United States Government Accountability Office

GAO Report to Congressional Committees

STATE 

DEPARTMENT 

State Has Initiated a 

More Systematic 

Approach for 

Managing Its Aviation 

Fleet 

February 2007 

 

GAO-07-264 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

February 2007

STATE DEPARTMENT

State Has Initiated a More Systematic 

Highlights of GAO-07-264, a report to Approach for Managing Its Aviation Fleet 

congressional committees 

The Department of State’s (State)

Bureau of International Narcotics 

and Law Enforcement Affairs (INL)

owns 357 helicopters and fixedwing aircraft (valued at over 

$340 million) primarily to help 

carry out its counternarcotics 

efforts, such as aerial eradication

of drug crops in Colombia. INL 

relies on contractor support to help 

maintain and operate its aircraft. 

In 2004, GAO analysis showed that

INL lagged behind other agencies 

in implementing Office of 

Management and Budget (OMB) 

and General Services

Administration (GSA) aviation fleet 

management principles. GAO was 

mandated to review INL’s 

management and oversight of this

fleet. GAO specifically examined

(1) the extent INL has complied 

with OMB and GSA aviation fleet 

management guidance and (2) how

INL has overseen its aviation

support contracts.

Since INL has undertaken 

initiatives to address the

weaknesses GAO observed, GAO

makes no recommendations. GAO 

will follow up to ensure that these

initiatives are completed, as 

planned. In comments on this 

report, State highlighted reforms 

under way. State also indicated

that INL conducted analyses to

justify most aviation investments. 

GAO notes, however, that the 

documentation provided did not 

reflect the key analyses called for 

by OMB guidance.

Despite some improvements since 2004, INL has not yet employed a 

systematic process for managing its aviation fleet that adheres to OMB and 

GSA guidance intended to help federal programs ensure that they acquire, 

manage, and modernize their aircraft in a cost-effective manner. However, 

in October 2006, INL began a number of initiatives to improve compliance 

with this guidance. The guidance entails three key principles: (1) assessing a 

program’s long-term fleet requirements, (2) acquiring the most cost-effective 

fleet of aircraft to meet those requirements, and (3) assessing fleet 

performance. INL’s initiatives are intended to address weaknesses in the

following three areas: 

• Long-term planning. Since 2004, INL has prepared a strategic plan and a 

Critical Flight Safety Program to refurbish certain aircraft and replace 

others to meet projected mission needs. However, this effort did not 

address the long-term aircraft needs of all INL aviation programs. 

• Fleet investment justifications. INL has funded multimillion dollar 

aircraft investments, including the acquisition of new aircraft and major 

overhauls of older assets, without documenting cost-benefit and life cycle 

cost analyses of alternatives. 

• Fleet composition assessment. INL has not reviewed the composition of 

its entire fleet to demonstrate that its aircraft are the most appropriate and 

cost-effective to meet mission requirements. INL is hampered in assessing 

the performance of its fleet because it does not have complete and reliable 

aircraft cost and usage data. 

INL has undertaken a study to assess the aviation fleet’s overall composition, 

identify investment needs, and assess alternative approaches for meeting 

those needs. INL expects completion of this and other initiatives in 2007. 

Regarding contract oversight, INL has met applicable federal, agency, and 

contract-specific requirements for managing its aviation support contracts. 

In addition to direct contractor oversight, State has used quantitative

measures, primarily aircraft readiness rates, to monitor and assess 

contractor performance. 

Examples of INL Aircraft

Source: INL.

www.gao.gov/cgi-bin/getrpt?GAO-07-264.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Jess T. Ford at 

(202) 512-4268 or FordJ@gao.gov. 
Contents 

Letter 1

Results in Brief 3

Background 6

State Did Not Employ a Systematic Process for Managing Its 

Aviation Fleet in Accordance with OMB and GSA Guidance, but 

Plans to Do So Are Under Way 12 

INL Has Met Contract Oversight and Evaluation Requirements 20 

Conclusions 24

Agency Comments and Our Evaluation 25 

Appendix I Scope and Methodology 27 

Appendix II Comments from the Department of State 30 

GAO Comments 34 

Appendix III GAO Contact and Staff Acknowledgments 36 

Table 

Table 1: Funds Allocated for Aviation Activity for Fiscal Years 

2002-2006 9

Figures 

Figure 1: Worldwide Distribution of INL Aircraft as of 

 September 1, 2006 6 

Figure 2: Examples of Aircraft Owned by INL 8 

Figure 3: Aviation Fleet Management Planning Process 11 

Page i GAO-07-264 State's Aviation Management
Abbreviations 

GSA General Services Administration 

INL Bureau of International Narcotics and Law Enforcement 

 Affairs 

NAS Narcotics Affairs Section 

OMB Office of Management and Budget 

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. However, because this work may contain copyrighted images or 

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately. 

Page ii GAO-07-264 State's Aviation Management
United States Government Accountability Office

Washington, DC 20548 

February 2, 2007 

The Honorable Patrick J. Leahy 

Chairman 

The Honorable Judd Gregg 

Ranking Minority Member 

Subcommittee on State, Foreign Operations, 

 and Related Programs 

Committee on Appropriations 

United States Senate 

The Honorable Nita M. Lowey 

Chairman 

The Honorable Frank R. Wolf 

Ranking Minority Member 

Subcommittee on State, Foreign Operations, 

 and Related Programs 

Committee on Appropriations 

House of Representatives 

Since fiscal year 2001, Congress has appropriated about $5 billion to the 

Department of State’s (State) Bureau of International Narcotics and Law 

Enforcement Affairs (INL) for counternarcotics, counterterrorism, and law 

enforcement programs. State owns an aviation fleet-–primarily to help INL 

carry out its counternarcotics efforts—that, as of September 1, 2006, 

totaled 357 aircraft.1

 Valued by State at over $340 million, the fleet is the 

second largest among U.S. government civilian agencies and includes 

aircraft in the United States and seven other countries—Afghanistan, 

Bolivia, Colombia, Ecuador, Mexico, Pakistan, and Peru. INL has allocated 

about $2.2 billion for aviation activities during fiscal years 2002 through 

2006. The aircraft are property of the U.S. government, though some are 

provided to countries on a no-cost lease basis. INL uses contractor 

support to help operate and maintain the aircraft, which are used in a wide 

variety of counternarcotics operations, from spraying herbicides on coca 

and opium poppies in Colombia and transporting the Colombian Army in 

 1

This figure includes 55 fixed-wing airplanes and 222 rotary-wing helicopters that were 

operational. Of these aircraft, 41 were operated and maintained fully by the host 

government where they were based. An additional 80 were nonoperational and were in 

storage. 

Page 1 GAO-07-264 State's Aviation Management
support of its operations2

 to helping to secure the border between 

Afghanistan and Pakistan. When called upon, INL aircraft may also be 

used to conduct medical evacuations, search and rescue missions, and 

other counternarcotics-related operations. INL acquired a significant 

portion of its fleet since 2000 to support the implementation of Plan 

Colombia, established by the Colombian government in 1999 to reduce the 

cultivation, processing, and distribution of illegal narcotics by 50 percent

over 6 years, among other goals. 

In recent years, funding for INL’s aviation fleet has been provided 

primarily through the Andean Counterdrug Initiative and the International

Narcotics Control and Law Enforcement appropriations. Most of the 

aircraft are managed by INL’s Office of Aviation (also called the Air Wing) 

headquartered at Patrick Air Force Base in Florida. However, other 

aircraft are managed by INL offices (often called a Narcotics Affairs 

Section or NAS) in the U.S. embassy in the countries where the aircraft are 

stationed. 

In 2004, we reviewed the management of Air Wing’s operations and found 

that the Air Wing had not implemented several key principles of fleet 

management planning, as outlined in Office of Management and Budget 

(OMB) and General Services Administration (GSA) guidance.3

 This 

guidance is intended to help agencies make sound decisions in acquiring 

aircraft and managing their aviation fleets. At that time, our analysis 

showed that INL lagged behind other federal programs we reviewed, 

particularly in terms of long-term planning and justifying acquisitions. 

Also, in its report on State’s fiscal years 2004 and 2005 financial 

statements, State’s external financial auditor noted that State had 

ineffective controls over its aviation fleet and cited this shortcoming as a 

material weakness.4

 More recently, State’s Office of Inspector General 

reported that, due to ineffective controls in tracking and reporting on its 

 2

INL’s aviation fleet is primarily used for counternarcotics programs. However, in 2002 and 

subsequent years, the Congress provided expanded authority for the use of U.S. assistance 

to Colombia. This authority enables the government of Colombia to use U.S.-provided

helicopters and other counternarcotics assistance to combat groups designated as terrorist

organizations, as well as drug production and trafficking. 

3

GAO, Federal Aircraft: Inaccurate Cost Data and Weaknesses in Fleet Management 

Planning Hamper Cost Effective Operations, GAO-04-645 (Washington, D.C.: June 18, 

2004). 

4

Audit of the U.S. Department of State 2005 and 2004 Principal Financial Statements

(AUD/FM-06-12A, December 2005). 

Page 2 GAO-07-264 State's Aviation Management
fleet, State underreported the value of its aircraft and parts by 

$162 million.5

 In 2005, the Senate Appropriations Committee commented 

that the lack of central program management and funding for INL aviation 

programs has resulted in contract cost growth, poor execution, and 

inadequate financial management. The committee directed the 

Comptroller General to review the management and oversight of State’s 

aviation fleet.6

In response to this mandate, we reviewed INL’s overall management of its 

aviation programs. We specifically examined (1) the extent to which INL 

has managed its aviation fleet in accordance with OMB and GSA guidance 

and (2) how INL has overseen aviation support contracts and whether it 

did so in accordance with applicable standards. 

To address these objectives, we reviewed OMB and GSA guidance and 

related federal regulations for managing aircraft and other capital asset 

programs, as well as applicable federal financial and contract management 

regulations and guidance. We reviewed policy, program, budget, and 

financial documentation and interviewed cognizant officials at INL in 

Washington, D.C. We also examined applicable documentation and 

interviewed INL and contract officials about fleet operations, financial 

management, and contract oversight at the Air Wing’s main operating base 

at Patrick Air Force Base, Florida, and at various sites in Colombia. We 

chose Colombia because about two-thirds of INL’s active aviation fleet is 

in that country and three contractors carry out aviation programs there. 

See appendix I for a more detailed description of our scope and 

methodology. We conducted our review from February 2006 through 

January 2007 in accordance with generally accepted government auditing

standards. 

INL has not employed a systematic process for managing its aviation fleet 

that adheres to OMB and GSA guidance. This guidance entails three key 

principles: (1) assessing a program’s long-term fleet requirements, (2) 

acquiring the most cost-effective fleet of aircraft to meet those 

requirements, and (3) assessing fleet performance. Since INL offices have

Results in Brief 

 5

See Audit of the Department’s Reporting of Aircraft and Aircraft Parts (AUD/IP-06-35, 

September 2006). 

6

S. Rept. 109-96 (Senate Committee on Appropriations, Report on Department of State, 

Foreign Operations, and Related Programs Appropriations Bill, 2006, p. 62). 

Page 3 GAO-07-264 State's Aviation Management
acquired and deployed hundreds of aircraft in response to the emerging 

needs of U.S. counternarcotics foreign assistance programs without fully 

adhering to federal aviation fleet guidance, INL has limited assurance that 

its aircraft investment decisions have been cost-effective for the 

government. In October 2006, INL began to take initiatives to centralize 

key aspects of aviation fleet management and address the following three 

key areas of noncompliance with OMB and GSA guidance we identified: 

• Strategic planning for aviation-related activities was not 

comprehensive. According to OMB and GSA guidance, a strategic 

assessment of long-term fleet requirements is the basis of sound fleet 

management. Beginning in 2004, Air Wing prepared a strategic plan for its

Air Wing operations and developed a Critical Flight Safety Program to 

rebuild certain aircraft and replace others to meet projected aerial 

eradication needs. This planning effort, however, did not address the longterm aircraft needs of other types of counternarcotics and 

counterterrorism activities not managed by the Air Wing, such as 

providing aircraft to support certain programs with the Colombian 

National Police and the Colombian Air Force. INL plans to complete an

aviation fleet study in fiscal year 2007, which is intended to analyze the 

bureau’s overall aircraft needs and form the basis for a long-term plan. 

• Aviation fleet investments were not systematically justified. INL has 

funded major, multimillion dollar aircraft investments, including the 

acquisition of aircraft and major overhauls of older assets, without 

conducting formal analyses to justify them. According to OMB guidance, 

agencies should justify major investments in their aviation fleet with a 

capital asset plan and business case, which, among other things, analyzes

three viable alternatives and calculates their life cycle costs. According to

OMB and GSA officials we consulted, without such analyses, State cannot 

demonstrate that the investments included in the department’s budgets are 

the most appropriate and economical for its missions. According to INL 

officials, however, adherence to federal guidance was not always practical 

for INL during the years after Plan Colombia implementation began in

2000, as program managers needed to respond rapidly to political 

exigencies by acquiring readily available surplus aircraft and procuring 

new aircraft specifically mandated by legislation. According to INL 

officials, INL has tasked a consulting firm to conduct the formal analyses

of alternative approaches needed to justify future aircraft investments in 

accordance with OMB guidance. The analyses are planned to be 

completed in 2007. Also, INL plans to issue an aviation program policy 

guide in 2007 to establish policies and directives on aircraft investments. 

Page 4 GAO-07-264 State's Aviation Management
• Aviation fleet cost and performance were not routinely assessed. INL was 

not routinely reviewing the composition of its entire fleet, as called for 

under OMB guidance, to demonstrate that its aircraft are the most 

appropriate and cost-effective to meet mission requirements. Furthermore, 

INL is hampered in assessing the performance of its fleet by a lack of 

comprehensive and reliable aircraft cost and usage data. INL’s planned 

aviation fleet study is expected to include an assessment of the soundness 

of the composition of INL’s aviation fleet and identification of appropriate 

performance measures to be included in an annual performance plan. In 

2007, INL also plans to make improvements in the compilation of cost and 

usage data for its aircraft. 

In managing its aviation support contracts, INL has met both State’s 

overall requirements and contract-specific oversight and management 

requirements. Air Wing and NAS officials interacted frequently with 

contract managers, made regular site visits, and reviewed regular progress 

reports. Furthermore, INL has established performance metrics and used 

them to ensure that contractors are meeting the terms of their contracts. 

For example, in 2005, State and DynCorp International entered into a new 

contract, whereby INL and DynCorp assess performance using an 

extensive set of indicators. Implementation of this performance 

measurement system has been challenging for both INL and the 

contractor. Metrics have not yet been developed for all aspects of 

contractor performance, and reliable data are not yet available for some 

indicators. Nonetheless, INL has used other key metrics, particularly 

aircraft operational readiness rates, to hold its contractors accountable for 

contract performance requirements. To ensure greater consistency in the 

implementation of aviation support contracts, INL plans to assign Air Wing 

the primary responsibility for managing and overseeing all aviation 

support contracts. 

Since INL has undertaken a number of initiatives to address the 

management weaknesses we observed, we are not making any 

recommendations in this report. However, we will follow up with INL to 

ensure that these initiatives have been completed in 2007, as planned. 

In commenting on a draft of this report, State highlighted the management 

initiatives under way at INL to improve the effectiveness and efficiency of 

aviation fleet operations, as well as to adhere to OMB and GSA guidance.

State also indicated that, contrary to the observations in our report, INL 

conducted analyses to justify most aviation investments. However, the 

documentation that INL provided to us did not reflect the analyses called 

for by OMB guidance. 

Page 5 GAO-07-264 State's Aviation Management
INL manages its aviation fleet in a decentralized manner. The Air Wing 

manages about two-thirds of INL’s 357 aircraft, while the NAS at four 

embassies manages the remainder. Figure 1 shows the distribution of INL 

supported aircraft worldwide. 

Background 

Figure 1: Worldwide Distribution of INL Aircraft as of September 1, 2006 

Kirtland Air Force Base

Air Wing Flight Training

State/INL/

Office of

Latin American 

Programs

Air Wing

support 

offices

Washington, D.C.

15 Air Wing

35 non-Air Wing

Mexico

1 non-Air Wing

Ecuador

25 Air Wing

1 non-Air Wing

Peru

112 Air Wing

61 non-Air Wing

Colombia

Bolivia

10 Air Wing

Total Air Wing managed 179

Total non-Air Wing managed 98

Total in storage (not shown) 80

Grand total State/INL aircraft 357

Sources: GAO based on INL (data); Map Resources (map).

Air Wing-managed aircraft

Non-Air Wing-managed aircraft

Afghanistan

13 Air Wing

Pakistan

2 Air Wing

2 Air Wing

Melbourne, FL Albuquerque, NM

Patrick Air Force Base

Air Wing Headquarters

Note: The principal locations of the aircraft are indicated; aircraft may be relocated on a temporary 

basis as necessary. 

The Air Wing is responsible for assisting host nations eradicate illicit drug 

crops and detect, monitor, and interdict drug production and trafficking 

operations. In Colombia, it also assists the Colombian Army with 

counterterrorism operations. To accomplish these missions, through its 

Page 6 GAO-07-264 State's Aviation Management
contract with DynCorp International, the Air Wing uses an active fleet of 

179 aircraft, including helicopters and fixed-wing airplanes, to undertake 

aerial eradication in Colombia; support manual eradication of drug crops 

in Afghanistan, Bolivia, and Peru; and enhance border security between 

Afghanistan and Pakistan. Operations often take place in hostile 

environments, which can place aircraft and personnel under small arms 

fire. These programs are managed by the Air Wing headquarters office at 

Patrick Air Force Base in Florida. As the aircraft program’s contractor, 

DynCorp performs major maintenance and initial pilot training at Patrick 

Air Force Base and flies and maintains U.S. aircraft and trains foreign 

personnel at various locations in Afghanistan, Bolivia, Colombia, Peru and

Pakistan. Training for some of the spray aircraft is also conducted at 

Kirtland Air Force Base in New Mexico, a location that helps simulate the 

mountainous environment of Colombia. 

In addition, the NAS offices within the U.S. embassies in Colombia, 

Ecuador, Mexico, and Peru manage a total of 98 aircraft to support a 

variety of host government counternarcotics efforts, with the involvement

and oversight of the INL Office of Latin American Programs. For example, 

through contracts with ARINC and Lockheed Martin, the NAS in Colombia 

provides aircraft to assist the (1) Colombian Air Force in interdicting 

suspicious aircraft and (2) Colombian National Police in conducting aerial 

eradication and interdiction operations, humanitarian missions, and other 

activities. The NAS in Mexico provides both new and older model U.S. 

government-owned helicopters to Mexico’s Office of Attorney General for 

use in counternarcotics operations, including aerial surveillance, border 

security, and training. INL also funds ARINC to assist the Government of 

Mexico in maintaining these aircraft.

INL supports a wide variety of rotary and fixed-wing aircraft. Some are 

excess defense aircraft that have been refurbished, while others were 

purchased for use in INL programs. Figure 2 depicts examples of types of 

aircraft owned and supported by INL.

Page 7 GAO-07-264 State's Aviation Management
Figure 2: Examples of Aircraft Owned by INL 

Source: INL.

Clockwise from upper left: UH-1H helicopter, AT-802 spray plane, OV-10 spray plane, UH-60 

helicopter, T-65 spray plane, C-27 cargo plane, K-1200 K-Max helicopter; center, UH-II helicopter.

Page 8 GAO-07-264 State's Aviation Management
Most of the funds used to support INL’s aviation fleet come from two 

annual appropriations—the International Narcotics Control and Law 

Enforcement and Andean Counterdrug Initiative—and supplemental 

appropriations in some years. During fiscal year 2002 through 2006, INL 

records indicate that it allocated about $2.2 billion for its aviation 

activities. Table 1 shows a breakdown of the total amount allocated for 

aviation activities by fiscal year and appropriation. 

Table 1: Funds Allocated for Aviation Activity for Fiscal Years 2002-2006 

Dollars in millions 

Fiscal year 

International Narcotics

Control and Law 

Enforcement

Andean

Counterdrug 

Initiative Total

2002 $67.6 $289.0 $356.6

2003 76.1 366.3 442.4

2004 125.3 316.4 441.7

2005 175.6 313.7 489.3

2006 168.4 348.0 516.4

Total $613.0 $1,633.4 $2,246.4

Source: INL “Congressional Notifications” and “Congressional Budget Justifications.”

INL allocates its aircraft funds to a NAS for some country programs and to 

the Air Wing. INL aircraft funding is also embedded in various program 

budgets, such as the Air Bridge Denial Program in Colombia. These 

program funds are primarily used to pay for three aviation support 

contractors that repair and maintain the aircraft, train aircraft crews and 

mechanics and, in some instances, fly the aircraft.

Federal Guidance for 

Aircraft Management 

OMB provides the following guidance for State and other agencies to 

follow in managing capital acquisitions, including aviation programs: 

• Circular No. A-126,7 which is intended to minimize cost and improve the 

management and use of governmental aviation resources, prescribes 

policies for acquiring, managing, using, accounting for the costs of, and 

disposing of aircraft. According to the circular, agencies should not have

more aircraft than they need to fulfill their mission, and they should 

 7

OMB Circular No. A-126, Improving the Management and Use of Government Aircraft, 

May 1992. 

Page 9 GAO-07-264 State's Aviation Management
periodically review the cost effectiveness of their entire fleet of owned 

aircraft. 

• Circular No. A-76 establishes policy for the competition and contracting 

out of commercial activities, including the use of aircraft, and provides 

guidance for conducting cost comparisons to determine if the private 

sector could provide aviation services at a lower cost.8

• Circular No. A-11, Part 7, establishes policy for planning, budgeting, 

acquisition, and management of federal capital assets, including aircraft, 

and requires agencies to submit a capital asset plan and business case 

summary (an “Exhibit 300”) for all major capital investments, including 

aircraft acquisitions and overhauls.9

 The exhibit should demonstrate that 

the agency analyzed three alternatives and calculated the life cycle costs 

for each. OMB provides procedural and analytic guidance, including its 

“Capital Programming Guide,”10 for implementing specific aspects of this 

policy. 

OMB Circular No. A-126 also sets out responsibilities for GSA regarding 

aircraft management. In implementing this circular, GSA establishes 

governmentwide policy on various aspects of aircraft management, 

including procurement, operation, safety, and disposal, and publishes its 

regulatory policies in the Code of Federal Regulations. GSA, through the 

Interagency Committee for Aviation Policy,11 also published a number of 

other guides and manuals to help agencies manage aircraft acquisitions, 

use, and disposal. Its “Fleet Modernization Planning Guide,” in particular,

aids programs in developing cost-effective fleet replacement plans. 

A comprehensive aviation fleet management planning process detailed in 

guidance that OMB and GSA have issued can help federal aircraft 

programs ensure that they acquire, manage, and modernize their aircraft in 

 8

OMB Circular No. A-76, Performance of Commercial Activities, May 2003. 

9

OMB Circular No. A-11, Part 7, Planning, Budgeting, Acquisition, and Management of

Capital Assets, revised June 2006. 

10Capital Programming Guide v 2.0, Supplement to Office of Management and Budget

Circular No. A-11, Part 7: Planning, Budgeting, and Acquisition of Capital Assets, June 

2006. 

11This committee is under the aegis of GSA. It formulates aviation polices for the various 

civilian federal departments and agencies that maintain aircraft. The committee also helps 

to ensure that agency aviation fleets are maintained properly and are operationally safe 

through on-site reviews.

Page 10 GAO-07-264 State's Aviation Management
a cost-effective manner. Sound fleet management decisions should be 

based on a comprehensive process that relies on three key principles: (1) 

assessing a program’s long-term fleet requirements, (2) acquiring the most 

cost-effective fleet of aircraft to meet those requirements, and (3) 

assessing fleet performance to determine if the needs are being effectively 

met. Figure 3 illustrates the fleet management planning process, showing

that it is a continuous cycle of planning and analyses. 

Figure 3: Aviation Fleet Management Planning Process

Sources: GAO analysis of OMB and GSA’s fleet management principles. Aircraft images Art Explosion.

Acquire cost-effective aircraft

• Perform A-76 review.

• Prepare A-11 cost-benefit analyses

for three alternatives.

• Acquire most cost-effective aircraft

or contract for aviation services.

Assess fleet performance

• Develop aviation metrics.

• Routinely review and analyze 

metrics.

• Review fleet cost-effectiveness.

• Use analyses to update fleet 

plans.

Strategic assessment of

long-term fleet requirements

• Determine mission and flight

hour requirements.

• Assess current fleet capabilities.

• Identify optimal fleet mix.

• Develop fleet 

acquisition/replacement plans.

Page 11 GAO-07-264 State's Aviation Management
Although INL has made limited progress since we first assessed the Air 

Wing’s aviation fleet management in 2004 in adhering to OMB and GSA 

guidance, the bureau plans to undertake a more systematic management 

approach beginning in 2007.12 The bureau has not (1) conducted a strategic 

assessment of all long-term fleet requirements, (2) justified new aircraft 

investments in a systematic way that considers the range of alternatives 

and life cycle costs, or (3) routinely reviewed the performance of the fleet 

to ensure that its composition is the most appropriate and cost-effective to

achieve the bureau’s missions. In August 2006, we shared our observations

with INL officials about INL not adhering to OMB guidance, particularly in

justifying new aircraft investments and analyzing the composition of the 

aviation fleet. In September 2006, after completing its own review of 

aviation program operations, INL officials told us that in October 2006 they 

would be initiating a number of steps to resolve weaknesses we observed. 

According to GSA’s guidance and the OMB “Capital Programming Guide,” 

a strategic assessment of the long-term fleet requirements is the 

foundation of fleet management because it identifies future workload 

requirements that serve as the basis for aircraft needs. The assessment 

process includes specific analyses, such as an assessment of the number 

of flight hours needed to meet mission requirements over a multiyear 

period and the capability of existing aircraft to meet those requirements 

cost effectively. The guidance recommends that, if shortfalls in the current 

mix of aircraft are identified, managers should determine the optimal mix 

of aircraft to meet anticipated flight hour and mission requirements and 

develop a proposed fleet acquisition or replacement plan to achieve the 

desired mix of aircraft. This plan could include an anticipated schedule of 

time frames for disposing of inadequate aircraft and procuring 

replacements. 

In 2004, we reported that Air Wing had not engaged in long-term planning 

to estimate the future, long-term mission requirements and what mix of 

aircraft was best suited for these requirements. Fleet planning was 

primarily short-term in nature and focused on identifying aircraft to meet 

current and the next year mission requirements. 

State Did Not Employ 

a Systematic Process 

for Managing Its 

Aviation Fleet in 

Accordance with 

OMB and GSA 

Guidance, but Plans 

to Do So Are Under 

Way

Comprehensive Strategic 

Assessment of Long-term 

Fleet Requirements 

 12The 2004 review did not include other INL programs managed by INL’s Office of Latin 

American Programs and the NAS offices. 

Page 12 GAO-07-264 State's Aviation Management
Since 2004, INL has prepared a strategic plan and a Critical Flight Safety

Program for Air Wing operations. The Air Wing’s strategic plan addresses 

the goals and long-term needs of its program in terms of operations, 

maintenance, logistics, safety, administrative/contract support, and 

information technology and communication. While the strategic plan does 

not analyze the flight hours needed to meet mission requirements, it does 

specify other operational requirements, including the total area of illicit 

crops to be sprayed and eradicated over a number of years. The strategic 

plan, completed in April 2004, also indicates the mix of aircraft assets and 

personnel necessary to meet these goals. The Air Wing’s Critical Flight 

Safety Program specifies how the Air Wing plans to achieve the goals in its 

strategic plan with the aircraft available—primarily through a combination 

of aircraft overhauls and aircraft acquisitions. 

However, the Air Wing strategic plan and accompanying Critical Flight 

Safety Program did not address the aircraft needs of several INL aviationrelated activities. For example, the strategic plan did not estimate the 

operational requirements or flight hours needed to continue supporting 

the Colombian Army’s operations, including protection of the Caño LimónCoveñas pipeline.13 Further, the Critical Flight Safety Program did not 

address the long-term aircraft needs of other INL aviation-related 

programs, such as assistance to the Colombian National Police or the 

Colombian Air Force’s Air Bridge Denial Program,14 or assistance to 

Mexico’s Office of Attorney General. These other programs represent over

a third of INL’s active aviation fleet and, in some cases, aircraft are closely 

related to Air Wing operations, such as the aircraft that NAS Colombia 

provided to the Colombian National Police to support aerial eradication.

According to INL officials, INL plans to conduct an aviation fleet study in

fiscal year 2007. The study is expected to take 9 months to complete and

include a needs analysis of INL’s current aviation fleet. The resulting 

report is expected to specify aircraft requirements in terms of a number of 

variables, including payload, range, speed, endurance, availability, and 

 13For more information about this program, see GAO, Efforts to Secure Colombia’s Caño 

Limón-Coveñas Oil Pipeline Have Reduced Attacks, but Challenges Remain, GAO-05-971 

(Washington, D.C.: Sept. 6, 2005). 

14For more information about this program, see GAO, Air Bridge Denial Program in

Colombia Has Implemented New Safeguards, but Its Effect on Drug Trafficking Is Not 

Clear, GAO-05-970 (Washington, D.C.: Sept. 6, 2005). 

Page 13 GAO-07-264 State's Aviation Management
maintainability, among other factors. This study is intended to form the 

basis of a long-term plan for all aviation-related programs in 2007. 

Until recently, INL had not taken actions to prepare the analyses 

prescribed by OMB and GSA to help justify aviation fleet investment 

decisions. Nor had INL established a set of policies and procedures for 

aviation acquisitions. 

According to GSA guidance, after identifying potential aircraft and 

developing a proposed fleet replacement plan, aviation managers should 

develop a series of analyses to identify and acquire the most cost-effective 

aircraft to meet mission needs. These analyses should include preparing a 

study, as described in OMB Circular No. A-76, to determine whether the 

aviation operations should be performed by the government or contracted 

to the private sector. Also, for all major investments, agencies should 

prepare a capital asset plan and business case summary as described in 

OMB Circular No. A-11, Part 7, Exhibit 300, which should include the 

results of an analysis of three alternatives, in addition to the current 

arrangement, to help ensure that the most cost-effective investment is 

selected. For this comparison of alternatives, a life cycle cost analysis is 

needed to provide managers with important information concerning the 

total cost of operating and maintaining an aircraft over its useful life. Such 

documents should be prepared to support acquisition of new aircraft, as 

well as modernization or enhancements of aircraft already in operation. 

Once these analyses are completed, aviation managers should obtain 

senior management approval and then acquire needed aircraft or 

commercial aviation services. 

In 2004, we reported that INL used no set criteria for Air Wing aircraft 

acquisitions and could not provide any A-76 cost comparison studies or 

cost-benefit analyses supporting its aircraft acquisitions. According to INL 

officials, the exigent circumstances of its programs precluded preparation 

of cost-benefit and other detailed analyses. INL acquired a large number of 

aircraft since 2000 to support Plan Colombia and other counternarcotics 

and counterterrorism efforts in Colombia, including 33 UH-1N, 25 UH-II, 

and 14 UH-60 Black Hawk helicopters. Some of the aircraft acquired were 

surplus aircraft that were made available under a relatively short time 

frame; other aircraft acquisitions were congressionally directed. 

Since 2004, INL has continued to make multimillion dollar investments in 

its aviation fleet, both by acquiring new aircraft or refurbishing older 

aircraft it had previously acquired, without conducting the analyses 

Justification of Aviation 

Fleet Investments 

Decisions 

Analyses of Alternatives Were 

Not Prepared Until Recently 

Page 14 GAO-07-264 State's Aviation Management
prescribed by OMB. According to officials we spoke to at OMB, the Air 

Wing, NAS Colombia, and the Office of Latin America Programs, the 

bureau has never prepared OMB-required justifications, as laid out in 

Circulars Nos. A-76 and A-11, for any of its aircraft investments. For 

example, in fiscal year 2006, the Air Wing began implementing its Critical 

Flight Safety Program, expected to cost a total of $356 million over 6 

years, to upgrade and overhaul the aviation fleet used for Air Wing 

operations. This investment includes refurbishing several Vietnam era OV10 observation airplanes and UH-1N helicopters to extend their useful life 

and make them more commercially supportable and procuring new UH-60 

and UH-II helicopters. However, the documentation Air Wing provided us 

did not include cost-benefit analyses of alternatives or a calculation of life 

cycle costs for each element of the program. Similarly, in 2004, INL began 

acquiring 12 new Schweizer SAC 333 helicopters to support Mexico’s 

Office of Attorney General’s antinarcotics efforts, at a cost of about 

$15 million, without conducting the analyses called for in OMB Circular 

Nos. A-76 and A-11 to justify the acquisitions. 

According to OMB and GSA officials we consulted, without the analyses 

called for in OMB guidance, State cannot be reasonably certain whether 

the aircraft procurements and refurbishments reflected in their budgets

are the most appropriate and economical alternatives. In particular, we 

found little evidence that important cost and operational considerations 

were formally taken into account when INL decided to refurbish OV-10 

spray aircraft. A NAS Colombia official indicated that this was not an 

appropriate investment for Colombia because, among other reasons, the 

Colombian government does not have the capacity to maintain these 

aircraft after U.S. support for the aerial eradication program ends. The 

NAS, therefore, decided to purchase new and commercially available AT802 crop dusting aircraft to conduct aerial eradication in Colombia. 

Representatives of DynCorp International, the contractor responsible for 

maintaining both aircraft, argued that the AT-802 was more practical and 

cost-effective to maintain than the OV-10. Air Wing officials considered the 

OV-10 refurbishment to be more appropriate because it kept in service an

aircraft with important safety characteristics, including a dual engine

configuration and ejection seats. A formal analysis of alternatives, 

including a calculation of life cycle costs, could have weighed these 

considerations on a more objective basis. 

Page 15 GAO-07-264 State's Aviation Management
INL has recently taken steps to justify its aircraft investment decisions 

better. As directed by an appropriations conference committee,15 INL 

prepared an analysis of alternatives for the procurement of new spray 

aircraft to support its aerial eradication program in Colombia. In August 

2006, we shared our observations with INL about the lack of supporting 

analysis for it aircraft investments. In October 2006, INL tasked a private 

consulting firm with conducting analyses in accordance with OMB 

Circulars Nos. A-11 and A-76 to justify an aircraft acquisition intended to 

replace leased transport aircraft to support counternarcotics activities in 

Afghanistan. In addition, as part of its 2007 fleet study, INL has tasked the 

same consulting firm to prepare a capital asset plan and business case, in 

accordance with OMB Circular No. A-11, that would identify and analyze

alternatives for filling INL’s aircraft needs. 

OMB Circular No. A-126 requires agencies to issue internal directives and 

policies for acquiring and managing aircraft. Responsibility for 

implementing these policies should be assigned to a senior management 

official who has the agencywide authority and resources to implement 

them. INL has not established bureauwide directives and policies relating 

to aviation acquisition that incorporate OMB guidance. Program managers 

we spoke to at INL and NAS Colombia were unaware of key OMB 

acquisition guidance and were unsure about the roles and responsibilities 

of the various INL offices in preparing the justification OMB circulars call 

for. 

INL plans to issue an “Aviation Program Policy Guide” that will set forth

policies, procedures, and responsibilities for managing the bureau’s 

aviation fleet and serve as a vehicle for planning, coordination, and dispute 

resolution. While INL has designated the director of the Air Wing as the 

senior aviation management official for its aviation fleet, this official’s 

authority, roles, and responsibilities will be defined in the policy guide, 

according to an INL official. INL expects that the policy guide will be 

completed in 2007 and reflect OMB guidance about justifying aviation fleet 

investments. 

INL Had Not Established 

Acquisition Policies and 

Procedures 

 15H. Rept. 109-265 requires that, prior to the obligation of funds for the procurement of

aircraft, State shall provide the Committees on Appropriations with an analysis of 

alternatives. 

Page 16 GAO-07-264 State's Aviation Management
According to OMB Circular No. A-126, agencies are required to review 

periodically the continuing need for all of their aircraft and the costeffectiveness of their aircraft operations, and then should report any 

excess aircraft and release all aircraft that are not fully justified by this 

review. A copy of each agency review should be submitted to GSA and to 

OMB with the agency’s next budget submissions. Federal regulations call 

for such studies every 5 years.16 Finally, managers should incorporate the 

results of their periodic Circular No. A-126 reviews into their long-term 

fleet planning process and make adjustments to their fleets as needed. We 

found that INL has neither assessed the composition of its aviation fleet,

nor fully tracked cost and usage of its aircraft. 

In 2004, we reported that INL had not followed OMB Circular No. A-126 for 

reviewing the composition of its entire fleet to ensure its costeffectiveness.17 According to INL officials we spoke with, the bureau has 

still not conducted the type of fleet review that is called for under OMB 

Circular No. A-126. Without such a review, INL cannot demonstrate that 

the composition of its fleet and planned additions to it are appropriate and

cost-effective. 

INL has included in the scope of its fleet study an assessment of the 

soundness of the fleet composition and possible alternative aircraft or 

approaches to consider. Also, as part of the fleet study, the bureau plans to 

identify cost-effective performance measures that can be used in an annual 

performance plan. 

Detailed cost and usage data are critical for assessing the costeffectiveness of aircraft, and Circular No. A-126 and related federal 

regulations require agencies to collect this data in a standardized format 

for their entire aviation fleet. One of the most common measures used to 

evaluate the cost-effectiveness of various aspects of an aircraft program is 

expressed as the cost per flying hour for certain types of aircraft costs. 

Other measures include, but are not limited to, maintenance costs per 

flying hour; fuel and other fluids costs per flying hour; and accident repair

costs per flying hour (or per aircraft). Federal regulation 41 C.F.R. 102.33-

425 requires federal agencies to accumulate and report to GSA aircraft 

usage data and the cost of operating each aircraft based on the standard 

Assessment of Fleet 

Composition and 

Performance 

Aviation Fleet Composition 

Aircraft Cost and Usage Data 

 1641 C.F.R. §102-33.200. 

17In 2004, we found that of the seven aviation programs we examined, only one program

(the Department of Interior’s Fish and Wildlife Service) had completed an A-126 review. 

Page 17 GAO-07-264 State's Aviation Management
aircraft program cost elements defined in OMB Circular No. A-126.18 In 

2004, we reported that State’s fiscal year 2000 through 2002 aircraft 

program costs reported to GSA were significantly understated.

19

However, State’s information systems do not capture the data necessary 

for INL to fully adhere to OMB guidance and related federal regulation 

regarding compiling and reporting data on the cost and usage of its 

aviation fleet and individual aircraft. In a September 2006 audit of State’s 

aircraft, the State Office of Inspector General determined that State did 

not have a comprehensive and effective cost management system to 

record, maintain, and report timely, reliable data on its aircraft.20 To 

provide GSA the required information on aircraft cost and usage, the Air 

Wing developed an information system called the Air Wing Information 

System that compiles cost and usage data such as flight hours per aircraft 

and other related information. However, although the system captured 

cost and usage data for the 179 aircraft managed by the Air Wing, it did not 

do so for the 98 aircraft managed by the Office of Latin American 

Programs and the NAS offices in Colombia, Ecuador, Peru, and Mexico. 

Additionally, due to financial management system deficiencies and 

weaknesses in key internal controls, INL could not provide us sufficiently 

reliable21 data on the status of the funds allocated for its aviation fleet. We

requested from INL the amounts obligated, expended, and available from 

fiscal year 2001 through 2005 appropriations used to acquire, operate, and 

maintain its aviation fleet. INL could not provide the necessary data 

because its financial management systems do not readily identify aviationrelated costs, even though State has taken steps to improve data 

completeness and additional improvement efforts are under way. Further, 

the systems do not accumulate data on the cost of operating individual 

aircraft based on the standard cost elements prescribed by OMB, such as 

costs related to crew, maintenance, engine overhaul, and fuel. INL officials 

told us that it would have to conduct a manual review of thousands of 

 18GSA maintains the Federal Aviation Interactive Reporting System to track aircraft cost

and usage data reported by federal agencies. 

19GAO-04-645. 

20AUD/IP-06-35 (September 2006). 

21We planned to review a statistical sample of INL aircraft financial transactions. However, 

due to data incompleteness and inconsistencies, we determined that INL aircraft financial 

data files were not sufficiently reliable for our planned statistical sampling. See appendix I 

for additional information.

Page 18 GAO-07-264 State's Aviation Management
transaction documents to identify all aircraft costs. We also noted 

weaknesses in key internal controls over the recording of financial 

transactions and management of funds.22 Specifically, INL had limited 

bureauwide written procedures addressing (1) how its staff should 

reconcile the financial records that overseas posts independently maintain 

with State’s Regional Financial Management System23 or (2) an effective 

method of reviewing outstanding obligations for identifying excess funds. 

These controls are critical to ensuring accurate and complete data on the 

status of funds allocated for INL aviation fleet. 

Although State is implementing two new financial management systems, 

neither is designed to generate the detailed data INL needs to analyze the 

cost-effectiveness of its aviation fleet. INL is spending about $1 million to 

implement a new bureauwide financial management system, called the 

Local Financial Management System, to standardize how each NAS 

records financial activity to provide more visibility over NAS financial 

activity to INL headquarters. State’s Bureau of Resource Management is 

also implementing a new departmentwide financial management system 

called the Global Financial Management System.24 However, like the 

existing systems, neither the new INL nor the departmentwide systems 

incorporate the standard program cost elements outlined in OMB Circular 

No. A-126 and the related federal regulation. Officials in State’s Bureau of 

Resource Management informed us that they were not familiar with INL’s 

cost data requirements when designing the Global Financial Management 

System. Without the ability to accumulate and summarize aircraft costs by 

standard program elements, INL will be limited in determining whether its 

aviation fleet is managed in a cost-effective manner. 

State has taken steps to improve its ability to compile and report aircraft 

cost data, such as establishing appropriate codes in its accounting system. 

Further, INL plans to assign responsibility for reporting cost and usage 

 22The Comptroller General’s Standards for Internal Control in the Federal Government, 

GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999) require that federal agencies 

document internal control procedures in their management directives, policies, and

manuals and that such documentation, as well as evidence the control procedures are 

actually performed be readily available for review. Furthermore, transactions and events 

are to be completely and accurately recorded. 

23The Regional Financial Management System processes foreign posts’ financial activity 

and provides information to the Central Financial Management System—State’s primary

financial management system. 

24This system will replace the Central Financial Management System. 

Page 19 GAO-07-264 State's Aviation Management
data for all INL aircraft to the Air Wing, regardless of which office 

manages the aircraft. According to an Air Wing official, the Air Wing plans 

to modify the Air Wing Information System to capture fleetwide cost and 

usage data. The Air Wing, according to the same official, expects the 

modification to help INL meet GSA reporting requirements and greatly 

improve its ability to capture selected aircraft cost elements. Furthermore, 

INL plans to use OMB Circular No. A-126 standard aircraft program cost 

elements to prepare a template to standardize budget line items used for 

all aviation-related programs. Finally, State officials responsible for 

implementing the Global Financial Management System told us that they 

plan to address INL’s cost data requirements after the system is 

implemented in fiscal year 2007 but were not sure whether the new system 

can provide the cost data capabilities needed by INL.25

Federal regulations require federal agencies to develop and perform 

contract quality assurance procedures to verify that services and supplies 

provided conform to contract requirements and to maintain suitable 

records enumerating quality assurance actions.26 Since 2004, State 

regulations have specified a policy that all new service contracts be 

performance-based, with clearly defined deliverables and performance 

standards.27 The aviation support contracts with DynCorp International, 

Lockheed Martin, and ARINC comply with these regulations and use 

performance-based metrics to assess contractor performance; however, 

the Lockheed Martin and ARINC contracts make less intensive use of such 

metrics.28 Currently the responsibility for contractor oversight for 

Lockheed and ARINC is divided among NAS officials in Colombia, the 

INL Has Met Contract 

Oversight and 

Evaluation 

Requirements 

 25We note that one of the key causes of financial management system projects not meeting

their cost, schedule, and performance goals across the federal government is agencies not 

following a disciplined process for defining and managing system requirements. See GAO,

Financial Management Systems: Additional Efforts Needed to Address Key Causes of

Modernization Failures, GAO-06-184 (Washington, D.C.: Mar. 15, 2006). 

2648 C.F.R. § 46.104. 

2748 C.F.R. § 637.6. 

28The Lockheed and ARINC contracts are not directly between State and the companies but 

are task orders under indefinite quantity, indefinite delivery contracts between Lockheed

and ARINC, respectively, and the U.S. Army Communications and Electronics Command in 

Fort Monmouth, New Jersey. A task order is a contract for services that does not procure

or specify a firm quantity of services (other than minimum and maximum quantities) and

that provides for the issuance of orders for the performance of tasks during the contract

period. For convenience, we refer to these task orders as contracts throughout this report. 

Page 20 GAO-07-264 State's Aviation Management
government task leaders in Washington, D.C., and the contractors located

in Colombia. INL plans to centralize contractor oversight by assigning Air 

Wing staff the responsibility for managing all aviation support contractors. 

In 2005, State and DynCorp International entered into a new performancebased contract29 whereby State and DynCorp assess contractor 

performance using an extensive set of indicators. The contract establishes 

standards for several functional areas across which performance is 

measured, including maintenance, logistics, operations, safety, and 

training. Within these areas, State and DynCorp track 84 specific 

performance metrics (such as hectares of illicit crop eradicated, 

percentage of total aviation fleet available, and host nation training hours

performed) to help assess DynCorp’s performance. 

In order to manage the oversight of these performance categories, State 

and DynCorp use an online tracking system and database; however, this 

system has limitations. The performance categories in this system, called 

SeeSOR, correspond to the 84 metrics specified in the contract. The 

SeeSOR system provides a quality assurance checklist for each activity 

and an inspection schedule, regularly prompting State and DynCorp 

managers to enter performance information. In the case of poor ratings, 

the system automatically produces corrective action reports, and DynCorp 

managers track these corrective actions by time and inspector. Each 

corrective action issue requires a response within a specified time frame. 

However, INL and DynCorp officials in Colombia told us that SeeSOR is 

not a comprehensive quality assurance or contract management tool 

because it does not include certain activities that DynCorp performs. For 

example, force protection, which DynCorp does in Colombia, is not 

incorporated into the system. Also, computer network difficulties make 

regular data entry from remote locations in the field problematic. Between 

November 2005 and September 2006, DynCorp conducted over 400 audits 

of information in the system and found 104 issues requiring corrective 

action. State and DynCorp are still fine tuning the system to improve its 

ability to measure contractor performance in an environment such as 

Colombia. 

DynCorp International 

 29The contract is primarily a fixed-price contract with an award fee, incentive fee, and 

award term, which allows for up to a 10-year performance period. 

Page 21 GAO-07-264 State's Aviation Management
Consequently, State and DynCorp use means other than the SeeSOR 

system, such as personal contact, to help oversee contractor performance. 

According to INL officials in Colombia, personal contact between INL and 

DynCorp is the most valuable monitoring tool. INL and DynCorp personnel 

talk and exchange e-mails throughout the day to identify issues that need 

attention. In addition, State program managers conduct daily “walk 

through” inspections of facilities in Bogotá and make unannounced site 

visits to forward operating locations. The DynCorp manager in Colombia 

also relies on daily oral communication with contractor staff outside of 

Bogotá to stay aware of issues in the field. Further, DynCorp provides a 

detailed briefing to INL every week, which addresses performance across 

all functional areas of the contract. All advisers and managers are 

expected to attend, and minutes are kept of these meetings. Also, State 

conducts monthly reviews of aircraft and eradication reports and formally 

evaluates DynCorp’s performance every 4 months. 

State and Lockheed Martin began a 4-year contract in July 2006 that 

implements a performance-based method for assessing contractor 

performance. In the contract, Lockheed Martin and its subcontractor30

work closely with the Colombian National Police to support its illicit drug 

eradication and interdiction and humanitarian missions, with 

responsibility for aircraft maintenance, logistics, police training, and 

multiple construction projects at bases across Colombia. Under the 

contract, the government task leader must hold regular status meetings, 

and Lockheed Martin is required to submit monthly performance reports

containing, among other things, accomplishments and issues that arose 

during the reporting period, projected future activities, and subcontractor

performance relative to agreed upon metrics. Lockheed Martin also must 

implement and maintain a quality assurance system to ensure that product

and service integrity meet or exceed contract requirements. In addition, 

the contract specifies specific performance standards in program 

management, quality control, safety, aircraft maintenance, logistics, 

support maintenance, training, and information technology. For example, 

one maintenance standard specifies that the contractor sustain a 75

percent aircraft operational readiness rate. 

Lockheed Martin 

 30Lockheed Martin’s subcontractor, Contracting, Consulting, Engineering LLC, performs

most of this work. 

Page 22 GAO-07-264 State's Aviation Management
In Colombia, we observed that State maintained regular contact with the 

contractor and the Colombian National Police to assess compliance with

contract requirements. State’s oversight measures included monitoring 

performance in functional areas, such as maintenance, logistics, training, 

and safety. While the program manager stated that the principal 

performance metric was aircraft readiness rates, State received and 

reviewed daily and monthly status reports, memos, and trip reports, and 

participated in a quarterly program management review covering the 

functional areas above. State attends weekly maintenance meetings 

between Lockheed and the Colombian Police. In addition, the contractor

also performed random site visits and fuel inspections, reporting the 

findings to the NAS program manager. The NAS uses standards from the 

U.S. Army Aviation Management System to produce and issue standard 

operating procedures in most functional areas. 

However, the planned nationalization of this program and its heavy

involvement with and dependence on the Colombian National Police has

presented challenges to implementing an effective performance-based 

contract. Personnel problems within the police force have adversely 

affected the contractor’s ability to meet nationalization or its aircraft 

readiness rate goals. For instance, the contractor reported absentee rates 

among police trainees in the logistics branch as high as 25 percent. 

Further, over half of Colombian helicopter mechanics were not 

sufficiently skilled to perform more than routine maintenance tasks and, 

therefore, required more contractor supervision than planned. The 

contractor also has little influence over personnel decisions within the 

police force. The Colombian police frequently rotate their trainees to 

different positions, which hampers the development of specialized skills 

and the ability of the contractor to pass on responsibility and nationalize 

the program. For example, the contractor logistics office reported working 

with seven different Colombian officers in 4 years. In another case, a 

police trainee attended a specialized and lengthy course for engine oil 

analysis in the United States, only to be transferred out of maintenance 

shortly after returning to Colombia. Program managers have corrected 

some of these training issues and now track the training Colombian police 

personnel receive to help ensure that only committed and appropriately 

skilled trainees receive detailed instruction. 

Under the ARINC contract, which began in June 2004 and could extend to

4 years, State has established a performance-based system to monitor 

contractor performance. Our review focused on State’s assessment of 

ARINC’s contract performance in support of the Air Bridge Denial 

ARINC

Page 23 GAO-07-264 State's Aviation Management
Program. The objective of this program is to suppress the illicit aerial 

trafficking of narcotics in Colombian airspace by tracking and forcing 

down suspected traffickers. ARINC is responsible for, among other things, 

maintaining seven aircraft and training Colombians to maintain these 

aircraft. Reporting requirements include monthly performance reports 

containing, among other things, accomplishments and issues that arose 

during the reporting period, projected future activities, and performance 

relative to the agreed upon metrics. In addition, the contract specifies 

performance standards in operations, logistics, training, and project 

management, among others. 

We found that State was in compliance with contractor oversight 

requirements and that, in many cases, ARINC exceeded its reporting 

requirements in the contract. State is in daily personal contact with the Air 

Bridge Denial Program manager. Although the program manager told us 

that he did not have the quality assurance plan required by the contract,

we found that ARINC’s reporting to State included many of the quality 

assurance plan requirements, such as training standards and reviews. The 

NAS program manager also received and reviewed flight activity reports 

on a daily, weekly, and monthly basis. In addition, the program manager 

participated in regular meetings to discuss the status of aircraft, training, 

and operations, and conducted a semiannual review, as well as an annual 

program certification. The program manager made monthly visits to Air 

Bridge Denial locations and shared trip reports with cognizant State 

officials. 

INL plans to centralize contractor oversight by assigning Air Wing staff the 

responsibility for managing all aviation support contractors. Under this 

arrangement, INL plans to compile information on aircraft performance in 

one central location. This will enable INL managers to assess performance 

of the entire fleet more consistently, and more readily collect the data that

INL needs to assess the overall composition and cost-effectiveness of the 

aviation fleet. 

INL’s aviation fleet has grown at a rapid pace to meet emerging, global 

counternarcotics and counterterrorism priorities. However, INL did not 

systematically employ federal management principles and guidelines in 

acquiring this fleet. As a result, key analyses were not done to help ensure

that INL program managers made cost-effective decisions, particularly 

with regard to major investments in the fleet. In October 2006, INL officials 

began initiating significant changes to the oversight of aviation fleet 

INL Plans to Centralize 

Contractor Oversight 

Conclusions 

Page 24 GAO-07-264 State's Aviation Management
operations, placing particular emphasis on conducting key analyses of its 

fleet to help guide future investment decisions and adhere to OMB and 

GSA guidance. If INL follows through, these analyses should result in a 

long-term plan for aircraft investments and an assessment of the current 

composition of the fleet to help ensure that it is the most cost-effective to 

meet mission requirements. Current plans call for these to be completed in

2007. Since INL has undertaken a number of initiatives to address the 

management weaknesses we observed, we are not making any 

recommendations in this report. However, we will follow up with INL to 

ensure that these initiatives have been completed in 2007, as planned. 

State provided comments on a draft of this report (see app. II). In its 

comments, State acknowledged that our work, among others, was an 

impetus for a comprehensive internal review of aviation management and 

expressed appreciation to us for confirming areas needing continued 

improvement. State highlighted the management reforms INL has 

undertaken to enhance the efficiency and effectiveness of aviation fleet 

management, as well as to improve INL’s adherence to OMB and GSA 

guidance. State also noted operational circumstances that make such 

adherence challenging. State disagreed with our observation that INL did 

not provide fleet investment justifications using cost-benefit and life-cycle 

analyses of alternatives. State indicated that considerable analysis was 

done to evaluate economically sound alternatives in most previous aircraft 

investments. However, the documentation INL provided did not include 

the analyses called for by OMB guidance. Without documentation of such

analyses, we were not able to assess whether State’s investment decisions 

were appropriately justified in accordance with this guidance. In addition 

to these comments, State provided us technical comments, which we have 

incorporated throughout the report, as appropriate. 

We are sending copies of this report to interested congressional 

committees and the Secretary of State. We also will make copies available 

to others upon request. In addition, this report will be available at no 

charge on the GAO Web site at http://www/gao.gov. 

Agency Comments 

and Our Evaluation 

Page 25 GAO-07-264 State's Aviation Management
If you or your staff have any questions concerning this report, please 

contact me at (202) 512-4268 or FordJ@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on the 

last page of this report. GAO staff who made major contributions to this 

report are listed in appendix III. 

Jess T. Ford

Director, International Affairs and Trade 

Page 26 GAO-07-264 State's Aviation Management
Appendix I: Scope and Methodology Appendix I: Scope and Methodology 

To assess the extent to which the Bureau of International Narcotics and

Law Enforcement Affairs (INL) has managed its aviation fleet in 

accordance with Office of Management and Budget (OMB) and General 

Services Administration (GSA) guidance, we reviewed the applicable 

guidance and discussed progress in adhering to this guidance with State 

and contractor officials at INL offices in Washington, D.C.; Melbourne, 

Florida; and Colombia, reviewing relevant documents, where appropriate. 

We chose to focus our review primarily on operations in Colombia 

because nearly two-thirds of INL’s active aviation fleet is in that country, 

and three contractors carry out programs there. We obtained information 

on the number and distribution of aircraft from INL officials and 

determined that this information was sufficiently reliable for the purposes 

of this report. 

• To assess how INL conducted strategic planning to identify long-term 

aircraft needs, we obtained and reviewed planning documents prepared by 

the bureau, including Bureau Performance Plans, the Air Wing Strategic 

Planning Summary, and the documentation of the Critical Flight Safety

Program. We reviewed the content of the planning documents and 

determined the extent to which it reflected information provided about 

INL fleet operations we obtained from INL officials. We based our 

assessment of the bureau’s planning documents on federal guidance 

described in a prior report on federal aircraft.1

• To assess how INL justified investments in its aviation fleet, we reviewed 

documentation, where available, and discussed major ongoing and 

planned aircraft investments with relevant bureau officials. In particular,

to assess the justification for the Critical Flight Safety Program, we 

discussed this program with Air Wing officials and DynCorp 

representatives in Melbourne, Florida, and with NAS officials in Bogotá, 

Colombia. We discussed justification of aircraft acquisitions for 

counternarcotics programs in Mexico with officials from the INL Office of 

Latin America Programs. We based our assessment of justification 

documentation on federal guidance presented in OMB Circulars Nos. A-76, 

A-126, and A-11 Part 7, and OMB’s “Capital Programming Guide.” To 

obtain a better understanding of the applicability of this guidance, we 

spoke with officials from OMB and GSA’s Aircraft Management Policy 

Division, and a representative from Conklin and DeDecker Company, a 

GSA contractor that assists federal agencies with developing cost-benefit 

analyses for their aviation programs. 

 1

GAO-04-645. 

Page 27 GAO-07-264 State's Aviation Management
Appendix I: Scope and Methodology 

• To determine how INL assessed the cost and performance of its aircraft 

and ensured that the composition of the fleet was cost-effective, we 

reviewed documentation and interviewed bureau officials in Washington,

D.C.; Air Wing officials in Florida; and Narcotics Affairs Section (NAS) 

officials in Colombia. To obtain an understanding of the systems and 

procedures INL used to track its aircraft funding and related obligations 

and expenditures, we gathered information from INL accounting and 

budget officials. We reviewed INL financial management handbooks as 

well as automated systems’ documents. We identified and evaluated key 

internal controls INL uses to ensure the completeness and accuracy of 

recorded appropriated funds and the status of those funds. We assessed 

INL’s reconciliation procedures with requirements found in the 

Comptroller General’s Standards for Internal Control in the Federal 

Government.

2

 To identify and report the amount of funds allocated to 

aviation activities, we obtained and reviewed Congressional Notifications

and Congressional Budget Justifications for the Andean Counterdrug 

Initiative and International Narcotics Control and Law Enforcement 

appropriations. We identified aviation related activities and compiled 

funding data for these activities by appropriation and fiscal year. Based on

our efforts to determine the reliability of the aviation activity allocations, 

we concluded that these data were sufficiently reliable for the purposes of 

this report. 

We also planned to review a statistical sample of INL aircraft financial 

transactions for fiscal years 2001 to 2005 to assess the reliability of 

recorded aircraft financial data. For each fiscal year, we requested the 

total appropriated funds used for aircraft acquisition, operation, and 

maintenance, along with the status of those funds—amounts obligated, 

expended, and available. For obligated and expended funds, we requested 

separate, detailed transaction-level data files that supported the obligation 

and expenditure levels reflected in the status of the fiscal year funds. State 

provided data files from NAS offices, its Office of Aviation, and its Central 

Financial Management System. We performed a data reliability analysis of 

the files provided to determine whether we could use the data files for the 

selection of our planned statistical sample. We noted that the data files 

were not complete; for example, NAS offices and the Office of Aviation 

data files did not include detail listings of expenditure transactions. We 

also noted inconsistencies in the data files State provided us. For example, 

the Central Financial Management System data files contained 

 2

GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999). 

Page 28 GAO-07-264 State's Aviation Management
Appendix I: Scope and Methodology 

expenditure records for the Office of Aviation but no related obligation 

records. Due to the aircraft financial data files being incomplete and the 

inconsistencies we identified, we determined that the INL aircraft financial 

data files were not sufficiently reliable for our planned statistical sampling. 

To assess how INL monitors its contract costs and performance, we 

gathered and analyzed contract documents and interviewed agency and

contract officials to determine each contract’s scope, activities covered,

and oversight requirements. In addition, we interviewed contract office 

representatives from the three main contractors identified in our review: 

Lockheed Martin Systems Management, LLC; DynCorp International LLC; 

and ARINC Engineering, LLC, and analyzed contract documents and 

reports to determine performance issues. The Lockheed and ARINC 

contracts are not directly between State and the companies, but are task 

orders under indefinite quantity, indefinite delivery contracts between 

Lockheed and ARINC, respectively, and the U.S. Army Communications 

and Electronics Command in Fort Monmouth, New Jersey. In Colombia, 

we discussed aircraft operations and maintenance issues with NAS, Air 

Wing, and contract staff at various operational sites in the country. We met 

officials with primary responsibility for the Colombian Police’s aerial 

eradication program and the Colombian Army’s aviation program at the 

Office of Aviation headquarters at El Dorado Airport in Bogotá. We also 

met with managers, pilots, and mechanics and observed flight operations 

and maintenance at two aerial eradication operating locations—

Barrancabermeja and San Jose—and the Colombian Army Aviation 

Brigade headquarters at Tolemaida. In addition, we met with NAS and 

contractor staff overseeing Colombia’s Air Bridge Denial Program at Apiay 

and the Colombian National Police’s aviation program at the Colombian 

police main operating base at Guaymaral near Bogotá. 

Page 29 GAO-07-264 State's Aviation Management
Appendix II: Comments from the Department Appendix II: Comments from the Department of State 

of State 

Note: GAO comments 

supplementing those in 

the report text appear at 

the end of this appendix. 

Page 30 GAO-07-264 State's Aviation Management
Appendix II: Comments from the Department 

of State 

See comment 1. 

Page 31 GAO-07-264 State's Aviation Management
Appendix II: Comments from the Department 

of State 

See comment 2. 

See comment 3. 

See comment 4. 

See comment 5. 

Page 32 GAO-07-264 State's Aviation Management
Appendix II: Comments from the Department 

of State 

See comment 6. 

Page 33 GAO-07-264 State's Aviation Management
Appendix II: Comments from the Department 

of State 

The following are GAO’s comments on the Department of State letter 

dated January 22, 2007. 

1. We acknowledge INL’s efforts to address the shortcomings that GAO 

and others have identified in its management of its aviation fleet 

throughout the draft report and this final version. However, we note 

that we began our review efforts with a formal notification to the 

Secretary of State in January 2006 and met with INL and other State 

officials to discuss our objectives in February 2006. At the time, INL 

did not inform us of any ongoing or planned efforts to evaluate its 

Office of Aviation Programs or INL’s overall aviation fleet. In August 

2006, we briefed INL on our preliminary findings that it had not 

complied with OMB and GSA guidance in managing its aviation fleet. 

The September briefing that INL presented to us addressed the issues 

we had raised and laid out the reforms it would begin in October. As a 

result, we concluded that recommendations for further actions were 

not necessary, but that we would follow up at a later date to ensure 

that INL’s initiatives are completed, as planned. 

GAO Comments 

2. We do not report that INL did not conduct any analyses. Rather, we 

noted in the draft report and this final version that documentation INL 

provided us did not reflect the key analyses called for by OMB 

guidance. 

3. In the draft report and this final version, we report that INL officials 

told us that the exigent circumstances of INL’s operations precluded 

them from doing the detailed OMB analyses. We also noted that, in 

some cases, Congress directed what aircraft to procure. Nevertheless, 

once the aircraft are in the inventory, OMB guidance requires agencies 

to review periodically the need for and the cost-effectiveness of the 

aircraft. INL has not done this, but we noted in the draft report and this 

final version that it has efforts under way to meet this requirement. 

4. In the draft report, we noted that INL’s aviation operations in 

Colombia often take place in hostile environments, which can place 

aircraft and personnel under small arms fire. We have modified the 

final report to note that aviation operations in other foreign locations 

often take place in hostile environments, too. 

5. In the draft report and this final version, we point out that INL’s Local 

Financial Management System does not provide the standard program 

cost elements needed to meet OMB requirements. We also note that 

State officials responsible for designing the Global Financial

Page 34 GAO-07-264 State's Aviation Management
Appendix II: Comments from the Department 

of State 

Management System were not aware of INL’s cost data requirements 

and are not sure the system can provide the data needed. Regarding 

the Air Wing Inventory System referred to, we reported in 2004 that the 

data in this system were significantly understated. We agree that, if the 

system’s shortcomings are corrected, it is an appropriate tool to 

address GSA’s reporting requirements. 

6. We agree that consolidating INL’s aviation fleet under a senior aviation 

management official is one way to address some of the shortcomings 

GAO, State’s Office of the Inspector General, and INL’s internal studies 

have identified. However, INL has not defined the senior aviation 

management official’s authority, roles, and responsibilities. This is 

under development and will be part of INL’s aviation program policy 

guide, which INL expects to complete later this year. 

Page 35 GAO-07-264 State's Aviation Management
Appendix III: GAO

A

 Contact and Staff 

cknowledgments 

Page 36 GAO-07-264

Appendix III: GAO Contact and Staff 

Acknowledgments 

Jess Ford, (202) 512-4268, FordJ@gao.gov

In addition to the individual named above, key contributors to this report 

were A.H. Huntington, III, Assistant Director; Felicia Brooks; Joseph 

Carney; Kay Daly; Mattias Fenton; James Michels; Sylvia Schatz; Ann 

Ulrich; and Leonard Zapata. 

State's Aviation Management

GAO Contact 

Staff 

Acknowledgments 

(320406) 
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