Relationship of the General Accounting Office to the Defense Contracting Process

Published by the Government Accountability Office on 1971-08-03.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

B-169 434     pf   AL-
Dear Senator       Smith:

         This is in response to your referral                of June 16, 1971,
'concerning      information       requested     by Mr. Paul Barton,      Rockland,
 Maine, on the relationship               of the General Accounting       Office
  (GAO) to the defense
                     .-.-- -   contracting       process.
         We are enclosing        two publications         about our Office     and its
 audit responsibilities            for Government contracts.           We are en-
 closing     also a number of reports            to the Congress relating        to
 defense contracting          activities.        Mr. Barton's    points   and our
 responses follow.           Our comments deal primarily          with the pro-
 curement of equipment and supplies,                 and the processes followed
 in contracting          for construction       work may differ     somewhat.

       "Outline  of the defense contracting                 process as be-
       tween Defense Department  agencies                 and contractors."

        Defense procurement       is accomplished          principally       through
large procurement       centers      operated     by the Army, Navy, Air
Force, and Defense Supply Agency.                 The basic methods of con-
tracting     are procurement      by advertising         and by negotiation.
One of the basic laws covering              these procurements          is the Armed
Services     Procurement    Act of 1947.          So that the provisions            of
the act may be carried         out under uniform           policies,      the Depart-
ment of Defense has issued the Armed Services                      Procurement      Reg-
ulation     (ASPR).   Section     II   and    III  of  ASPR     cover   procurement
by formal advertising        and by negotiation.               This regulation       is
obtainable      at the Government Printing            Office.

       "Role of Congress           in the process.         What committees
       oversee and where           in the process.)(

      The Congress has the power to authorize             programs,    to
appropriate   moneys, and to regulate          spending and accountabil-
ity of moneys.     Congressional      interest     lies in the broad pro-
curement programs presented        annually     by budget requests       to the
Congress for its approval.         Although      any committee may express
an interest,   procurement-related         programs generally      are re-
viewed at the start     of a session by both the House and Senate ,.Y : 1
Armed Services    Committees and the House and Senate Committees.

                            SOTH   ANNIVERSARY    1921-    197

on Appropriations.          These committees       may direct    cutbacks      in
certain    programs      and increases    in others.       In certain     in-
stances    the Congress may express          interest    in specific      pro-
curements,     particularly       those involving     major weapon systems.

       “Role    of    the    GAO in   the   contract     process   .I’

        GAO has       no direct     role in the procurement       process.         From
time to time,          however,     we may be called      upon to rule on bid
protests      or    to answer questions         involving   the eligibility         of
bidders     and     the legality       of prospective     awards.     GAO also au-
dits    contracts        in accordance      with its statutory      responsibility
for examining          the legality       and propriety    of Government       expendi-
tures by the          executive     department.

       “Relation          to GAO to Congress in reporting            its
       findings.          How Congress responds;  through           what    com-
       mittees.      I1

        GAO, as an arm of the Congress,                 is responsible       to it for
reporting    the results of its work.                  Our basic policy        is to re-
port to the Congress all significant                    findings.

         Those committees       having a particular          interest     in defense
contracting        are usually     the Armed Services,          Government       Opera-
tions,       and Appropriations       Committees.       Congressional        committees
often hold hearings           on matters    contained      in our reports.            The
subject        is explored    at the hearings      with Department          of Defense
officials.         Sometimes    our recommendations          require    legislative
action       by the Congress.        Others could be implemented             adminis-
tratively        by the Secretary       of Defense.      The Secretary,          like    all
agency heads 9 is required            to report     to specific       committees       the
action       that he has taken or proposes            to take on all recommenda-
tions      that we have directed         to him in our reports.

       “Any GAO reports   you might have for the last           three
       years concerning   defense   contracts,    particularly        on
       C-SA and the F-14.     Congressional    reaction       to these
       reports. IV


              We are enclosing, as requested,    a number of reports   to
        the Congress concerning  defense contracting     as well as infor-
        mation on the C-5A and the F-14 aircraft     programs.

                We are unaware of any direct          legislation       resulting      from
         the reports,     but the information       furnished        on the C-5A air-
    l-7 craft program has been considered             by the Banking and Currency                s-
        Committees and the Joint Economic Committee in connection                         with    7~“ >-*':>
        proposals     to guarantee     loan funds to the Lockheed Aircraft
     _‘zCorporation.        Previously    Senator William         Proxmireldiscussed
         our findings     in the Congressional        Record on April          19, 1971.
          (See pp. S4979 through       S4982.)    Also information           furnished     in
         connection    with the F-14 aircraft         program presently           is being
         considered    by the Senate Armed Services             Committee.
               If    we can be of further        assistance,      please    let   us know.

                                                  Sincerely     yours,

                                               Comptroller  General
                                               of the United States

        Enclosures      - 12

        The Honorable      Margaret     Chase Smith
        United States      Senate