Suspension of the Vinson-Trammell Act

Legislation has been proposed which waives the application of the Vinson-Trammell Act to October 1, 1981. Under the Vinson-Trammell Act, fixed limits are placed on profits of contracts and subcontracts over $10,000 for the manufacture or construction of all or part of a complete military aircraft or naval vessel. With the abolition of the Renegotiation Board, the Vinson-Trammell Act, dormant for many years, is now operative. Although restricted to the ship and aircraft categories, the scope and implications of the act are far-reaching. Because of its low-dollar-minimum reporting requirement, the act covers practically all tiers of subcontractors and material suppliers that contribute to a completed aircraft or vessel. This requirement affects many small businesses never previously subject to a profit limiting statute and those contractors selling commercial products that become part of an aircraft or ship. While GAO agrees that the Vinson-Trammell Act is outdated and should be replaced, GAO believes that the question of whether or not this act should be replaced with a new statute is a matter of policy, which Congress should determine after considering all of the advantages and disadvantages. Therefore, GAO supports the proposed legislation to postpone implementation of the act until October 1981. Additionally, GAO believes that between the two provisions currently before Congress requesting suspension of the application of the Vinson-Trammell Act on particular contracts and subcontracts, the final payment approach in H.R. 7247 appears to present the least administrative difficulties.