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GAO-20-514R 1 (2020-06-18)

handle is hein.gao/gaobaebga0001 and id is 1 raw text is: 




G      A     O        U.S. GOVERNMENT ACCOUNTABILITY OFFICE
441 G St. N.W.
Washington, DC 20548



June 18, 2020


The Honorable Adam Smith
Chairman
The Honorable Mac Thornberry
Ranking Member
Committee on Armed Services
House of Representatives

Defense Contracting: DOD Contracts with Companies Having Employee Stock
Ownership Plans

The Department of Defense (DOD) is the largest contracting agency in the federal government
and contracts with thousands of companies annually, including companies that have employee
stock ownership plans (ESOP). ESOPs are employee benefit plans designed to invest primarily
in shares of the sponsoring company, but ESOPs can also invest in other assets, such as the
stock of other companies or government securities.

You requested that we analyze DOD's contracting with companies that have ESOPs. This
report identifies what federal procurement data show regarding DOD contracting with
companies that had ESOPs during calendar years 2014 through 2017, which is the latest year
for which complete data were available. The report focuses on areas such as obligation
amounts and contractor performance. Figure 1 illustrates the relationships of the various parties
in the contracting process.

Figure 1: Department of Defense Contracting with Companies that Have Employee Stock
Ownership Plans






                                                       Employee Stock
                                                       Ownership Plan
                                     Company                                    Stock
                                     stock or cash                            allocation



                  Contract obligations                   Salaries,
                                         ~bonuses,
              Products or services                        other
                                                         benefits

  Department                         Contractor
  of Defense                                                                  Employees
Source: GAO  nalysis. I GAO-20-514R


GAO-20-514R Employee Stock Ownership Plans


Page 1

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