Contract Pricing:

Overpricing of Secure Voice Communication Systems

NSIAD-89-124: Published: Jun 7, 1989. Publicly Released: Jun 7, 1989.

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GAO reviewed an Air Force procurement for voice communications systems to determine whether the contractor complied with the Truth in Negotiations Act by providing accurate, complete, and current cost or pricing data on noncompetitive contracts.

GAO found that the contractor: (1) did not disclose accurate, complete, and current cost or pricing data for the proposed material and labor costs, which overstated the contract costs by about $2.03 million; (2) could not provide supporting cost or pricing data for material costs valued at about $4.96 million; and (3) overbilled the Air Force $876,382 for labor not included in the installation billing rate negotiation. GAO also found that, although the contractor believed that it properly priced and billed the contract, it failed to keep certain records and did not disclose certain required data.

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