Managing and Accounting for Property Furnished to Defense Contractors

GAO discussed the management of and accounting for property furnished to Department of Defense (DOD) contractors by DOD and the military services. Information suggests that property with an acquisition cost of about $22 billion may be in the hands of contractors: $14 billion is government-furnished material and about $8 billion is government-furnished equipment. The accountability gap may be due to the fact that DOD has not adequately enforced federal procurement regulations. GAO believes that, although DOD has taken steps to improve such accountability, management and accountability problems continue. To correct this situation, GAO believes that congressional recommendations concerning management and accountability should be implemented. Further, DOD should reemphasize the need for recording use data for industrial plant equipment, and hold contractors accountable for poor property management and losses of government property.