- 64 -
It is true that each aircraft was individually delivered by
petitioner and accepted by the Air Force, and that completion of
the contract was dependent upon annual congressional
appropriations. In sum and substance, however, this was a single
multiyear contract for the delivery of 480 aircraft. Financially
and legally, Contract 2034 was no different from a long-term
contract to build a structure composed of 480 parts. In either
event, the contract would not be completed until the 480th part
was completed and put in place or placed in service with the
other 479 parts to complete the delivery and/or form the final
structure. In both situations, the first, last, and parts in
between, bear on the profitability of the contract. Contract
2034 was a financial and technological continuum for a 4-
contract-year period. Instead of a series of 1-year contracts
which take 2-1/2 years each to complete, it was a 4-year contract
that took almost 7 years to complete. Contract 2034 was a long-
term contract of the type for which CCM is a permissible method.
We recognize respondent's argument that petitioner’s
reporting of any profit on the first group of aircraft would be
accelerated if Contract 2034 were severed into four separate
contracts. However, we do not find that petitioner in any manner
distorted or abused CCM. As a matter of principle, we must
accept that CCM permits deferral beyond that which would be
permitted under the accrual method. We are unable to find that
Page: Previous 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 NextLast modified: May 25, 2011