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B-177110 1 (1973-02-07)

handle is hein.gao/gaobaafzg0001 and id is 1 raw text is: 0 /? COMPTROLLER GENERAL OF THE UNITED STATES WASHINGTON, D.C. 20548 B-177110IIIII FEB 7 1973 LM096176 Dear Senator Proxmire: In response to your request of September 20, 1972, we have looked into the charges made by Dr. Henry Girouard, in his September 11, 1972, letter to you, that a division of a major aerospace corporation has been defrauding the U.S. Gov- ernment. Dr. Girouard stated that the company--later identified as General Dynamics Corporation, Convair Aerospace Division ' - of San Diego, California--performs studycqntracts and sub- mits the results in documents to collect a fee, and that they reorganize the report and format to that of a technology re- port and use this to collect another fee from a different Government department. We were told by Dr. Girouard that the technology reports referred to in his letter were developed under the contrac- tor's independent reseaxahAd development (IR&D) program. The costs of this program are included in the contractor's overhead and are allocated to all its work, including that done under Government contracts. Our inquiries disclosed no improper practices on the part of the contractor. The circumstances observed and questioned by Dr. Girouard were provided for in the contracts, and we found that in several instances the practices followed by the contractor and the Government agencies involved tended to help keep total costs for study and research to a minimum. When we discussed our findings with Dr. Girouard, he acknowl- edged that he did not have a complete understanding of the contractor's administrative and financial controls nor of the contract provisions designed to preclude duplicate payments by the Government. Our examination included a test of labor charges for a selected number of employees working on study contracts and on IR&D projects. We compared contract technical reports with engineering research reports under the IR&D program to determine the extent to which duplicative material was in- cluded. We found a certain amount of duplication of data, but the contracts required the integration of technical o4± E0_ L2Zal

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