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In response to a congressional request, GAO identified prominent issues which it believed warranted early consideration by the 95th Congress. GAO was concerned about the possible erosion of central policy direction and executive control in the Department of Defense's acquisitions process. GAO also felt that reports of cost, schedule, and performance data were needed on major civil projects. GAO endorsed the concept of renegotiation of excessive profits on government contracts and, therefore, fully supported the renewal of the Renegotiation Act. GAO estimated a backlog of unsettled shipbuilding claims totaling over $2 billion. As a result, some contractors refused new government contracts or threatened work stoppages. GAO found an inflation of these claims, poor documentation, and a need for a liberalized payment policy. GAO believed that there is a continuing need for Navy review and evaluation of claims before they are settled. GAO was of the opinion that further increases in the capitalization of the automatic data processing fund could result in significant savings. GAO continued to support legislation which would create clear distinctions between contracts and grants.

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