United States General Accounting Office

GAO Report to the Chairman and Ranking

Minority Member, Subcommittee on

National Security, Committee on

Appropriations, House of

Representatives

July 1996 DEFENSE

MANAGEMENT

Information on

Selected Aspects of

DOD’s Jet Fuel

Programs

G O A

years

1921 - 1996

GAO/NSIAD-96-188

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-272293 

July 31, 1996

The Honorable C.W. Bill Young

Chairman

The Honorable John P. Murtha

Ranking Minority Member

Subcommittee on National Security

Committee on Appropriations

House of Representatives

In response to House Report 104-208, we reviewed the Department of

Defense’s (DOD) reimbursement pricing policies for the Defense Logistics

Agency’s bulk and into-plane jet fuel programs. The bulk fuel program

refers to jet fuel that the agency’s Defense Fuel Supply Center (DFSC)

purchases from major commercial suppliers and transports directly (via

trucks, pipelines, barges, and railroads) to military installations for use by

military and other authorized aircraft. The into-plane program consists of

individual contracts between DFSC and fixed-base operators1

 who provide

jet fuel to authorized aircraft at contractually established prices. These

prices are generally less than commercial prices charged at civilian

airports. The policies and procedures of the Defense Business Operations

Fund (DBOF) 2

 govern the setting of standard prices for jet fuel.

Specifically, this report discusses

• pricing policies, rules, and regulations used to establish standard prices

for both fuel programs and whether the cost factors used for each are

consistent with applicable policies;

• whether bulk fuel usage and into-plane sales have changed in recent years

and our assessment of the reasons for any changes; and

• the significance and validity of questions and complaints raised by

into-plane contractors and the National Air Transportation Association

about the effect on their businesses of DOD changes in the pricing of

into-plane jet fuel.

Background In fiscal year 1995, bulk jet fuel usage by all military services totaled about

$2.7 billion and into-plane contract sales to authorized aircraft (including

the military services and other U.S. government agencies) totaled about

1

Organizations at civilian airports that provide fueling and other support functions for private,

corporate, and commercial aircraft.

2

These policies and procedures are established by the DOD Comptroller.

Page 1 GAO/NSIAD-96-188 Defense Management
B-272293 

$152 million.3 According to DFSC, as of May 1996, there were 305 into-plane

contractors covering about 500 airports or locations worldwide; 288 of

them provided service at 340 locations in the United States. DOD officials

told us that, among the military services, the Air Force was the major

consumer of jet fuel, accounting for about 70 percent of the total.

DOD policy stipulates that the first choice to refuel military aircraft is bulk

fuel at a military facility. When a bulk fuel source is not available or

feasible, the next preference is an into-plane contractor. Purchasing fuel

commercially without an into-plane contract is the source of last resort.

This policy dates from the mid-1980s and was in effect prior to the

establishment of separate bulk and into-plane standard prices.

When a military aircraft refuels at a location other than its home base, the

pilot or aircrew presents a card identifying the aircraft by tail number and

home unit to the fuel supplier. When military aircraft refuel at a military

facility, the officer in charge of bulk fuel at that facility is responsible for

billing the aircraft’s home unit using the bulk fuel standard price in effect

at the time. When an aircraft uses an into-plane source to refuel, the

contractor bills and is paid by the Defense Finance and Accounting

Service4

 (DFAS) based on the per gallon price contained in his contract in

effect at the time of purchase. DFAS, in turn, bills the aircraft’s home unit

for the fuel purchase using the current standard price for into-plane fuel.

DFSC, using DBOF policies and procedures, establishes standard prices for

both the bulk and into-plane contract jet fuel programs based primarily on

costs that include purchases of product from contractors and program

administration. Standard prices represent a uniform selling price for all

services that facilitates budgeting for jet fuel requirements and simplifies

the process for billing units. There are two commonly used military jet

fuels—JP-8 and JP-5. The Air Force and the Army primarily use JP-8 while

the Navy primarily uses JP-5 because its higher flash point is considered

safer for use aboard Navy ships. Unlike commercial jet fuels, both JP-8 and

JP-5 include additives to satisfy certain military requirements.

3

Authorized users include all DOD components, including Reserve Components; non-DOD

departments and agencies of the U.S. government; and agencies of the governments of Canada and

Germany—at U.S. locations. These contracts do not obligate the government to purchase any fuel from

the contractor.

4

DFAS, established in January 1991, is responsible for identifying and implementing finance and

accounting requirements, systems, and functions for appropriated and non-appropriated funds, as well

as working capital, revolving funds and trust fund activities.

Page 2 GAO/NSIAD-96-188 Defense Management
B-272293 

Before DBOF was established in 1991, DFSC used one standard price to

charge the military services for jet fuel obtained from either bulk or

into-plane sources. In fiscal year 1993, however, DFSC established separate

standard prices for both fuel programs to comply with directions from the

DOD Comptroller to establish prices that more accurately assign to DBOF

customers DOD’s costs of acquiring goods and services. In addition, this

action responded to recommendations in a DOD Inspector General report5

that all costs incurred to obtain fuel at commercial airports be billed to

customers.

Separate standard prices, established and implemented in fiscal year 1993,

resulted in a comparatively higher price for into-plane fuel. The higher

standard price for into-plane fuel generated complaints from individual

contractors as well as the National Air Transportation Association (NATA),

which represents many into-plane contractors. The complaints were based

on beliefs that (1) many into-plane contractors were experiencing reduced

sales after separate standard prices were established and (2) many military

aircraft were landing at their airfields without buying fuel (or buying very

little) while expecting services, such as use of the facilities and

transportation support, without paying for them.

Results in Brief DBOF policies governed standard pricing for both the bulk and into-plane

jet fuel programs. The standard prices used in each program were based

on appropriate cost factors and complied with current DBOF policies.

However, while the current policies as applied to the into-plane program

meet DBOF’s original objective that standard prices recover the total costs

of goods and services provided to customers, they do not in the bulk fuel

program. In that program, the current standard price is based only on the

direct costs incurred by DFSC to supply jet fuel and, therefore, excludes the

cost of fuel operations at military installations. By statute, DBOF excludes

such costs for installations that perform mission critical functions, such as

bases with combat-related missions. Although most installations with

training missions do not qualify for the exclusion, their number is small

and inclusion of all their operations costs in the bulk fuel standard price

would not materially affect the difference between bulk and into-plane

fuel standard prices. Inclusion of these costs would only have a substantial

impact on the price difference between bulk and into-plane fuel at specific

locations if the installations were not part of a standard pricing system.

5

Into-Plane Refueling, Office of the Inspector General, DOD, Report Number 93-029, December 9, 1992.

Page 3 GAO/NSIAD-96-188 Defense Management
B-272293 

In recent years, DOD’s consumption of jet fuel has declined significantly.

The reduction is consistent with force downsizing and related reductions

in the number of military flying hours. Between fiscal years 1991 and 1995,

worldwide bulk jet fuel usage decreased by 33 percent and the total DOD

flying hour program decreased by 30 percent. Domestic into-plane fuel

usage, however, declined only 7 percent. Furthermore, the proportional

consumption of bulk and into-plane jet fuel during this period remained

relatively stable at approximately 96 percent to 4 percent, respectively.

The overall decline in jet fuel usage appears to account for much of the

into-plane contractors’ concerns about the effect of DOD fuel pricing

policies on their businesses. The implementation of separate standard

prices for jet fuel in 1993 produced an into-plane price that was higher

than the bulk price. A number of into-plane contractors expressed

concerns about the effect of the higher jet fuel prices on their businesses.

However, although some military commands and units increased efforts to

use bulk fuel, domestic into-plane jet fuel sales remained constant in fiscal

years 1994 and 1995 following a drop from 1993. In addition, information

developed by the NATA and selected into-plane contractors suggested that

concerns expressed about military aircraft stopping at their facilities and

not buying fuel or paying for services provided were neither widespread

nor systemic.

Standard Jet Fuel

Prices Are Consistent

With Current DBOF

Policies and

Procedures

Standard prices for bulk and into-plane jet fuel were set in compliance

with current DBOF policies and procedures. DOD 7000.14-R, Volume 11B,

Reimbursable Operations, Policy and Procedures—Defense Business

Operations Fund, dated December 1994, requires components to establish

product prices at the lowest practical level in order to promote cost

visibility/management and to motivate cost-effective customer/supplier

behavior. Further, the regulation states that an activity or function (such

as DFSC) must recover all of the direct costs it incurs to break even.

However, the 1994 regulation does not fully meet the original intent for

DBOF because it does not require the identification of other costs of

operations that are incurred by operational components such as Air Force

fighter squadrons. Accordingly, those fuel operations costs at military

bases that are funded through the military service budgets are not

included in the bulk fuel standard price. These costs, which are incurred

directly by the individual military services—not DFSC, include contract

labor, the salaries of military personnel, and military construction.

Page 4 GAO/NSIAD-96-188 Defense Management
B-272293 

DOD officials cited several reasons for excluding these costs. First, in

accordance with the regulation governing DBOF reimbursement policies,

DFSC computes the bulk standard price using only those direct costs—fuel

product, transportation, services, and operations—incurred by DFSC in

supplying the jet fuel. Second, statutory provisions require the exclusion

of mission critical functions from DBOF charges. At installations with

combat-related missions, functions that are performed to maintain

readiness, support military mobilization requirements, and, in the case of

the Navy, allow for rotation of essential personnel between sea and shore

duty are considered mission critical. Third, at installations with

training-related missions, DOD also excludes fuel service costs because

they are not direct DFSC costs and because they are associated with base

fuel facilities and operations considered integral to the functioning of the

installations. Further, DOD officials believe it would not be cost-effective to

capture these costs because the financial systems are not set up to identify

and report such costs and their inclusion would not materially affect the

standard bulk price of jet fuel. While we agree with this view, we believe

that, ideally, all costs should be captured under the DBOF concept to help

develop a standard price that could be compared to prices offered by

alternate jet fuel providers such as into-plane contractors. However, we

recognize that this may not be possible in the near-term, given the state of

existing defense accounting and financial reporting systems that are not

currently set up to capture installation-level support costs with any

precision. This problem is not new. We recently reported that, since DBOF

was established in 1991, DOD has not achieved DBOF’s objectives because of

serious weaknesses in the accounting and financial reporting systems and

other difficulties in implementation.6

Cost Factors Included and

Excluded From Bulk Jet

Fuel Standard Price

The initial standard price for into-plane fuel was established in fiscal 

year 1993 and for JP-8 was about $0.19 per gallon higher than the bulk

price. In 1994, the difference for JP-8 was $0.41 per gallon. However, the

difference is now less. For example, in fiscal year 1996, the standard price

for JP-8 bulk fuel was $0.76 per gallon compared to $0.98 per gallon for

into-plane contract fuel—a difference of $0.22 per gallon.

The standard price for bulk jet fuel is intended to recover the costs that

are directly incurred by DFSC in supplying jet fuel. The total of these costs

are divided by the quantity of fuel estimated to be sold in that year to

calculate an average cost per barrel, or standard price. Jet fuel standard

6

See Defense Business Operations Fund: Management Issues Challenge Fund Implementation

(GAO/AIMD-95-79, Mar. 1, 1995).

Page 5 GAO/NSIAD-96-188 Defense Management
B-272293 

price computations start 18 months and are finalized 9 months in advance

of the fiscal year affected. The standard price is not changed during the

year without the approval of the DOD Comptroller. According to DFSC data,

the fiscal year 1996 standard price of $0.76 per gallon for JP-8 jet fuel was

based on:

• The cost of product ($0.60) makes up 79 percent of the standard price.

• The cost of transportation ($0.07) represents 9 percent of the standard

price.

• The cost of services ($0.07) makes up 9 percent of the standard price.

Services include costs of minor construction, maintenance, repairs,

environmental compliance, and leasing of commercial storage.

• The cost of operations ($0.02) is 3 percent of the standard price. The

operations category covers DFSC staff (including the salaries of military

personnel assigned to DFSC) and overhead costs.

The costs for on-base jet fuel distribution and refueling operations are

funded directly from the military services’ budgets, not by DFSC and,

therefore, are not included in the standard price of jet fuel. DOD officials

stated that it is appropriate to exclude these costs because most are

mission related and essential to maintaining military training and

readiness. In this regard, 10 U.S.C. 2216 (d)(2)(C) provides that DBOF

charges for goods and services may not include amounts necessary to

recover the costs of functions designated as mission critical. This would

include contract and labor costs for fueler personnel, fueling equipment,

and construction of storage tanks. Funds for these items are largely

provided in the service appropriations for operations and maintenance,

military personnel, and military construction. According to DOD officials,

the largest excluded costs at combat or training facilities were

personnel-related—the salaries of military personnel or contract/civilian

labor costs.

The installations we visited that had combat-related missions used military

personnel to perform most of the fueling operations. Most of the personnel

had mobility ratings that required them to deploy during contingencies or

mobilization. For example,

• Cannon Air Force Base (AFB), Clovis, New Mexico, which is under the Air

Force’s Air Combat Command, used military personnel for its fuel

functions. About 76 percent of the 86 authorized aircraft fuelers were

assigned to the fighter wing stationed at Cannon and were earmarked for

mobilization.

Page 6 GAO/NSIAD-96-188 Defense Management
B-272293 

• Oceana Naval Air Station, Virginia Beach, Virginia, used about 50 military

personnel assigned to the base to refuel aircraft stationed there. The shore

duty at Oceana enables the Navy to provide personnel a shore rotational

billet for about 24 to 36 months. These military personnel refuel aircraft

aboard deployed aircraft carriers when assigned to sea duty.

Three installations we visited had training related missions. One of them,

Luke AFB, used military personnel for base fueling operations because its

command, the Air Education and Training Command, intends to maintain

a capability to provide military fuel personnel for deployment and

mobilization missions. The other two installations, Randolph AFB in San

Antonio, Texas, and the Army’s Fort Rucker, Alabama, used civilian

contractors to perform fueling functions. Although cost information on

these contracts was available at these bases—about $5 million—it was not

captured in the standard bulk fuel price.

DOD officials cited different reasons for not including contractor costs in

its bulk fuel prices. Installation officials stated that mission-criticality was

not a factor for the contractors providing fuel services because they had

no deployment or mobilization missions. Nevertheless, they believed these

costs should be considered “sunk” because the government’s investments

in its facilities associated with aircraft fueling such as fuel equipment, fuel

storage tanks, runways, and hangars were integral to the functioning of the

base.

DOD officials also stated it would not be cost-effective to capture these

costs considering the effort that would be required to collect accurate data

or to establish a new standard pricing system for just training bases. This

is especially true given the relatively small amount of fuel pumped at

training bases when compared to combat bases. To illustrate, a DFSC

official stated that even if most training base contract costs (mostly at

facilities in the Navy and the Air Force) were added to the bulk fuel

standard price, the impact would be approximately $0.01 per gallon. While

the different reasons for not including installation-level fueling costs in the

bulk fuel standard price appear reasonable, inclusion of these costs only

would have a substantial impact on the price difference between bulk and

into-plane fuel at specific locations if the installations were not part of a

standard pricing system.

Page 7 GAO/NSIAD-96-188 Defense Management
B-272293 

Cost Factors Included in

the Standard Price for

Into-Plane Contract Jet

Fuel

The standard price for into-plane contract jet fuel is based on two factors:

the cost of product and DFSC operations costs. DOD officials told us in fiscal

year 1996, this amounted to 98 percent and 2 percent of the standard price,

respectively.

Into-plane contractors bid on DFSC contracts based on their cost of the jet

fuel product, per-gallon fees, and their into-plane fee, which includes the

contractors’ pumping costs and profit. Cost of product is normally based

on the invoices or certifications made by the contractor’s jet fuel supplier

or established by the weekly posted price in the Oil Price Information

Service, a private weekly publication that shows commercial jet fuel

market prices for specific geographic areas throughout the United States.

Per-gallon fees are those imposed by governmental or airport authorities

on a per-gallon basis, such as environmental and airport assessments, that

must be paid by the contractor. Into-plane fees are negotiated by the

contractors with DFSC and include the contractors’ costs for items such as

storage, record keeping, and fuel testing. It also includes the contractors’

profit. The into-plane fees for all into-plane contracts ranged from $0.03 to

$0.57 per gallon; the fees at the eight contractors we visited were between

$0.04 to $0.49.7

Contractors can, and some do, charge military aircraft various handling

fees such as landing and overnight parking fees when they do not buy fuel.

For example, two of the nine into-plane locations we visited charged

handling fees if the pilot did not buy fuel. Handling fees could be charged

for needed items such as landing fees, parking fees, oxygen, or oil. We

were told by base officials and pilots at bases that they do not permit

into-plane contractors to work on their aircraft other than for minor

maintenance.

Status of DOD’s Financial

and Accounting Systems

DBOF consolidated numerous industrial and stock funds8 operated by the

military services and DOD in 1991. Its overriding goal is to focus the

attention of all levels of management on the total cost of carrying out and

managing a number of critical DOD business operations, including the

acquisition and distribution of jet fuel to the military services. A basic DBOF

principle is to establish prices that recover the total costs of providing

7

The into-plane fee range is dictated by competitive market forces, other economic conditions,

negotiations, and geographic location. For example, if the amount of fuel pumped at a location is

expected to be great and several companies bid for the DFSC contract, the into-plane fee would likely

be lower than if the projected volume were small and there was no competition.

8

These are types of revolving funds that are modeled after business-like operations except they operate

on a break-even basis by recovering the costs incurred in providing goods and services to customers.

Page 8 GAO/NSIAD-96-188 Defense Management
B-272293 

goods and services to its customers. DBOF policies and procedures, which

are established by the DOD Comptroller, govern the pricing for jet fuel

provided to government aircraft.

We have reported serious weaknesses in the accounting and financial

reporting systems and other difficulties in DBOF’s implementation and

previously concluded that additional functions and activities should not be

added to DBOF until these problems are resolved. For example, under

current systems, there is no way to (1) segregate the amount of work

military personnel do for DFSC versus the amount of work they perform for

the military service they are assigned to with any degree of precision or

(2) accurately extract fuel related costs from large multifunction base level

operations contracts. Such capabilities are essential to establishing

standard prices consistent with the intent of DBOF. DBOF’s problems are

symptomatic of the weaknesses in DOD’s overall financial management

environment. We, congressional committees, and the DOD Inspector

General have continually highlighted pervasive problems in DOD’s financial

operations, which we have designated as a high-risk area.9

Force Downsizing

Actions Reduced

DOD’s Jet Fuel Usage

Both bulk and into-plane fuel sales have declined in recent years due to

the downsizing and realignment actions that have been occurring in the

wake of the end of the Cold War. However, the proportion between

worldwide bulk and into-plane fuel sales remained relatively stable at

approximately 96 percent to 4 percent, respectively.

Between fiscal years 1991 and 1995, according to service data, total DOD

flying hours dropped from about 7.2 million to just over 5 million—a

decrease of 30 percent. For the same period, bulk fuel sales reported by

DFSC to the military services declined 33 percent worldwide. Worldwide

sales of into-plane fuel for the same period dropped 48 percent. However,

according to DOD officials, the size of this drop was exaggerated by the

unusually high sales in 1991 resulting from Operations Desert Shield and

Desert Storm. Reported into-plane sales—domestic and foreign—for 1991

totaled 7.5 million barrels10 compared to an average of about 4 million for

the 4 following years. Reported domestic into-plane jet fuel sales

decreased just 7 percent over this period, however, and remained steady in

the last 2 fiscal years—1994 and 1995.

9

High Risk Series: An Overview (GAO/HR-95-1, Feb. 1995).

10One barrel equals 42 gallons.

Page 9 GAO/NSIAD-96-188 Defense Management
B-272293 

Appendixes II and III provide details and summarizes trends on the

indicators previously discussed as well as others related to DOD fuel usage

and force downsizing during fiscal years 1991-95.

Contractor Concerns

Do Not Appear to Be

Widespread Problems

NATA officials and some of its into-plane contractor members believed that

many contractors were experiencing significant drops in their jet fuel sales

following the establishment of separate standard prices for bulk and

into-plane fuel. They also believed that many aircraft were landing at their

airfields and not buying any or buying very little fuel while expecting the

same level of service provided by the into-plane contractor to aircraft that

bought fuel. They believed the above conditions to be widespread and

systemic.

Information provided to us by NATA and individual into-plane contractors

we visited did not substantiate these concerns as being either widespread

or systemic. NATA volunteered to survey its 800 members who sell fuel

(including about 250 into-plane contractors) to document the nature and

extent of their concerns. Only 53 of the 800 members responded and 

21 responses were illegible or unresponsive. Of the 32 usable responses,

• 12 (37 percent) showed a pattern of declining sales over 2 or more years,

• 7 (22 percent) reported an increase in sales for at least 2 years, and

• 13 (41 percent) indicated no clear pattern of increase or decrease.

Further, in a follow-up survey, only 4 of the 53 who responded to the first

survey expressed any concern about government aircraft stopping and

using their facilities without buying fuel.

We found similar results at the eight into-plane contractors (at nine sites)

we visited—six of which were NATA members. DFSC domestic jet fuel sales

data for 1991 to 1995 showed six contractors experienced stable—less

than 1 percent change—or increased government sales; three experienced

sales declines in excess of 10 percent. Three expressed concerns about

military aircraft using their facilities without purchasing fuel. Two of the

three contractors charged fees for such services.

Agency Comments DOD generally agreed with the information contained in this report. Where

appropriate, we have incorporated DOD’s comments and other points of

clarification throughout the report.

Page 10 GAO/NSIAD-96-188 Defense Management
B-272293 

Appendix I explains the scope of our work and the methodology used in

conducting the study. Appendix II is a summary of indicators reflecting

trends in jet fuel usage and aircraft inventory for fiscal years 1991 through

1995. The aircraft inventory charts in appendix II display totals for

attack/fighter aircraft and bombers used by active and reserve forces.

Appendix III shows the percentage of yearly changes in DOD indicators.

Appendix IV contains a reproduction of DOD’s comments.

We are sending copies of this report to interested congressional

committees and Members of Congress; the Secretary of Defense; the

Director, Defense Logistics Agency; the Commander, Defense Fuel Supply

Center; and the Director, Office of Management and Budget. We will also

make copies available to others on request.

Please contact me at (202) 512-8412 if you or your staff have any questions

concerning this report. Major contributors to this report are listed in

appendix V.

David R. Warren, Director

Defense Management Issues

Page 11 GAO/NSIAD-96-188 Defense Management
Contents

Letter 1

Appendix I 

Scope and

Methodology

14

Appendix II 

Selected DOD

Indicators, Fiscal

Years 1991-1995

15

Appendix III 

Percentage Change

From Prior Fiscal

Year for Selected

DOD Indicators

23

Appendix IV 

Comments From the

Department of

Defense

24

Appendix V 

Major Contributors to

This Report

25

Figures Figure II.1: Total DOD Flying Hours 15

Figure II.2: Bulk Jet Fuel Sales 16

Figure II.3: Worldwide, Domestic Into-Plane Sales 17

Figure II.4: Percent of Bulk and Into-Plane Sales 18

Figure II.5: Air Force Attack/Fighter Aircraft 19

Figure II.6: Air Force Heavy Bombers 20

Figure II.7: Navy Attack/Fighter Aircraft 21

Figure II.8: Marine Corps Attack/Fighter Aircraft 22

Page 12 GAO/NSIAD-96-188 Defense Management
Contents

Abbreviations

AFB Air Force Base

DBOF Defense Business Operations Fund

DFAS Defense Finance and Accounting Service

DFSC Defense Fuel Supply Center

DOD Department of Defense

NATA National Air Transportation Association

Page 13 GAO/NSIAD-96-188 Defense Management
Appendix I 

Scope and Methodology

Our study of the Department of Defense’s (DOD) jet fuel reimbursement

pricing policies was performed DOD-wide and included briefings and

discussions with Office of the Under Secretary of Defense (Comptroller)

and (Logistics) officials and with jet fuel managers at the Defense

Logistics Agency, the Air Force, the Army, and the Navy headquarters.

At DOD, the military services, and the Defense Fuel Supply Center (a

component of the Defense Logistics Agency), we identified and obtained

overall information on the policies and procedures for buying and pricing

bulk and into-plane contract fuel. We also obtained overall data on the

quantities and value of jet fuel purchased by the military services for fiscal

years 1991 through 1995 to determine recent trends in sales from the

Defense Fuel Supply Center. Information provided by the Defense Fuel

Supply Center is the best available government data. We did not validate

the accuracy of the databases from which this information was obtained.

We visited seven military bases to observe the aircraft refueling process;

identify the costs associated with receipt, storage, and distribution of jet

fuel; and determine general mobilization or contingency missions. The

military installations were Andrews Air Force Base (AFB), Maryland;

Cannon AFB, Clovis, New Mexico; Randolph AFB, San Antonio, Texas; Luke

AFB, Glendale, Arizona; Fort Rucker, Enterprise, Alabama; Fort Bliss, 

El Paso, Texas; and Oceana Naval Air Station, Virginia Beach, Virginia.

We also met with representatives of the National Air Transportation

Association to discuss their concerns and review results of a survey

(volunteered by the organization) of their into-plane contractors to

identify and document the nature and extent of member concerns. We also

visited eight into-plane contractors (at nine geographic locations) to

discuss their contracts with the Defense Fuel Supply Center and concerns

about sales of jet fuel to military and other authorized aircraft. The

into-plane contractors visited were Andalusia-Opp Airport Authority,

Andalusia, Alabama; Pensacola Aviation Center, Inc., Pensacola, Florida;

Flight International Aviation, Inc., Newport News, Virginia; Great

Southwest Aviation, Inc., Roswell, New Mexico; Oasis Aviation, El Paso,

Texas—two locations; GTA Aviation Services, Inc., Phoenix, Arizona;

Hawthorne Aviation, Chantilly, Virginia; and Raytheon Aircraft Services,

Inc., San Antonio, Texas.

We conducted our review from October 1995 through July 1996 in

accordance with generally accepted government auditing standards.

Page 14 GAO/NSIAD-96-188 Defense Management
Appendix II 

Selected DOD Indicators, Fiscal Years

1991-1995

Figure II.1: Total DOD Flying Hours

FY 1991 FY 1992 FY 1993 FY 1994 FY 1995

0

2,000,000

4,000,000

6,000,000

8,000,000

7,171,931

6,144,601

5,735,706

5,141,358 5,002,919

Flying hours

Source: DOD.

Page 15 GAO/NSIAD-96-188 Defense Management
Appendix II 

Selected DOD Indicators, Fiscal Years

1991-1995

Figure II.2: Bulk Jet Fuel Sales

FY 1991 FY 1992 FY 1993 FY 1994 FY 1995

0

20

40

60

80

100

120

140 133.3

109 105.5

94.8

89.9

Millions of barrels

Source: DOD.

Page 16 GAO/NSIAD-96-188 Defense Management
Appendix II 

Selected DOD Indicators, Fiscal Years

1991-1995

Figure II.3: Worldwide, Domestic Into-Plane Sales

FY 1991 FY 1992 FY 1993 FY 1994 FY 1995

0

2

4

6

8 7.5

2.9

4.8

4.2

3.9

1.7 1.8 1.8 1.6 1.6

Millions of barrels

Worldwide Domestic

Source: DOD.

Page 17 GAO/NSIAD-96-188 Defense Management
Appendix II 

Selected DOD Indicators, Fiscal Years

1991-1995

Figure II.4: Percent of Bulk and Into-Plane Sales

FY 1991 FY 1992 FY 1993 FY 1994 FY 1995

0

25

50

75

100

Percentage

Bulk fuel Into-plane fuel

Source: DOD.

Page 18 GAO/NSIAD-96-188 Defense Management
Appendix II 

Selected DOD Indicators, Fiscal Years

1991-1995

Figure II.5: Air Force Attack/Fighter Aircraft

FY 1991 FY 1992 FY1993 FY 1994 FY 1995

0

500

1,000

1,500

2,000

2,500 2,421

2,178

1,947

1,605

1,503

Number of aircraft

Source: DOD.

Page 19 GAO/NSIAD-96-188 Defense Management
Appendix II 

Selected DOD Indicators, Fiscal Years

1991-1995

Figure II.6: Air Force Heavy Bombers

FY 1991 FY 1992 FY 1993 FY 1994 FY 1995

0

50

100

150

200

250

300

240

213

194

151

140

Number of bombers

Source: DOD.

Page 20 GAO/NSIAD-96-188 Defense Management
Appendix II 

Selected DOD Indicators, Fiscal Years

1991-1995

Figure II.7: Navy Attack/Fighter Aircraft

FY 1991 FY 1992 FY 1993 FY 1994 FY 1995

0

400

800 770

794

726

680

566

Number of aircraft

Source: DOD.

Page 21 GAO/NSIAD-96-188 Defense Management
Appendix II 

Selected DOD Indicators, Fiscal Years

1991-1995

Figure II.8: Marine Corps Attack/Fighter Aircraft

FY 1991 FY 1992 FY 1993 FY 1994 FY 1995 

0

100

200

300

400

500

452

418

402

388 392

Number of aircraft

Source: DOD.

Page 22 GAO/NSIAD-96-188 Defense Management
Appendix III 

Percentage Change From Prior Fiscal Year

for Selected DOD Indicators

Item 1992 1993 1994 1995

Total

percent

decline

since 1991

Air Force attack/fighter aircraft –10 –11 –18 –6 –38

Air Force heavy bombers –11 –9 –22 –7 –42

Navy attack/fighter aircraft +3 –9 –6 –17 –26

Marine Corps attack/fighter aircraft –8 –4 –3 +1 –13

Total DOD flying hours –14 –7 –10 –3 –30

Bulk jet fuel –18 –3 –10 –5 –33

Worldwide into-plane jet fuel –61 +66 –13 –7 –48

Domestic into-plane jet fuel +6 0 –11 0 –7

Source: GAO calculations based on DOD data.

Page 23 GAO/NSIAD-96-188 Defense Management
Appendix IV 

Comments From the Department of Defense

Page 24 GAO/NSIAD-96-188 Defense Management
Appendix V 

Major Contributors to This Report

National Security and

International Affairs

Division, Washington,

D.C.

Brad Hathaway, Associate Director

George A. Jahnigen, Project Director

Foy D. Wicker, Project Manager

David W. Rowan, Senior Evaluator

Accounting and

Information

Management Division,

Washington, D.C.

Gregory E. Pugnetti, Assistant Director

Office of General

Counsel

William T. Woods, Assistant General Counsel

Norfolk Field Office J. Larry Peacock, Senior Evaluator

Willie J. Cheely, Jr., Evaluator

(709169) Page 25 GAO/NSIAD-96-188 Defense Management
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