Overpricing on Naval Nuclear Contract

NSIAD-85-92: Published: Sep 30, 1985. Publicly Released: Sep 30, 1985.

Additional Materials:

Contact:

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

GAO evaluated the reasonableness of prices negotiated for two fixed-price incentive contracts the Department of Energy's (DOE) Pittsburgh and Schenectady Naval Reactors Offices awarded for nuclear reactor cores.

GAO found that some of the contract costs were questionable because: (1) DOE allowed a price escalation clause for certain materials in one contract to allow for inflation, but the contractor purchased the materials earlier than expected at the original price; (2) DOE allowed a subcontract with one of the contractor's subdivisions that included interdivision profits of over $3 million; (3) DOE should have written a formal justification for allowing the interdivision profits since its actions were contrary to procurement regulations then in force; (4) the contractor based labor costs for uranium recovery on only the final year of contract performance rather than on the entire life of the contract, which resulted in over $300,000 in excess costs; and (5) the contractor made computational errors in determining the cost of special tooling and subcontracted work that resulted in excess costs of about $11,000. GAO believes that DOE should negotiate a price adjustment to recover the costs associated with the costing errors.

Oct 12, 2017

Oct 2, 2017

  • budget icon, source: GAO

    U.S. Territories:

    Public Debt Outlook
    GAO-18-160: Published: Oct 2, 2017. Publicly Released: Oct 2, 2017.

Sep 20, 2017

May 3, 2017

Jan 18, 2017

Jan 17, 2017

Jan 12, 2017

Dec 20, 2016

Dec 8, 2016

  • budget icon, source: GAO

    State and Local Governments' Fiscal Outlook:

    2016 Update
    GAO-17-213SP: Published: Dec 8, 2016. Publicly Released: Dec 8, 2016.

Dec 1, 2016

Looking for more? Browse all our products here