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U.S. Air Force Spent Billions on F117 Engine Sustainment Without Knowing What a Fair Price Was (Redacted) DODIG-2016-059

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Objective:

The audit objective was to determine whether the U.S. Air Force (Air Force) is purchasing sole source F117 engine sustainment services at fair and reasonable prices through the Globemaster III Integrated Sustainment Program (GISP) contract.  This is the second in a series of audits addressing the acquisition of F117 engine sustainment services provided by Pratt & Whitney.  This report focuses on evaluating the Air Force’s approach to pricing the F117 engine sustainment services acquired as commercial services through the GISP base contract.

Finding:

Air Force officials awarded the GISP base contract without obtaining sufficient data to determine whether the Air Force purchased the F117 engine sustainment services provided by Pratt & Whitney at fair and reasonable prices.  This occurred because the Air Force did not perform key steps needed to implement a successful performance-based logistics (PBL) contract. 

Specifically, the Air Force:

  • entered into a PBL arrangement for sustainment services without establishing technical and cost/pricing baselines; and
  • did not establish an effective approach to monitor the impact of any efficiencies made during the performance of the GISP contract or predecessor contract for its engine fleet.

Recommendations:

We recommend that the Assistant Secretary of the Air Force (Acquisition) (SAF/AQ): establish a baseline for the performance and costs of the F117 engine sustainment services; obtain and use actual cost data from the GISP contract to support any future sole-source PBL contracts for F117 engine sustainment; include metrics in any future PBL contracts that would allow monitoring of the availability, reliability, and affordability of the F117 engine sustainment; and require the contracting officer to include a reporting requirement in all future sole-source commercial PBL contracts to collect data other than certified cost and pricing information.

Management Comments and Our Response:

Comments from the Acting SAF/AQ partially addressed recommendations. We requested that the Acting SAF/AQ provide comments to the final report.  

This report is a result of Project No. D2015-D000AG-0036.000.