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B-176834 1 (1973-05-15)

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               COMPOt.=RCE1&btiM3pNITED STATES
                        WASI4INGTON. D.C. 20348

          PL L, J ED                              I.97
                  cL  LUMA Y 1. i 1973

B-176834


The Honorable Les Aspin

House of Representatives

Dear Mr. Aspin:

     Pursuant to your letter of August 7, 1972, we examined
the circumstances surrounding the Naxys settlement of four
claims during June 197L . The claims involved were made by
aicam    n   -L          ing and Dry Dock Company, (2) North'

American Rockwell Corporation, (3) Westinghouse Electric Cor-
poration, and (4) General Dynamics Corporation, Quincy Ship-
building Division.

     We reviewed claim settlement proposals and related docu-
mentation submitted to the Navy by-4e-c-ea-ractors. We also
examined the Navy's analytical, legal, and technical data on
the claims and interviewed Navy officials involved in the
settlements.

     We found that the Navy made payments only after extensive
technical, legal, and financial reviews and negotiation--rang-
ing from 15 months to several years. The Defense Contract Au-
dit Agency (DCAA) also examined the claims and issued audit
reports.

     We believe that the claims were adequately reviewed and
negotiated to insure equitable settlements. The circumstances
of each settlement are discussed in enclosures 1 through 4.

     Official comments on this report have not been requested
 or obtained from the contractors or the Navy.

     We do not plan to distribute this report further unless
you agree or publicly announce its contents.

                                  Sincerely yours,

                                ... ,:      /  / '


                                   Comptroller General
                                   of the United States



                               O67?O57

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