Government Operations: Assessment of Admiral Rickover's Recommendations to Improve Defense Procurement: Plrd-83-37

Pursuant to a congressional request, GAO reviewed recommendations by Admiral Hyman G. Rickover, USN, retired, to improve Department of Defense (DOD) operations. Admiral Rickover's recommendations are in three areas: (1) the utilization of resources, (2) the conduct of procurements, and (3) the resolution of contractual conflicts. His recommendations for resource utilization cover three topics: avoiding hasty labor buildups in shipyards
restarting nuclear ship construction in a Navy-owned yard
and withdrawing financial support for industry-initiated research and development. The admiral believes that labor buildups in private shipyards were a cause of the large shipbuilding claims of the past decade. DOD agrees with the admiral's assessment and plans to contract only with those firms that have sufficient skilled labor. GAO stated that this approach was unreliable for two reasons: (1) disagreement over shipbuilding capacity, and (2) a frequent lack of alternative sources. GAO also disagreed with the admiral's conclusions regarding in-house construction and industry-initiated research and development. The principal theme in Admiral Rickover's recommendations for improving the conduct of procurement was that the Government should use more leverage and business judgment and be a more demanding customer in its dealings with contractors. GAO agreed with the thrust of the admiral's recommendations regarding procurement and stated that performance should be emphasized in awarding new contract work. With regard to contractual conflicts, GAO agreed with the admiral's assertion that a time limit on claims submission is necessary and that steps should be taken to facilitate prosecution of contractors when fraud is suspected.