Compliance with Requirements To Include Comptroller General's Examination of Records Clause

Five subcontracts awarded to Canadian firms were examined to determine the extent of compliance with procurement regulations to include the "examination of records by Comptroller General" clause in subcontracts awarded under Navy contracts with Lockheed-California Company of Burbank. The review disclosed that the Canadian subcontracts contained no provisions for examination of records by the Comptroller General. The Navy's failure to require Lockheed to incorporate the required audit clause in these subcontracts could impede efforts to audit the subcontractors' books and records. Lockheed officials declared that an attempt would be made to include an appropriate Comptroller General's examination of records clause by reference in the current subcontracts and agreed to include such a clause in all future subcontracts. The Secretary of the Navy should direct Lockheed to amend the current subcontracts and direct Navy contract administration personnel to report on their efforts to monitor contractor compliance with the requirement to include a Comptroller General audit clause in specified subcontracts.