As part of the 1985 Department of Defense (DOD) Authorization Act Congress enacted legislation requiring DOD to obtain cost-effective warranties on weapon systems. The warranties were expected to improve weapon system reliability by providing a mechanism to hold contractors liable for poor performance. Past reviews by GAO' and others concluded that DOD was not properly managing its warranty program. This report assesses whether the warranties being obtained for weapon systems provide the expected benefits to the government and whether warranties, as required by 10 U.S.C. 2403, are compatible with weapon system acquisitions. As part of the 1985 Department of Defense (DOD) Authorization Act Congress enacted legislation requiring DOD to obtain cost-effective warranties on weapon systems. The warranties were expected to improve weapon system reliability by providing a mechanism to hold contractors liable for poor performance. Past reviews by GAO' and others concluded that DOD was not properly managing its warranty program. This report assesses whether the warranties being obtained for weapon systems provide the expected benefits to the government and whether warranties, as required by 10 U.S.C. 2403, are compatible with weapon system acquisitions.

Warranties are required by law to be obtained on all weapon systems purchased by the Department of Defense. As a result, the three services within the DoD must face a variety of issues associated with weapon system warranties. This thesis examines the issues associated with the acquisition, enforcement, and subsequent evaluation of warranties. It then examines how each of the three services treat these issues in their supplement to the Federal Acquisition Regulation and in their primary warranty regulation. Prior to examining the foregoing issues, the thesis begins by first reviewing the background of warranties and discussing some theoretical considerations. The issues themselves are then presented followed by their treatment by the DoD. After the examination of the issues and their treatment by the DoD, recommendations are made for suggested improvements to the services' regulations. This thesis is useful in that it identifies several areas that should be addressed by the military departments in their warranty guidance. It also advances recommendations for improvements to the regulations. Theses. (FR).

Warranties have been selectively applied to weapon systems acquisition over several decades . However, in 1983 Congress passed the first law requiring that military contractors provide warranties on all major weapons sold to the Services. Such blanket application raises issues both of tailoring warranties to the wide range of weapons and acquisition environments and of proper implementation policy and procedural guidelines. This study concludes that warranties can have a positive effect on selected acquisition programs. Analysis of pre-law warranties suggests that factors contributing to warranty success include: specific, easily measurable objectives; explicit contractor incentives and remedies; explicit government duties; and reasonable prices and expectations. An initial survey of post-law warranties, however, reveals that many warranties do not appear to adequately detail either their objectives or the remedies to be applied if those objectives are not met. (Author).