Defense Contracting

Terminating Major Weapons Contracts for the Government's Convenience Gao ID: NSIAD-91-255 August 30, 1991

Pursuant to a congressional request, GAO provided information on the Department of Defense's (DOD) procedures for terminating contracts for the convenience of the government.

GAO found that: (1) federal regulations governing contract terminations for convenience, including termination clauses and allowable costs, have changed only slightly over the last decade; (2) DOD termination procedures implement and supplement federal regulations or satisfy particular needs of the specific military service and do not conflict with federal regulations; (3) convenience termination procedures are unique to the government; (4) planned changes to DOD convenience termination procedures are generally intended to address administrative matters and to streamline existing regulations; (5) DOD does not have specific criteria for identifying potential candidates for termination or for determining which weapons systems, if any, should be terminated, but DOD uses an approach in evaluating weapon systems progress that helps identify systems experiencing problems; and (6) modifications to the existing DOD cost reporting system could be made to provide more reliable termination cost estimates for major weapon systems.

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