Comments on Proposed Change in Reserving Funds Sufficient to Pay Termination Costs for Two FAA Contracts for Civil Supersonic Aircraft

B-159141: Published: Aug 18, 1967. Publicly Released: Aug 18, 1967.

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The Department of Transportation requested an advisory opinion on whether it could change its present procedure requiring the reserving of funds sufficient to meet termination costs, in the event of termination, under two existing Federal Aviation Administration (FAA) contracts for the development of the civil supersonic aircraft without violating certain statutory laws. GAO noted that: (1) the proposed change would not violate the Antideficiency Act or any other law, since Congress directed FAA not to set aside funds for possible termination costs; (2) there also would be no violation in the event of actual termination of the contracts in the circumstances outlined; and (3) it had no objections to the proposed contract amendments.