Comptroller General Reports to Congress on Audits of Defense Contracts

Excerpt from Senate Report 603, 82d Congress...
Excerpt from comment by member of House Appropriations
Committee during February 11, 1964, hearings re Melpar case_

Roe, Austin G., House Counsel, Melpar, Inc.-

Full test of prepared statement...

650

656

550

Letter from Frank W. Davis, vice president, Convair Division of

General Dynamics Corp., to E. M. Bostick, president, Melpar,

Inc., dated March 30, 1961..

554

Statement by Melpar, Inc. re GAO report B-118695 of January

1964.

555

Letter to Chairman Holifield dated July 16, 1965..
Rosen, Harry, Auditor, Army Audit Agency: Memorandum by Mr.
Neuman, Army Audit Agency, dated December 12, 1963....
Staats, Elmer B., Deputy Director, Bureau of the Budget:

1074

241

Excerpt from instructions to budget examiners re attention to
GAO reports_-

Excerpt from statement by President Johnson of May 2, 1964
re attention to GAO reports..

173

176

177

Bureau of the Budget Circular No. A-50, dated April 1, 1959.
Bureau of the Budget Circular No. A-71, dated March 6, 1965--

Weitzel, Frank H., Assistant Comptroller General of the United

States:

Letter from Joseph Campbell to Chairman Holifield dated June

14, 1965, re criteria for audit selection____

185

608

Letter from Joseph Campbell to Chairman Holifield dated June

17, 1965, re prior testimony..

581

Attachment to statement re issues raised in prior testimony.

Excerpt from House floor debate on Budget and Accounting Act

of 1921.

624

577, 578

Excerpts from Senate Report 603, 82d Congress-

Excerpts from House floor debate, October 15, 1951---

650

651

Statement for the record re existence of withholding of funds in

Northern Radio case..

645

APPENDIXES

Appendixes 1A-11-General Accounting Office documents:

Page

Appendix 1A-Information on interagency relationships and delays.

Appendix 1B-Information on GAO contract audits, fiscal years

1959-64, and half of fiscal year 1965...

669

678

Appendix 1C-Legal memorandum on 18 U.S.C. 1905-

692

Appendix 1D-Directions to GAO Staff on treatment of data related

to 18 U.S.C. 1905__

696

Appendix 1E-Memorandum on review of reports by Office of General

Counsel, General Accounting Office.

697

Appendix 1F-Transmittal letter from GAO Report B-146718 of

December 11, 1964, and DOD response-

698

Appendix 1G-Title page, transmittal letter, and summary from

GAO Report B-114878 of January 10, 1962_.

712

Appendix 1H-Title page, transmittal letter, and summary from

GAO Report B-133340 of January 31, 1964-.

719

Appendix II-Correspondence Re GAO Report B-146801 of July 31,

1963 (Servomechanisms case).

726

Appendixes 2A-2E-Department of Defense statements on General Account-

ing Office contract audit reports:

Appendix 2A-Department of Defense cases:

1. GAO Report B-146813, February 25, 1964-

2. GAO Report B-146894, June 2, 1964.-

3. GAO Report B-133149, June 15, 1964-

4. GAO Report B-146922, August 4, 1964..

5. GAO Report B-146926, September 1, 1964.

6. GAO Report B-133149, September 30, 1964-

7. GAO Report B-146984, October 21, 1964-

8. GAO Report B-133307, November 19, 1964.

9. GAO Report B-133386, November 27, 1964.

10. GAO Report B-125016, December 21, 1964-

11. GAO Report B-146761, January 19, 1965-

12. GAO Report B-146965, February 2, 1965..

Appendix 2B-Army cases:

13. GAO Report B-133295, January 31, 1964-

14. GAO Report B-146747, April 17, 1964_.

15. GAO Report B-125016, June 2, 1964.-

16. GAO Report B-146883, June 16, 1964-

17. GAO Report B-146873, June 22, 1964.

18. GAO Report B-146793, August 31, 1964-

19. GAO Report B-146884, August 31, 1964-

20. GAO Report B-146956, November 25, 1964.

21. GAO Report B-146829, January 6, 1965_

22. GAO Report B-146901, August 24, 1964--

Appendix 2C-Navy cases:

23. GAO Report B-114878, January 10, 1962..

24. GAO Report B-146733, July 23, 1962-

25. GAO Report B-146760, December 26, 1962_.

26. GAO Report B-118763, June 28, 1963.

27. GAO Report B-146733, September 20, 1963_

28. GAO Report B-146833, December 19, 1963.

29. GAO Report B-146035, December 31, 1963.

30. GAO Report B-146892, August 28, 1964-

31. GAO Report B-146780, January 13, 1964.

32. GAO Report B-146733, January 31, 1964-

33. GAO Report B-146733, February 6, 1964.

34. GAO Report B-146760, February 12, 1964.

35. GAO Report B-146846, February 19, 1964.

36. GAO Report B-146733, March 5, 1964.

37. GAO Report B-146718, March 18, 1964_

38. GAO Report B-146877, April 8, 1964..

39. GAO Report B-146751, June 30, 1964-

40. GAO Report B-146900, June 30, 1964-

Appendix 2C-Navy cases-Continued

41. GAO Report B-152600, July 31, 1964.

42. GAO Report B-132988, August 4, 1964.

43. GAO Report B-146932, October 1, 1964.

44. GAO Report B-146946, October 2, 1964.

45. GAO Report B-146798, October 16, 1964.

46. GAO Report B-146733, October 29, 1964.

47. GAO Report B-146732, December 2, 1964.

48. GAO Report B-146760, January 5, 1964.

49. GAO Report B-146975, April 30, 1965_

50. GAO Draft Report, January 28, 1965----

Appendix 2D, Air Force cases:

51. GAO Report B-146801, July 31, 1963 -

52. GAO Report B-125071, October 24, 1963.

53. GAO Report B-114808, December 30, 1963.

54. GAO Report B-118965, February 7, 1964

55. GAO Report B-146854, February 28, 1964.

56. GAO Report B-146845, March 6, 1964.

57. GAO Report B-118965, March 30, 1964.

58. GAO Report B-118965, April 27, 1964_

59. GAO Report B-146886, May 21, 1964_

60. GAO Report B-146717, May 25, 1964.

61. GAO Report B-118663, June 9, 1964-

62. GAO Report B-125071, July 31, 1964.

63. GAO Report B-133143, July 31, 1964 -

64. GAO Report B-146918, August 18, 1964_

65. GAO Report B-146916, August 18, 1964.

66. GAO Report B-146919, September 24, 1964-

67. GAO Report B-146876, October 2, 1964_

68. GAO Report B-146942, October 5, 1964.

69. GAO Report B-146945, October 16, 1964

70. GAO Report B-146705, November 24, 1964

71. GAO Report B-133251, November 25, 1964.

72. GAO Report B-146882, November 30, 1964

73. GAO Report B-146860, December 10, 1964-

74. GAO Report B-146954, December 28, 1964-

75. GAO Report B-132992, February 9, 1965.

76. GAO Report B-146967, February 26, 1965.

77. GAO Report B-146784, July 31, 1963-

78. GAO Report--Draft Report, October 30, 1964..

79. GAO Report B-146920, August 20, 1964--

80. GAO Report-Draft Report, March 11, 1965-

Appendix 2E-Additional cases on which information was furnished

by the Department of Defense-

81. GAO Report B-146732 (Series of cases).

82. GAO Report B-146823, November 29, 1963-

83. GAO Report B-146836, January 24, 1964.

84. GAO Report B-146843, January 31, 1964_

85. GAO Report B-133396, February 28, 1964_

86. GAO Report B-146848, March 17, 1964-

87. GAO Report B-146812, March 18, 1964-

88. GAO Report B-146885, March 23, 1964-

89. GAO Report B-146882, May 15, 1964_.

90. GAO Report B-133341, June 29, 1964_

91. GAO Report B-146921, August 12, 1964.

92. GAO Report B-146920, August 20, 1964-

93. GAO Report B-125050, August 28, 1964.

94. GAO Report B-146926, September 1, 1964_.

95. GAO Report B-146940, September 18, 1964-

96. GAO Report B-152600, December 30, 1964-

97. GAO Report B-153403, July 21, 1964_.

Appendixes 3A-30-Department of Defense documents:

Appendix 3A-Policy Letter by the Secretary of Defense re GAO

reports..

Page

836

Appendix 3B-DOD Directive No. 7650.2, dated December 29, 1961-

Appendix 3C-DOD Instruction 7600.3, dated January 13, 1958....

Appendix 3D-Army Chief of Staff Regulation CSR 36–1--

Appendix 3E-Army Regulation 36-20__.

Appendix 3F-SecNav Instruction 5741.3C_

Appendix 3G-Air Force Headquarters Operating Instruction No.

11-25--

883

Appendix 3H-Air Force Regulation No. 11-8-.

890

Appendix 31-Armed Services Procurement Regulation, section III,

parts 8 and 9__

900

Appendix 3J-Armed Services Procurement Regulation, excerpts from.

Section VII, Part 1---.

944

Appendix 3K-Defense Procurement Circular No. 22.

952

Appendix 3-DOD policy on requests for voluntary refunds, with re-

sponse to GAO on Varian case__

966

Appendix 3M-DOD response to GAO Report B-146894 (Lane Con-

struction Co.-Andrews AFB case) -

977

Appendix 3N-DOD response to GAO Report B-146035 (Westinghouse

technical data package case) ----.

988

Appendix 30-DOD response to GAO Report B-146760 of April 5,

1965 (Westinghouse-Crane Co.-submarine part case) ---

Appendixes 4A-4C-Additional statements for the record by contractors:

Appendix 4A-Statement by Honeywell, Inc-----

Appendix 4B-Statement by Melpar, Inc-----

Appendix 4C-Statement by National Association of Wholesalers---- 1075

1038

1072

1073

COMPTROLLER GENERAL REPORTS TO CONGRESS ON AUDITS OF DEFENSE CONTRACTS

MONDAY, MAY 10, 1965

HOUSE OF REPRESENTATIVES,

MILITARY OPERATIONS SUBCOMMITTEE

OF THE COMMITTEE ON GOVERNMENT OPERATIONS,

Washington, D.C.

The subcommittee met, pursuant to recess, at 10 a.m., in room 2247 Rayburn Office Building, Hon. Chet Holifield (chairman of the subcommittee) presiding.

Present: Representatives Chet Holifield. William S. Moorhead, Frank J. Horton, Delbert L. Latta, and Howard H. Callaway.

Also present: Herbert Roback, staff administrator; Douglas Dahlin, attorney; Paul Ridgely and Robert J. McElroy, investigators.

OPENING STATEMENT OF CHAIRMAN HOLIFIELD

Mr. HOLIFIELD. The subcommittee will be in order.

Today, we begin a series of hearings on procedures and results of contract audit reports by the Comptroller General. These concern the Department of Defense and, to some extent, the Atomic Energy Commission.

The Committee on Government Operations is given the duty by rule XI, paragraph 8(c) (1) of the House of Representatives of—

receiving and examing reports of the Comptroller General of the United States and of submitting such recommendations to the House as it deems necessary or desirable in connection with the subject matter of such reports.

The Comptroller General, for his part, is charged with auditing the financial transactions of the several branches of Government; of investigating all matters relating to the receipt, disbursement, and application of public funds; and of reporting to the Congress with recommendations looking for greater economy or efficiency in public expenditures.

In discharge of his duties, the Comptroller General is further authorized by law "to examine any books, documents, or records" of contractors and subcontractors "that directly pertain to, and involve transactions relating to, the contract or subcontract." This authority applies to negotiated as distinguished from advertised

contracts.

In recent years, the Comptroller General has submitted to the Congress a large number of reports on selected contracts in defense and related areas. In fiscal year 1964, 164 such reports were submitted to the Congress. In the House of Representatives, these re

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Comptroller General Reports to Congress on Audits of Defense ..., Part 1