Pricing and Financially Reconciling Systems Used to Support the F-16 Aircraft Multinational Fighter Program Buy
INSPECTOR GENERAL DEPT OF DEFENSE ARLINGTON VA
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This audit was requested by the Supreme Audit Institutions of Belgium Denmark, the Netherlands, and Norway. In 1975, the U.S. Air Force Air porce entered into a foreign military sales arrangement with the European Participating Governments EPO of Belgium, Denmark, the Netherlands, and Norway to procure and produce F-16 aircraft under the cooperative program known as the F-16 Multinational Fighter Program. Under that program, the Air Force procured 650 F-16 aircraft and the EPO procured 348 F-16 aircraft. Governed by a June 10, 1975, memorandum of understanding, the program involves a cost-sharing, pricing, and coproducing arrangement between the Air Force and the EPO. The memorandum of understanding provided the framework for implementing the Letter of Offer and Acceptance. The program consisted of four cases, one each for Belgium, Denmark, the Netherlands, and Norway. Audit Objectives. Our overall audit objective was to determine whether the Air Force and the EPO paid equitable prices based on the provisions of the memorandum of understanding for the engine and airframe. Specifically, the audit was to evaluate the procedures for pricing and billing the cost to deliver the F-16 aircraft to the EPG. In addition, the audit was to review the associated management control program and to ensure that adequate planning existed to complete contract and case closure by December 1997 as scheduled. The contract and case closure objective was covered in Inspector General, DoD, Report No. 95-304, Quick-Reaction Report on the F-l6 Multinational Fighter Program Case Closure Process, September 11, 1995.
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