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Texas. The ACO was the Air Force representative primarily
responsible for enforcing the terms and conditions of the
multiyear contract. The ACO administered Contract 2034 as a
single contract for the manufacture and delivery of aircraft over
a period of years.
The ACO approved, rejected, or deferred GENDYN's requests
for progress payments for work performed. Progress payments to a
contractor are advances against the contract price based upon the
contractor's incurred costs. Progress payments are essentially
loans that remain repayable to the Government unless and until
they are “liquidated” in exchange for the Government's acceptance
of a portion of the contractor's performance under the contract.
GENDYN submitted requests for progress payments on a monthly
basis, using an official Air Force form. In accord with the
requirements of the form, GENDYN reported all of its costs (not
broken down by program year) under the entire contract. The only
estimate requested on the form and provided by GENDYN was an
estimate of the total cost of completing all 480 aircraft
pursuant to Contract 2034.
Based on his determination that GENDYN was underrunning or
overrunning the contract, the ACO could also adjust the
liquidation rate that applied to progress payments. The Air
Force liquidated progress payments using a single liquidation
rate, not separate rates by program year.
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