United States General Accounting Office . Briefing Report to Congressional GAO Requesters November 1990 AIR FORCE BUDGET Potential Reductions to Aircraft Procurement Budgets United States GAO General Accounting Washington, D.C. 20548 _~ Office National Security and International Affairs Division B-235884 November 30.1990 The Honorable Daniel K. Inouye Chairman, Subcommittee on Defense Committee on Appropriations IJnited States Senate The Honorable John P. Murtha Chairman, Subcommittee on Defense Committee on Appropriations House of Representatives As requested, we reviewed the Air Force’s fiscal year 1991 aircraft pro- curement budget request and prior year appropriations for the C-l 7, H-2, and F-16 aircraft procurement programs and the C/KC-135, B-52, and B- 113modification programs. Our objectives were to identify poten- tial reductions to the fiscal year 1991 budget request and potential rescissions to prior year appropriations. This report was prepared before House and Senate Conferees agreed to the terms of the fiscal year 1991 Defense Appropriations Act. On July 19, 1990, we briefed your staffs on the results of our work so that the potential reductions or rescissions could be considered in the debate on the fiscal year 199 1 Defense Appropriations Act. The House and Senate Conferees agreed to the terms of this act in late October 1990. WC identified $3,094.9 million in potential reductions: $2,864.3 million in the fiscal year 1991 budget request and $186.8 million, $19.5 million, and $24.3 million in potential rescissions of appropriated funds from fiscal years 1990, 1989, and 1988, respectively. As shown in table 1, these potential reductions were primarily the result of our suggestions not to acquire C-17 aircraft and initial spares for B-2 aircraft in fiscal year 1991. page 1 GAO/NsIADsl-17BR Aircraft Pmcurement Budgets Page 3 GAO/NSIADSl-17BR Aircraft Procurement Budgets Page 5 GAO/NSIAD-91.17BR Aircraft Procurement Budgets Appendix I Potential Reductions to the Air Force’s Aircraft Procurement Budgets made in developing the V-17 aircraft, the program continued to face sig- nificant cost and schedule challenges. For example, the program’s total cost estimate increased from $37.5 billion in 1988 to $41.8 billion in 1990, a delay of nearly 1 year in the program’s schedule was reported in late 1989, the first flight of the C-17 development aircraft was delayed from August 1990 until ,Junr 1991, and further delays in the program’s schedule were expected because of continuing difficulties with aircraft assembly and avionics development and testing. Delays of nearly 1 year in achieving important contract milestones, such as first flight, slowed the program, and, as a result, most of the funds appropriated in fiscal year 1990 remained unobligated. For example, because of slow progress, the production contract for aircraft author- ized for fiscal year lQ90. originally scheduled to be awarded in January 1990, had not been awarded as of July 1990. The Air Force believed the contract would be awarded in December 1990, 11 months later t,han originally planned. The Air Force and the contractor anticipated similar delays in achieving contract milestones required before the contract for aircraft requested in fiscal year 1991 could be awarded. For example, first flight of the first production aircraft, originally scheduled for October 1990, is now expected to occur in September 1991. If the contractor accomplishes this milestone in September 1991, the Air Force will not award the fiscal year 1991 procurement contract until the end of fiscal year 1991. In our testimony we recommended that the Congress consider reducing both the proposed procurement of two aircraft in fiscal year 1991 and the request for advance procurement funds for six aircraft to be acquired in fiscal year 1992. We believed schedule delays of about 1 year justified delaying the procurement funding requested in fiscal year 1991 until fiscal year 1992. Advance procurement funds appropri- ated in fiscal year 1990 could be used to acquire items with long lead times for fiscal year lQQ2. The acquisition of initial spares could be delayed until the aircraft are acquired. Page 7 GAO/NSIADSl-17BR Aircraft Procurement Budgets Appendix I Potential Reductions to the Air Force’s Aircraft Procurement Budgets Advance Procurement The Congress provided $424.8 million in fiscal year 1990 for advance procurement of B-2 aircraft. These funds were intended, in part, to pro- vide funding for items with long lead times for five aircraft, which were to be requested by the Air Force in fiscal year 1991. We identified approximately $82 million of these funds to be considered for rescission because the number of aircraft in the fiscal year 1991 budget was reduced from 5 to 2 by the Secretary of Defense. The program office estimated that the $82 million was applicable to the aircraft that will no longer be procured in fiscal year 1991. Air Force officials told us that if the $82 million in fiscal year 1990 advance procurement funds were rescinded, additional funding in fiscal year 1991 would be required. F-l 6 Fighter Brief Description of The F-16 fighter aircraft is a single-engine, lightweight, high-perform- Program ante aircraft that is capable of delivering both air-to-air and air-to-sur- face weapons. The first aircraft was delivered in September 1978. The F-16 is used by the air forces of 17 nations. The Air Force plans to acquire 150 F-16s per year for fiscal years 1990 through 1993 under a multiyear contract that is being negotiated. Program officials expect this contract to be finalized in ,June 199 1. Results of Analysis We did not identify any potential reductions to the fiscal year 1991 budget request. However, we identified potential rescissions of $865 million in appropriated funds: $43.9 million from fiscal year 1990, $18.3 million from fiscal year 1989, and $24.3 million from fiscal year 1988, as shown in table 1.2. Page 9 GAO/NSIAD.Sl-17BR Aircraft Procurement Budgets Appendix I Potential Reductions to the Air Force’s Aircraft Procurement Budgets Also, the Air Force expected higher engine costs due to the increased price of nickel and, as a result, allocated funds to cover increases in the engine prices. However, a recent analysis showed cost increases were $35.3 million less than expected. Thus, we identified $14.1 million, $14.9 million, and $6.3 million in fiscal year 1990, 1989, and 1988 appropri- ated funds, respectively, to be considered for rescission. Final Contract Price Adjustment The Air Force and General Dynamics both agreed to decrease the final contract price for the F-16’s Fl 10 engine support equipment in fiscal year 1988. The Air Force modified the Fl 10 engine contract in November 1989 to deobligate $2.1 million for fiscal year 1988. These funds were only available for obligation through September 30, 1990. __- -..~__ After reviewing the results of our evaluation, officials from Air Force Headquarters and the program office emphasized that although the orig- inal purposes for which these funds were budgeted may have changed, the funds are not excess. They are needed to compensate for unantici- pated increases in procurement costs and transfers of program funds for high-priority requirements. The program manager told us that signifi- cant increases over budgeted amounts were expected in the contractor’s costs for manufacturing labor and overhead. Additionally, program office officials said $142.1 million from the fiscal year 1990 budget had been transferred for other purposes including military pay and Central American relief. Accordingly, the program manager advised us that all available funds appropriated for the F-16 program are needed to acquire aircraft and support equipment. C/KC-135 Modifications Brief Description of Over 800 C/KC-135 aircraft were produced in the 1950s and 1960s for Program aerial refueling and other purposes. Modifications have been made to C/KC-135 aircraft to improve their performance, reliability, and main- tainability. The fiscal year 1991 budget includes $631.9 million for 11 different modification programs. Page 1 I GAO/NSIADSI-17BR Aircraft Procurement Budgets Appendix I Potential Reductions to the Air Forcr’s Aircraft Procurement Budgets These three modifications were originally scheduled to be procured in fiscal year 1990, but the procurement was postponed until fiscal year 1991 because of delays in determining the requirements for the inte- grated system. Therefore, we identified $22.8 million in fiscal year 1990 appropriated funds-$5.6 million for the Global Positioning System, $7.2 million for the Ground Collision Avoidance System, and $10 million for the Fuel Savings Advisory System-to be considered for rescission. ‘I’hc C/KC-l 35 System Manager agreed with our conclusion. Engine Replacement The Air Force is replacing the engines in the C/KC-135 aircraft to reduce fuel consumption, comply with engine noise standards, and increase the amount of fuel the aerial tankers can carry by l-1/2 times. The Air Force received $743.6 million for this modification in fiscal year 1989, but only $742.4 million was needed to meet cont,ract commitments and other program costs. Accordingly, we identified %1.2 million in fiscal year 1989 appropriated funds to be considered for rescission. The system manager agreed with our conclusion. MIISTAR UHF/EHF Command This modification will allow the Air Force to use Navy fleet satellites to Post Upgrade disseminate command messages in a more jam-resistant mode. The Pres- ident’s fiscal year 1991 budget request included $51.3 million for this modification; however. Air Force estimates showed requirements for only $38.5 million. Thus. WVidentified $12.8 million in the fiscal year 1991 request to be considered for reduction. Program officials explained that the $12.8 million is needed to procure a prototype of the system. The Air Force has yrt not documented and justified the need to acquire a prototype. B-52 Modifications Brief Description of B-.52 bombers were acquired in the late 1950s and early 1960s and are Program used in both nuclear and conventional roles. The current inventory includes B-52G and WY211models. Modifications have been made to these aircraft to improve their performance, reliability, and maintain- ability. The fiscal year 199 1 budget included nine different modification projects for B-52 bombt~rs. totaling $109.6 million, Page 13 GAO/NSIAD-91.17BRAircraft Procurement Budgets - Appendix I Potential Reductions tea the Air Force’s Aircraft Procurement Budgets origit& budget submission and has not identified sources for the addi- tional $73 million needed for this change, we identified $15.9 million from the fiscal year 199 1 budget request to be considered for reduction. Global Positioning System When fully deployed, the Global Positioning System is expected to pro- vide precise, worldwide positioning and navigation data for many mili- tary users. The fiscal year 1991 budget request included $5.1 million to acquire and install the system on 16 B-52G aircraft. However, because the Air Force now plans to retire these aircraft by 1995, the modifica- tions arc no longer needed. Thus, we identified $5.1 million in the fiscal year 1991 budget request to be considered for reduction. Even though the Air Force received $4 million to imtall this modifica- tion on some B-52 aircraft in fiscal year 1990. only $400,000 was needed. Therefore, we identified $3.6 million in fiscal year 1990 appro- priated funds to be considered for rescission. The Is-52 system manager agreed with the proposed rescission of $3.6 million and that the Global Positioning System should not be installed on the 16 IMXG aircraft beginning in fiscal year 1991 if these aircraft are to be retired. However, the system manager planned to use the $5.1 mil- lion requested in fiscal year 1991 to begin the installation of this modifi- cation on B-52H aircraft. Since the modification of B-52H aircraft was not justified in the budget request and was not planned until fiscal year 1993, we identified $5.1 million in the fiscal year 1991 budget request to be considered for rescission. The Air Force can justify the K52H modifi- cation as a separate modification. Heads-Up Display and Night This modification will acquire kits that provide lighting support for a Vision Goggles heads-up display and night vision goggles. For fiscal year 1991, the Air Force requested $5.1 million to acquire 60 modification kits (component parts and materials). Howc>vrr, because all but 40 B-52G aircraft are planned to be retired by fiscal year 1995, and since 12 kits were acquired in fiscal year 1990. only 28 kits needed to be acquired in fiscal year 1991, We estimated that $3.1 million would be needed in fiscal year 1991 to procure the 28 modification kits. Thus, we identified $2 million in the fiscal year 1991 budget request to be considered for reduction. Program officials disagreed with our conclusion. They maintained that anJ’ modification kits not installed on B-52G aircraft can be used on I~-5211aircraft. IIowevcr, this modification project for 1%52H bombers was not requested or justified in the budget request. Page 15 GAO/NSIAD-91.17BR Aircraft Procurement Budgets Appendix I Potential Reductions to thr Air Force’s Aircraft Procurement Budgets Results of Analysis We did not identify any potential reductions to the fiscal year 1991 budget request. Howcvcr, we identified a potential rescission of $3 1.9 million from fiscal year 1990 appropriated funds because the Air Force did not proceed as planned with a modification to add anti-icing heaters to B-l H engine inlets. The B-l B anti-icing modification is required to permit low-level flights during icing conditions. 1‘rider certain conditions, ice can build up on ISIB engine inlets, break off, and damage the engine. A proposed solu- tion was to install heating elements on each engine inlet. The Air Force requested and received $31.9 million in fiscal year 1990 to procure anti-icing modification kits. However, procurement was not initiated because no funds were available to complete full-scale develop- ment of the modification. Accordingly, we identified $31.9 million in fiscal year 1990 appropriated funds to be considered for rescission. Even though the $3 1.9 million is not needed for the anti-icing modifica- tion, the Air Force wants 1o apply these funds to a new modification program to install fire detection and suppression equipment in a section of the II-113 wing in which f’ircs have occurred and destroyed two air- craft. Program officials told us this modification is a high priority and involves the safety of f’liglit crews. The Air Force requested $33.4 mil- lion in its fiscal year I!~91 budget, for this modification program but wants to begin the program in fiscal year 1990 using the funds appropri- ated initially for the anti-icing modification. Since the Air Force has not formally .justified the nwtl for additional funds in the first year of the fire detect ion and suppression modification program, we identified the 63 1.9 million to bc consldercd for rescission. Page 17 GAO/NSIAD-91.1’7BR Aircraft Procurement Budgets Appendix II1 ~- Major Contributors to This Report Norman Rabkin, Associate Director National Security and Carl Rogar, Assistant Director International Affairs Division, Washington, D.C. ~__ Robert D. Murphy, Ass&ant Dirt&or Cincinnati Regional Matthew Mongin, Evaluator-in-Charge Office #JohnSeidl. Senior J3valuator .Jamcs Kahmann, Senior Evaluator Robert Rcpasky, Senior Evaluator Donald Allgyer, Senior F:valuator Roger Tomlinson, Senior Evaluator Kansas City Regional Stephen Boyles, Senior Evaluat.or Office .- Theophilus Yu, Senior Evaluator Los Angeles Regional Office (392543) Page 19 GAO/NSIADPl-17BR Aircraft Procurement Budgets Ordering Information The fiit five copies of each GAO report are free. Additional copies are $2 each. Orders should be sent to the following address, accom- panied by a check or money order made out to the Superintendent of Documents, when necessary. Orders for 160 or more copies to be mailed to a single address are discounted 26 percent. U.S. General Accounting Office P.O. Box 6016 Gaithersburg, MD 20877 Orders may also be placed by calling (202) 2756241. .,-a.+ ‘.., - . .,,. ,, .. .1/ H.y- , .”* Appendix II Objectives, Scope,and Methodology This review is one of a series that examines defense budget issues. Our objectives were to review the Air Force’s fiscal year 199 1 aircraft pro- curement budget request and prior year appropriations and identify potential reductions and/or rescissions. We examined the C-17, B-2, F-15, and F-16 aircraft procurement programs and the C/KC-135, B-52, and B-1B modification programs. We identified potential reduc- tions and/or rescissions to the budgets for all of the programs except the F-15. We interviewed budget and program officials and reviewed pertinent program documents, audit reports, and budget support data at the Air Force Logistics Command and Aeronautical Systems Division, Air Force Systems Command, Wright-Patterson Air Force Base, Ohio; Oklahoma City Air Logistics Center, Tinker Air Force Base, Oklahoma; and Douglas Aircraft Company, Long Beach, California. We performed our work from March to .July 1990 in accordance with generally accepted government auditing standards. Page 18 GAO/NSIADSl-l7BR Aircraft Procurement Budgets Appendix I Potential Reductions to thr Air Force’s Aircraft Procurement Budgets The Air Force also received $6 million for 24 modification kits in fiscal year 1990. In June 1990 program officials estimated a requirement for $3.4 million because the procurement of 12 modification kits was delayed until fiscal year 1991. Thus, we identified $2.6 million in fiscal year 1990 appropriated funds to be considered for rescission. The pro- gram manager agreed with our conclusion. Weapon System Trainer Update The weapon system trainer update modification will replace the current computer system with a state-of-the-art computer that has the capacity and spare memory required to accommodate extensive modifications to B-52 training devices. The Strategic Air Command has not revalidated the requirement for this modification, since B-52 force structure has changed and the program manager is uncertain whether this modifica- tion will be required in fiscal year 199 1. Accordingly, we identified $10.8 million in t,hc fiscal year 199 1 budget request to be considered for reduction. Air Force Logistics Command officials that manage the modi- fication program did not agree with our conclusion, since they were not certain whether the Strategic Air Command would revalidate the requirement for this modification. Enhanced Ground Egress Concern arose over the safety of B-52 ejection seat systems after a repair technician pulled an ejection seat lever and was killed. The Enhanced Ground Egress modification will allow the system to be repaired safely. Since this modification had already been funded with excess prior year fimds, fiscal year 1991 funds were not needed. Thus, we identified $55 million requested for this modification in the fiscal year 1991 budget to be considered for reduction. B-l B Modifications Brief Description of B- 1B multirole bcjmbers were produced in the mid- 1980s to replace aging Program B-52 bombers. Air Force plans call for the B-lB to replace the B-52 as a penetrating bomber and provide the capability to penetrate Soviet defenses until the 11-2,a more advanced bomber, is deployed in the mid- 1990s. The H-11<will eventually become a cruise missile carrier and could be used as a conventional bomber. The B-l B will be modified throughout its life span to correct deficiencies, improve reliability and maintainability. and add or improve operational capability. Page 16 GAO/NSIAD91-17BR Aircraft Procurement Budgets Appendix I Potential Reductions to the Air Force’s Aircraft Procurement Budgets In light of dramatic changes in eastern Europe and other factors, such as efforts to reduce the defense budget, the Air Force planned to restruc- ture the bomber force and retire some of the B-52G bombers. The cur- rent program objective memorandum for B-52 aircraft indicates the current B-52G inventory of 159 aircraft will be reduced to 40 by fiscal year 1995. Thus, fewer aircraft will have to be modified than previously planned. Results of Analysis We identified potential reductions of $46.5 million: $40.3 million in the fiscal year 1991 budget request and $6.2 million in appropriated funds from fiscal year 1990, as shown in table 1.4. Table 1.4: Potential Reductions in B-52 Modification Funds Dollars r mllllons . Fiscal year Program 1991 1990 Total Advanced Cruise M~sslle Integration $1 0 $0 0 $1.0 Al-Q-172 electronic countermeasures set 159 00 15.9 Global Posltlonlng Systema 51 36 8.7 Heads-up display and mght vlsun goggles 20 26~ 4.6 Weapon system trainer update 108 00 10.6 Enhanced Ground Egress 55 00 5.5 Total $40.3 $6.2 $46.5 %ee note a I” table I3 Advanced Cruise Missile This modification will enable the B-52H to carry heavier weapon loads. Integration The fiscal year 199 1 budget request included $11.7 million for this modi- fication; however, in -June 1990 the system manager determined that only $10.7 million would be needed, since contract proposals were lower than budgeted. Thus, WCidentified $1 million to be considered for reduc- tion from the fisc,al year 1991 budget request. ALQ-172 Electronic This modification will update the B-52H’s primary defensive system. Countermeasures Set The fiscal year 1991 budget request included $65.4 million for the pro- curement of support equipment. During our evaluation, program offi- cials documented an estimated cost for the support equipment of $49.5 million and advised us that the remaining $15.9 million in the fiscal year 1991 budget request would be used to partially fund an engineering change to the system. which is expected eventually to cost $89 million. Because the Air Force did not document or justify this requirement in its Page 14 GAO/NSIADSl-17BR Aircraft Procurement Budgets - Appcmlix I Potential Reductions to the Air Force’s Aircraft Procurement Rudgrts Results of Analysis We identified potential reductions of $80 million: $56 million in the fiscal year 199 1 budget request and $22.8 million and $1.2 million in appropriated funds from fiscal years 1990 and 1989, respectively, as shown in table 1.3. Table 1.3: Potential Reductions in C/KC-135 Modification Funds Dollars II- millions Fiscal year Program 1991 1990 1989 Total Global Poshonlng System’ $190 $5 6 $0 0 $24.6 Ground Colhs~on Awdance System 77 72 00 14.9 Fuel Savings AdvIsor) System 165 100 00 26.5 Englne replacement 00 00 12 l3 MILSTAR UHF/EHF Comnland Post upgrade 128 00 00 12.6 Total $56.0 $22.6 $1.2 $60.0 “We ldenllfied a total polenl~al reduction of $110 mullion to the fiscal year 1991 budget request for “se, equlpmenl for this system rhls potential reduction IS discussed I” Air Force Budget Potenh Reduce tions in Command, Control and Communlcatlons Funds (GAO/NSIAD-90.300BR. Sepl 28 1990) Global Positioning, Ground The Air Force plans to integrate and install the Global Positioning, the Collision Avoidance, and Fuel Ground Collision Avoidance. and the Fuel Savings Advisory Systems on Savings Advisory Systems C/KC-135 aircraft as one project. The Global Positioning System is to provide precise, worldwide, three-dimensional positioning and naviga- tion for various military aircraft, including the C/KC-135. The Ground Collision Avoidance System is to provide visual indications, alarm sig- nals, and verbal cxutions if the aircraft encounters hazardous flight con- ditions. The Fuel Savings Advisory System is to provide the flight crew optimum power sett mgs needed to meet mission requirements while get- ting the most cfflcictnt fuel use. The Air Force’s tixxl ycsar 1991 budget request includes $43.2 million for these modifications: $19 million for the Global Positioning System, $7.7 million for thr, Ground Collision Avoidance System, and $16.5 mil- lion for the Fuel Savings Advisory System. These modifications are to be installed in C/Kc’-l:l5 aircraft by one contractor. The contract award is scheduled for Scptcmbcr 1991, less than 1 month before the end of fiscal year 1991. To acc.omplish the planned contract award schedule, the Air Force would 1IaI.c’to compress several pre-contract award activities. Since the modifkations are to be accomplished in fiscal year 1992, the funds can be reqt~c~s~cdand justified for fiscal year 1992. Accordingly, we suggested tht,sct I‘untls be deleted from the fiscal year 1991 budget request. Page 12 GAO/NSIAD-91.17BR Aircraft Procurement Budgets Appendix I Potential Reductions to the Air Force’s Aircraft Procurement Budgets Table 1.2: Potential Reductions in F-16 Fighter Procurement Funds Dollars I” millions Fiscal year 1990 1969 1966’ Total Advanced ldentlflcatlon Friend or Foe System $29.8 $0 0 $0 0 $29.8 Economvz price adlustments Alrframe 00 34 159 19.3 Engines 14 1 149 63 35.3 FInal contract price adjustment 00 00 21 2.1 Total $43.9 $18.3 924.3 $86.5 aThese funds were only wallable for obligation through September 30, 1990 Advanced Identification Friend The Air Force was developing an Advanced Identification Friend or Foe or Foe System System to help F- 16 pilots identify aircraft encountered during combat missions. The Air Force received $29.8 million in fiscal year 1990 and planned to request $.50.3 million in fiscal year 1991 to procure the system. In June 1989, however, the Air Force changed plans to buy and install this system in F-16s and reallocated the $50.3 million included in the fiscal year 199 1 budget request to pay for expected increases in manufacturing labor and overhead costs. Since the system is not going to be acquired for F-16s. we identified $29.8 million in fiscal year 1990 appropriated funds to be considered for rescission. Economic Price Adjustments The provisions of F- 16 aircraft and engine production contracts allow periodic adjustments in price due to changes in inflation; the price of specific materials. such as industrial metals; or the labor cost index. tinder these provisions, General Dynamics, the F-16 prime contractor, and the Air Force agreed to reduce the price of the current production contract for fiscal years 1989 and 1988. The Air Force subsequently modified the F-16 multiyear contract in May 1990 to deobligate $38.5 million and $33.1 million for fiscal years 1989 and 1988, respectively. The fiscal year 1988 funds were only available for obligation through September 30, 1990 In anticipation of this modification, the Air Force committed $35.1 mil- lion and $17.2 million in fiscal year 1989 and 1988 appropriated funds, respectively, to other program costs. Since the amounts committed were less than the amounts deobligated, we identified $3.4 million and $15.9 million in fiscal year 1989 and 1988 appropriated funds, respectively, to be considered for, rc,scission. Page 10 GAO/NSIAL%Sl-17BR Aircraft Procurement Budgets Appendix I Potential Reductions to the Air Force’s Aircraft Procurement Budgets B-2 Bomber Brief Description of The B-2 is intended to be a long-range, multirole bomber capable of car- rying both nuclear and conventional munitions. The aircraft incorpo- Program rates low observable technologies, making it difficult to detect in flight. The Northrop Corporation began full-scale development of the B-2 in 1981 and conducted the first flight test in 1989. tinder the development program, six aircraft are to be built and used for flight tests. Through fiscal year 1990, 10 production aircraft were authorized and funded. Advance procurement funding was approved in fiscal year 1990 for the Air Force to begin acquiring parts with long lead times for an additional five production aircraft. Due to the high cost of the B-2 program, funding restrictions, and a reduction in the Soviet threat, the Secretary of Defense, in April 1990, reduced the total mnnber of aircraft to be procured from 127 to 70 and the number to be procured in fiscal year 199 1 from 5 to 2. Results of Analysis We identified potential reductions of $704 million: $622 million in the fiscal year 1991 budget request and $82 million in fiscal year 1990 appropriated funds, as shown in table I. 1. Table 1.1: Potential Reductions in B-2 Bomber Procurement Funds Dollars in mlhons Fiscal year 1991 1990 Total lnltlal spares $622 0 $0 0 $622.0 Advance procurement 00 82 0 62.0 Total $622.0 $62.0 $704.0 Initial Spares According to Air Force Logistics Command officials, the program changes proposed by the Secretary of Defense reduced the requirement for the procurement of initial spares in fiscal year 199 1. Air Force offi- cials said current unobligat.ed prior year appropriations were adequate to acquire the net’essary spares through fiscal year 1991. Thus, we iden- tified $622 million in the fiscal year 1991 budget request to be consid- ered for reduction. Page 8 GAO/NSIAD-91.17BR Aircraft Procurement Budgets Potential Reductions to the Air Force’s Aircraft Procurement Budgets We identified $3,094.9 million to be considered for reduction from the Air Force’s fiscal year 1991 budget request and prior year appropria- tions: $2864.3 million in the fiscal year 1991 budget request and $186.8 million, $19.5 million. and $24.3 million in appropriated funds from fiscal years 1990. 1989, and 1988, respectively. These potential reduc- tions are described below by program. C-l 7 Airlifter Brief Description of The C-17 aircraft is being developed by Douglas Aircraft Company to provide the Air Force with increased long-range airlift capability. The Program aircraft is to have four engines, a wide body, and a three-person crew. It is being designed to transport a full range of military cargo directly into small and austere airfields. Full-scale development of the C-17 began in 1985, at which time the Air Force planned to acquire a total of 210 air- craft between fiscal years 1988 and 1998. The Air Force requested $2,146 million for fiscal year 1991: $1,705 million for six aircraft, $204 million for advance procurement, and $237 million for initial spares. On April 26, 1990, the Secretary of Defense announced that, as a result of his review of ma.jor aircraft programs, the total number of C-17s would be reduced from 210 to 120 and the request for 6 aircraft in the President’s fiscal year 1991 budget would be reduced to 2 aircraft. These reductions were expected to allow more time for flight testing before the production rate increases. Results of Analysis Because of continuing schedule delays under the existing contracts and the significant amount of unobligated prior year appropriations, we identified $2,146 million of the fiscal year 1991 budget request to be considered for reduction. However, Air Force officials told us that even if nv aircraft arc approved for procurement in fiscal year 199 1, procure- ment funds may be needed to keep critical subcontractors actively working on C-l 5 subsystems and parts. In June 1990 wc testified’ on the C-17 aircraft program before the Sub- committee on Projection Forces and Regional Defense, Senate Committee on Armed Services. We stated that although some progress had been ‘Status of the Air For< e‘s (‘-17 Arcraft Program (GAO,?NSIAD-90-48, June 19, 1990). Page 6 GAO/NSIALMl-17BR Aircraft Procurement Budgets contents - Letter 1 Appendix I 6 Potential Reductions C-17 Airlifter 6 B-2 Bomber 8 to the Air Force’s F-16 Fighter 9 Aircraft Procurement C/KC-135 Modifications 11 B-52 Modifications 13 B-1R Modifications 16 Appendix II 18 Objectives, Scope, and Methodology Appendix III 19 Major Contributors to This Report Tables Table 1: Potential Reductions to the Air Force’s Aircraft 2 Procurement Budgets Table 1.1: Potential Reductions in B-2 Bomber 8 Procurement Funds Table 1.2: Potential Reductions in F-16 Fighter ICI Procurement Funds Table 1.3: Potential Reductions in C/KC-135 Modification 12 Funds Table 1.4: Potential Reductions in B-52 Modification 14 Funds Page 4 GAO/NSIADSl-17BR Aircraft Procurement Budgets - - J&236884 Table 1: Potential Reductions to the Air Force’s Aircraft Procurement Dollars in mkns Budgets Fiscal year Program 1991 1990 1989 198a8 Total C 17 Alrllfler $2.146 0 $0 0 $00 $0 0 92,146.O 8~2 Bomber 622 0 820 00 00 704.0 F-16 Flghier 00 43 9 183 24 3 86.5 C/KC-l35 Modifications’ 56 0 228 12 00 80.0 B-52 Modlflcatlo&’ 40 3 62 00 00 46.5 B~l B Modlflcations 00 319 00 00 31.9 Total $2,864.3 $186.8 $19.5 $24.3 $3,094.9 “These funds WE only ava~lahlv for obl!gat$on through September 30. 1990 “Among the potential reduc t~ons for the C/KC-l35 and B 52 modkatlon pragrams IS Global Posltlonlng System user equipment This potential reduct!on IS discussed in AIMForce Budget Potential Reductux in Command, Control and Communications Funds (GAO/NSIAD 90 300BK Sept 28, 1990) Additional information on our review is discussed in appendix I. Our object,ives, scope, nntl methodology are described in appendix II. We did not obtain written agency comments on this report. However, we discussed its contents with officials from the Office of the Secretary of Defense and the D~~pattmcnt of the Air Force and incorporated their comments where appropriate. We are sending copies of this report to appropriate congressional committees; the Secretaries of Defense and the Air Force; the I )irc~ctor, Offic*r of Management and Budget; and other interested parties. This report was prepared under the direction of Nancy R. Kingsbury, Director, Air Force Issues, who may be reached at (202) 275-4268 if you or your staff have any questions concerning this report. Other major caontribut,ors to this rclport are listed in appendix III. Frank C. Conahan Assistant Comptroller General Pagr 2 GAO/NSLAIb91-17BR Aircraft Procurement Budgets
Air Force Budget: Potential Reductions to Aircraft Procurement Budgets
Published by the Government Accountability Office on 1990-11-30.
Below is a raw (and likely hideous) rendition of the original report. (PDF)