General Dynamics Corporation and Subsidiaries - Page 13

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               Contract 2034, in CLIN 0001, also provides that the                    
          deliverables identified in the other CLIN’s “are neither priced             
          nor funded nor is the Government under any obligation to                    
          subsequently acquire said items.”   Contract 2034, in addition to           
          the CLIN’s, contains about 200 pages of clauses that define the             
          terms and conditions under which GENDYN would manufacture and               
          deliver the 480 aircraft.  Included in the subject matter of                
          these clauses, among other items, are requirements and terms for            
          EOQ contracts, change proposals, rights in data, definitization,            
               In essence, therefore, Contract 2034 was a basic multiyear             
          agreement between the Air Force and GENDYN, under which GENDYN              
          was expressly authorized to begin work on the delivery of 480               
          aircraft, including the ability for EOQ and long-lead items.  In            
          response to the agreements reached with the Air Force, GENDYN's             
          Fort Worth Division began planning for the production of all 480            
          aircraft, including the exercise of options obtained from vendors           
          to convert their annual subcontracts into multiyear subcontracts.           
               On December 29, 1981, Congress passed the fiscal year 1982             
          Department of Defense Authorization Act, 10 U.S.C. sec. 2301                
          (Supp. V 1981), which increased the cancellation ceiling                    
          applicable to multiyear contracts from $5 million to $100 million           
          and expressly authorized the Air Force's multiyear procurement of           
          F-16's.  This legislation significantly expanded the use of                 

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