GAO Contractual Activities Report

B-51662: Published: Jul 10, 1947. Publicly Released: Jul 10, 1947.

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Pursuant to a legislative requirement, GAO reported on the contractual activities of its offices, focusing on whether: (1) contract settlement payments were made in accordance with the Contract Settlement Act of 1944; and (2) contract settlement payments were induced by fraud.

GAO noted that: (1) the examination thus far has found evidence which has convinced GAO that at least 79 termination settlements, involving 107 contracts of 19 war contractors, were induced by fraud; (2) the gross amount proper for recovery from the contractors involved--including penalties and forfeitures--is estimated to be well in excess of $2 million; (3) however, according to the Department of Justice, no case thus far referred there by GAO has yet been brought to conclusion; (4) evidence has been found which appears to warrant a reasonable belief that at least 57 additional settlements were induced by fraud; (5) in the examination of termination settlements to determine whether and to what extent fraud was present, there have been found many overliberal payments which cannot be said with any certainty to have been induced by fraud; and (6) a large number of termination settlements have been made excluding certain claims that previously had been disallowed by GAO.

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