European Stars And Stripes (Newspaper) - December 22, 1988, Darmstadt, Hesse                                Thursday december 22, 1988 the stars and stripes Page 5 audit claims Navy paid $27.2 million too much for missile by Norman Blackcap military writer Washington the Navy seems to have overpaid its prime contractor for the Phoenix air to air missile by up to $27.2 million and now is preparing to award a contract to a second manufacturer without prior testing of its version a Pentagon audit concludes. The audit says the Navy could save $35.4 million Over the next three years if it would directly Purchase 10 of the sub contracted components used in the mis Sile instead of allowing the prime con tractors to buy them and add on a profit. The audit performed by the defens department s Independent inspector general is dated aug. 22 and focuses on $684 million Worth of contracts for Pho enix missiles awarded from March 1985 to july 1987. The Phoenix is the Navy s Premier missile for Aerial dog fighting. The latest Model of the Long Range supersonic mis Sile is known As the aim-54c and is car ried by the Navy s f-14 tomcat Jet fight ers. The missile s Developer and prime contractor is the Hughes aircraft co. The Navy decided in 1984 to bring on a second producer and competitor for Hughes and the Raythelon co. Is fighting for annual production work. According to the audit the overpay ments to Hughes occurred in fiscal i98sand fiscal 1986 and probably totalled be tween $18.1 and $27.2 million. The overpayment resulted when the Navy allowed Hughes workers More than three times As Long to fabricate each missile As called for by Hughes own internal labor efficiency standards the auditors wrote. Even if Industry averages were used for labor efficiency instead of internal Hughes standards. Hughes was Given about twice As much time to build each missile As would normally be the Case the audit says. We believe that the Phoenix missile program would have saved about half of us fabrication Assembly and test labor Cost if an Industry average realization Factor would have been achieved the audit states. The audit docs not suggest the Money can be recovered at this Point but does recommend the Navy Analyse Hughes labor efficiency on the Assembly line be fore awarding More contracts. The auditors claimed the Navy really was t in the proper position to begin significant competitive bidding Between Hughes and Raythelon because it has conducted verification testing of Ray Theon s missile to demonstrate its operational suitability Raythelon could be awarded a por Tion of the total requirement in fiscal 1989 of 560 missiles valued at about $483 million before demonstrating that it can produce a qualified missile wit components that can be interchanged with those of the Hughes aircraft mis  of no you Don to Nora , 11, was tired of play ing with her Doc Brandon after school in Merced calif., but her Don did t agree. Putting bile into his bark he let Nora know he still wanted to play. Santa gives wheelchair to boy s mom in California Banning Calif