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NCJ Number: 65482 Find in a Library
Title: COMPTROLLER GENERAL'S AUTHORITY TO EXAMINE THE PRIVATE BUSINESS RECORDS OF GOVERNMENT CONTRACTORS - ELI LILLY & CO V STAATS
Journal: HARVARD LAW REVIEW  Volume:92  Issue:5  Dated:(MARCH 1979)  Pages:1148-1159
Author(s): ANON
Corporate Author: Harvard Law Review Assoc
Harvard Law Review
United States of America
Date Published: 1979
Page Count: 12
Sponsoring Agency: Harvard Law Review Assoc
Cambridge, MA 02138
Format: Article
Language: English
Country: United States of America
Annotation: THE SEVENTH CIRCUIT COURT'S HOLDING THAT THE GENERAL ACCOUNTING OFFICE (GAO) IS AUTHORIZED TO EXAMINE ALL RECORDS RELATED TO THE COST OF PRODUCTS PURCHASED BY THE GOVERNMENT FROM PRIVATE COMPANIES IS CRITIQUED.
Abstract: SINCE 1951, MOST NEGOTIATED CONTRACTS BETWEEN THE FEDERAL GOVERNMENT AND PRIVATE CONTRACTORS HAVE CONTAINED A STATUTORY PROVISION AUTHORIZING THE GAO TO EXAMINE THE CONTRACTOR'S BOOKS AND RECORDS WHICH ARE 'DIRECTLY PERTINENT' TO THE GOVERNMENT CONTRACT. IN 1974, THE GAO ATTEMPTED TO USE THIS PROVISION AS A MEANS OF OBTAINING DETAILED COST INFORMATION FOR A CONGRESSIONAL SUBCOMMITTEE FROM SIX PHARMACEUTICAL COMPANIES DOING BUSINESS WITH THE GOVERNMENT. ELI LILLY AND CO., ONE OF THE SIX COMPANIES, SOUGHT DECLARATORY AND INJUNCTIVE RELIEF IN FEDERAL DISTRICT COURT, ARGUING THAT THE COST RECORDS SOUGHT WERE NOT 'DIRECTLY PERTINENT' TO LILLY'S CONTRACTS WITH THE GOVERNMENT. THE DISTRICT COURT HELD FOR THE PLAINTIFF, BUT WAS REVERSED BY THE SEVENTH CIRCUIT, WHICH PLACED HEAVY RELIANCE ON HEWLETT-PACKARD CO. V. UNITED STATES, THE ONLY REPORTED COURT DECISION WHICH HAD CONSIDERED THE PARAMETERS OF CONTRACTUAL ACCESS TO BUSINESS RECORDS. IN HEWLETT-PACKARD, GAO'S AUTHORITY TO INQUIRE INTO THE BOOKS AND RECORDS OF GOVERNMENT CONTRACTORS WAS DETERMINED TO BE VERY BROAD. IN AFFIRMING GAO'S EXTENSIVE AUTHORITY OF RECORDS EXAMINATION, THE COURT MISSED THE CHANCE TO STATE THE GAO'S AUTHORITY TO PURSUE AN INVESTIGATION SHOULD VARY ACCORDING TO THE SOURCE OF THE INITIATIVE. A GAO INVESTIGATION PROPERLY ORDERED BY CONGRESS NEED NOT BE JUSTIFIED ON THE BASIS OF GAO'S CONTRACTUAL AUTHORITY, BUT SHOULD BE CONSIDERED AS IF PERFORMED BY CONGRESS THROUGH THE GAO. IF, ON THE OTHER HAND, GAO UNDERTAKES AN INVESTIGATION ON ITS OWN INITIATIVE, A CONTRACTUAL PURPOSE SHOULD BE CLEARLY SHOWN. FOOTNOTES ARE PROVIDED. (RCB)
Index Term(s): Federal government; Fraud; Grants or contracts; Judicial decisions; Jurisdiction; Profiteering; Program monitoring; US Government Accountability Office (GAO)
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http://www.ncjrs.gov/App/publications/abstract.aspx?ID=65482

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