Accession Number:



Government Contracting: Selected Review of Defense Contractor Profitability

Descriptive Note:

[Technical Report, Congressional Report]

Corporate Author:

United States General Accounting Office

Personal Author(s):

Report Date:


Pagination or Media Count:



On February 24, 1987, you asked us to follow up on selected aspects of our report entitled Government Contracting Assessment of the Study of Defense Contractor Profitability GAONSIAD-87-50, Dec. 23, 1986, in which we reported on the results of the Defense Financial and Investment Review and showed that defense contractor profitability was higher than comparable durable goods manufacturers from 1970 to 1983. We also reported that defense contractors were 35 percent more profitable than commercial manufacturers during 1970-79 and 120 percent more profitable during 1980-83. This conclusion differed from that in the Defense Financial and Investment Review which basically stated that defense contractors profitability was very similar to that of comparable durable goods manufacturers for the years 1970 through 1979 but during 1981 to 1983 defense profits were higher overall. The primary difference centers on methodology used in computing return on assets ROA. Our report also discussed the potential impact of the Department of Defenses DODSinterim profit policy and the likelihood of it causing overall negotiated defense profits to be reduced. We recommended that the Congress consider establishing a Profitability Reporting Program.

Subject Categories:

  • Economics and Cost Analysis
  • Government and Political Science
  • Personnel Management and Labor Relations

Distribution Statement:

[A, Approved For Public Release]