Public Law 87-653, Incentive Contracts, and GAO

[bob7947]

Back in the mid-1980s, I was researching Public Law 87-653 which picked up the popular name "Truth in Negotiations Act."  It isn't called that in the law.  I remember searching for the popular name in Committee Reports, hearings, etc.  I seem to remember the phrase "level playing field" somewhere but that is over 30 years ago and I lost the paper I wrote and all my research material.

I do remember the hearing where Carl Vinson, a major player in 87-653, celebrated his 50th anniversary as a member of Congress.  He was given a color TV at the hearing by his colleagues.  Many years later, DoD gave him an aircraft carrier.

I read Joel's thread that included mention of incentive contracting and know that 87-653 was passed, to a great degree, because of the abuse of fixed-price incentive contracts.  So, I went back and found a statement about GAO's involvement in the law.  I had the file stored in one of my "favorites" folders.  Before I show it to you, back then incentive contracts were used to increase profits.  It was too easy for contractors to beat their negotiated target costs.  Today, it's a different story as Joel points out.

The article is from 1968--6 years after 87-653 became law.  It is entitled:  Role of the General Accounting Office in the Enactment and Implementation of Public Law 87-653-The Truth in Negotiations Act .  It was delivered by Robert Keller, who later became Deputy Comptroller General, to The Southwestern Legal Foundation.  I've also added 87-653 as it became law in 1962 so you can view it before Congress added decades of perfections.