Profits on Defense Contracts

Gao ID: 123696 March 21, 1984

GAO discussed profits on defense contracts and methods by which the Government can assure itself that profits are not excessive. Because of the significant increase in defense spending and concern that this buildup not result in excessive profits, the Department of Defense (DOD) should conduct a comprehensive review of its profit policy. The study should consider all factors that will ensure a fair return to contractors and encourage investment in Government programs, while at the same time assuring taxpayers that their interests are being served properly. GAO believes that the current DOD profit study, if done in this manner, would allow it to monitor profits and make the appropriate policy adjustments.



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