Defense Industry:

Restructuring Costs Paid, Savings Realized, and Means to Ensure Benefits

NSIAD-99-22: Published: Dec 1, 1998. Publicly Released: Dec 1, 1998.

Additional Materials:


Louis J. Rodrigues
(202) 512-4841


Office of Public Affairs
(202) 512-4800

Pursuant to a legislative requirement, GAO provided information on: (1) the six business combinations for which the Department of Defense (DOD), as of September 30, 1998, had certified that the projected restructuring savings should exceed associated restructuring costs; and (2) on a seventh combination, Hughes Aircraft Company's acquisition of General Dynamics' missile operations.

GAO noted that: (1) in April 1998, GAO reported that DOD estimated it would save a net of $3.3 billion between 1993 and 2000 from restructuring activities carried out by the seven business combinations; (2) GAO also reported that DOD estimated it had realized savings of about $1.9 billion as of August 1997, or more than half of the expected savings; (3) now, DOD estimates it has realized savings of about $2.1 billion, or 64 percent of the expected savings; (4) while GAO determined that selected restructuring activities had lowered the operational costs of the business combinations by hundreds of millions of dollars, it was not feasible to develop a methodology for precisely determining how contract prices were affected; (5) to make such a determination requires isolating the impact of restructuring from nonrestructuring-related factors, such as changes in business volume, quantities purchased, and accounting practices; (6) DOD, the contractors, and GAO were not able to isolate the effects of restructuring from those of other factors; and (7) however, other methods exist through which DOD can ensure that it receives its equitable share of restructuring savings in a timely manner.

Oct 16, 2017

Oct 5, 2017

Sep 29, 2017

Sep 28, 2017

Sep 27, 2017

Sep 26, 2017

Sep 19, 2017

Sep 12, 2017

Looking for more? Browse all our products here