Summary: One of the more significant developments in the Navy's $2 billion aviation depot maintenance program has been to allow the Navy and private contractors to directly compete for work. Overhaul of the F-14 airframe was the first major maintenance work completed under the public/private competition program. GAO found that the program provided an incentive for the Navy depots to streamline production processes and minimize costs, which has helped reduce the Navy's F-14 overhaul costs. Average overhaul repair costs, adjusted for inflation, have declined about 23 percent since fiscal year 1987. More effective administration of the F-14 competition program would have yielded even more savings. Cost overruns, which may top $6.9 million, were mainly due to (1) inconsistent contract administration guidance, (2) a lack of top management attention to resolve problems, (3) contract disputes, (4) problems in the depots' cost accounting system, and (5) depot inefficiency. F-14 overhauls not under the competition program cost about 21 percent more than competition overhauls in fiscal year 1990. The cost difference was caused primarily by differences in the management and oversight applied to each overhaul program.
