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DoD Warranties: Improvements Needed in Implementation of Warranty Legislation


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The Congress passed section 794 of the 1984 Department of Defense(DOD) Appropriations Act (Public Law 98-212) requiring that DOD obtain warranties in its weapon system production contracts. This law was passed because of concern that weapon systems often failed to meet their military missions, were operationally unreliable, had defective an shoddy workmanship, and could endanger the lives of U.S. troops. The belief was that warranties would make contractors more accountable and encourage them to build more quality and reliability into their systems. The law was controversial. DOD and industry officials criticized it as being impractical and unworkable. They also considered warranties to be potentially very costly because, in almost all instances, DOD would pay for the additional contractor risk that warranties would constitute In 1984, section 794 was replaced by section 1234 of the 1985 DOD Authorization Act (Public Law 98-525). (Hereafter section 794 of the1984 DOD Appropriations Act and section 1234 of the 1986 DOD Authorization Act are referred to as the 1984 and 1985 acts, respectively.)



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