Quick-Reaction Report on Contracting Procedures for the Hot Metal Plus Plume Suppression System Used on the AH-1 Cobra Helicopter

摘要

During our audit of Suppression Systems Used on the AH-1 Helicopter and OV-lD Aircraft, and the AN/ALQ-144 Infrared Jammer, we made a limited review of contracting procedures as a part of our overall objective, which was to evaluate the design adequacy of the systems. We reviewed modification P000l0 of contract no. DAAJ09-87-C-ll96 for production of the Hot Metal Plus Plume Suppression system to determine the nature and extent of efforts made to improve the suppressor's reliability. The Army awarded modification P00010 to Hayes Targets, Leeds, Alabama, on December 5, 1989. The modification incorporated two value engineering changes: a replaceable nosecone and strut reinforcements. This report discusses the propriety of approving the value engineering change proposal and the appropriateness of sharing the projected savings with the contractor. Hayes projected that life-cycle operation and maintenance costs would be reduced by $10 million if the Army implemented the two value engineering changes. Hayes' estimated share of the $10 million savings is $5 million. In an August 16, 1990 memorandum (Enclosure 1), we requested that the Army suspend further negotiations pending issuance of this report. We determined that the Army had paid for development of the proposed changes in 1985, 2 years before it awarded the contract to Hayes Targets; therefore, Hayes is not entitled to benefit from the savings generated by the changes. Further, responsible Army personnel were aware that the improvements proposed by Hayes Targets had already been implemented and were undergoing test and evaluation, but the COBRA helicopter Project Management Office made a management decision to approve the value engineering change proposals. Payments based on projected savings relating to the value engineering changes would be.