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DO~CUMENT BESCHE
0635S - [81606647] -4s&.t
[Allegations of Unaccounted for Ste~l1. psir-Tb-'06; B-188978.
Jun? 8, 1978. Released June 21, 1978. 2 pp.
Report to Sen. William Proxmire, Chairsam, Senate Committee on
Banking, Housing and Urban Affaits; by Robert F. Xeller, Acting
comptroller Ge dral.
Issue Area- Federal Procurement of Goods and Srvices (1900);
Federal Procurement of Goods and Services: Procurement of
Only Needed Quantities of Guods (1901).
Contact: Procuremant and Systems Acquisiticn Div.
Budqet FanctoA.o National Defense: Department of Defense -
Procurement F, Contracts (058).
OrqanizatIon Concerned: Department of the Navy; Department of
Defense; Renegotiation Board; Lockheed Shipbuilding and
Constraction Co., Seattle, VA.
Conqregsional Relevance: Senate Committee ca Banking, Housing
and Urban Affairs. Sen. William Froxaire.
The Renegotiation Board alleged that 017 milalicn pounds
of steel was ,,raccounted for and had been billed or wzz claimed
to have been used for seven amphibious txansport docks (tPDs) by
Lockheed Shipbuilding and Construction Company. Lockheed
contended that all steel was accounted for and that there was no
basis for the Board's claim. A GAO review, a lockheed internal
audit, and an independent accounting firs study found that
Lockheed spent about $10.8 million for about 134 million tons of
steel instead of $18.1 million estimated by the Renegotiation
Board, The priazry reason for the Eoardls miscalculation was an
erroneous assumption that increased costs cf the LED program
were due to increased steel usage. Lockheed could nct account
for all of the steel purchased and charged to LED cost accounts,
but this was not a contractual requirement. The contracts were
competitive and firm fixed priced; the Navy did not require, and
Lockheed did not keep, rscords shooing hcv the steel was used.
In addition, the amount of steel actu~lly used did act affect
the cost to the Government since the contract was firm fixed
priced. (RRS)](ViewImageLocal?handle=hein.gao/gaobaaxmr0001&div=1&collection=&method=preview&ext=.png&size=3)