The Use of Warranties for Defense Avionics Procurement

Abstract : The potential benefit of using warranty agreements as part of military avionics procurements was investigated. Interviews were conducted with airlines, vendors, and military agencies that had made use of warranties. A life-cycle cost model was formulated to permit comparisons between warranty and no-warranty procurements. The model makes it possible to compute the optimum warranty time period and the break-even cost to identify the minimum additional funds that may be spent on warranty coverage. The major conclusion of the investigation is that a properly constituted and applied warranty can yield significant reliability and life-cycle cost benefits and that broader use of warranties is advisable.