Deferment Actions Associated with the A-12 Aircraft
Abstract
On January 7, 1991, the Navy terminated the A-12 full-scale development contract for default. On February 5, 1991, it issued a demand letter to the team of contractors for repayment of $1.35 billion in progress payment for which no completed items had been accepted by the government. On the same day, at the team's request, the Navy--with DOD approval--agreed to defer the repayment until litigation over the termination is resolved in court or a negotiated settlement is reached. According to Federal Acquisition Regulation section 32.613, the government may defer the collection of debts it is owed. Deferment pending the disposition of an appeal may be granted to small businesses and financially weak contractors with a reasonable balance of the need for government security against loss and of undue hardship on the contractor. The regulation also provides that if the contractor has appealed the debt under the procedures of the disputes clause of the contract, the information supplied by the contractor with its request for deferment may be limited to an explanation of the contractors financial condition. On the other hand, if there is no appeal pending or action filed under the disputes clause of the contract, the following information about the contractor should be submitted with the request for deferment: its financial condition, its contract backlog, its projected cash receipts and requirements, the feasibility of immediate payment of the debt, and the probable effect on the contractor's operations of immediate payment in full.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jul 24, 1991
- Accession Number
- AD1157939
Entities
People
- Frank C. Conahan
Organizations
- United States Government Accountability Office