Procurement:

Defense General Supply Center's Management of Contractor Delinquencies

NSIAD-87-166BR: Published: Jun 30, 1987. Publicly Released: Jul 14, 1987.

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In response to congressional concern about the Defense General Supply Center's (DGSC) handling of companies that have contracts with overdue delivery dates, GAO: (1) determined if DGSC treated such companies in accordance with its policies, procedures, and practices; and (2) assessed the reliability of data DGSC used to identify such companies.

GAO found that DGSC: (1) identifies and ranks individual contractors having the largest number of delinquent contract lines and identifies individual contract lines delinquent for 90 days or more; (2) uses the Defense Logistics Agency's Active Contract File database to obtain information on overdue contracts; (3) identifies on a monthly basis the 100 contractors with the largest number of delinquent line items; and (4) recommends placement of uncooperative contractors on a checklist that imposes automatic contracting sanctions for a minimum period of 90 days. GAO also found that DGSC: (1) treated contractors differently but the differences did not seem unreasonable; (2) placed large and small companies, as well as manufacturers and dealers, on the top-100 list; (3) rarely placed sole-source contractors on the checklist, since the federal government would not have any alternative sources of supply; and (4) used reliable data to identify contractors with overdue delivery dates, since the average error rate for a sample of contract lines was less than 2 percent.

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