Procurement Budget:

Defense Contract Provisions Affecting Congressional Controllability

NSIAD-88-110BR: Published: Feb 12, 1988. Publicly Released: Feb 22, 1988.

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Pursuant to a congressional request, GAO examined whether certain provisions in Department of Defense (DOD) contracts limit congressional control of the DOD procurement budget.

GAO found that: (1) while some contract provisions could reduce congressional controllability of the DOD procurement budget, these provisions did not concern significant dollar amounts; and (2) DOD and the military services felt that a congressional approval or reporting system would be burdensome and not cost-effective. GAO also found that contract provisions affecting congressional controllability of the DOD procurement budget included: (1) major firm, fixed-price contracts with options for funding advance acquisition items; (2) major firm, fixed-price contracts with unexercised options; and (3) variable quantity provisions. GAO believes that there is no need for either: (1) a congressional approval system over major firm, fixed-price contracts; or (2) DOD to report annually to Congress on the procurement budget's controllability.

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