C-17 Cargo Aircraft Program
The C-17 Globemaster III is a long-range cargo/transport aircraft operated by the U.S. Air Force since 1993. Congress approved development of the aircraft in the late 1970s, when it was recognized that the Air Force did not have enough airlift capability. In 1981, the McDonnell Douglas C-17 emerged as winner of a competition with Boeing and Lockheed to develop a next-generation aircraft to replace C-130s and C-141s.
Order Code IB93041
CRS Issue Brief for Congress
Received through the CRS Web
C-17 Cargo Aircraft Program
Updated March 20, 2000
Christopher Bolkcom
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress
CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Major Developments
Performance Considerations
Strategic Need
Production Problems
Test Schedules
Some Alternatives
Extend the Life of the C-141
Buy Fewer C-17s and More C-5s or Commercial Aircraft — The “Non- Developmental
Airlift Aircraft” (NDAA) Option
Cost Factors
Congressional Action on Budget Requests
FOR ADDITIONAL READING
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C-17 Cargo Aircraft Program
SUMMARY
The C-17 Globemaster III is a long-range
cost-effective alternatives. In April 1990,
cargo/transport aircraft operated by the U.S.
Defense Secretary Cheney reduced the
Air Force since 1993. Congress approved
projected buy from 210 to 120 planes. In late
development of the aircraft in the late 1970s,
1993, DOD gave the contractor two years to
when it was recognized that the Air Force did
solve production problems or face termination
not have enough airlift capability. In 1981,
of the contract, with airlift shortfalls to be
the McDonnell Douglas C-17 emerged as
filled by modified commercial transport planes
winner of a competition with Boeing and
or existing military airlifters.
Lockheed to develop a next-generation aircraft
to replace C-130s and C-141s.
By the mid-1990s, the program’s earlier
difficulties had been largely resolved, although
Full-scale development of the C-17 got
some questioned the number of C-17s to be
underway in 1986, but technical problems and
procured. In 1996 DOD approved plans to
funding shortfalls delayed the program, leading
order 80 more C-17s for a total of 120 aircraft
to slipped schedules and increased costs.
— increased in late 1998 to 134. Through
Despite these difficulties, the C-17 has retained
FY1999, some $28 billion was provided for
congressional support and enjoyed strong Air
the C-17 program, which would cost about
Force and Army backing. Defense officials
$45 billion for development and procurement
view the C-17 as essential in the post-Cold
of 134 aircraft, as estimated in September
War environment, because of its ability to use
1999.
smaller bases in remote areas.
For FY1997, Congress appropriated
The C-17 first flew in 1991, about a year
almost $2.2 billion for procurement of eight
later than originally scheduled. Deliveries
C-17s under a multiyear procurement contract.
began in 1993, and in January 1995 the Air
For FY1998, Congress provided $2.3 billion
Force declared the aircraft fully operational.
for the program, procuring nine aircraft. The
By January 2000, the Air Force had taken
FY1999 budget provided some $3 billion for
delivery of 57 C-17s, some of which were
procurement of 13 C-17s. The FY2000 budget
used in Bosnia and later in Kosovo operations
provides about $3.1 billion for the program,
with notable success.
procuring another 15 aircraft. For FY2001,
the Administration requested some $3.1 billion
Production problems in the late 1980s
for procurement of 12 C-17s.
raised questions about the possibility of more
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MOST RECENT DEVELOPMENTS
The Administration’s FY2001 defense budget, submitted on February 7, 2000,
requested $3,067.3 million in procurement and R&D funding for 12 C-17s, compared to this
year’s 15-plane buy.
BACKGROUND AND ANALYSIS
Major Developments
The Air Force’s C-17 Globemaster III is a long-range cargo/transport aircraft
manufactured by Boeing (since its acquisition of McDonnell Douglas in 1997). Powered by
four turbofan engines made by Pratt & Whitney, the C-17 is expected to meet U.S. strategic
(long-range) airlift requirements, complementing the tactical (shorter-range) airlift capabilities
of the C-130 cargo/transport planes built by Lockheed-Martin. The C-17 can carry some
169,000 lb of outsize or oversized cargo (e.g., Abrams tanks and Apache helicopters) and can
operate from small runways in remote areas where the larger C-5 heavy-lift cargo plane
cannot be used.
The program had a difficult time winning the support of Congress in the late 1970s, but
funding was finally approved to begin development in FY1981. The program experienced
delays and cost escalations throughout its development and early production period, and in
late 1993 the C-17 program was threatened with cancellation after the 40 aircraft then under
contract if production and cost problems were not resolved in two years. Thus, the Defense
Department’s decision in November 1995 to buy the remaining 80 aircraft in a 120-plane
program was a major event in the C-17 saga. In late 1998 the program was increased by 14
aircraft for the Special Operations Command, making it now a 134-plane program.
The main hurdle in winning approval from Congress at the outset of the program was
that the Air Force had not clearly demonstrated a need for additional strategic airlift capacity.
The Soviet invasion of Afghanistan in December 1979 prompted President Carter to declare
that the United States would defend its interests in the Persian Gulf by force if necessary.
Concern that U.S. military forces might be ill-prepared to carry out such a mission led
Congress to ask the Department of Defense (DOD) to conduct a study of the entire long-
range strategic mobility situation, showing how much airlift and sealift would be needed to
deploy forces to remote areas.
Known as the Congressionally Mandated Mobility Study (CMMS), a classified report
was sent to Congress in April 1981. The CMMS considered all modes of strategic mobility
and what it would take to satisfy the simultaneous demands of a major war in Central Europe
and any one of three lesser contingencies, including a deployment to the Persian Gulf. The
study established several long-range strategic airlift goals that were considered attainable
within the limits of realistic budget assumptions. One of the conclusions was that 66 million
miles per day (MTMD) would be needed by the year 2000. At the time of the study in 1981,
the Air Force’s long-range cargo capability was only 29 MTMD.
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The Air Force submitted a request to build the McDonnell Douglas C-17 as the winner
of a competition with several other firms, and Congress agreed to fund development of the
plane. Just when the program was getting under way, however, DOD decided in early 1982
that the airlift shortfall was too urgent to await development of a new plane and that it would
be better also to buy some planes already in production. Congress approved funds in the
FY1983 budget to purchase 50 additional C-5 cargo planes (made by Lockheed) and 44 new
KC-10 tanker aircraft (then made by McDonnell Douglas) to make up part of the airlift
shortfall in the shortest time possible. Since the Air Force wanted to develop the C-17 as
well as to buy additional C-5s, Congress directed the service to develop a comprehensive
description of its future acquisition plans. The result was the Airlift Master Plan of September
1983, which compared several alternatives for modernizing the airlift fleet and concluded that
the C-17 was the most cost-effective.
The FY1985 budget included $129 million to begin full-scale development of the C-17
— then to be produced in a 210-aircraft program. The Airlift Master Plan had projected a
requirement for 210 C-17s, with 180 in the active fleet and 30 additional aircraft for backup
and spares and for testing and evaluation. The Air Force would also retain 114 C-5s but
would turn many of these over to the Air Force Reserve and Air National Guard. By the
mid-1980s the program appeared to be on track, if somewhat behind schedule. Production
difficulties later delayed the program further, with slipped schedules and rising development
costs. In April 1990, Defense Secretary Dick Cheney reduced the program from 210 to 120
production C-17s, reflecting revised estimates of airlift requirements in view of the collapse
of the Soviet Union as well as budgetary restraints.
In 1991-92, an updated Mobility Requirements Study (MRS) concluded that 57 million
ton miles per day ( MTMD) would be required during the 1990s in a new set of scenarios
based on changing international circumstances and reductions in the size and deployment of
U.S. military forces. The study also concluded that even with 120 C-17 aircraft and
commercial cargo and transport planes in the Civil Reserve Air Fleet (CRAF), the total U.S.
cargo airlift capability would remain at 48 MTMD because of the phaseout of aircraft
reaching the end of their service life. The April 1995 “Mobility Requirements Study
Bottom-Up Review Update” (MRSBURU) concluded that 120 to 140 C-17s, or some
comparable aircraft, would be needed in the 1990s.
The Air Force agreed in December 1993 to buy another 12 C-17s during FY1994-
FY1995, but Defense Secretary Les Aspin stated that the contract would end with the 40
aircraft then on order if McDonnell Douglas failed to resolve production and cost problems
during that two-year period. In that event, DOD would buy a mix of C-17s and modified
commercial transport planes or C-5 military transports to replace the aging C-141. By
accepting the 1993 agreement, McDonnell Douglas incurred a loss of nearly $1.5 billion on
the development phase of the program. In addition, the company agreed to spend $456
million in process improvements and testing. DOD agreed to provide an additional $438
million for the program — $237 million to settle claims with McDonnell Douglas and $201
million for flight testing.
An October 1995 report by the Congressional Budget Office (CBO) stated: “If there was
adequate room at airfields in regions of potential conflict, buying 32 more C-17s plus 30
C-33s [militarized version of Boeing 747s] would provide the same delivery capability as 80
additional C-17s. That option would also be nearly $8 billion cheaper.... If, however, U.S.
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forces were limited to a few airfields that had a small amount of ramp space, that option might
not deliver cargo as quickly as would 80 more C-17s. And such a combination would not
provide as much flexibility to handle specific military missions such as strategic brigade
airdrops.... The appropriate mixture of planes depends on how much DOD and the Congress
are willing to pay for the flexibility provided by 80 additional C-17s.”
In November 1995, the Defense Department decided to continue procurement of the
C-17 for a total program of 120 aircraft instead of meeting airlift requirements with a mix of
C-17s, modified Lockheed C-5s, and Boeing 747s (designated as C-33s). The military
services maintained that additional airlift capacity was critical and argued that if C-17s were
not procured, other less capable cargo/transport aircraft would be needed to make up the
shortfall. Most Members of Congress recognized the need for additional airlift, although
some questioned the need to buy as many as 80 more C-17s. (See GAO/NSIAD-97-38
report cited in For Additional Reading.)
In January 1996, the Defense Acquisition Board (DAB) approved plans to buy 80 C-17s
over a seven-year period (FY1997-FY2003) in a multiyear contract that would be less
expensive than either single-year buys or multiyear procurement over a longer period (with
savings estimated at 5% of a projected program cost of $18 billion). The Air Force argued
that buying the C-17 in six or seven years would provide the planes sooner and more
cost-effectively and would avoid funding competition with other Air Force programs after
2003. Critics argued that such a long-term contract could entail financial penalties for
reducing annual buys, if budgetary constraints in future years were to force the Air Force to
choose between buying C-17s or other aircraft, such as F-22 fighter/attack planes. On May
31, 1996, the Air Force and McDonnell Douglas (now owned by Boeing) signed a
$16.2-billion multi-year procurement contract for 80 aircraft to be produced over seven years.
The first of these 80 was delivered on August 10, 1998, bringing total deliveries to 41
aircraft. By January 2000, the Air Force had taken delivery of 57 C-17s (40 funded annually
and 17 funded under the multi-year procurement contract). C-17s are currently based at
Charleston AFB, SC (437th Airlift Wing) and McChord AFB, WA — each wing having an
authorized force of 48 aircraft — and at Altus, OK (97th Air Mobility Wing), a training unit
with eight C-17s. As projected in 1999, C-17s would also be operated by the Mississippi Air
National Guard after 2004. In addition to the numbers of authorized operational aircraft,
other C-17s would be in the maintenance/repair pipeline as well as being used for other
operational missions, such as special operations.
Performance Considerations
The Air Force maintains that the performance characteristics of the C-17 are significantly
better than those of other cargo/transport aircraft. The C-17 can land on shorter runways and
is more maneuverable on the ground than the larger C-5 or commercial transport planes, such
as the Boeing 747, which would require much longer and wider runways. That factor limits
the number of available bases and thus would complicate deployment planning for remote
areas. In explaining the November 1995 decision to buy another 80 C-17s, DOD officials
cited as a critical feature their calculations that eight C-17s could land and offload 3,852 tons
per day in a space where only three modified 747s could operate, delivering 1,754 tons per
day.
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The C-17 is also expected to be more cost-effective than its competitors based on
projected life-cycle costs. The C-17's performance in the “reliability, maintainability, and
availability evaluation” exercises of July-August 1995 confirmed its supporters’ expectations
about operational capabilities with favorable cost implications, in part because fewer people
are needed to operate and maintain the aircraft. (See Test Schedules below.)
As part of the 1993 omnibus agreement between the Air Force and McDonnell Douglas,
DOD agreed to change certain contract specifications that were causing design and cost
problems. The most noteworthy of these changes included: cruise speed reduced from Mach
0.77 to Mach 0.74; maximum payload from 172,200 lb to 169,000 lb; and ferry range from
4,600 nm to 4,300 nm. Air Force General Ronald Fogleman, then head of the U.S. Mobility
Command, said these changes did not affect critical operational requirements, explaining that
a 3,200-mile mission with a 110,000-lb payload had been established as a goal and that the
C-17 would meet or exceed this requirement.
Strategic Need
A critical question has been to what extent the C-17 may still be needed in the absence
of Cold War threats to U.S. national security. Despite the disappearance of these threats, the
Defense Department maintains its strong support for the C-17 as a long-range strategic airlift
asset. The Air Force views the C-17 as the cornerstone of its airlift modernization program
to replace older aircraft now nearing the end of their useful life. In the mid-1990s Air Force
officials said that if the C-17 were canceled and work on a new plane started immediately, the
first delivery would not be until 2005, when the C-141s then in service would be 35 to 40
years old.
The Army’s strong support of this Air Force program was a critical factor in DOD’s
decision in November 1995 to rely entirely on the C-17 to meet airlift requirements. The
Army is largely dependent on the Air Force for rapid transportation of its forces in an
emergency deployment. Army units deployed to Panama in 1989 were carried entirely by air,
and after-action reports said that all U.S. airlift assets were fully employed during that period.
DOD officials say the C-17 would have greatly facilitated the Panama operation (where the
C-5 was difficult to use because it is hard to maneuver on the ground and ties up other
traffic), adding that the C-17 would be even more necessary in operations where friendly
airfields and troops on the ground might not be as available as they were in Panama.
The massive military airlift to the Persian Gulf before and during the 1991 Gulf war
further bolstered the case for the C-17. During the 5 months before the outbreak of
hostilities, the Air Force moved more ammunition, weapons, food, and other military supplies
than in any period in U.S. history, using almost all of its 283 C-5 and C-141 cargo planes at
maximum utilization rates. The operation put heavy stress on older C-141s and probably
shortened their remaining service life, making it impossible to maintain the 48 million ton
miles per day (MTMD) level through the 1990s even with the C-17, according to the Air
Force.
The demands placed on available military cargo planes during the Persian Gulf buildup
could not have been met without the call-up of the Civil Reserve Air Fleet (CRAF). About
110 commercial passenger and cargo aircraft were requisitioned when the program was
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activated for the first time in its 38-year history. Two-thirds of all passengers and one-fifth
of all air cargo were moved to the Gulf by civil aircraft in the CRAF program. Commercial
airlines in the program are compensated through the award of a share of the military airlift
workload generated by the Air Force.
As more troops are brought home and forward bases are given up, more airlift would
be needed in an emergency, such as the Bosnian and Kosovo operations. In 1996, C-17s
were used in Operation Joint Endeavor missions in Bosnia with outstanding results; e.g.,
offloading cargos of some 165,000 lb in less than 15 minutes and carrying 44% of cargo
delivered while performing 26% of airlift missions. (GAO. C-17 Globemaster — Support
of Operation Joint Endeavor. GAO/NSIAD-97-50. February 1997.) The C-17’s ability to
operate from austere airfields in Albania and Macedonia further demonstrated its value during
the Operation Allied Force in March-June 1999, when C-17s achieved a 96-percent mission-
capable rate.
Some British defense officials also view the C-17 as a strategic airlift asset that can be
used in rapid-reaction operations. The United Kingdom’s Strategic Defence Review of July
1998 indicated that the Ministry of Defence might lease or buy several C-17s to meet air
mobility requirements of Britain’s Rapid Reaction forces; however, funding for these aircraft
had not been budgeted as of early 2000. In late 1998, the Air Force increased the 120-
aircraft program by an additional 14 aircraft, which would be procured in FY2003-FY2005
for use by special operations forces, although procurement contracts for these additional
aircraft had not been signed as of early 2000.
Production Problems
The C-17 was expected to be a low-risk development project, since most of its
technology was to be “off-the-shelf.” McDonnell Douglas was sure enough of the design
concept to enter into a contract based upon strong price guarantees and warranties of
performance. Shortly after the first contract was awarded in 1981, however, the program was
put on hold by DOD when it decided to buy an updated model of the C-5 and additional
KC-10 tanker aircraft, a military version of the McDonnell Douglas DC-10 airliner. It took
several years for the C-17development program to regain momentum and by then, problems
had developed on the production line and with subcontractors responsible for major
components of the aircraft, such as the avionics, flight computers and programs.
The result was that fabrication and assembly of the first development aircraft was
delayed from December 1987 to August 1988, causing postponement of the aircraft’s first
flight from February 1990 to September 1991. During that period, congressional funding
committees began questioning the contractor’s ability to deliver on schedule, making
incremental cuts in the C-17 budget, and linking future funding to production performance.
These restrictions became more stringent each year as other production and management
problems arose. Since 1995 the aircraft have been delivered to the Air Force on or ahead of
schedule.
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Test Schedules
System-level testing began on the C-17 in late 1992. Early testing was conducted by the
contractor and Air Force members of the Combined Development Test and Evaluation/Initial
Operational Test and Evaluation test team. Initial engineering tests developed the aircraft and
its systems, compared the performance to contract specifications, and prepared for later
operational testing. Comprehensive mission testing by operational personnel using
operational bases and procedures occurred in late 1994 through early 1995.
Some 300 hours of flight testing were performed at Edwards AFB, California, and
operational deployment sites, using a production-representative test plane. Initial squadron
operations at Charleston AFB, South Carolina, included a 30-day Reliability, Maintainability,
and Availability Evaluation (RM&AE) in July-August 1995. The C-17s participating in these
RM&AE exercises demonstrated notable operational success, with overall reliability of 99%
and 98% of missions completed successfully.
Some Alternatives
Opponents of the C-17 have proposed alternatives ranging from extending the service
life of cargo planes now in service to relying more on sealift. Timeliness is the strongest
argument for delivering military cargo by air, and some analysts believe that where time is not
so critical it would be possible to use sealift instead of buying additional airlift assets. The
Department of Defense has steadfastly defended the C-17, arguing that it will be needed even
more, as more U.S. troops return from overseas stations. The Air Force continues to assert
that the C-17 holds high priority in relation to other Air Force programs, pointing out that the
current U.S. airlift capability is only about 48 million ton miles per day compared to the 57
MTMD stipulated in the 1992 Mobility Requirements Study.
Extend the Life of the C-141
Some have suggested that the C-141 be kept in service longer by means of a Service Life
Extension Program (SLEP). Under this concept, parts of the plane that are worn out or
dangerous would be replaced in order to keep the C-141s in service until an affordable
replacement is found. The Air Force maintains, however, that the C-141 is already well
beyond its original service life and is limited in the kinds of missions it can perform. Earlier
modifications increased the life of the planes from about 25,000 hours to 45,000 hours, but
even if their service lives were extended, C-141s could not carry outsized cargo such as tanks,
helicopters, and large vehicles and artillery. These items are more easily and economically
transported by ship, but in an emergency when time is critical, only the C-5 or the C-17 can
carry military equipment that large and bulky.
Buy Fewer C-17s and More C-5s or Commercial Aircraft — The “Non-
Developmental Airlift Aircraft” (NDAA) Option
Another proposed alternative was to buy fewer C-17s and to make up the shortfall with
additional C-5s and commercial transport/cargo aircraft — referred to as “non-developmental
airlift aircraft” (NDAAs). The leading candidate in the NDAA option was a military version
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of the Boeing 747 jumbo jet, designated as the C-33. These Boeing C-33s would not be
replacements for the C-17 but would fill the need for routine cargo flights between large
airports. The C-17 can be operated on unimproved surfaces and can unload under austere
conditions. Proponents of the NDAA argued that its acquisition cost would be less than that
of the C-17, whose special performance features would not be needed in many airlift
operations.
Air Force officials conceded that in some situations a mix of C-17s and NDAAs might
be the most cost-effective way to carry military cargo. However, DOD’s decision in
November 1995 reflected a choice of an all-C-17 force of 120 aircraft (including the 40 then
under contract) in lieu of a C-17/NDDA mix. A report by the Congressional Budget Office
in early 1997 considered the costs and capabilities of five alternatives to current
Administration plans for modernizing strategic airlift and sealift, including buying fewer C-17s
with estimated savings of $8.4 to $18.9 billion in 1998-2020. ( U.S. Congressional Budget
Office. Moving U.S. Forces: Options For Strategic Mobility. [by] Rachel Schmidt. CBO
Report, February 1997; U.S. General Accounting Office. Military Airlift — Options Exist
for Meeting Requirements While Acquiring Fewer C-17s. GAO/NSIAD-97-38, February
1997.)
Cost Factors
A major issue in the C-17 program has been the lower acquisition costs of the proposed
NDAA alternatives as projected by their manufacturers. As of September 30, 1999, DOD
estimated a 134-aircraft program to cost $44.9 billion, of which some $28 billion was spent
in developing and procuring the aircraft through FY1999. Unit costs have been reduced by
multiyear procurement. Under the multiyear production contract of May 31, 1996, 80 aircraft
are to be produced during the 1996-2003 period for some $16.2 billion, at a program unit
cost of $202.5 million. (Bender, Bryan and Foote, Sheila. Pentagon Signs $16 Billion Deal
for C-17 Transport Planes. Defense Daily, June 3, 1996: 366-367.)
Congressional Action on Budget Requests
The Administration’s FY2001 defense budget, submitted on February 7, 2000, requested
$3,067.3 million for the C-17 program: $2,890.9 million for procurement of 12 aircraft and
$176.4 million in research-development (R&D) funds. DOD officials stated that buying 12
aircraft in FY2001 instead of 15 as originally planned would not break the multiyear contract
for 80 C-17s to be procured over seven years (FY1997-FY2003).
The FY2000 defense budget requested $3,555.7 million for the C-17 program: $3,385
million in procurement funds for 15 aircraft and $170.7 million in R&D funds. The Senate
version of the FY2000 defense authorization bill (S. 1059), passed on May 27, 1999,
authorized funding for the program as requested; the House version (H.R. 1401), passed on
June 10, 1999, also authorized the funding requested as well as an additional $3.5 million in
procurement funds for the C-17. House and Senate conferees agreed on August 5, 1999, to
authorize C-17 funding as requested, and the conference report on FY2000 defense
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authorizations (H.Rept. 106-301/P.L. 106-65) was passed by the House on September 15 and
the Senate on September 22, 1999.
The Senate version of the FY2000 defense appropriations bill (S. 1122), passed on June
8, 1999, funded the program as requested and authorized by the Senate. The Senate
Appropriations Committee also recommended “new multi-year procurement authority to
allow the Air Force to enter into negotiations on the procurement of sixty additional C-17s”
(S.Rept. 106-53); this second multiyear procurement would begin in 2003 at the end of the
current 7-year contract. The House version (H.R. 2561), passed on July 22, 1999, provided
$412.3 million less than the $3,385 million requested and authorized for procurement. The
conference report on FY2000 defense appropriations ( H.Rept. 106-371/P.L. 106-79), passed
by the House on October 13 and the Senate on October 14, 1999, provided $3,135.2 million
for the C-17 program ($2,974.3 million in procurement and advance procurement funds;
$160.9 million in R&D funds). Sections 8008 and 8145 of the conference report granted
authority for a follow-on multiyear contract for 60 more C-17s if the Secretary of the Air
Force certifies that the average unit flyaway price of these aircraft will be “at least twenty-five
percent below the average unit flyaway price” of the 80 aircraft currently in multiyear
procurement “with both prices calculated in fiscal year 1999 dollars.”
The FY1999 budget requested $3,023.6 million for the C-17 program: procurement,
$2,900.5 million; R&D, $123.1 million. Procurement funding in FY1999 bought 13 aircraft
in a multi-year buy of 80 aircraft over a seven-year period (FY1997-FY2003). The House
and the Senate authorized FY1999 funding for the C-17 as requested (H.Rept. 105-532 on
H.R. 3616, passed May 21, 1998; S.Rept. 105-189 on S. 2057, passed June 25, 1998). The
House appropriated C-17 funding as requested in H.R. 4103, passed on June 24, 1998; the
Senate version of the FY1999 defense appropriations bill (S. 2132, passed July 30, 1998)
contained procurement funds as requested but reduced R&D funding to $108.1 million of the
$123.1 million requested. House and Senate conferees agreed in H.Rept. 105-746,
September 25, 1998, to appropriate procurement funds as requested and $119.1 million of
the $123.1 million requested for R&D. FY1999 defense authorizations and appropriations
bills were enacted on October 17, 1998, as P.L. 105-261 and P.L. 105-262, respectively.
Also included in the FY1999 defense budget was a request for $125.8 million to procure
a C-130J aircraft, the latest version in the C-130 Hercules series of cargo/transport planes
produced by Lockheed since the 1950s. The C-130J upgrade “will address the need to
modernize U.S. tactical airlift capability,” according to DOD budget documents. The C-17
is expected to modernize long-range strategic airlift capability, while the C-130J would be
used in theater operations at shorter range. Congress authorized and funded procurement
of seven C-130 aircraft in FY1999 — 3 C-130Js for the Air National Guard; 2 KC-130J
tanker aircraft for the Marines; and 1 EC-130J and 1 WC-130J for the Air Force.
For FY1998, the Administration requested $2,315.1 million for the C-17 program in
procurement ($2,201.5) and R&D ($113.6) funding for nine aircraft in a multiyear buy of 80
aircraft through FY2003. In addition, some $9.7 million was requested in military
construction funds, mainly related to enlarging hangars.
B o t h t h e H o u s e N a t i o n a l
Security Committee and the Senate Armed Services Committee recommended authorization
of C-17 funding as requested for FY1998, which was authorized by the House on June 25,
1997 (H.R. 1119) and by the Senate on July 11, 1997 (S.936). The House appropriated
$2,179.8 million in procurement funding for nine C-17s in FY1998. The Senate version of
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the FY1998 defense appropriation bill (S. 1005, passed July 15, 1997) provided $2,641.5
million for procurement of 11 C-17s. The FY1998 defense appropriation bill (H.R.
2266/P.L. 105-56), passed by Congress on September 25, 1997, provided $2,290.4 million
of the $2,315.1 million requested for a 9-aircraft buy.
Funding for the program in FY1997 totaled $2,269.7 million — $2,117.0 million in
procurement funding for eight planes, $71.8 million in R&D funds, and $80.9 million for
military construction related to the C-17. (Smaller amounts of military construction funding
for the C-17 have also been included in other annual budget requests and congressional
appropriations.) The Administration’s FY1997 budget was expected to fund procurement
of the first eight planes in a multiyear buy of 80 aircraft over a seven-year period
(FY1997-FY2003).
Congressional approval of such a multiyear procurement was included in the Senate
version of an omnibus budget bill (S. 1594, Section 803), passed on March 19, 1996
(Congressional Record, March 19, 1996: S2284), but this language was not in the House
version of the bill (H.R. 3019), passed earlier on March 7 (Congressional Record, March 7,
1996: H1808). During Senate debate on S. 1594, Senator Warner noted that the Senate
Armed Services Committee had expressed to the Air Force its strong opposition to
proceeding with such a long-term commitment of defense procurement funds without
allowing the committee an opportunity to review the matter. (Congressional Record, March
14, 1996: S2070- S2071.) On March 28, 1996, the Committee held a hearing on C-17
multi-year procurement issues (MDC’s Kozlowski Defends MYP C-17 Saving, Cites Small
Buy. Aerospace Daily, March 29, 1996: 492 and Eurich, Heather J. GAO Halves Estimate
on C-17 Multiyear Proposal Savings. Defense Daily, March 29, 1996: 483.) House and
Senate conferees on H.R. 3019 agreed to a C-17 multiyear procurement that would provide
savings of more than the 5% projected earlier. (Foote, Sheila. Appropriators Back C-17
Multiyear Buy, with Conditions. Defense Daily, April 1, 1996: 2-3.) H.R. 3019 was enacted
on April 26, 1996, as P.L. 104-134, thus resolving the FY1997 budget issue between
Congress and the Administration.
The House versions of the FY1997 defense authorizations bill (H.R. 3230, passed May
15, 1996) and defense appropriations bill (H.R. 3610, passed June 13, 1996) approved a buy
of 10 C-17s in a six-year procurement contract. The Senate version of the FY1997 defense
authorizations bill (S. 1745, passed July 10, 1996) authorized procurement of nine C-17s,
with the details of a multiyear procurement contract regarding termination costs and
alternative annual procurement costs to be determined later (S.Rept. 104-267: 89). The
Senate version of the FY1997 defense appropriations bill (S. 1894, passed July 18, 1996)
provided funding for eight C-17s as requested (S.Rept. 104-286: 81, 126). House and Senate
conferees agreed to authorize $87.5 million as requested for R&D and $2,376.8 million in
procurement funds for nine or more C-17s in FY1997 as part of a multiyear procurement
program. On August 1, 1996, the House passed the conference report on FY1997 defense
authorizations (H.Rept. 104-724), which the Senate passed on September 10. On September
30, 1996, the President signed an omnibus FY1997 appropriations bill (H.R. 3610/ P.L.
104-208), which provided $2,202 million in Air Force procurement and development funding
in FY1997 for multi-year procurement of eight C-17s — somewhat less than the
Administration’s request of $2,230 million for the program.
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For FY1996, the Administration requested $2,612.7 million for the C-17 program
(including $117.5 million for initial spares, $85.8 million for R&D, and $6.9 million for
military construction), funding procurement of eight aircraft. The House version of the
FY1996 defense authorizations bill (H.R. 1530, passed June 15, 1995) authorized funding for
the C-17 program as requested by the Administration and recommended by the House
National Security Committee. H.R. 1530 also authorized $254 million that might be used as
advance funding for procurement of commercial transport planes in lieu of additional C-17s,
if the Defense Department chose what was termed the “non-developmental airlift aircraft”
(NDAA) option; otherwise, this amount could be used as C-17 funding. The committee
noted “that consideration of an NDAA option was initiated originally out of concern that the
C-17 program was not performing well. However, the committee observes that there have
been positive achievements of the C- 17 program within the past year. Recent deliveries of
C-17s have been ahead of schedule, and both the quality and production performance have
improved significantly.”
The Senate version of the FY1996 defense authorizations bill (S. 1026) also authorized
funds for the C-17 program as requested, with a reduction of $21.9 million in procurement
funding for spare parts in concurrence with current Air Force plans. S. 1026 also authorized
the $183.8 million requested for “strategic aircraft,” for which the House bill authorized $254
million to buy either commercial transport planes or additional C-17s as noted above in regard
to H.R. 1530.
The House version of the FY1996 defense appropriations bill (H.R. 2126) provided the
$2,488 million requested for an 8-aircraft buy; the Senate version (S. 1087) provided $2,635
million. House and Senate conferees agreed to $2,486 million in a conference report that the
House rejected on September 29, 1995, for reasons not related to the C-17 program. On
November 16, 1995, a modified conference report, which funded the C-17 program as
provided in the earlier conference report ($2,486 million in FY1996 procurement and R&D
funds), was passed by the House and Senate and was enacted without the President’s
signature on December 1, 1995, as P.L. 104-61. FY1996 funding for the C-17 was
authorized in P.L. 104-106 (passed by Congress and signed by the President on February 10,
1996), which authorized funds for combat aircraft as appropriated earlier in P.L. 104-61.
FOR ADDITIONAL READING
Butler, Amy and Hebert, Adam J. DOD Explanation for Delayed C-17 Buy at Odds with
Boeing Assertions. Inside the Air Force, February 11, 2000: 1, 24-25.
Bender, Bryan and Foote, Sheila. Pentagon Signs $16 Billion Deal for C-17 Transport
Planes. Defense Daily, June 3, 1996: 366-367.
Defense Acquisition Board Endorses Multi-Year Buy Option for 80 C-17s. Inside the
Pentagon, January 18, 1996: 1-2.
Foote, Sheila. Appropriators Back C-17 Multiyear Buy, with Conditions. Defense Daily,
April 1, 1996: 2-3.
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Fruehling, Gudrun R. and Silverberg, David. The C-17: From Trouble to Triumph. Armed
Forces Journal International, September 1995: 35.
Mulholland, David. DoD Officials Likely Will Place Future C-17 Orders. Defense News,
March 20, 2000: 8, 36.
Offley, Ed. C-17’s Role in Kosovo May Lead To Pentagon’s Purchase of More. Seattle
Post-Intelligencer, June 4, 1999: B2.
Roos, John G. Getting a Needed Lift. Armed Forces Journal International, July 1996: 40-41.
U.S. Congressional Budget Office. Moving U.S. Forces: Options For Strategic Mobility.
[by] Rachel Schmidt. CBO Report, February 1997: 117 p.
U.S. General Accounting Office. Military Airlift — Options Exist for Meeting Requirements
While Acquiring Fewer C-17s. GAO/NSIAD-97-38. February 1997: 62 p.
—— C-17 Globemaster — Support of Operation Joint Endeavor. GAO/NSIAD-97-50.
GAO/NSIAD-97-50. February 1997: 12 p.
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CRS Issue Brief for Congress
Received through the CRS Web
C-17 Cargo Aircraft Program
Updated March 20, 2000
Christopher Bolkcom
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress
CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Major Developments
Performance Considerations
Strategic Need
Production Problems
Test Schedules
Some Alternatives
Extend the Life of the C-141
Buy Fewer C-17s and More C-5s or Commercial Aircraft — The “Non- Developmental
Airlift Aircraft” (NDAA) Option
Cost Factors
Congressional Action on Budget Requests
FOR ADDITIONAL READING
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C-17 Cargo Aircraft Program
SUMMARY
The C-17 Globemaster III is a long-range
cost-effective alternatives. In April 1990,
cargo/transport aircraft operated by the U.S.
Defense Secretary Cheney reduced the
Air Force since 1993. Congress approved
projected buy from 210 to 120 planes. In late
development of the aircraft in the late 1970s,
1993, DOD gave the contractor two years to
when it was recognized that the Air Force did
solve production problems or face termination
not have enough airlift capability. In 1981,
of the contract, with airlift shortfalls to be
the McDonnell Douglas C-17 emerged as
filled by modified commercial transport planes
winner of a competition with Boeing and
or existing military airlifters.
Lockheed to develop a next-generation aircraft
to replace C-130s and C-141s.
By the mid-1990s, the program’s earlier
difficulties had been largely resolved, although
Full-scale development of the C-17 got
some questioned the number of C-17s to be
underway in 1986, but technical problems and
procured. In 1996 DOD approved plans to
funding shortfalls delayed the program, leading
order 80 more C-17s for a total of 120 aircraft
to slipped schedules and increased costs.
— increased in late 1998 to 134. Through
Despite these difficulties, the C-17 has retained
FY1999, some $28 billion was provided for
congressional support and enjoyed strong Air
the C-17 program, which would cost about
Force and Army backing. Defense officials
$45 billion for development and procurement
view the C-17 as essential in the post-Cold
of 134 aircraft, as estimated in September
War environment, because of its ability to use
1999.
smaller bases in remote areas.
For FY1997, Congress appropriated
The C-17 first flew in 1991, about a year
almost $2.2 billion for procurement of eight
later than originally scheduled. Deliveries
C-17s under a multiyear procurement contract.
began in 1993, and in January 1995 the Air
For FY1998, Congress provided $2.3 billion
Force declared the aircraft fully operational.
for the program, procuring nine aircraft. The
By January 2000, the Air Force had taken
FY1999 budget provided some $3 billion for
delivery of 57 C-17s, some of which were
procurement of 13 C-17s. The FY2000 budget
used in Bosnia and later in Kosovo operations
provides about $3.1 billion for the program,
with notable success.
procuring another 15 aircraft. For FY2001,
the Administration requested some $3.1 billion
Production problems in the late 1980s
for procurement of 12 C-17s.
raised questions about the possibility of more
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MOST RECENT DEVELOPMENTS
The Administration’s FY2001 defense budget, submitted on February 7, 2000,
requested $3,067.3 million in procurement and R&D funding for 12 C-17s, compared to this
year’s 15-plane buy.
BACKGROUND AND ANALYSIS
Major Developments
The Air Force’s C-17 Globemaster III is a long-range cargo/transport aircraft
manufactured by Boeing (since its acquisition of McDonnell Douglas in 1997). Powered by
four turbofan engines made by Pratt & Whitney, the C-17 is expected to meet U.S. strategic
(long-range) airlift requirements, complementing the tactical (shorter-range) airlift capabilities
of the C-130 cargo/transport planes built by Lockheed-Martin. The C-17 can carry some
169,000 lb of outsize or oversized cargo (e.g., Abrams tanks and Apache helicopters) and can
operate from small runways in remote areas where the larger C-5 heavy-lift cargo plane
cannot be used.
The program had a difficult time winning the support of Congress in the late 1970s, but
funding was finally approved to begin development in FY1981. The program experienced
delays and cost escalations throughout its development and early production period, and in
late 1993 the C-17 program was threatened with cancellation after the 40 aircraft then under
contract if production and cost problems were not resolved in two years. Thus, the Defense
Department’s decision in November 1995 to buy the remaining 80 aircraft in a 120-plane
program was a major event in the C-17 saga. In late 1998 the program was increased by 14
aircraft for the Special Operations Command, making it now a 134-plane program.
The main hurdle in winning approval from Congress at the outset of the program was
that the Air Force had not clearly demonstrated a need for additional strategic airlift capacity.
The Soviet invasion of Afghanistan in December 1979 prompted President Carter to declare
that the United States would defend its interests in the Persian Gulf by force if necessary.
Concern that U.S. military forces might be ill-prepared to carry out such a mission led
Congress to ask the Department of Defense (DOD) to conduct a study of the entire long-
range strategic mobility situation, showing how much airlift and sealift would be needed to
deploy forces to remote areas.
Known as the Congressionally Mandated Mobility Study (CMMS), a classified report
was sent to Congress in April 1981. The CMMS considered all modes of strategic mobility
and what it would take to satisfy the simultaneous demands of a major war in Central Europe
and any one of three lesser contingencies, including a deployment to the Persian Gulf. The
study established several long-range strategic airlift goals that were considered attainable
within the limits of realistic budget assumptions. One of the conclusions was that 66 million
miles per day (MTMD) would be needed by the year 2000. At the time of the study in 1981,
the Air Force’s long-range cargo capability was only 29 MTMD.
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The Air Force submitted a request to build the McDonnell Douglas C-17 as the winner
of a competition with several other firms, and Congress agreed to fund development of the
plane. Just when the program was getting under way, however, DOD decided in early 1982
that the airlift shortfall was too urgent to await development of a new plane and that it would
be better also to buy some planes already in production. Congress approved funds in the
FY1983 budget to purchase 50 additional C-5 cargo planes (made by Lockheed) and 44 new
KC-10 tanker aircraft (then made by McDonnell Douglas) to make up part of the airlift
shortfall in the shortest time possible. Since the Air Force wanted to develop the C-17 as
well as to buy additional C-5s, Congress directed the service to develop a comprehensive
description of its future acquisition plans. The result was the Airlift Master Plan of September
1983, which compared several alternatives for modernizing the airlift fleet and concluded that
the C-17 was the most cost-effective.
The FY1985 budget included $129 million to begin full-scale development of the C-17
— then to be produced in a 210-aircraft program. The Airlift Master Plan had projected a
requirement for 210 C-17s, with 180 in the active fleet and 30 additional aircraft for backup
and spares and for testing and evaluation. The Air Force would also retain 114 C-5s but
would turn many of these over to the Air Force Reserve and Air National Guard. By the
mid-1980s the program appeared to be on track, if somewhat behind schedule. Production
difficulties later delayed the program further, with slipped schedules and rising development
costs. In April 1990, Defense Secretary Dick Cheney reduced the program from 210 to 120
production C-17s, reflecting revised estimates of airlift requirements in view of the collapse
of the Soviet Union as well as budgetary restraints.
In 1991-92, an updated Mobility Requirements Study (MRS) concluded that 57 million
ton miles per day ( MTMD) would be required during the 1990s in a new set of scenarios
based on changing international circumstances and reductions in the size and deployment of
U.S. military forces. The study also concluded that even with 120 C-17 aircraft and
commercial cargo and transport planes in the Civil Reserve Air Fleet (CRAF), the total U.S.
cargo airlift capability would remain at 48 MTMD because of the phaseout of aircraft
reaching the end of their service life. The April 1995 “Mobility Requirements Study
Bottom-Up Review Update” (MRSBURU) concluded that 120 to 140 C-17s, or some
comparable aircraft, would be needed in the 1990s.
The Air Force agreed in December 1993 to buy another 12 C-17s during FY1994-
FY1995, but Defense Secretary Les Aspin stated that the contract would end with the 40
aircraft then on order if McDonnell Douglas failed to resolve production and cost problems
during that two-year period. In that event, DOD would buy a mix of C-17s and modified
commercial transport planes or C-5 military transports to replace the aging C-141. By
accepting the 1993 agreement, McDonnell Douglas incurred a loss of nearly $1.5 billion on
the development phase of the program. In addition, the company agreed to spend $456
million in process improvements and testing. DOD agreed to provide an additional $438
million for the program — $237 million to settle claims with McDonnell Douglas and $201
million for flight testing.
An October 1995 report by the Congressional Budget Office (CBO) stated: “If there was
adequate room at airfields in regions of potential conflict, buying 32 more C-17s plus 30
C-33s [militarized version of Boeing 747s] would provide the same delivery capability as 80
additional C-17s. That option would also be nearly $8 billion cheaper.... If, however, U.S.
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forces were limited to a few airfields that had a small amount of ramp space, that option might
not deliver cargo as quickly as would 80 more C-17s. And such a combination would not
provide as much flexibility to handle specific military missions such as strategic brigade
airdrops.... The appropriate mixture of planes depends on how much DOD and the Congress
are willing to pay for the flexibility provided by 80 additional C-17s.”
In November 1995, the Defense Department decided to continue procurement of the
C-17 for a total program of 120 aircraft instead of meeting airlift requirements with a mix of
C-17s, modified Lockheed C-5s, and Boeing 747s (designated as C-33s). The military
services maintained that additional airlift capacity was critical and argued that if C-17s were
not procured, other less capable cargo/transport aircraft would be needed to make up the
shortfall. Most Members of Congress recognized the need for additional airlift, although
some questioned the need to buy as many as 80 more C-17s. (See GAO/NSIAD-97-38
report cited in For Additional Reading.)
In January 1996, the Defense Acquisition Board (DAB) approved plans to buy 80 C-17s
over a seven-year period (FY1997-FY2003) in a multiyear contract that would be less
expensive than either single-year buys or multiyear procurement over a longer period (with
savings estimated at 5% of a projected program cost of $18 billion). The Air Force argued
that buying the C-17 in six or seven years would provide the planes sooner and more
cost-effectively and would avoid funding competition with other Air Force programs after
2003. Critics argued that such a long-term contract could entail financial penalties for
reducing annual buys, if budgetary constraints in future years were to force the Air Force to
choose between buying C-17s or other aircraft, such as F-22 fighter/attack planes. On May
31, 1996, the Air Force and McDonnell Douglas (now owned by Boeing) signed a
$16.2-billion multi-year procurement contract for 80 aircraft to be produced over seven years.
The first of these 80 was delivered on August 10, 1998, bringing total deliveries to 41
aircraft. By January 2000, the Air Force had taken delivery of 57 C-17s (40 funded annually
and 17 funded under the multi-year procurement contract). C-17s are currently based at
Charleston AFB, SC (437th Airlift Wing) and McChord AFB, WA — each wing having an
authorized force of 48 aircraft — and at Altus, OK (97th Air Mobility Wing), a training unit
with eight C-17s. As projected in 1999, C-17s would also be operated by the Mississippi Air
National Guard after 2004. In addition to the numbers of authorized operational aircraft,
other C-17s would be in the maintenance/repair pipeline as well as being used for other
operational missions, such as special operations.
Performance Considerations
The Air Force maintains that the performance characteristics of the C-17 are significantly
better than those of other cargo/transport aircraft. The C-17 can land on shorter runways and
is more maneuverable on the ground than the larger C-5 or commercial transport planes, such
as the Boeing 747, which would require much longer and wider runways. That factor limits
the number of available bases and thus would complicate deployment planning for remote
areas. In explaining the November 1995 decision to buy another 80 C-17s, DOD officials
cited as a critical feature their calculations that eight C-17s could land and offload 3,852 tons
per day in a space where only three modified 747s could operate, delivering 1,754 tons per
day.
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The C-17 is also expected to be more cost-effective than its competitors based on
projected life-cycle costs. The C-17's performance in the “reliability, maintainability, and
availability evaluation” exercises of July-August 1995 confirmed its supporters’ expectations
about operational capabilities with favorable cost implications, in part because fewer people
are needed to operate and maintain the aircraft. (See Test Schedules below.)
As part of the 1993 omnibus agreement between the Air Force and McDonnell Douglas,
DOD agreed to change certain contract specifications that were causing design and cost
problems. The most noteworthy of these changes included: cruise speed reduced from Mach
0.77 to Mach 0.74; maximum payload from 172,200 lb to 169,000 lb; and ferry range from
4,600 nm to 4,300 nm. Air Force General Ronald Fogleman, then head of the U.S. Mobility
Command, said these changes did not affect critical operational requirements, explaining that
a 3,200-mile mission with a 110,000-lb payload had been established as a goal and that the
C-17 would meet or exceed this requirement.
Strategic Need
A critical question has been to what extent the C-17 may still be needed in the absence
of Cold War threats to U.S. national security. Despite the disappearance of these threats, the
Defense Department maintains its strong support for the C-17 as a long-range strategic airlift
asset. The Air Force views the C-17 as the cornerstone of its airlift modernization program
to replace older aircraft now nearing the end of their useful life. In the mid-1990s Air Force
officials said that if the C-17 were canceled and work on a new plane started immediately, the
first delivery would not be until 2005, when the C-141s then in service would be 35 to 40
years old.
The Army’s strong support of this Air Force program was a critical factor in DOD’s
decision in November 1995 to rely entirely on the C-17 to meet airlift requirements. The
Army is largely dependent on the Air Force for rapid transportation of its forces in an
emergency deployment. Army units deployed to Panama in 1989 were carried entirely by air,
and after-action reports said that all U.S. airlift assets were fully employed during that period.
DOD officials say the C-17 would have greatly facilitated the Panama operation (where the
C-5 was difficult to use because it is hard to maneuver on the ground and ties up other
traffic), adding that the C-17 would be even more necessary in operations where friendly
airfields and troops on the ground might not be as available as they were in Panama.
The massive military airlift to the Persian Gulf before and during the 1991 Gulf war
further bolstered the case for the C-17. During the 5 months before the outbreak of
hostilities, the Air Force moved more ammunition, weapons, food, and other military supplies
than in any period in U.S. history, using almost all of its 283 C-5 and C-141 cargo planes at
maximum utilization rates. The operation put heavy stress on older C-141s and probably
shortened their remaining service life, making it impossible to maintain the 48 million ton
miles per day (MTMD) level through the 1990s even with the C-17, according to the Air
Force.
The demands placed on available military cargo planes during the Persian Gulf buildup
could not have been met without the call-up of the Civil Reserve Air Fleet (CRAF). About
110 commercial passenger and cargo aircraft were requisitioned when the program was
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activated for the first time in its 38-year history. Two-thirds of all passengers and one-fifth
of all air cargo were moved to the Gulf by civil aircraft in the CRAF program. Commercial
airlines in the program are compensated through the award of a share of the military airlift
workload generated by the Air Force.
As more troops are brought home and forward bases are given up, more airlift would
be needed in an emergency, such as the Bosnian and Kosovo operations. In 1996, C-17s
were used in Operation Joint Endeavor missions in Bosnia with outstanding results; e.g.,
offloading cargos of some 165,000 lb in less than 15 minutes and carrying 44% of cargo
delivered while performing 26% of airlift missions. (GAO. C-17 Globemaster — Support
of Operation Joint Endeavor. GAO/NSIAD-97-50. February 1997.) The C-17’s ability to
operate from austere airfields in Albania and Macedonia further demonstrated its value during
the Operation Allied Force in March-June 1999, when C-17s achieved a 96-percent mission-
capable rate.
Some British defense officials also view the C-17 as a strategic airlift asset that can be
used in rapid-reaction operations. The United Kingdom’s Strategic Defence Review of July
1998 indicated that the Ministry of Defence might lease or buy several C-17s to meet air
mobility requirements of Britain’s Rapid Reaction forces; however, funding for these aircraft
had not been budgeted as of early 2000. In late 1998, the Air Force increased the 120-
aircraft program by an additional 14 aircraft, which would be procured in FY2003-FY2005
for use by special operations forces, although procurement contracts for these additional
aircraft had not been signed as of early 2000.
Production Problems
The C-17 was expected to be a low-risk development project, since most of its
technology was to be “off-the-shelf.” McDonnell Douglas was sure enough of the design
concept to enter into a contract based upon strong price guarantees and warranties of
performance. Shortly after the first contract was awarded in 1981, however, the program was
put on hold by DOD when it decided to buy an updated model of the C-5 and additional
KC-10 tanker aircraft, a military version of the McDonnell Douglas DC-10 airliner. It took
several years for the C-17development program to regain momentum and by then, problems
had developed on the production line and with subcontractors responsible for major
components of the aircraft, such as the avionics, flight computers and programs.
The result was that fabrication and assembly of the first development aircraft was
delayed from December 1987 to August 1988, causing postponement of the aircraft’s first
flight from February 1990 to September 1991. During that period, congressional funding
committees began questioning the contractor’s ability to deliver on schedule, making
incremental cuts in the C-17 budget, and linking future funding to production performance.
These restrictions became more stringent each year as other production and management
problems arose. Since 1995 the aircraft have been delivered to the Air Force on or ahead of
schedule.
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Test Schedules
System-level testing began on the C-17 in late 1992. Early testing was conducted by the
contractor and Air Force members of the Combined Development Test and Evaluation/Initial
Operational Test and Evaluation test team. Initial engineering tests developed the aircraft and
its systems, compared the performance to contract specifications, and prepared for later
operational testing. Comprehensive mission testing by operational personnel using
operational bases and procedures occurred in late 1994 through early 1995.
Some 300 hours of flight testing were performed at Edwards AFB, California, and
operational deployment sites, using a production-representative test plane. Initial squadron
operations at Charleston AFB, South Carolina, included a 30-day Reliability, Maintainability,
and Availability Evaluation (RM&AE) in July-August 1995. The C-17s participating in these
RM&AE exercises demonstrated notable operational success, with overall reliability of 99%
and 98% of missions completed successfully.
Some Alternatives
Opponents of the C-17 have proposed alternatives ranging from extending the service
life of cargo planes now in service to relying more on sealift. Timeliness is the strongest
argument for delivering military cargo by air, and some analysts believe that where time is not
so critical it would be possible to use sealift instead of buying additional airlift assets. The
Department of Defense has steadfastly defended the C-17, arguing that it will be needed even
more, as more U.S. troops return from overseas stations. The Air Force continues to assert
that the C-17 holds high priority in relation to other Air Force programs, pointing out that the
current U.S. airlift capability is only about 48 million ton miles per day compared to the 57
MTMD stipulated in the 1992 Mobility Requirements Study.
Extend the Life of the C-141
Some have suggested that the C-141 be kept in service longer by means of a Service Life
Extension Program (SLEP). Under this concept, parts of the plane that are worn out or
dangerous would be replaced in order to keep the C-141s in service until an affordable
replacement is found. The Air Force maintains, however, that the C-141 is already well
beyond its original service life and is limited in the kinds of missions it can perform. Earlier
modifications increased the life of the planes from about 25,000 hours to 45,000 hours, but
even if their service lives were extended, C-141s could not carry outsized cargo such as tanks,
helicopters, and large vehicles and artillery. These items are more easily and economically
transported by ship, but in an emergency when time is critical, only the C-5 or the C-17 can
carry military equipment that large and bulky.
Buy Fewer C-17s and More C-5s or Commercial Aircraft — The “Non-
Developmental Airlift Aircraft” (NDAA) Option
Another proposed alternative was to buy fewer C-17s and to make up the shortfall with
additional C-5s and commercial transport/cargo aircraft — referred to as “non-developmental
airlift aircraft” (NDAAs). The leading candidate in the NDAA option was a military version
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of the Boeing 747 jumbo jet, designated as the C-33. These Boeing C-33s would not be
replacements for the C-17 but would fill the need for routine cargo flights between large
airports. The C-17 can be operated on unimproved surfaces and can unload under austere
conditions. Proponents of the NDAA argued that its acquisition cost would be less than that
of the C-17, whose special performance features would not be needed in many airlift
operations.
Air Force officials conceded that in some situations a mix of C-17s and NDAAs might
be the most cost-effective way to carry military cargo. However, DOD’s decision in
November 1995 reflected a choice of an all-C-17 force of 120 aircraft (including the 40 then
under contract) in lieu of a C-17/NDDA mix. A report by the Congressional Budget Office
in early 1997 considered the costs and capabilities of five alternatives to current
Administration plans for modernizing strategic airlift and sealift, including buying fewer C-17s
with estimated savings of $8.4 to $18.9 billion in 1998-2020. ( U.S. Congressional Budget
Office. Moving U.S. Forces: Options For Strategic Mobility. [by] Rachel Schmidt. CBO
Report, February 1997; U.S. General Accounting Office. Military Airlift — Options Exist
for Meeting Requirements While Acquiring Fewer C-17s. GAO/NSIAD-97-38, February
1997.)
Cost Factors
A major issue in the C-17 program has been the lower acquisition costs of the proposed
NDAA alternatives as projected by their manufacturers. As of September 30, 1999, DOD
estimated a 134-aircraft program to cost $44.9 billion, of which some $28 billion was spent
in developing and procuring the aircraft through FY1999. Unit costs have been reduced by
multiyear procurement. Under the multiyear production contract of May 31, 1996, 80 aircraft
are to be produced during the 1996-2003 period for some $16.2 billion, at a program unit
cost of $202.5 million. (Bender, Bryan and Foote, Sheila. Pentagon Signs $16 Billion Deal
for C-17 Transport Planes. Defense Daily, June 3, 1996: 366-367.)
Congressional Action on Budget Requests
The Administration’s FY2001 defense budget, submitted on February 7, 2000, requested
$3,067.3 million for the C-17 program: $2,890.9 million for procurement of 12 aircraft and
$176.4 million in research-development (R&D) funds. DOD officials stated that buying 12
aircraft in FY2001 instead of 15 as originally planned would not break the multiyear contract
for 80 C-17s to be procured over seven years (FY1997-FY2003).
The FY2000 defense budget requested $3,555.7 million for the C-17 program: $3,385
million in procurement funds for 15 aircraft and $170.7 million in R&D funds. The Senate
version of the FY2000 defense authorization bill (S. 1059), passed on May 27, 1999,
authorized funding for the program as requested; the House version (H.R. 1401), passed on
June 10, 1999, also authorized the funding requested as well as an additional $3.5 million in
procurement funds for the C-17. House and Senate conferees agreed on August 5, 1999, to
authorize C-17 funding as requested, and the conference report on FY2000 defense
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authorizations (H.Rept. 106-301/P.L. 106-65) was passed by the House on September 15 and
the Senate on September 22, 1999.
The Senate version of the FY2000 defense appropriations bill (S. 1122), passed on June
8, 1999, funded the program as requested and authorized by the Senate. The Senate
Appropriations Committee also recommended “new multi-year procurement authority to
allow the Air Force to enter into negotiations on the procurement of sixty additional C-17s”
(S.Rept. 106-53); this second multiyear procurement would begin in 2003 at the end of the
current 7-year contract. The House version (H.R. 2561), passed on July 22, 1999, provided
$412.3 million less than the $3,385 million requested and authorized for procurement. The
conference report on FY2000 defense appropriations ( H.Rept. 106-371/P.L. 106-79), passed
by the House on October 13 and the Senate on October 14, 1999, provided $3,135.2 million
for the C-17 program ($2,974.3 million in procurement and advance procurement funds;
$160.9 million in R&D funds). Sections 8008 and 8145 of the conference report granted
authority for a follow-on multiyear contract for 60 more C-17s if the Secretary of the Air
Force certifies that the average unit flyaway price of these aircraft will be “at least twenty-five
percent below the average unit flyaway price” of the 80 aircraft currently in multiyear
procurement “with both prices calculated in fiscal year 1999 dollars.”
The FY1999 budget requested $3,023.6 million for the C-17 program: procurement,
$2,900.5 million; R&D, $123.1 million. Procurement funding in FY1999 bought 13 aircraft
in a multi-year buy of 80 aircraft over a seven-year period (FY1997-FY2003). The House
and the Senate authorized FY1999 funding for the C-17 as requested (H.Rept. 105-532 on
H.R. 3616, passed May 21, 1998; S.Rept. 105-189 on S. 2057, passed June 25, 1998). The
House appropriated C-17 funding as requested in H.R. 4103, passed on June 24, 1998; the
Senate version of the FY1999 defense appropriations bill (S. 2132, passed July 30, 1998)
contained procurement funds as requested but reduced R&D funding to $108.1 million of the
$123.1 million requested. House and Senate conferees agreed in H.Rept. 105-746,
September 25, 1998, to appropriate procurement funds as requested and $119.1 million of
the $123.1 million requested for R&D. FY1999 defense authorizations and appropriations
bills were enacted on October 17, 1998, as P.L. 105-261 and P.L. 105-262, respectively.
Also included in the FY1999 defense budget was a request for $125.8 million to procure
a C-130J aircraft, the latest version in the C-130 Hercules series of cargo/transport planes
produced by Lockheed since the 1950s. The C-130J upgrade “will address the need to
modernize U.S. tactical airlift capability,” according to DOD budget documents. The C-17
is expected to modernize long-range strategic airlift capability, while the C-130J would be
used in theater operations at shorter range. Congress authorized and funded procurement
of seven C-130 aircraft in FY1999 — 3 C-130Js for the Air National Guard; 2 KC-130J
tanker aircraft for the Marines; and 1 EC-130J and 1 WC-130J for the Air Force.
For FY1998, the Administration requested $2,315.1 million for the C-17 program in
procurement ($2,201.5) and R&D ($113.6) funding for nine aircraft in a multiyear buy of 80
aircraft through FY2003. In addition, some $9.7 million was requested in military
construction funds, mainly related to enlarging hangars.
B o t h t h e H o u s e N a t i o n a l
Security Committee and the Senate Armed Services Committee recommended authorization
of C-17 funding as requested for FY1998, which was authorized by the House on June 25,
1997 (H.R. 1119) and by the Senate on July 11, 1997 (S.936). The House appropriated
$2,179.8 million in procurement funding for nine C-17s in FY1998. The Senate version of
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the FY1998 defense appropriation bill (S. 1005, passed July 15, 1997) provided $2,641.5
million for procurement of 11 C-17s. The FY1998 defense appropriation bill (H.R.
2266/P.L. 105-56), passed by Congress on September 25, 1997, provided $2,290.4 million
of the $2,315.1 million requested for a 9-aircraft buy.
Funding for the program in FY1997 totaled $2,269.7 million — $2,117.0 million in
procurement funding for eight planes, $71.8 million in R&D funds, and $80.9 million for
military construction related to the C-17. (Smaller amounts of military construction funding
for the C-17 have also been included in other annual budget requests and congressional
appropriations.) The Administration’s FY1997 budget was expected to fund procurement
of the first eight planes in a multiyear buy of 80 aircraft over a seven-year period
(FY1997-FY2003).
Congressional approval of such a multiyear procurement was included in the Senate
version of an omnibus budget bill (S. 1594, Section 803), passed on March 19, 1996
(Congressional Record, March 19, 1996: S2284), but this language was not in the House
version of the bill (H.R. 3019), passed earlier on March 7 (Congressional Record, March 7,
1996: H1808). During Senate debate on S. 1594, Senator Warner noted that the Senate
Armed Services Committee had expressed to the Air Force its strong opposition to
proceeding with such a long-term commitment of defense procurement funds without
allowing the committee an opportunity to review the matter. (Congressional Record, March
14, 1996: S2070- S2071.) On March 28, 1996, the Committee held a hearing on C-17
multi-year procurement issues (MDC’s Kozlowski Defends MYP C-17 Saving, Cites Small
Buy. Aerospace Daily, March 29, 1996: 492 and Eurich, Heather J. GAO Halves Estimate
on C-17 Multiyear Proposal Savings. Defense Daily, March 29, 1996: 483.) House and
Senate conferees on H.R. 3019 agreed to a C-17 multiyear procurement that would provide
savings of more than the 5% projected earlier. (Foote, Sheila. Appropriators Back C-17
Multiyear Buy, with Conditions. Defense Daily, April 1, 1996: 2-3.) H.R. 3019 was enacted
on April 26, 1996, as P.L. 104-134, thus resolving the FY1997 budget issue between
Congress and the Administration.
The House versions of the FY1997 defense authorizations bill (H.R. 3230, passed May
15, 1996) and defense appropriations bill (H.R. 3610, passed June 13, 1996) approved a buy
of 10 C-17s in a six-year procurement contract. The Senate version of the FY1997 defense
authorizations bill (S. 1745, passed July 10, 1996) authorized procurement of nine C-17s,
with the details of a multiyear procurement contract regarding termination costs and
alternative annual procurement costs to be determined later (S.Rept. 104-267: 89). The
Senate version of the FY1997 defense appropriations bill (S. 1894, passed July 18, 1996)
provided funding for eight C-17s as requested (S.Rept. 104-286: 81, 126). House and Senate
conferees agreed to authorize $87.5 million as requested for R&D and $2,376.8 million in
procurement funds for nine or more C-17s in FY1997 as part of a multiyear procurement
program. On August 1, 1996, the House passed the conference report on FY1997 defense
authorizations (H.Rept. 104-724), which the Senate passed on September 10. On September
30, 1996, the President signed an omnibus FY1997 appropriations bill (H.R. 3610/ P.L.
104-208), which provided $2,202 million in Air Force procurement and development funding
in FY1997 for multi-year procurement of eight C-17s — somewhat less than the
Administration’s request of $2,230 million for the program.
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For FY1996, the Administration requested $2,612.7 million for the C-17 program
(including $117.5 million for initial spares, $85.8 million for R&D, and $6.9 million for
military construction), funding procurement of eight aircraft. The House version of the
FY1996 defense authorizations bill (H.R. 1530, passed June 15, 1995) authorized funding for
the C-17 program as requested by the Administration and recommended by the House
National Security Committee. H.R. 1530 also authorized $254 million that might be used as
advance funding for procurement of commercial transport planes in lieu of additional C-17s,
if the Defense Department chose what was termed the “non-developmental airlift aircraft”
(NDAA) option; otherwise, this amount could be used as C-17 funding. The committee
noted “that consideration of an NDAA option was initiated originally out of concern that the
C-17 program was not performing well. However, the committee observes that there have
been positive achievements of the C- 17 program within the past year. Recent deliveries of
C-17s have been ahead of schedule, and both the quality and production performance have
improved significantly.”
The Senate version of the FY1996 defense authorizations bill (S. 1026) also authorized
funds for the C-17 program as requested, with a reduction of $21.9 million in procurement
funding for spare parts in concurrence with current Air Force plans. S. 1026 also authorized
the $183.8 million requested for “strategic aircraft,” for which the House bill authorized $254
million to buy either commercial transport planes or additional C-17s as noted above in regard
to H.R. 1530.
The House version of the FY1996 defense appropriations bill (H.R. 2126) provided the
$2,488 million requested for an 8-aircraft buy; the Senate version (S. 1087) provided $2,635
million. House and Senate conferees agreed to $2,486 million in a conference report that the
House rejected on September 29, 1995, for reasons not related to the C-17 program. On
November 16, 1995, a modified conference report, which funded the C-17 program as
provided in the earlier conference report ($2,486 million in FY1996 procurement and R&D
funds), was passed by the House and Senate and was enacted without the President’s
signature on December 1, 1995, as P.L. 104-61. FY1996 funding for the C-17 was
authorized in P.L. 104-106 (passed by Congress and signed by the President on February 10,
1996), which authorized funds for combat aircraft as appropriated earlier in P.L. 104-61.
FOR ADDITIONAL READING
Butler, Amy and Hebert, Adam J. DOD Explanation for Delayed C-17 Buy at Odds with
Boeing Assertions. Inside the Air Force, February 11, 2000: 1, 24-25.
Bender, Bryan and Foote, Sheila. Pentagon Signs $16 Billion Deal for C-17 Transport
Planes. Defense Daily, June 3, 1996: 366-367.
Defense Acquisition Board Endorses Multi-Year Buy Option for 80 C-17s. Inside the
Pentagon, January 18, 1996: 1-2.
Foote, Sheila. Appropriators Back C-17 Multiyear Buy, with Conditions. Defense Daily,
April 1, 1996: 2-3.
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Fruehling, Gudrun R. and Silverberg, David. The C-17: From Trouble to Triumph. Armed
Forces Journal International, September 1995: 35.
Mulholland, David. DoD Officials Likely Will Place Future C-17 Orders. Defense News,
March 20, 2000: 8, 36.
Offley, Ed. C-17’s Role in Kosovo May Lead To Pentagon’s Purchase of More. Seattle
Post-Intelligencer, June 4, 1999: B2.
Roos, John G. Getting a Needed Lift. Armed Forces Journal International, July 1996: 40-41.
U.S. Congressional Budget Office. Moving U.S. Forces: Options For Strategic Mobility.
[by] Rachel Schmidt. CBO Report, February 1997: 117 p.
U.S. General Accounting Office. Military Airlift — Options Exist for Meeting Requirements
While Acquiring Fewer C-17s. GAO/NSIAD-97-38. February 1997: 62 p.
—— C-17 Globemaster — Support of Operation Joint Endeavor. GAO/NSIAD-97-50.
GAO/NSIAD-97-50. February 1997: 12 p.
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