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GAO slams multi-year procurement with Boeing

by: Matthew Potter
February 9, 2008

Category: Boeing, Federal Budget Process, GAO, production program | RSS 2.0

The GAO wrote a report at Senate behest about performance on multi-year aircraft procurement contracts. See Business Week here. In the three they looked at, C-17, AH-64 and F/A-18, all cost more than original projections and did not deliver the savings hoped. Multi-year by providing stable funding and quantities are supposed to save the government money by allowing large component buys. In these cases labor and part prices were higher than originally thought. That is going to be true of any contract. The thing to do, which is hard, is to try and compare the costs of these contracts to those if you did one year contracts like most DoD procurements. Remember, Congress budgets annually for a two year budget that has a five year projection. It makes so much sense.

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