 cases additional  costs
    caused by delays in processing the engineering change proposals could
    total as much as $3.7 million   if all planned changes were made. (See
    p. 10.)
    Delays in processing change proposals can deny the advantages of the
    change to the aircraft  users for substantial    periods of time or, in
    some cases9 permanently because aircraft    lacking the change may be
    1 to 3 years away from their next overhaul (the most practical      time to
    implement the change).   Even then, the overhaul period is sometimes
    curtailed for reasons of urgency, leaving insufficient     time to make the
    change. (See pp. 10 and 11.)
    Among the causes for delay were

      --ineffective      monitoring   by project   offices   of evaluations   by review-
         ing staffs,

      --insufficient   direction for contractors from the military            services
         as to the kind and extent of data to be submitted,

      --the reliance on a single, overall time standard in lieu of time
         standards for each individual organization concerned in the evalua-
         tion,

      --the reviewing staffs'  practices of processing             change proposals
         sequentially rather than concurrently,

      --duplicate      reviews of change proposals,      and' *'

      --lengthy processing of change proposals           by groups not under the con-
         trol of the group managing the project.           (See pp. 13 to 22.)

   The advantages of reducing the time for processing engineering change
   proposals are important enough to warrant a concentrated management ef-
   fort.   (See p. 23.)


RECOMMENDATIONS
            OR SUGGESTIONS
   GAO suggested that the Secretary         of Defense designate a group in the De-
   partment of Defense to establish         procedures for effective control of the



                                        2
        I
        I
                       processing of engineering change proposals and to monitor the implementa-
         I             tion of these controls by the military  services.  GAOalso suggested
        II             specific  actions that it believed would reduce processing time.  (See
         II            P* 23.)

    ; AGENCY
           ACTIONSANDUNRESOLVED
                             ISSUES
                       The Department of Defense agreed that the advantages of reducing proc-
                       essing time for change proposals warranted increased management effort.
                       The Department stated that each of the military    services had established
                       procedures for providing effective  controls over the timeliness     of the
                       processing of change proposals, or had such procedures in a late stage
                       of development, and that an audit of current practices for controlling
                       engineering change proposals was under way. The Department stated also
                       that a group would be formed!, on an ad hoc basis, to review procedures,
                       and that any deficiencies  found would be corrected.     (See p. 24.)

     1                 GAO recommends that the Secretary of Defense monitor actions planned
     I                 for improvement of the processing of change proposals, to ensure that
     I                 the actions are carried out effectively and are achieving the desired
    ,I
                       objectives.  (See p. 25.)
    I                  GAO plans to inquire   into   the effectiveness   of the new controls.
    I

:I MATTER
        FORCONSIDERATION
                      BY THECONGRESS
    I
I                      GAO is bringing this matter to the attention    of the Congress because
                       of its expressed interest  in matters affecting   the cost, timeliness, and
II                     effectiveness  of military weapons systems.




’             Tear
              -      Sheet


I
t
                                                          3
,
I
                         Contents
                                                               Page

DIGEST                                                           1

CHAPTER
                                                                 ,
  1       INTRODUCTION                                          4

  2       DEPARTMENTOF DEFENSE POLICY PROVIDES FOR
          TIMELY PROCESSINGOF ENGINEERING CHANGE
          PROPOSALS                                             6

  3       EXTENSIVE DELAYS IN PROCESSINGENGINEERING
          CHANGEPROPOSALS                                       8

  4'      EFFECTS OF DELAYS IN PROCESSING ENGINEERING
          CHANGEPROPOSALS                                      10
              Processing delays can result    in added
                cost                                           10
              Operational forces denied benefits    be-
                cause of delays in processing    changes       11

  5       IMPROVED PROCEDURESNEEDED TO REDUCE TIME
          REQUIRED TO PROCESSENGINEERING CHANGE
          PROPOSALS                                            13
              Actual performance not sufficiently
                 monitored                                     14
              Contractors   not adequately     instructed
                 on the kind of data needed for evalu-
                 ation of proposals                            16
              Time limits   not broken down into seg-
                 ments                                         18
              Concurrent processing      of change pro-
                 posals would reduce processing         time   19
              Elimination   of duplicate    reviews            20
              Delays caused by reviews by units from
                 outside project   management group            21

  6       GAO PROPOSALSAND AGENCY COMMENTS                     23
              GAO proposals                                    23
              Agency comments                                  24
                                                                  Page
CHAPTER

       7    CONCLUSION AND RECOMI'GNDATION                         25

       8    SCOPE OF REVIEW                                        26

APPENDIX

        I   Delayed    change proposals   resulting   in addi-
              tional    cost                                       29

   II       Letter     of June 30, 1970, from the Deputy As-
               sistant    Secretary of Defense (Installations
               and Logistics)                                      30

 III        Principal     officials    of the Department of De-
               fense and the Departments of the Army,
               Navy, and Air Force responsible        for the
               administration       of activities discussed in
               this report                                         31
COMPTROLLER
          GENERAL'S                 OPPORTUNITYTO REDIJCECOSTSAND IMPROVE
REPORT
     TO THECONGRESS                 AIRCRAFT THROUGHPROMPTPROCESSINGOF
                                    ENGINEERINGCHANGEPROPOSALS
                                    Department of Defense B-752600


DIGEST
------

WHYTHEREVIEWWASMADE
    Although precise information   is not available,    the General Accounting
    Office (GAO) has estimated that the total cost of engineering changes
    for the Department of Defense ran between $390 million      and $410 million
    during fiscal years 1967 and 1968. In view of such sizable expenditures,
    GAO has inquired into the efficiency   and economy of the practices and
    procedures followed by the three military     services in processing engi-
    neering change proposals.


FINDINGSANDCONCLUSIONS
    Engineering changes are frequently made to military         aircraft  to improve
    their safety, performance reliability,     or maintainability.       The need for
    such changes is usually discovered as a result of experience with some
    of the models that are already in operation or under test.           For example,
    statistics   showed that the flight-crew   escape mechanism for three types
    of Navy aircraft   being used by the operating forces did not work well at
    low speed and zero altitude;     therefore engineering change proposals were
    initiated  to improve the performance.

    Such changes may be originated  by either the Government or the contrac-
    tor; but in either case the plan for a change, in the form of an engi-
    neering change proposal, must be approved by the military    service that
    is responsible for the aircraft  before the contractor   is authorized to
    make the change.   (See p. 5.)

    Usually, some aircraft   are in production while the proposed engineering
    change is being evaluated.     Delays in processing the change proposal can
    increase the number of unchanged aircraft     completed and delivered to the
    operating forces.    Once those aircraft  are delivered to the users, the
    change could be delayed for months or years or never be made at all.
    Moreover, making such changes after production is generally more expensive.
     (See p. 6.)
    GAO examined 547 engineering change proposals implemented on 11 types of
    aircraft  by the military   services during fiscal years 1967 and 1968, to
    see whether extensive delays in processing the changes had occurred.      In
    making its evaluation,    GAO used a standard established by the Department
    of Defense. That standard allows 45 days for evaluating    routine change
    proposals.   GAO found that the length of time for processing the 547 en-
    gineering changes avera ed 131 days, or nearly three times as long as
    the standard allowed.   4See P* 8.)
    From the 547 change proposals, GAO selected for further review 184 on
    which it appeared most likely   that delays had served to increase costs.
    Partly because contractors'   records were often incomplete or inaccurate,
    GAO could not determine the significance    of the delays for many of the
    184 changes. GAOestimated,     however, that in 42 cases additional  costs
    caused by delays in processing the engineering change proposals could
    total as much as $3.7 million   if all planned changes were made. (See
    p. 10.)
    Delays in processing change proposals can deny the advantages of the
    change to the aircraft  users for substantial    periods of time or, in
    some cases, permanently because aircraft    lacking the change may be
    1 to 3 years away from their next overhaul (the most practical      time to
    implement the change).   Even then, the overhaul period is sometimes
    curtailed  for reasons of urgency, leaving insufficient    time to make the
    change. (See pp. 10 and 11.)

    Among the causes for delay were

      --ineffective       monitoring   by project   offices   of evaluations   by review-
          ing staffs,

      --insufficient   direction for contractors from the military             services
         as to the kind and extent of data to be submitted,

      --the reliance on a single, overall time standard in lieu of time
         standards for each individual organization concerned in the evalua-
         tion,

      --the reviewing staffs'  practices of processing            change proposals
         sequentially rather than concurrently,

      --duplicate       reviews   of change proposals,    and

      --lengthy  processing of change proposals           by groups not under the con-
         trol of the group managing the project.            (See pp. 13 to 22.)

    The advantages of reducing the time for processing engineering change
    proposals are important enough to warrant a concentrated management ef-
    fort.   (See p. 23.)


RECOMMENDATIONS
              OR SUGGESTIONS

    GAO suggested that the Secretary          of Defense designate a group in the De-
    partment of Defense to establish          procedures for effective control of the
    processing of engineering change proposals and to monitor the implementa-
    tion of these controls by the military  services.  GAO also suggested
    specific  actions that it believed would reduce processing time.   (See
    Ps 23.)

AGENCY
     ACTIONSANDUNRESOLVED
                       ISSUES
   The Department of Defense agreed that the advantages of reducing proc-
   essing time for change proposals warranted increased management effort.
   The Department stated that each of the military    services had established
   procedures for providing effective  controls over the timeliness     of the
   processing of change proposals, or had such procedures in a late stage
   of development, and that an audit of current practices for controlling
   engineering change proposals was under way. The Department stated also
   that a group would be formed, on an ad hoc basis, to review procedures,
   and that any deficiencies  found would be corrected.     (See p. 24.)
   GAO recommends that the Secretary of Defense monitor actions planned
   for improvement of the processing of change proposals, to ensure that
   the actions are carried out effectively and are achieving the desired
   objectives.  (See p. 25.)
   GAO plans to inquire   into   the effectiveness   of the new controls.


MATTER
     FORCONSIDERATION
                   BY THECONGRESS
   GAO is bringing this matter to the attention    of the Congress because
   of its expressed interest  in matters affecting   the cost, timeliness, and
   effectiveness  of military weapons systems.




                                      3
                                   CHAPTER1

                                INTRODUCTION

      The General Accounting           Office has reviewed the prac-
tices and procedures followed             by the Departments of the
Army y Navy 9 and Air Force in          processing  engineering change
proposals   for aircraft    being       produced for the Department of
Defense (DOD).     The   scope  of      our review is presented on
page 26.

        Generally,      the military        departments procure a specific
type or model of aircraft               over a period of several years,
purchasing      a portion         of the total      quantity   each year.     As
experience      is accumulated on aircraft               in operational     use,
it is common practice               to make changes to both completed
aircraft    and those in production               to improve their safety,
performance,       reliability,         or maintainability.         Another rea-
son for such changes is to provide the capability                       to perform
missions not originally               contemplated     for the aircraft.        Al-
though precise information                showing the total      cost of making
these changes was not available                 from the agency's records,
we estimated       that between $390 million               and $410 million     was
spent by the DOD in fiscal               years 1967 and 1968 to make
changes in aircraft             in production.        This amount does not in-
clude the cost of incorporating                 changes on aircraft       already
in service,

       The changes necessary to modify aircraft               are called en-
gineering     changes.     Under existing    policy,     engineering
changes should not be made unless they offer significant
benefit     to the Government.       More specifically,        engineering
changes are limited        to those which (1) correct          design defi-
ciencies,     (2) significantly      improve operational         effective-
ness, (3) significantly         reduce costs, or (4) prevent slip-
pages in an approved production           schedule.      Falling     within
these criteria      are changes which either         eliminate      safety
hazards or improve the reliability,           performance,        or main-
tainability      of equipment.

      Following      are examples of such changes:



                                        4
        The design of the Navy's A-6A aircraft      was modified
        while it was in production      to provide for the installa-
        tion of a 20 mm. gun pod on each of four wing stations
        on the aircraft.    The change was made to improve the
        aircraft's   attack capability,

        Engineering    changes were to be made to various configu-
        rations   of three Navy aircraft   (A-6, F-4, and F-8) to
        provide a better flight-crew     escape mechanism after sta-
        tistics   revealed that the original    mechanism did not
        work well for ejections    at low speed and zero altitude.

        When the CR-53A cargo helicopter    was first  sent to
        Southeast Asia, it was found that the fine-grained,       ex-
        ceptionally    hard sand in the area was wearing out the
        teflon   bearings in the helicopter  engines very rapidly.
        To extend the life of the bearings,    an engineering
        change was made that involved installation     of devices
        designed to remove the particles    of sand from the air
        taken into the engine air intake ducts.

       Engineering    changes may originate       with either      the Gov-
ernment or the manufacturer,           Before  the   contractor      may be-
gin implementation      of the change, however, the change must
be evaluated,     approved, and funded by the Government.               Re-
quests for approval of changes, which are called engineering
change proposals,      are prepared by the manufacturer            and sub-
mitted to the appropriate       offices     of the military      services
for approval.       Cur review dealt with the processing             of these
proposals by those Government organizations             having the re-
sponsibility     for evaluating    and approving them.          Because of
the importance of timeliness         in evaluating     and processing
engineering    change proposals,      we were primarily       concerned
with the effectiveness       of management in achieving          timely
performance of this function.

        A list  of principal officials responsible for activ-
ities    discussed in the report is included as appendix III.
                                 CHAPTER 2

           DEPARTmNT OF DEFENSE POLICY PROVIDES FOR

      TIMELY PROCESSINGOF ENGINEERING CHANGEPROPOSALS

      To maintain control        over the design of an aircraft           they
are purchasing,      the military    services require       that all pro-
posals for changes to aircraft          under production       be approved
by officials    of the appropriate       military    service before the
change is made. Since the aircraft             are in production,        de-
lays in processing        the change proposals can result          in some
of the aircraft      being produced without the changes.              This
is costly because it generally          is more expensive to make the
change after    the aircraft      have been completed and delivered
to the operating       forces.    Moreover, making such changes af-
ter production     tends to overload the already overworked re-
pair and overhaul organizations           of the military      services.

        The problem of delays in processing           engineering     change
proposals can be particularly         significant      for aircraft     be-
cause most aircraft      manufacturers      produce aircraft        in pro-
duction "blocks."       Usually,   all aircraft       produced in a block
are identical.       Changes are implemented in production             on a
block basis since breaking into an ongoing production                  block
involves additional      cost.   Therefore,       a few days' delay in
processing     a change proposal may result         in missing an entire
production     block, which in turn could result           in having to
implement the change after production             on a sizable number of
aircraft,    often over 100.

       Recognizing    the importance of timely processing           of en-
gineering   change proposals,       DOD has established      specific
time standards and priorities          to minimize the processing
time for engineering       change proposals.       The directive      issued
by DOD concerning time standards for processing              engineering
changes provides that the chazges be categorized               by priority
as either   "emergency ," "urgent,"       or "routine."      The direc-
tive provides further       that an emergency proposal be pro-
cessed within     24 hoq..rs, an urgent proposal within         15 days,
and a routine     proposal within     45 days, following      receipt.
Although these processing        time standards were not issued un-
til after the change proposals covered in our review had

                                      6
been processed,     the standards were essentially     a codifica-
tion of previously     issued instructions    of the individual
military  services.      These instructions   were more stringent
than the time standards issued by DOD. For consistency,             we
have used the more lenient       DOD-wide standards for comparing
actual and standard processing        times in this report,     Our
review did not include an evaluation        of the reasonableness
of the time standards provided in the DOD directive.
                              CHAPTER
                              --- .- 3

                EXTENSIVE-DELAYS IN PROCESSING

                 ENGINEERING CHANGE PROPOSALS

      We found that extensive     delays had occurred in proc-
essing engineering     change proposals.   We determined the
processing   time for all the 547 engineering     change proposals
approved during fiscal     years 1967 and 1968 for the 11 air-
craft listed    below.

     Navy:
          F-4 fighter   aircraft
          A-6 attack aircraft
          CH-53 heavy cargo helicopter
          A-7 attack aircraft
          CH-46 cargo helicopter
     Army:
          UH-1 utility    helicopter
          CH-47 cargo helicopter
          CH-54 heavy lift      helicopter
     Air Force:
          T-38 trainer
          A-37 attack aircraft
          C-141 transport     aircraft

These 547 engineering      change proposals   included 292 pro-
cessed by the Naval Air Systems Command, 180 by the Army
Aviation     Systems Command, and 7.5 by the Air Force Aeronau-
tical    Systems Division.    The average processing   time for
these 547 changes was 131 days, or 86 days in excess of the
standard DOD established      for routine   changes.

       Processing   time varied considerably    among the three
services.     For example, change proposals processed at the
Naval Air Systems Command averaged 158 days; at the Army
Aviation    Systems Command, 103 days; and at the Air Force
Aeronautical     Systems Division,   92 days.   At these locations,
we found that about 19 percent of the change proposals were
processed within      the 45-day time limit   established  by DOD
for a routine     change.   Moreover, about 57 percent of the
change proposals      took 91 days or more to process.     An
analysis        of   processing          time    at       these      organizations        is   as
follows:             -
                                          Percent of engineering change
                                              proposals process&d in -
                                  45 days   46 to    -91 to     181 to  Over
                                  or
                                  -- less 90 days 180 days 360 days 360 days
Naval Air Systems
   Command                                9               21           39            26             5
Army Aviation Systems
   Command                               27               24           34            15             0
Air Force Aeronautical
   Systems Division                      37               32           19             9             3
Overall                                  19               24           34            20             3


        Within each service separate project     offices had been
established      for monitoring  the procurement of each individual
aircraft.      In more detailed    comparisons of change proposal
processing     times,  we  found that  there were also wide varia-
tions      in   processing        time        among the           aircraft     project     offices
within a particular       service.       In a review of selected cases
at the aircraft     project     offices,    we found that the varia-
tions in the processing        time of engineering      change proposals
were basically    attributable        to varying degrees of managerial
control   and to the processing methods being applied.             F'ur-
ther comments on these controls            and methods and the improve-
ments we consider necessary are presented in subsequent
chapters.




                                                      9
                               CHAPTER4

                  EFFECTS OF DELAYS IN PROCESSING

                   ENGINEERING CHANGE PROPOSALS

      By reviewing    a selected number of engineering      change
proposals,    we estimated    that processing delays could result
in additional    costs of as much as $3.7 million       if all
changes were made and found that operational        units had been
denied the benefits      of the changes for substantial     periods
of time,

       We selected,    from the 547 proposals mentioned previ-
ously, 184 in which it appeared most likely              that the delays
might have resulted       in additional      costs or other adverse ef-
fects.    Because contractors'        records were often incomplete
or inaccurate,      we could not determine the effect          of many of
the delays.     In 42 cases, however, we were able to determine
from the contractors'        records that six or more aircraft         had
not received the change because of the delay, and we were
able to calculate      the cost of installing        the change later
than had been planned by the contractor.               Several of these
cases involved over 100 aircraft.             Moreover, since the con-
tractors   often anticipate       delays in estimating       which produc-
tion aircraft    will receive the change, it is possible            that
prompt processing      of these change proposals could have en-
abled the contractors        to make the changes to an even greater
number of aircraft       during production.

PROCESSING DELAYS CAN RESULT IN ADDED COST

        In evaluating    the effects    of engineering   change pro-
posal processing      delays, we calculated      that additional    costs
of as much as $3.7 million         would be incurred    by the Govern-
ment if all planned changes were made. This cost would be
attributable     to the fact that the contractors        were not able
to make the 42 changes as they had originally            planned.    A
description     of these change proposals,       the number of air-
craft missing the change during production,            and the related
increased cost is presented in appendix I.




                                    10
      On an individual-change        basis,   the estimated     additional
cost resulting     from processing      delays varied widely.        We
estimated    that,   at one extreme, an additional         cost of about
$250 would be incurred       to install     switches on seven helicop-
ters as a result      of engineering     change proposal processing
delays.    At the other extreme, additional          costs of about
$1 million    would be incurred      for installing    attitude     indi-
cators and remote-control        gyroscopes in 231 helicopters
that could have received       the change during production           if the
change proposal had received         timely processing.        We esti-
mated that additional      costs would exceed $50,000 on 17 of
the 42 delayed changes and would exceed $100,000 on nine of
the 42.

OPERATIONAL FORCES DENIED BENEFITS
BECAUSEOF DELAYS IN PROCESSINGCHANGES

      Where changes are not made to aircraft   during produc-
tion,  the changes may not be incorporated   on "missed" air-
craft  for a long period of time and, in some instances,    may
never be made. Under these circumstances,     delays in proc-
essing can have a significant   impact on operational   use of
the aircraft.

        DOD officials     informed us that,    for several reasons,
aircraft    leaving the contractor's       plant without   the change
may remain without        the change for substantial     periods of
time.     In the first      place, changes are normally made during
the aircraft's        scheduled overhaul or rework which, in the
case of the Navy, is performed on the basis of cycles which
vary from 12 to 37 months.          The changes cannot ordinarily
be made until       this overhaul or rework period is reached.

        Secondly, we were informed by one DOD official               that
sometimes, for reasons of urgency,             changes which were plan-
ned for certain        aircraft     during overhaul were not made be-
cause the overhaul period was too short.               Many Navy opera-
tional    aircraft    have an active service life         of only 6 or
7 years; therefore          a combination    of processing   delays and
insufficient       overhaul time could result        in an aircraft's
not having the benefit            of an improvement for the greater
part of its useful          life.



                                    11
        Furthermore,   the change may never be made. Changes
made after production         are funded from a different        source
than changes made during production.              Therefore,   a change
that has been approved during production              but not made be-
cause of processing        delays must compete with other changes
for funds, and funds are often limited.               Also, because of
the extent of work required,          it is not practical      to make
a change after production.          We were informed of one delayed
change proposal which required           extensive    rewiring   of the
aircraft.      Although this change could have been carried              out
during production,       it was not practical       to make it after
the aircraft      was completed.      Consequently,      the operational
users will never have the benefit            of the change on a number
of aircraft.




                                     12
                             CHAPTER5

    IMPROVED PROCEDURESNEEDED TO REDUCE TIME REQUIRED

           TO PROCESSENGINEERING CHANGE PROPOSALS

       Although each of the military     services had standards
for what was considered timely processing        of engineering
change proposals,     none of the services had established        the
procedural     steps necessary to effect   adherence to these stan-
dards.     On pages 8 and 9 we cited statistics        which showed
that the length of time the services       took to effect    an engi-
neering change proposal,      of the 547 we reviewed,     averaged
three times that allowed by the DOD-wide standards adopted
after our review.      These standards were more lenient       than
those which the services had in effect        at the time these
changes were processed.

      In view of the services'   failure   to secure adherence
to processing   time standards,  we inquired   into the actual
procedures followed   by the three services,     to ascertain
what might be done to expedite the processing       of engineering
change proposals.    Our review showed the following      areas in
which improvement appears possible.

     DOD-wide:
          Monitoring      of actual performance to ensure compli-
             ance with time standards.
          Instructions       for contractors    on the kind of data
             needed for evaluation        of proposals.
     Air Force and all but one Navy project:
          Breakdown of overall        processing   time standards into
             segments to guide groups in processing          engineer-
             ing change proposals.
     Navy:
          Processing of change proposals on a sequential            or
             concurrent      basis.
          Duplicate     reviews.
     Air Force:
          Delays because of reviews by units outside the
             project    management group.




                                  13
Details  of each of the areas in which we believe            improve-
ments are needed are presented below.

ACTUAL PERFORMANCENOT SUFFICIENTLY MONITORED

        Our review showed that with one exception             the project
offices    did not systematically       keep track of the time re-
quired by each organizational         level for evaluating        engineer-
ing change proposal processing;          thus, management had insuf-
ficient    means of monitoring      to see that actual performance
was commensurate with established           standards.      The status
and historical       records on engineering      change proposals      gen-
erally    showed the change number, the title,            and the dates of
various events such as receipt,          approval,     and change order
release but, except for one instance,            did not show essential
information       needed to evaluate processing        delays.    The one
project    office    (Air Force's T-38 Project       Office)    which had
maintained      adequate information     records had been doing so
for about 6 months prior to our review.

        Because the chronology of processing      individual     change
proposals was not available       in most cases, we traced and
documented, to the extent possible from existing           records,
the chronology     of processing    the changes included in our re-
view.     In doing this, we noted one instance where the mis-
routing     of a change proposal was not discovered       for 70 days.
A proper monitoring      system should have led to the discovery
of the misrouting     much sooner, and the resultant        delay would
have been appreciably      reduced.

      Furthermore,    we believe that,    to determine whether
goals are being met, management needs reports         on actual per-
formance.     Although each activity     we reviewed has some type
of reporting,     none appears to provide the type of informa-
tion that we believe is needed by management to sufficiently
evaluate actual performance.        We found that:

      --the monthly reports which the Army Aviation    Systems
         Command prepared showed the number of engineering
          change proposals on hand at the beginning and end of
          the month but did not show how many proposals ex-
          ceeded processing time standards.



                                    14
      --the Air Force Aeronautical     Systems Division   report
          did show the number of proposals    exceeding estab-
          lished time limits  but did not show the extent of the
          delays or other data which would be necessary to ad-
          equately appraise performance    in meeting time stan-
         dards,

      --at the Naval Air Systems Command, a report on engi-
         neering change activity     had been prepared for fiscal
         year 1966.    After  that,  however, there had been no
         reporting   by the Command. The 1966 report     showed
         the volume in numbers and in dollar      value and catego-
         rized the change proposals by type and priority.
         The report,   however, did not show information    con-
         cerning processing    delays.

       It is our view that, to be meaningful,         these reports
should show the volume of engineering          change proposals in
numbers and dollar value; the categorization            by priority
and type; the percentage and number of proposals exceeding
established    goals; the extent of processing        delays based on
established    standards;   the points where delays occur; and,
most important,     the reasons for the delays.        Such informa-
tion would be sufficient       to alert management to significant
deviations   from established       processing   time standards and
to permit appropriate      corrective     measures.

       It is our opinion that the ineffective        reporting     proce-
dure has apparently      resulted   in management's not being
alerted   to the significance      and extent of processing       prob-
lems.    Moreover, there is insufficient       information     for man-
agement to pinpoint      problem areas and take corrective         ac-
tion.    We believe that,      if a meaningful  reporting     system
had been in existence,       the chronic processing     problem might
not have been allowed to persist        as long as it did.




                                   1.5
CONTRACTORS
---         NOT ADEQUATELYINSTRUCTED
~- THE KIND OFDATA NEEDEDFOR
0~
EJALUATJON OF PROPOSALS

       Prior to our review, the military       services had estab-
lished military    standards governing the development and
preparation    of engineering    change proposals.       It was the in-
tent of the services that these standards would provide for
uniform documentation;      ensure that complete and accurate
data were included in each change proposal;           and, thereby,
permit a complete evaluation,       normally without the need for
recourse to the contractor      for additional     data.

       The standards,     although providing      explicit    guidelines
for preparation     of these proposals,        did not define the depth
of information     to be provided.        In recognizing    that the mag-
nitude of cost and the extent of technical              complexity     were
factors   which determined the amount of information               to be
provided,    the military      services generally     left to systems
commands and project       offices     the task of expanding upon the
standards to ensure that information            of appropriate      range
and depth for evaluation         was provided.

        We found that the weapons systems commands and the
project     offices,     in general,    had not tailored     these stan-
dards to the peculiarities           of their equipment nor their or-
ganizational        approach to the processing       of change proposals.
The extent of direction         to the contractor       usually   amounted
to no more than a contract           clause stipulating      that appropri-
ate military        standards be adhered to in preparing          and sub-
mitting     change proposals.        The depth of the information        to
be provided apparently         was left to the judgment of the con-
tractor.       Furthermore,    we found little     evidence that spe-
cific    direction      had been provided to contractors         on an indi-
vidual basis.

      At every activity     we visited   that was responsible  for
approving change proposals,       we found that some delays had
occurred because the proposals did not contain sufficient
data for prompt evaluation       and decisionmaking.    Lack of rec-
ordkeeping on the processing        of changes precluded our deter-
mining the full    extent of the delays in each processing
step and identifying     all instances where lack of data was


                                      16
a delay-causing    factor.     Responsible       officials assured us,
however, that the lack       of sufficient       data was a frequently
recurring   problem.

       We found that in several instances       processing   of change
proposals had been delayed until      further    testing   was com-
pleted.     It appeared that in each instance tests had not
been requested until    after the proposal was submitted.          DOD
standards provide only that sufficient        testing    be performed.
The extent of tests required     for prompt and complete evalua-
tion in these cases apparently      was to be decided by the re-
viewers at the time of the evaluation.

       In several other instances,           processing     of change pro-
posals was delayed until          the contractor      furnished    detailed
blueprint      drawings although the standards did not specifi-
cally require       that detailed     drawings accompany the proposed
change.      Configuration     management officials--those           having
responsibility        for control    of the aircraft      design--stated
that detailed       drawings were not needed in most cases but
might be necessary on certain            types of change proposals.

       We found further       that processing      of change proposals
was delayed while contractors          performed additional          engineer-
ing effort.       In  one   case  the Air    Force  wanted     a change   in a
fuel shutoff      valve but had not fully         defined its criteria
for the valves.        Consequently,      after the change proposal was
submitted,     the contractor      was required      to redesign the shut-
off valve and resubmit the change proposal.                  In another case
when the Air Force submitted          a change proposal,         it did not
notify   the contractor       that corrosion      preventative      meas-ures
were required       as a part of the change.           As a result,    addi-
tional   information      from the contractor       was required.       We be-
lieve that these two cases illustrate              instances     in which
specific    direction     could have been provided on an individual
basis, preventing       delay.

        We believe that substantial     delays in processing     change
proposals would be avoided if contractors         were provided with
sufficient     direction    delineating the information   required
for effective      evaluations.

     Subsequent      to the period     covered    by our review,    DOD is-
sued a military      specification     setting    forth information

                                       17
requirements      for change proposals          for all types of equip-
ment.     This  specification        becomes    a part of the contract         for
such equipment.        The specification,          which replaced standards
previously     adopted for a similar          purpose by each of the ser-
vices,    is somewhat more specific           as to information       require-
ments.      Nonetheless,     it  is   our   opinion    that    the specifica-
tion is still       not sufficiently        specific     to ensure submission
of necessary data.         This    is  particularly        true because the
specification       covers all types of equipment and does not ad-
dress itself      to the informational          needs peculiar      to specific
types of equipment such as aircraft.

TIME LIMITS NOT BROKEN DOWNINTO SEGMENTS

        To encourage prompt processing          of change proposals,         two
of the three military        services not only had established
overall    time standards for processing          change proposals        but,
in addition,     had provided that time standards be established
for each group charged with evaluating              change proposals.          In
view of the numerous separate evaluations               on change propos-
als, it seems that the most effective             control     would be
achieved when time limits         are established        for each group
having evaluation      responsibilities.         Configuration      manage-
ment officials     haveagreed that time limits             on engineering
change evaluations       serve as a standard for determining              that
delays exist and act as disciplines             motivating     personnel to
minimize inactivity       and indecision.        Time limits      can also
serve as a basis for systematic           follow-up     by management on
engineering    change proposals        in process to determine reasons
for delays and to expedite completion             of the evaluation.

        Although both the Army and the Navy had requirements
for establishing          time limits   for each processing         group, we
found that only the Army Aviation              Systems Command project
off ices and one Naval Air Systems Command project                    office
 (A-6 Project       Office)    had established     time-limit      criteria     for
functional       groups,     such as  engineering,     logistics,       and  pro-
duction,      that participated       in the review process.            The
groups in the remaining Naval Air Systems Command project
offices     and those of the Air Force Aeronautical                Systems Di-
vision     (the Air Force had established            no time limitations
for functional        groups) had only the overall            processing     goals
set by the services to guide them.


                                        18
        We believe that the lack of time limits            at the review
level permitted      inactivity     and indecision     which added to the
engineering     change proposal processing         time.     That this may
be the case is illustrated          by a test performed by one con-
figuration     manager.      He stated that, for a number of change
proposals,he      convened a meeting of evaluating           personnel
within     10 days after having received each of the proposals.
At these meetings all aspects of the change proposals were
discussed and the proposals were acted upon immediately
thereafter.       The proposals,     which experience showed might
normally have taken more than 45 days to process, were ap-
proved within      20 days.     In view of his experience,         the
configuration      manager concluded that much of the delay in
processing     proposals was attributable        to inactivity       or in-
decision.      Other configuration       managers also said they felt
that much of the delay in processing            proposals was due to
paper shuffling,       routing   practices,   or inactivity.

       We believe that processing          delays could be reduced if
time limits    were applied and enforced at the appropriate                or-
ganizational     level.    Where such time limits          are not in ef-
fect,   we feel that there is no pressure,             sense of urgency,
or obligation      put on the individual         evaluations.    We believe
also that,    because the overall        time limit      of 45 days for a
routine    change proposal is unrelated           to the individual     proc-
essing steps to which a change proposal is exposed and be-
cause the time limit        is applicable      to such a wide scope of
evaluation,    the individual       evaluator     has no comprehension
of how he fits      chronologically      into the framework.        We be-
lieve that imposing time limits            on all evaluating      groups
would accomplish this.

      DOD apparently     was in general agreement with this view.
The Department's     time standards for processing        change propos-
als,  issued subsequent     to  the period    covered  by  our review,
provided that specific      time limits    for individual    groups in-
volved in processing      change proposals be established.

CONCURRENTPROCESSING OF CHANGEPROPOSALS
WOULDREDUCE PROCESSINGTIME‘

      The processing  of an engineering          change proposal in-
volves an evaluation   of the proposal          by different  divisions
of the appropriate   DOD organization,          with regard to their

                                      19
specific    areas of responsibility.         When each of these eval-
uations is performed concurrently,           the total processing     time
is as long as the evaluation         requiring   the most time.      When
evaluations      are performed in sequential       order, the total
processing     time is the sum of the individual          evaluation
times.     Since there are many evaluations         of a change pro-
posal, it follows      that evaluation      of a proposal in sequen-
tial   order will result      in longer processing      time.

      For example, in one case a change proposal was in proc-
essing for 84 days before it was approved.       Fifty-nine       of
these days were spent in the sequential    processing       cycle.
The longest period that any group in this cycle had the pro-
posal was 17 days.    We believe that concurrent      processing
of evaluations   could have saved 42 days.

      In comparing total     processing   times of the Naval Air
Systems Command, where evaluations        are sequentially    pro-
cessed, with those of the Air Force Aeronautical           Systems Di-
vision and the Army Aviation       Systems Command, where they are
processed concurrently;      we found that, on the average, it
took the Navy about 66 days more than the Air Force and
55 days more than the Army to process a change proposal.
The proposals were reviewed from the same aspects at all
three procurement activities,       and the items undergoing re-
view were generally     comparable.     We believe that, partly     be-
cause of the time consumed in the sequential         routing    and re-
view procedures,    processing    at the Naval Air Systems Command
is more lengthy.

      Although processing    instructions    followed   by the Naval
Air Systems Command require       that change proposals     be pro-
cessed expeditiously,    the instructions      do not explicitly      re-
quire that the proposals be processed concurrently.              We be-
lieve that the instructions       should require concurrent       proc-
essing of change proposals,      when possible,     as an aid toward
minimizing   processing  time.

ELIMINATION
--          OF DUPLICATE F%VIEX?S

     We believe also that minimal processing      time can result
when each individual   reviewer,   as a normal practice,   per-
forms only one evaluation    of the proposed change.     Duplicate


                                    20
processing not only lengthens the total   processing  time but
also increases the workload of the reviewer.     This in turn
can cause delays in processing  other proposed changes.

      The processing   systems in existence     at the Air Force
Aeronautical   Systems Division   and the Army Aviation        Systems
Command do not appear to contain duplicate         processing.      Nor-
mally, each reviewing    element performs an evaluation         of the
proposed change and prepares formal comments.           The comments
are then submitted to a configuration        manager, and the vari-
ous reviewing   elements do not participate      in the processing
again unless technical     advice is solicited     in the approval
process.

      At the Naval Air Systems Command, the normal processing
procedure requires    each reviewing   element to evaluate the
proposed change at least twice.      The reviewing   elements per-
form evaluations    of the proposal submitted by the contractor
and then informally    submit comments to an equipment design
engineer.    At the completion   of his evaluation,   the engineer
prepares a condensed version of the proposed change and
routes it to each of the reviewing      elements for a second
evaluation.    The condensed version normally contains the
same data shown in the basic change proposal.

      Our review indicated      that duplicate processing     was add-
ing to delays at the Naval Air Systems Command. In an anal-
ysis of 40 proposed changes, we calculated        that the average
total  processing  time   was increased by 33 days due to the
second evaluation.      We believe that elimination      of duplicate
processing   could substantially     decrease processing    time.

DELAYS CAUSED BY REVIEWS BY UNITS
FROM OUTSIDE PROJECT MANAGEMENTGROUP

       In the Air Force the responsibilities       for supply manage-
ment and other functions      are separated from the project       man-
agement group that approves change proposals.           All supply
aspects of a proposed change are thus evaluated and acted
upon by the activity    responsible    for supply management.
Also, unlike the other services,       the Air Force requires      op-
erational    commands to participate     directly  in the processing
of the proposal.     Air Force configuration      management


                                   21
directives    provide that each of the commands evaluating
change proposals     establish and maintain   a formal evaluation
board.     The board meets periodically    to review and act upon
the proposed changes.

       Our review of selected change proposals                at the Air
Force Aeronautical       Systems Division        indicated     that delin-
quent processing     by activities       other than the project            man-
agement group was a primary cause of delay.                  For example, we
found that delays ranging from 36 to 221 days had occurred on
selected change proposals          at one Air Force Aeronautical             Sys-
tems Division    project     office,    primarily       because of delin-
quent processing     at a command having responsibility                 for other
functions.     One responsible       project     official     stated that Air
Force Aeronautical       Systems Division        project    offices     had no
control    over the processing       by other activities.             A repre-
sentative    of one of these other activities              mentioned that
generally    a review was not begun until             word was received
from the Air Force Aeronautical            Systems Division         that the
change proposal had been found technically                 acceptable.       This
amounted to sequential        processing     and substantially          delayed
completion    of the review process.




                                       22.
                               CHAPTER 6

                GAO PROPOSALSAND AGENCY COHHENTS

GAO PROPOSALS

       In a draft of this report,     we advised DOD that delays
in the processing     of change proposals appeared to be the rule
rather than the exception.        We advised DOD further     that we
believed management action to reduce processing          time to the
minimum and secure compliance with its standards was war-
ranted because the advantages of reducing processing            time--
reductions    in expenditures   and better equipped aircraft--
seemed so significant      that it was well worth concentrated
management effort     to attain more timely processing.

       In the draft report,    we also suggested steps to achieve
more timely processing      of engineering   change proposals.      We
suggested that the Secretary       of Defense designate a group in
DOD to establish    procedures for effective      control   of the
processing   of engineering    change proposals and to monitor
the implementation     of these controls    by the military    ser-
vices.    We suggested further     that matters to be considered
should include the establishing        of:

      1. Time standards for processing  change proposals,     bro-
         ken down into segments, to guide individuals     and
         groups functioning in the evaluating   cycle.

      2.   A system of recording enough information        on the ac-
           tual performance of evaluating     groups to provide
           management a means of periodically      evaluating     how
           actual performance compares to established         standards.

      3.   Reviews by project    officials    to determine,   for each
           aircraft  type, specific      data to be furnished    by con-
           tractors  for evaluating      change proposals applicable
           to the aircraft.

      4.   Standardized    procedures that will provide for con-
           current reviews of engineering       change proposals and
           eliminate    duplicate   processing.


                                   23
AGENCY COMMENTS

        The DOD responded to our draft report           in a letter    from
the Deputy Assistant       Secretary     of Defense (Installations
and Logistics)     dated June 30, 1970, a copy of which is in-
cluded as appendix II.        The Deputy Assistant         Secretary
agreed that the advantages of reducing the processing                time
for engineering      change proposals warranted         increased man-
agement effort     to ensure more timely processing.             He stated
that the military      departments had devoted considerable            man-
agement attention      this past year to all aspects of config-
uration    management, especially        to the processing      of engi-
neering change proposals,        and   that   each   of the  departments
had established,      or had procedures in a late stage of de-
velopment to establish,       effective     controls    over the timeli-
ness of processing       change proposals.

        The Deputy Assistant      Secretary    stated that a formal in-
ternal audit,     then underway, to evaluate the configuration
management programs of the departments would include an au-
dit of the then-current        practices    for controlling     engineer-
ing change proposals.         He stated also that,       in view of these
actions,    DOD did not plan to form a group, such as we had
suggested,    to establish     additional     DOD-wide procedures for
controlling     and monitoring     engineering     change proposals,
He indicated,     however, that a group would be formed, on an
ad hoc basis, to review specific           procedures developed by the
military    departments and that action would be taken to cor-
rect any deficiencies       found.




                                     24
                              WAFTER --7

                  CONCLUSION AND RECCPPlENDATION

     We believe that the advantages of reducing the time
for processing  engineering  change proposals are important
enough to warrant a concentrated   management effort to at-
tain more timely processing.

      The action being taken by DOD of developing            and imple-
menting controls    over processing      time seems to be respon-
sive to our suggestions     and,    if the   controls   are appropri-
ate and are effectively     carried    out, it should significantly
improve the timeliness    of engineering       change proposal proc-
essing.   We plan to inquire      into the effectiveness       of DOD's
new controls   after the actions,      which   it   has taken  and plans
to take, have been completed.

      We recommend that the Secretary        of Defense monitor ac-
tions planned for improvement of the         processing  of engineer-
ing change proposals,   to ensure that       the actions are carried
out effectively  and are achieving   the       desired objectives,




                                   2.5
                                CHAPTFX8

                            SCOPE OF REViEW

       Our review included an examination        of DOD policies,
procedures,    and practices    for processing     engineering       change
proposals.     At aircraft   procurement activities        of the Army,
Navy, and Air Force and at associated          contractor      locations,
we analyzed pertinent-records       and interviewed       officials
responsible    for processing    engineering    changes.       Our review
was conducted between January 1968 and September 1969 at
three procurement activities       and nine aircraft       contractor
locations.

       We developed engineering    change proposal chronologies
of events; computed processing      times; compared actual proc-
essing times with established      standards to determine de-
lays; determined extent and significance        of delays;    ascer-
tained reasons why delays occurred;       evaluated the reasons
in terms of authenticity;     and determined what action man-
agement was taking to preclude recurrences.         We also mea-
sured the impact of engineering       change proposal processing
delays in terms of the increased implementation         costs and
the user benefits     denied when the delays prevented      the in-
corporation    of engineering   changes on aircraft    during pro-
duction.




                                    26
APPENDIXES




 27
                                                                                                                 APPENDIX I

                               DELAYED CHANGEPROPOSALS RESULJING IN ADDITIONAL COST

             Engineering
                change                                                                           Aircraft       Estimated increased cost
Aircraft      proposal                                                                            missing         resulting  from making
project        number             Description      of engineering        change proposal          change        change after production
DB-1            275        Add engine air induction         screen and install        par-
                              ticle    separator                                                      4(!              $    62,200
BB-1            288        Improved swashplate assembly                                              288                    10,190
DB-1            278        Provide a secondary source of hydraulic               power to
                              collective     and cyclic boost cylinders                                51                   46,333
UH-1            279        Improve serviceability         and reliability       of the
                              collective     and rotating    control      system                       51                  133,722
U-I-1           285~       Install     AR/ARC 54 FM communication equipment in
                              lieu of AN/ARC 44                                                       53                    69,012
UH-1            349        Add additional        roof access step                                    670                    37,493
AK-1            363        Improved taillight                                                         85                    34,467
WI-1 and                   Improved method for connecting            the engine fuel
AH-l            310           inlet hose                                                             155                      7,170
DB-land
An-l            371R2      Improved hydraulic          air filter      system                        868                   131,415
AH-1            378        Improved hydraulic          system lockout valves                         259                    74,799
AH-1            390        Relocate UHF-VHF and FM antennas                                                                 24,193
AH-1            398        Improved S&i pylon compensation network                                     ;i                   37,431
AH-1            366        Improved attitude         indicator       and remote control
                              gyroscope                                                              231                1,052,205
AH-l            380        Improved capacity main rotary inverter                                     84                    30,660
CB-47           404        Provide added drainage for fuselage                                        32                     7,680
C&47            495        Deletion of VCR audio-padding               from the inter-
                              phone junction       box                                                 58                    1,740
CR-47           526        Improved N-2 actuator                                                                           193,209
CB-47           533        Increase torquemeter           indicator      damping                       ::                   28,305
T-38            135DR      Motor operated fuel shutoff valve                                           87                   43,061
T-38            187D       Phase revision       elimination       primary AD1 sphere
                              system                                                                   36                    6,696
T-30            199D       Canopy safe warning system improvements                                     12                   12,986
T-30            203D       Aileron control        system improvement                                   76                   20,501
T-30            204D       CAM flap control        detent modification                                 34                     8,697
T-38            205D       Nose wheel steering          circuitry      bearings                        20                   10,231
T-38            209D       Installation      of rudder servo input shaft duct
                              seal                                                                     21                     1,533
A-6A            276        Installation      of two point oil quantity              gauging
                              systems                                                                 20                     84,392
A-6A            470        Improvement of airborne moving target radar                                85                   290,428
A-6A            475        Provide TACAN-IFF separation                                               19                    51,433
A-6A            486        Installation       of beacon radar                                        101                   142,107
A-6A            495        LABS IP LAY down bombing                                                   74                   111,311
A-7B             27        Modification       of wing leading and trailing               edge
                              flap controls                                                            57                  296,373
A-7A and B        29-1     Canopy handle change and wingfold                 addition                  57                   10,597
A-7B              29-6     Addition      of rain removal hot caution light                            196                   43,057
A-7A              29-14    Provision      for AWW-2A fuel function            control     unit         57                   19,495
A-7A              22       Installation       of additional         armor                              57                   88,610
A-7A              31       APQ-116 radar change                                                        73                   70,937
A-7A and B        33       Increase range turbine inlet temperature                    indica-
                              tor                                                                     104                   85,134
A-7B              44       Addition      of communication equipment--Juliet                 28         81                  275,358
CB-46            370        Installation      of lock on/lock off altitude               hold
                              switch automatic trim system control panel                                    7                    249
CR-53            6046      Incorporation       of the range extension configura-
                              tion                                                                     24                     1,%X?
CH-53            6062E      Incorporation      of remote topping                                       18                     3,912
CH-54            8057       Installation      of improved control           rod assembly
                               and strut assembly                                                           6                    264
                                                                                                   4,556               $3,662,300




                                                                   29
    APPENDIX II

                                           ASSISTANT     SECRETARY           OF DEFENSE
                                                   WASHINGTON,       0.~.     20301




                                                                                                   30 J'UN 1970
lNSTAM.AllONS    AND LOGISTIC5
                AR


                Mr. C. M. Bailey
                Director,   Defense    Division
                U. S. General     Accounting           Office
                Washington,    D. C. 20548

                Dear    Mr.      Bailey:

                This is in response   to your letter   of April                       29, 1970, to the Secretary
                of Defense  which forwarded     copies of your                        draft  report,    “Opportunity
                to Reduce  Costs through    Prompt    Processing                         of Engineering     Change
                Proposals,  ” (OSD Case #3112).

                We agree that the advantages           associated   with reducing      the processing
                time for engineering         change proposals     warrant    increased     management
                effort   to assure     more timely    processing.       The Military     Departments
                have devoted      considerable     management      attention   this past year to all
                aspects     of configuration     management,      especially    to the processing     of
                engineering      change proposals.

                Each of the Departments         has now established,       or has procedures          in a
                late stage of development        to establish,   effective   controls      over the time-
                liness of processing     change proposals.         A formal    internal      audit now
                under way to evaluate      the configuration     management        programs       of the
                Departments    will specifically      include  audit of current       practices     for
                controlling  engineering     change proposals.

                In view of these actions        it is not planned       to form a group to establish
                additional      Defense-wide     procedures      for control      and monitoring     of
                engineering       change proposals       at this time.      However,     a group will be
                formed     on an ad hoc basis to review           specific    procedures     developed    by
                the Military       Departments.       Action will be taken to correct           any defi-
                ciencies     found.

                                                                            5incc. rely,




                                                                 30
                                                     APPENDIX III
                                                          Page 1

                    PRINCIPAL OFFICIALS

           OF THE DEPARTMENTOF DEFENSEAND THE

       DEPARTMENTSOF THE ARMY, NAVY, AND AIR FORCE

     RESPONSIBLE FOR THE ADMINISTRATION OF ACTIVITIES

                 DISCUSSED IN THIS REPORT


                                           Tenure of office
                                           From            -To

                   DEPARTMENTOF DEFENSE

SECRETARYOF DEFENSE:
   Melvin R. Laird                  Jan.      1969     Present
   Clark M. Clifford                Mar.      1968     Jan.    1969
   Robert S. McNamara               Jan.      1961     Feb. 1968

DIRECTOR OF DEFENSERESEARCH
  AND ENGINEERING:
    John S. Foster, Jr.             Oct.      1965     Present

ASSISTANT SECRETARYOF DEFENSE
  (INSTALLATIONS AND LOGISTICS):
     Barry J. Shillito              Feb.      1969     Present
     Thomas D. Morris               Sept.     1967     Jan.    1969
     Paul R. Ignatius               Dec.      1964     Aug. 1967
                  DEPARTMENTOF THE ARMY

SECRETARYOF THE ARMY:
   Stanley R. Resor                 July      1965     Present

ASSISTANT SECRETARYOF THE ARMY
  (INSTALLATIONS AND LOGISTICS):
     J. Ronald Fox                  June      1969     Present
     Vincent P. Huggard (acting)    Mar.      1969     June 1969
     Dr. Robert A. Brooks           Oct.      1965     Feb. 1969




                             31
APPENDIX III
     Page 2

                    PRINCIPAL OFFICIALS

           OF THE DEPARTMENTOF DEFENSEAND THE

       DEPARTMENTSOF THE ARMY, NAVY, AND AIR FORCE

     RESPONSIBLE FOR THE ADMINISTRATION OF ACTIVITIES

                 DISCUSSED IN THIS REPORT (continued)


                                          Tenure of office
                                          From            -To
                  DEPARTMENTOFTHENAVY

SECRETARYOF THE NAVY:
   John H. Chafee                    Jan.    1969     Present
    Paul R. Ignatius                 Aug.    1967     Jan.    1969
   Charles F. Baird (acting)         Aug.    1967     Aug. 1967
   Robert H. B. Baldwin (acting)     July    1967     July    1967
   Paul H. Nitze                     Nov.    1963     June 1967
ASSISTANT SECRETARYOF THE NAVY
  (INSTALLATIONS AND LOGISTICS):
     Frank Sanders                   Feb.    1969     Present
     Barry J. Shillito               Apr.    1968     Jan.    1969
     Vacant                          Feb.    1968     Mar.    1968
     Graeme C. Bannerman             Feb.    1965     Feb. 1968


                DEPARTMENTOF THE AIR FORCE

SECRETARYOF THE AIR FORCE:
   Robert C. Seamans, Jr.            Feb.    1969     Present
   Harold Brown                      Oct.    1965     Jan.    1969

ASSISTANT SECRETARYOF THE AIR
  FORCE (INSTALLATIONS AND LOGIS-
  TICS):
    Phillip Whittaker                May     1969     Present
    Robert H. Charles                Nov.    1963     May     1969
                                                     U.S.   GAO   Wash.,   D.C.



                             32