National Defense:

Deferment Actions Associated With the Navy A-12 Aircraft

T-NSIAD-91-51: Published: Jul 25, 1991. Publicly Released: Jul 25, 1991.

Additional Materials:

Contact:

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

GAO discussed the Department of Defense's (DOD) decision to defer repayment of progress payments to former Navy A-12 contractors pending a settlement, focusing on the impact analysis, data used, and the reasonableness of the deferment decision. GAO found that: (1) DOD did not document its analysis; (2) DOD based its deferment decision on early information indicating that the contractor was in a weak financial condition; (3) the contractor submitted a copy of its January 11, 1991, debt forecast which showed that it would be in a negative cash flow position during 1991; (4) the contractor could not afford to repay the A-12 debt and needed additional short-term financing; (5) the deferment was reasonable because the contractor told DOD that its financial condition made obtaining additional credit from its banks or the securities market unlikely, the contractor is responsible for a variety of major weapons systems that could be adversely affected it is unable to continue performing, and the loss of a major defense contractor could have a negative impact on the U.S. defense industrial base; and (6) the majority of the analysis for the financial package submitted by the contractor was focused on the request for advance payments.

Dec 16, 2014

Dec 12, 2014

Dec 11, 2014

Dec 1, 2014

Nov 21, 2014

Nov 20, 2014

Nov 19, 2014

Nov 18, 2014

Oct 30, 2014

Looking for more? Browse all our products here