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![handle is hein.gao/gaobacxog0001 and id is 1 raw text is:
DOCUMENT RESUME
02479 - [A1732718] (Restricted)
(Settlement of Noncompliance cases Involving Cost Accounting
Standards at Northrop Corporation]. March 1, 1977. 2 pp.
Report to Brig. Gen. N. V. Baker, Commander, Headquarters,
Department of the Air Force: Air Force Contract Management Div.
Kirtland AFB, NM; by J. T. Hall, Jr., Regional Manager, Field
Operations Div.: Regional Office (Los Angeles).
Issue Area: Accounting and Financial Reporting (2800).
Contact: Field Operations Div.: Regional Office (Los Angeles).
Budget Function: Miscellaneous: Financial Management and
Information Systems (1002).
Authority: A.S.P.R. 3-1212.
A determination was made of whethar the administrative
contracting offices of the Air Force Plant Representative
Office, Northrop Corporation, took timely and appropriate action
in settling reported cases of contractor noncompliance with cost
accounting standards. Findings/Conclusions: The administrative
contracting officer indicated noncompliance on two Air Force
contracts in the preparation of cost performance report3 (CPR)
for aircraft sales to Saudi Arabia. Specifically, propoved labor
and related expenses were accounted as direct, rather than
indirect, costs. Air Force legal counsel determined that
noncompliance was unwarranted and sihould not be issued. The
contractor was then informed by the administrative contracting
officer that direct charging of preparation costs was acceptable
to the Saudi Arabia effort. If the Saudi Arabia requirement had
been negotiated with Northrop on a separate Air Force contract,
the costs of the CPR would have been accounted for as an
indirect expense, in line with the company's normal procedures.
Recommendations: The Air Force should reconsider this matter,
and should advise GAO of any action taken. (DJM)](ViewImageLocal?handle=hein.gao/gaobacxog0001&div=1&collection=&method=preview&ext=.png&size=3)