Contract Pricing: Dual-Source Contract Prices

NSIAD-89-181 Published: Sep 26, 1989. Publicly Released: Oct 13, 1989.

Highlights

Pursuant to a congressional request, GAO reviewed eight dual-source contracts the Department of Defense (DOD) awarded for weapon systems procurement to determine whether contracting officers had a sound basis for negotiating fair and reasonable contract prices.

Recommendations

Recommendations for Executive Action

Agency Affected	Recommendation	Status
Department of Defense	The Secretary of Defense should direct appropriate personnel to revise the DOD Federal Acquisition Regulation (FAR) Supplement to provide contracting officers guidance for determining when adequate price competition exists in dual-source contracts. The guidance should address the need for contracting officers to obtain a thorough understanding of contractors' proposed prices before making adequate price competition determinations.	Closed – Implemented A revision to the DOD FAR Supplement was issued in November 1990 in the form of a Defense Acquisition Circular.

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Topics

National Defense

Bid evaluationContract negotiationsContracting officersDefense procurementDual source procurementInternal controlsProcurement regulationsQuestionable procurement chargesWeapons systemsPrice competition