Tom Harkin: “I appreciate my chairman's comments on this. I know that the law was changed last year; Commerce put these provisions in…”

“I appreciate my chairman's comments on this. I know that the law was changed last year; Commerce put these provisions in there. Let me respond by saying that I think the GAO report points out that these are ephemeral, at best. It does say that you have to, if I could just have the chairman's attention, have the savings, the restructuring savings for DOD just has to be projected by at least 2-to-1. Then here is what the GAO said about estimating these savings. It said: Restructuring savings, on the other hand, are not recorded in a contractor's accounting records. Therefore, neither the amount nor the nature of the savings can be determined by reviewing the accounting records. Consequently, savings have to be estimated. For example, Northrop-Grumman's estimated 5-year savings from closing the Grumman corporate headquarters of about $215 million, of which about $100 million represents the labor and fringe costs that would be avoided over the 5-year period by laying off approximately 250 workers. These savings are, therefore, an estimate of a cost avoidance over the 5 years, the cost of the additional people that would have been needed had the headquarters not been closed. The savings from restructuring activities we examined were generally in the form of such future cost avoidances.”