Naval Aviation:

Opportunities to Apply A-12 Research, Knowledge, and Technologies

NSIAD-92-110: Published: Mar 19, 1992. Publicly Released: Apr 21, 1992.

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GAO reviewed: (1) the Department of Defense's (DOD) actions to preserve the government's investment in A-12 Aircraft Program assets; (2) whether the government's investment in A-12 assets is protected; and (3) potential opportunities the Navy may have to use the technologies and knowledge developed for the A-12 Program.

GAO found that: (1) before June 1991, the Navy did not plan to control the A-12 contractors' disposal of program assets, and consequently the contractors had disposed of some assets; (2) in June 1991, the Navy modified this position and required the A-12 contractors to submit asset disposition plans for approval; (3) the Navy believes that the government owns all A-12 assets it paid for and accepted and is entitled to buy the remaining A-12 assets; (4) although the Navy's position changed, the contractors continued to sell A-12 assets for salvage and transferred some assets to other government programs that they were working on; (5) the Navy could not ensure that the contractors' asset disposition was in the government's best interest, since the contractors did not follow the Navy's June 1991 guidance; (6) if the Navy waits until litigation with the contractors is settled, it may miss opportunities to use the technologies and knowledge developed from the A-12 on other development programs; and (7) the Navy could incur additional costs to develop the same technologies and hardware if it does not take immediate action to acquire the A-12 assets.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The government is tracking the contractor's disposition of A-12 assets to ensure the return of proceeds received as a result of disposition actions to the government. The government, however, has not inventoried A-12 assets and sought users for them. The reason given is the magnitude of the effort.

    Recommendation: The Secretary of the Navy should immediately identify the assets that have value to other programs and, in accordance with the contract's default clause, require the contractors to deliver those assets to the Navy. The Navy should work with the contractors to reach agreement on an equitable price for those assets, to be credited against the $1.35 billion the contractors owe.

    Agency Affected: Department of Defense: Department of the Navy

  2. Status: Closed - Implemented

    Comments: According to the Administrative Contracting Office at General Dynamics, the contractors have now agreed to turn over to the government all proceeds that they receive from the disposition of A-12 assets.

    Recommendation: The Secretary of the Navy should respond quickly to the contractors' asset disposal notices by approving or denying the requests. The Secretary should require that proceeds from such past or future sales be applied against the debt owed the government.

    Agency Affected: Department of Defense: Department of the Navy


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