General Dynamics Corporation and Subsidiaries - Page 20

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               Such modifications to Contract 2034 contained separate                 
          prices for each of the CLIN’s that identified for billing                   
          purposes the quantities and models of F-16 aircraft required for            
          each program year.  CLIN prices were adjusted by program year               
          from time to time based upon comparisons of GENDYN's actual costs           
          with the contract's target cost.  These billing price adjustments           
          were sometimes retroactive; that is, they changed the billing               
          price of aircraft already delivered.                                        
               Although the Air Force and GENDYN had negotiated a single              
          pricing arrangement covering all 480 aircraft, it was necessary             
          for the proposed costs to be individually broken out by program             
          year for traceability and funding reasons.  It was also necessary           
          to evaluate and negotiate amounts for each fiscal year in the               
          same manner.                                                                
               The F-16 aircraft procured under Contract 2034 were                    
          manufactured by GENDYN's Fort Worth Division in a                           
          Government-owned, contractor-operated manufacturing facility in             
          Fort Worth, Texas.  At the height of production, approximately              
          12,000 GENDYN employees worked on the F-16 program, including               
          more than 1,000 engineers.  GENDYN manufactured a total of 534              
          aircraft under Contract 2034 and subsequent modifications, the              
          480 plus 54 aircraft acquired by the Government through the                 
          exercise of the options that were added to Contract 2034 by POO             
          80.  The aircraft were continuously produced and delivered                  
          without any inter-program year interruptions.  Some F-16's were             

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