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NCJ Number: 66092 Add to Shopping cart Find in a Library
Title: BETTER NAVY MANAGEMENT OF SHIPBUILDING CONTRACTS COULD SAVE MILLIONS OF DOLLARS
Author(s): ANON
Corporate Author: US Comptroller General
United States of America
Date Published: 1980
Page Count: 40
Sponsoring Agency: Azimuth Inc.
Fairmont, WV 26554
US Comptroller General
Washington, DC 20548
Sale Source: Azimuth Inc.
1000 Technology Drive, Suite 3120
Fairmont, WV 26554
United States of America
Language: English
Country: United States of America
Annotation: RESULTS AND RECOMMENDATIONS ARE REPORTED FROM AN INVESTIGATION OF THE NAVY'S MANAGEMENT OF CHANGES IN SHIPBUILDING CONTRACTS.
Abstract: CHANGES TO ANY SHIPBUILDING PROGRAM CAN NUMBER IN THE THOUSANDS AND INCREASE THE PRICE OF SHIPS BY MILLIONS OF DOLLARS. THE NAVY MAKES FORMAL CHANGES BY MODIFYING A SHIPBUILDING CONTRACT IN WRITING. CONSTRUCTIVE CHANGES RESULT FROM NAVY ACTION OR INACTION WHICH CAUSES THE SHIPBUILDER TO DO ADDITIONAL OR DIFFERENT WORK THAN IS SPECIFIED IN THE CONTRACT. IF THE NAVY AND THE SHIPBUILDER AGREE THAT A CONSTRUCTIVE CHANGE OCCURRED BECAUSE OF THE NAVY, IT CAN BECOME A FORMAL CHANGE. IF THEY DISAGREE ABOUT THE CHANGE, THE CONSTRUCTIVE CHANGE MAY FORM THE BASIS FOR A SHIPBUILDER'S CLAIM. CLAIMS REACHED $2.7 BILLION IN 1978. TO PREVENT THE NAVY FROM SPENDING UNNECESSARY MONEY BECAUSE OF CONSTRUCTIVE CHANGES TO CONTRACTS, THE SECRETARY OF THE NAVY SHOULD ENSURE THAT ENOUGH TIME WILL BE ALLOWED TO CORRECT LEAD-YARD PLANS BEFORE THEY ARE USED BY FOLLOW YARDS. GUIDELINES SHOULD ALSO BE ESTABLISHED FOR USE IN FIXED-PRICE INCENTIVE SHIPBUILDING CONTRACTS TO SPREAD THE RISK BETWEEN THE CONTRACTOR AND THE NAVY. NAVY CONTRACTING OFFICERS SHOULD BE DIRECTED TO DISCONTINUE NEGOTIATING SHIPBUILDING CONTRACTS WHICH PAY ESCALATION ON COSTS NOT AFFECTED OR AFFECTED TO A LESSER DEGREE BY INFLATION. ESCALATION SHOULD ALSO BE DISCONTINUED ON COSTS INCURRED AFTER THE DELIVERY DATE SET IN THE CONTRACT. THE BUREAU OF LABOR STATISTICS' INDEXES OF THE SHIPBUILDING INDUSTRY SHOULD CONTINUE TO BE USED AS THE BASIS FOR ESCALATION RATHER THAN THE NAVAL SHIP PROCUREMENT PROCESS STUDY RECOMMENDATION TO PAY SHIPBUILDERS' ACTUAL LABOR ESCALATION. (AUTHOR ABSTRACT MODIFIED--RCB)
Index Term(s): Efficiency; Financial management; Grants or contracts; US Armed Forces; US Government Accountability Office (GAO)
Note: THERE IS A CHARGE FOR MORE THAN ONE COPY REPORT TO THE CONGRESS OF THE UNITED STATES BY THE COMPTROLLER GENERAL
To cite this abstract, use the following link:
http://www.ncjrs.gov/App/publications/abstract.aspx?ID=66092

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