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MASAD-81-40 1 (1981-09-02)

handle is hein.gao/gaobabcsw0001 and id is 1 raw text is: WW 1116q3 COMPTROLLER GENERAL OF THE UNITED STATES WASHINGTON D.C.-- B-204170 SEPTEMBER 2,1981 The Honorable Jamie L. Whitten Chairman, Committee on Appropriations House of Representatives 117093 Dear Mr. Chairman: Subject: Alternatives are Available Which Can Reduce Costs of the LAMPS MK III Program (MASAD-81-40) Your letter of January 27, 1981, requested that we review the program cost and, because of the inordinate cost growth experienced over the years, examine potential cost reduction alternatives to the Light Airborne Multipurpose System (LAMPS) MK III antisub- marine warfare system. We agreed to determine whether current estimates of the program's total cost are complete or whether additional cost increases can be expected. In conducting this review, we examined Navy and contractor cost data, reviewed Navy and Army studies related to program and contractor costs, and interviewed Navy officials. Also, through an examination of LAMPS MK III mission requirements, technical capabilities, operating tactics, force levels, and the present and projected threats, we identified management actions and program alternatives which could be taken to reduce costs. Through discussions with Navy and Department of Defense (DOD) officials and reviews of various Navy and contractor studies, we analyzed these alternatives to determine their effect on mission capabilities and performance characteristics. We estimated the potential cost savings of each alternative based on the current program schedule and procurement rate. Because we could not foresee whether any or all of these alternatives would be under- taken, we did not attempt to evaluate what effect they would have on unit costs as determined by the current program schedule. Program uncertainties still exist which could result in fur- ther cost increases of up to $1 billion. On May 1, 1981, the Navy released a report on the causes of cost growth and indicated that program costs may still be underestimated. They identified poten- tial growth of $925 million due to underestimated helicopter and ship construction costs, contractor overhead, subcontractor costs, and use of optimistic inflation rates. The report also warned that an additional $140 to $300 million growth could result depend- ing upon manufacturing learning curves experienced; the prices (951605)