Acquisition Requirements:

Impact on Company Structures and Operations

NSIAD-94-20: Published: Apr 19, 1994. Publicly Released: Apr 19, 1994.

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GAO reviewed the Department of Defense's (DOD) efforts to reform its acquisition system, focusing on: (1) how eight defense contractors integrate or separate their structures and operations to do business with the defense and commercial sectors; and (2) whether contractor operations are influenced by defense acquisition laws, policies, regulations, practices, and specifications.

GAO found that: (1) in the companies studied, there are varying degrees of integration in their administrative, research and development, and production activities; (2) all but one of the companies either separated their defense and commercial administrative operations or assigned additional people to comply with DOD acquisition requirements; (3) the companies integrate production for defense and commercial customers when warranted by product similarity; (4) defense and commercial research and development operations are integrated to varying degrees; and (5) although acquisition requirements seem to have the greatest effect on administrative structures and operations, other economic factors can greatly affect how a company structures production or otherwise does business.

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