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accounting reports. During the performance of Multiyear I, the
“Indicated Profit” for each program year, as reflected on the
CCPS reports, varied.
Under CCM, GENDYN treated Contract 2034 as a single, long-
term contract. GENDYN reported all of its taxable income for
Contract 2034 in its return for 1987, the year in which the last
of the 480 F-16's was delivered.
Contract 2038 was negotiated and entered into on April 15,
1982, separate and apart from Contract 2034. Contracts 2038 and
2034 were not related as to the pricing in each contract.
Contract 2038 was a firm fixed-price incentive contract under
which petitioner was to provide engineering services in
connection with the F-16 aircraft. Contract 2038 services were
set forth in eight CLIN’s and each CLIN was further separated
into numerous individually priced "sub-CLIN" items to, in part,
enable petitioner to receive interim progress payments upon
completion of sub-CLIN’s. There were business purposes for
treating Contract 2038 separately from Contract 2034 and they
were separately funded. The subject of Contract 2038 was
research, design, and development of new systems for the F-16
aircraft. The new technology was first developed and perfected
under Contract 2038 and then integrated into the Contract 2034
aircraft production. Petitioner claimed the income and
deductions in connection with Contract 2038 under CCM.
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