Defense Restructuring Costs: Payment Regulations Are Inconsistent with Legislation
NSIAD-95-106
Published: Aug 10, 1995. Publicly Released: Aug 10, 1995.
Skip to Highlights
Highlights
Pursuant to a legislative requirement, GAO reviewed the Department of Defense's (DOD) regulations regarding payments for contractors' business restructuring costs, focusing on whether the regulations: (1) are consistent with the Defense Authorization Act for Fiscal Year 1995 and other applicable procurement laws and regulations; and (2) ensure that restructuring costs are paid only when in the best interests of the United States.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | The Secretary of Defense should revise the regulations to make clear that all restructuring costs associated with a business combination, whether involving internal or external activities, are subject to section 818 certification requirements. |
Closed – Implemented
The Office of Defense Procurement, Office of the Under Secretary of Defense (Acquisition & Technology), revised the definitions of internal and external restructuring activities. The revisions are intended to make it clear that activities that affect the operations of both previously separate companies are external restructuring activities.
|
| Department of Defense | The Secretary of Defense should determine how DOD will comply with the annual congressional reporting requirement, and if contractor data are necessary for compliance, incorporate such data collection requirements in DOD regulations. |
Closed – Implemented
The Office of Defense Procurement, Office of the Under Secretary of Defense (Acquisition & Technology), by letter dated July 24, 1995, provided guidance for compiling data and information for the Department of Defense's first report to Congress on defense contractor restructuring activities.
|
Full Report
Office of Public Affairs
Topics
Contract costsContractor paymentsCorporate mergersData collectionDefense conversionDefense cost controlDepartment of Defense contractorsOverhead costsProcurement regulationsQuestionable paymentsReporting requirements