The Civil Reserve Air Fleet (CRAF) is a voluntary, contract-based agreement between DOD and U.S. commercial air carriers that augments DOD’s military airlift capability during times of war and national emergency. It was created in 1951 to augment DOD airlift capability during a national defense-related crisis. The National Airlift Policy, signed by President Reagan in 1987 and still in effect, establishes policy that the military will rely on the commercial air carrier industry to provide the airlift capability required beyond that available in the military airlift fleet. The policy includes guidelines for meeting airlift requirements in both peacetime and wartime. These guidelines direct, among other things, that policies be designed to increase participation in CRAF and enhance the mobilization base of the U.S. commercial air carrier industry. In exchange for this participation, the government provides commercial carriers the opportunity to fly DOD peacetime missions moving passengers and cargo and also sets aside business for CRAF participants in the General Services Administration City Pairs passenger program and TRANSCOM’s Worldwide Express cargo program. CRAF is divided into three progressive stages that TRANSCOM can activate during times of crisis, in part or in whole, with the approval of the Secretary of Defense. Stage I covers a minor regional contingency or other situations where AMC cannot simultaneously meet both deployment and other airlift requirements. Stage II is tailored for a major theater war or a defense airlift emergency short of a full national emergency. Stage III would be required if the military had to fight more than one major theater war at the same time or operate in a larger crisis, including a national emergency declared by the President or Congress. A stage III CRAF activation has never occurred. DOD has activated CRAF only twice in the history of the program. Stage I and part of stage II were activated in support of Operations Desert Shield and Desert Storm in August 1990 and January 1991, respectively, through May 1991. The CRAF stage I passenger segment was activated in support of Operation Iraqi Freedom in February through June 2003. To enter the CRAF program, an air carrier must (1) be a U.S. flagged, Federal Aviation Administration approved Part 121 air carrier, (2) be approved by the Commercial Airlift Review Board, (3) have one year prior equivalent uninterrupted service to the commercial sector, (4) meet a minimum fleet participation level (for international carriers), (5) meet a specified utilization rate (for international and aeromedical evacuation fleet participants), and (6) be able to meet manning and crew requirements. Once approved to participate, carriers commit the number of aircraft they will make available for each of the three stages of the CRAF program. AMC then decides the number of aircraft that will be accepted into the CRAF program, based on DOD’s wartime requirements. As of April 2013, a total of 64 aircraft were committed to stage I, 308 to stage II, and 554 to stage III. Two segments of the commercial airlift industry—scheduled service carriers and charter carriers—comprise the CRAF wartime capability. The scheduled service carriers—which include large passenger airlines such as American Airlines and Delta Air Lines and cargo carriers such as FedEx and UPS—pledge the majority of the aircraft accepted into the CRAF program. DOD will use most of the pledged aircraft only during a CRAF activation. In peacetime, scheduled service carriers operate commercial flights on regular routes and cannot afford unplanned disruptions to their airline networks. Because many DOD missions are not routine in their locations or timing, charter carriers—which have the flexibility to provide airlift based on their customers’ schedules—transport the majority of DOD’s peacetime, contingency, and stage I business. For some of the charter carriers, this peacetime business accounts for a significant portion of their total business revenue. However, because scheduled service carriers have large fleets, they are also a critical component of CRAF, and they provide the bulk of the CRAF strategic reserve in the event of a CRAF activation. The primary incentive for commercial carriers to participate in the CRAF program is the opportunity to obtain DOD peacetime business. DOD distributes peacetime business to CRAF participants using an entitlement process. CRAF carriers are awarded points based on the number of aircraft they commit to the program, the stage to which these aircraft are assigned, and other considerations as applicable to the individual airline. The amount of peacetime business CRAF participants are entitled to is determined in advance of any missions awarded. DOD makes this business available to the CRAF carriers to fulfill its peacetime business obligation to them, and it does so by offering the carriers the opportunity to fly various missions (for a list of all CRAF carriers, see appendix III). TRANSCOM and AMC share responsibility with respect to CRAF policy. TRANSCOM validates the requirements for the movement of personnel and cargo, determines which transportation mode will be used for these movements, and distributes the work to the appropriate component command. Once TRANSCOM determines that a movement will go by air, the mission requirement is handled by AMC. Within AMC, the Tanker Airlift Control Center (TACC) normally handles mission planning, assignment of airlift assets, mission control, and tracking. Mission planning includes determining whether military or commercial aircraft will fly a mission. CRAF carriers generally have priority over non-CRAF carriers for movements of passengers and cargo. The Fly CRAF Act generally requires DOD to use CRAF carriers when contracting for airlift services, whenever the carriers are available. If no CRAF participant is available to supply the airlift, DOD may use a non- CRAF carrier (either U.S. or foreign flagged) to fly the mission. For airlift services between two locations outside the United States, CRAF carriers must be used as long as they are “reasonably available.” Only foreign carriers operate larger aircraft, such as the AN-124 and IL-76, which are designed to carry outsized and oversized cargo that U.S. commercial carriers normally cannot accommodate. However, according to TRANSCOM officials, DOD uses foreign carriers through subcontracts with CRAF participants, and only rarely contracts directly with foreign carriers. DOD interprets the Fly CRAF Act as applying only to contracts that are specifically for airlift services, and not to contracts for services or supplies that may involve airlift or other transportation services. For example, according to TRANSCOM, DOD does not require “The Fly CRAF preference” to be applied to service or supply contracts such as the Logistics Civil Augmentation Program or the Defense Logistics Agency Prime Vendor Program. According to DOD officials, the current law and related contracting provisions provide the department with the flexibility to acquire the best value for products and services when executing service or supply contracts. DOD has exceeded the flying hours needed to meet military training requirements for fiscal years 2002 through 2010 due to increased operational requirements associated with Afghanistan and Iraq; however it does not know whether it used CRAF participants to the maximum extent practicable during this period. In fiscal years 2010 through 2012, DOD’s flying hours have more closely matched its training plan. In keeping with its policy to both provide training within the military airlift system and use commercial sources of transportation to conduct eligible airlift missions, DOD has taken steps to provide CRAF participants with peacetime business. However, DOD does not use information from its process for monitoring flying hours to determine when it will use more hours than it has planned to meet training requirements and shift eligible airlift missions to CRAF participants to ensure that commercial sources are used to the maximum extent practicable, as required by DOD guidance. Unless DOD uses its information on flying hours to determine when it can shift eligible airlift missions to CRAF participants, it may be flying its military fleet unnecessarily. DOD officials say that using the military fleet to fly missions that are eligible to be shifted to CRAF participants is more expensive than using the CRAF carriers and could reduce these carriers’ level of participation in the CRAF program. The National Airlift Policy states that the “Department of Defense shall establish appropriate levels for peacetime cargo airlift augmentation in order to promote the effectiveness of the Civil Reserve Air Fleet and provide training within the military airlift system.” Consistent with that policy, DOD Instruction 4500.57 requires that DOD operate its fleet to meet its training requirements and also requires that it use commercial sources of transportation to the “maximum extent practicable.” DOD officials stated that they have been using military airlift beyond what was planned, because the operations in Afghanistan and Iraq created additional airlift requirements, many of which could not be met using U.S. commercial sources. For example, some kinds of cargo—such as the mine resistant ambush protected vehicles—are too large to fit inside the aircraft operated by CRAF participants. Military aircraft, along with some foreign aircraft such as the AN-124 and the IL-76, are able to accommodate these kinds of cargo. Additionally, missions in Afghanistan and Iraq often could not be flown by CRAF participants because of airspace restrictions on U.S. carriers operating in those countries. Finally, some missions have additional requirements that call for the use of military airlift, such as requirements that cargo be escorted by military personnel or that an aircraft land on an unpaved runway. Every year, DOD develops requirements for its military aircrews that serve as the basis for its flying hour program. The flying hour program provides training and experience for the aircrews. These requirements consist mainly of two types of flying hours—”currency hours” and “experiencing hours.” Training flights conducted to log currency hours generally do not carry cargo or passengers and therefore do not compete with commercially-operated missions.