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GAO-02-724R 1 (2002-05-15)

handle is hein.gao/gaobaalyz0001 and id is 1 raw text is: £ Accountability * Integrity * Reliability United States General Accounting Office Washington, DC 20548 May 15, 2002 The Honorable Carl Levin Chairman The Honorable John Warner Ranking Minority Member Committee on Armed Services United States Senate The Honorable John McCain United States Senate Subject: Air Force Aircraft: Preliminary Information on Air Force Tanker Leasing In your April 10, 2002, letter, you asked us to assess the Air Force's plan to replace a portion of its KC-135 aerial refueling tanker fleet with leased Boeing 767 aircraft. You asked us to assess * aerial refueling tanker requirements; * the cost-effectiveness of different options (lease, purchase, modify, or extend the service life of the fleet); * the policy for leasing major defense acquisition programs; * the costs associated with infrastructure improvements; and * the depot maintenance backlog. Recognizing that the full extent of this analysis could not be done before the terms of the lease were negotiated, you asked that we provide the preliminary results of our efforts by May 15, 2002. We provided an oral briefing accompanied by the enclosed slide presentation to your staff on May 2, 2002. The briefing and this letter respond to your request for preliminary information. In February 2002, the Air Force requested information from the Boeing Company and from Airbus of North America on the potential for leasing tanker aircraft. The Air Force's request recognized that in the aftermath of the September 11, 2001, attacks on the World Trade Center and the Pentagon, commercial aircraft manufacturers were faced with the prospect of reduced or cancelled orders as a result of projected declines in air passenger travel. According to the Air Force, this situation presented a possibly unique opportunity to accelerate Air Force tanker replacement and to address the increasingly acute challenges of maintaining the KC-135 as a viable, cost- effective platform. In response to this emerging opportunity, Congress included language in section 8159 of the fiscal year 2002 Defense Appropriations Act allowing the Air Force to establish a multiyear pilot program for leasing Boeing 767 aircraft. GAO-02-724R Air Force Tanker Leasing Page I

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