ACCOUNTING REVIEW OF TERMINATION SETTLEMENT PROPOSAL (INTERIM) OF WESTINGHOUSE ELECTRIC CORPORATION, AIR ARM DIVISION BALTIMORE, MARYLAND, RELATING TO ITEM 12 OF CONTRACT FL-3011, PARTIALLY TERMINATED AS OF 2 OCTOBER 1956

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89B00709R000400860005-6
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 22, 2016
• Document Release Date: January 10, 2011
• Sequence Number: 5
• Publication Date: August 4, 1958
• Content Type: LETTER

STAT
DEPARTMENT OF THE AIR FORCE
HEADQUARTERS UNITED STATES AIR FORCE
WASHINGTON 25, D. C.
#187
.~uS 3/ss
Auditor General
Comptroller, USAF
Hq Western District
1206 Maple Avenue (Room 916)
Los Angeles 15, California
4 August 1958
STAT
STAT
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TO: Contracting Officer
SUBJECT: Accounting Review of Termination Settlement Proposal (Interim)
of Westinghouse Electric Corporation, Air Arm Division
Baltimore, Maryland, relating to Item 12 of Contract FL-3011,
Partially Terminated as of 2 October 1956
REF: Document #24874, 4 March 1958
1. An accounting review has been made of the contractor's termination' '
settlement proposal (interim) submitted on the inventory basis. The amount tea,
of the proposal is $24,443.00, and reflects no disposal credits or advance."*
progress, or other payments. The review consisted of the analysis of the
contractor's own charges of $13,484.00, before the addition of profit of
$862.00 and settlements with subcontractors of $10.097.00.
2. The contractor's accounting records were examined and selective
tests were made of accounts and supporting records. Contractor's own charges,
before inclusion of a variance adjustment, general and administrative expense,
and settlement expenses, are in the same amount as costs relieved in the
records for the continuing portion of Contract Item 12.
3. The indicated effective date of termination in the proposal, 2 October
1956, is the date of contractor's letter requesting confirmation of verbal
advice received on 28 September 1956, that contract requirements for Contract
Item 12 shall be reduced from 7 sets to 5 sets. The Contracting Officer's
letter of confirmation was dated 10 October 1956.
4. At the time of the audit, no Statement of Allocability has been
received from the Contracting Officer. For this reason, the auditor's recom-
mendation in the succeeding paragraph is subject to such verification of the
inventories as is deemed necessary by the Contracting Officer with respect to
allocability, count, and stage of completion, technical requirements, and
divertibility.
Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400860005-6
 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400860005-6
#187, Accounting Review of Term Settlement Proposal (Interim) of Westinghouse
Elec Corp, Air Arm Div, Baltimore, Md., relating to Item 12 of Contr FL-30l1,
Partially Term as of 2 Oct 56, 4 Aug 58 - (cont'd)
5. The following recommendations with respect to the items reviewed
are submitted for the guidance of the Contracting Officer:
For Acceptancg $ 12,609
For Non-acceptance:
Excessive amount of variances
applied to factory labor and
overhead
General and Administrative Expense
(paragraph 6)
Contractor's Own Charges - Items 10
and 12 of Settlement Proposal
/y/p~
/)
$ 578
2
875
1 8
6. Comment on General and Administrative Expense: The amount of General
and Administrative Expense recommended for non-acceptance is computed, as
follows:
Costs in contractor's proposal to which rate of
17% was applied
G&A related to excessive variance of $578 at
rate of 17%
Difference between contractor's rate of 17%
and auditor's rate of 15%, or 2% x costs of
19,946
10 2
S 98
227
Reference is made to paragraph 3a of supplement to report on price redetermina-
tion audit for Contract Items 7 and 10 through 15 in regard to the auditor's
rate.
7. Although the termination claim was submitted as an interim proposal,
it was represented as including all costs except for on increase in settlement
expense. The proposal is subject to reduction for disposal credits, depending
upon disposition of the termination inventory.
Project Supervisor
Western District
Auditor General
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