Defense Industry Consolidation: Issues Related to Acquisition and Merger
Restructuring Costs (Testimony, 07/27/94, GAO/T-NSIAD-94-247).

The pace of consolidation of the U.S. defense industry has increased
sharply this year. In the 16 months between August 1992 and December
1993, the industry experienced four large mergers and acquisitions; but
since the start of this year, the industry has already seen five major
combination of firms. This dramatic reshaping of the industry involves
extraordinarily complex transactions with potentially significant cost,
benefit, and risk implications for corporate bottom lines, taxpayer
expenditures, and national security capabilities. In July 1993, the
Pentagon issued a memorandum allowing restructuring costs to be charged
against defense contracts when it could be shown that savings to the
government as a result of the restructuring would exceed the costs or
when the merger preserved a critical defense capability. This testimony
focuses on (1) the definition of restructuring costs, (2) the costs
impact on Defense Department contracts, and (3) other issues.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-NSIAD-94-247
     TITLE:  Defense Industry Consolidation: Issues Related to 
             Acquisition and Merger Restructuring Costs
      DATE:  07/27/94
   SUBJECT:  Defense contracts
             Procurement policies
             Defense procurement
             Defense industry
             Cost analysis
             Reductions in force
             Defense economic analysis
             Defense capabilities
             Defense cost control
             Defense budgets

             
------------------------------------------------------------------------

We regret that electronic text of GAO Testimony is not available at 
this time. 

See the GAO FAQ - Section 2.0 for printed copy ordering information.
The FAQ is automatically retrieved with all WAIS search results or 
can be obtained by sending e-mail to: [email protected]