Need to Prevent Department of Defense from Paying Some Costs for Aircraft Engines That Contractors Should Pay

PSAD-77-57: Published: Feb 28, 1977. Publicly Released: Feb 28, 1977.

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The Department of Defense (DOD) needs to tighten its controls over the allowability on government contracts of certain technical costs incurred by aircraft manufacturers. Four manufacturers of aircraft or engines were investigated to determine whether the government was paying more than its appropriate share of such costs.

Some contractors are using independent research and development (IR&D) funds for questionable purposes. Technical work known as production support to bring products in use up to specifications has been charged to IR&D. GAO believes such costs should be paid by the company. Because of the difficulty in obtaining records and the questionable adequacy of records provided by the contractors, DOD will have to modify its planned questionnaire to allow government access to commercial records to verify the certified data and obtain other data not covered in the questionnaire.

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