This paper reviews the initiatives of the Reagan Administration to control cost overruns during the last 2 and a half years and the actions taken by the Congress to strengthen its oversight role. Particular attention is directed at the critical need to enhance management incentive and accountability at all level of the acquisition process. If recently instituted reform in the Department of Defense fail to control cost overruns, pressure may grow for a more sweeping and radical approach. Serious consideration in such an event might even be given to removing responsibility for weapons acquisition management for the military service and assigning it to a civilian-operated supply agency.
Numerous Federal agencies -- including the Justice Department and Congressional committees -- are investigating allegations of fraud at the Electric Boat Division of General Dynamics Corporation, the nation's third largest defense contractor. This issue brief provides a chronological summary, based on newspaper and magazine accounts, of each of these investigations.