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The conditional first article approval given by the Defense Logistics Agency (DLA) to Julian A. McDermott Corporation and Federal Sign and Signal Corporation was investigated. First article requirement for DLA procurement of signal lights was waived for the two companies when DLA determined that their full production run items met specifications. DLA has since admitted that this was an error after test reports submitted by Mars Signal Light Company showed that the full production items did not meet specifications. After the Defense General Supply Center also determined that the McDermott samples did not meet specification requirements, the contract price was reduced. Since corrective actions have been taken, further audit investigation by GAO was not necessary.

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