Department Of Defense Agency Financial Report 2007 - Section 2: Financial Information Page 58
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82Department of Defense Agency Financial Report 2007
Section 2: Financial Information
70
Nonfederal Other Liabilities consists primarily of estimated accruals for work in process by contractors in support of depot
maintenance activities.
The balance in Nonfederal Other Liabilities includes $29.2 billion that the Department is executing on behalf
of the Executive Office of the President. These amounts do not represent liabilities of the Department.
Capital Lease Liability
2007
As of September 30
2006
Asset Category
Land and
(amounts in millions)
Equipment
Other
Total
Total
Buildings
Future Payments Due
2007
$
0.0
$
0.0
$
0.0
$
0.0
$
63.0
2008
47.1
3.8
0.0
50.9
47.3
2009
43.9
1.5
0.0
45.4
43.9
2010
43.9
0.0
0.0
43.9
43.9
2011
41.3
0.0
0.0
41.3
36.8
2012
15.5
0.0
0.0
15.5
0.0
After 5 Years
28.6
0.0
0.0
28.6
52.1
Total Future Lease Payments Due
220.3
5.3
0.0
225.6
287.0
Less: Inputed Interest Executory Costs
42.0
0.1
0.0
42.1
60.9
Net Capital Lease Liability
$
178.3
$
5.2
$
0.0
$
183.5
$
226.1
Capital Lease Liabilities Covered by Budgetary Resources
150.8
181.2
Capital Lease Liabilities Not Covered by Budgetary Resources
$
32.7
$
44.9
Note 16. Commitments and Contingencies
Legal Contingencies
The Department is a party in various administrative proceedings and legal actions related to claims for environmental
damage, equal opportunity matters, and contractual bid protests. The Department has accrued contingent liabilities for
legal actions where the Office of General Counsel (OGC) considers an adverse decision probable and the amount of loss
measurable. In the event of an adverse judgment against the Government, some of the liabilities may be payable from the
U.S. Treasury Judgment Fund. The Department records Judgment Fund liabilities in Note 12, “Accounts Payable,” and
Note 15, “Other Liabilities.”
The OGC reported 63 legal actions with individual claims greater than the Department’s FY 2007 materiality threshold
of $110.5 million. The total of these 63 actions is approximately $1.6 trillion. Of this amount, the OGC determined that
claims totaling approximately $15.4 billion are reasonably possible, $12.9 billion are remote, and $1.57 trillion unable to
determine the probability of loss. The Department also had a number of potential claims that individually did not meet the
Department’s materiality threshold, but did meet the individual Components’ thresholds. These claims are disclosed in the
Components’ financial statements.
Other Commitments and Contingencies
Undelivered orders for open (unfilled or unreconciled) contracts citing cancelled appropriations, for which the Department
may incur a contractual commitment for payment, total $1.2 billion.
The Department is a party in numerous individual contracts that contain clauses, such as price escalation, award fee
payments, or dispute resolution, that may result in a future outflow of funds if contract terms are satisfied. Currently, the
Department has limited automated system processes by which it captures or assesses these potential contingent liabilities.
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