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B-184830 1 (1976-02-27)

handle is hein.gao/gaobaddfm0001 and id is 1 raw text is: 01 /' 7~THE COMPTROLLER GENERAL K ~A~OF THE'UNITED STATES .k/WASHINGTON, 0. C. 20548 DATfE: Fetruar,% 27', 1,7 MATTER OF: Newport News Shipbuilding and Dry Dock Company q DIGEST: 1. Allocation of Navy appropriation for DLGN nuclear powered guided missile frigate program between DLGN 41 and DLGN 42, which was based on Navy's budget request and contained in committee reports to 1975 Defense Department Appropriation Act, is not legally binding on Navy since it was not specified in Appropriation Act itself. 2. Full funding of military procurement programs is not a statutory requirement, and deviation from full funding does not necessarily or automatically indicate vios*!tion of 31 U.S.C. § 665 or 41 U.S.C. § 11. 3. Where exercise of contract option required Navy to furnish various items of Government-furnished property (GFP), but contract clause authorized Navy to uni- laterally delete items of GFP and make necessary equitable adjustment, full value of unobligated and undelivered GFP should not be considered an obligation as of time of option exercise for purposes of assessing violation of 31 U.S.C. § 665 or 41 U.S.C. § 11. Exercise of DLGN 41 contract option did not violate these statutes since recorded obligations and other binding commitments did not exceed available appropriations. 4. Proviso in Appropriation Act requires DLGN 41 to be follow ship of DLGN 38 class. Proviso is not violated since DLGN 41 has same basic characteristics as prior ships of that class, notwithstanding nonincorporation of series of modifications and absent showing that un- incorporated modifications would significantly alter those characteristics. INTRODUCTION This decision concerns the validity' of the exercise of a contract option. For clarity of presentation, we have divided the text into four sections. The first section summarizes pertinent facts and sets forth the relevant chronology. Second is a brief summary of the issues presented. Since the interpretation of the 1975 Defense Department Appropriation Act is of major importance to our decision, the statutory . - 1 - PUBLISIED DECISIOT( '14 C.omn. Gen......... 001S__55 9 /U c ,3S FILECISI N FILE: B-184830

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