[Request for Concurrence in Navy Interpretation of Termination Liability Obligations]

The Navy requested GAO concurrence in its interpretation of a 1983 supplemental appropriations act provision concerning the recording of obligations for termination liability for the TAKX and T-5 ship leasing programs. GAO agreed with the Navy's view that the provision constitutes contract authority to cover all but 10 percent of the termination liability arising from the ship charters. GAO stated that the Navy should record the TAKX and T-5 obligations against the Navy Industrial Fund to cover the costs of the initial 5-year lease period and against the Navy's operation and maintenance appropriation to cover 10 percent of the gross termination liability.