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RELEASED ° ' ° -asis of Specific approoo, ' a2- MO
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COMPTROLLER GbuNion _
WASHINGTON, D.C. 20548
B-102963 R 1974
The Honorable James L. Buckley
t United States Senate
Dear Senator Buckley:
On January 30, 1974, you asked that we consider a complaint to
you from Mr. Mollas, President, Molla Incorporated, and provide you
with our findings and views. Specifically, Mr. Molla complained that
the Ac requires an endless amount of dgetai]&Abookeep
ingfui!in anMd aaintainipo ts, and he provided examples. He
also stated that the Renegotiation Board (1) identifies the refunds it
obtains only in gross figures and does not disclose the net amounts
recovered, (2) does not submit figures on what it costs industry to
comply with its regulations and Mr. Molla feels these costs are astro-
nomical, and (3) does not make apparent the burden it places on other
Goverment agencies.
Mr. olla requested that you consider (1) having the Congress
revise and update the law so that it is consistent with the original
meaning and intent, (2) asking GAO to review to determine whether re-
negotiation is cost effective, and (3) permitting the act to expire
June 30, 1974.
On May 9, 1973, we completed a review of the operations and
activities of the Renegotiation Board and a copy of our report to the
Congress is enclosed. In that report we made a number of recommenda-
tions to the Congress and the Renegotiation Board to improve the oper-
ation and effectiveness of the Board. In addition, the Government
Activities Subcommittee of the House Committee on Government Opera-
tions reviewed the operations of the Renegotiation Board and proposed
many changes in the Renegotiation Act and the Board's operations in
the Committee's report dated December 16, 1971. Further, the Commis-
sion on Government Procurement made four recommendations with respect
to renegotiation. These are discussed on pages 47 and 48 of the GAO
report mentioned above.
Our comments on Mr. Mlla's specific complaints follow.
We talked with Renegotiation Board officials about the type of
situation Mr. Mblla described in his examples of the minute detail
required by the Renegotiation Act regulations. These officials told
us that a difference in color of chairs would not ordinarily make a
nonrenegotiable item renegotiable (see Renegotiation Regulations
1467.47). However, the blue and brown chairs may have been purchased
by the General Services Administration for stock and, as such, were](ViewImageLocal?handle=hein.gao/gaobaaemf0001&div=1&collection=&method=preview&ext=.png&size=3)