Operation Desert Storm:

Comparing Peacetime and Wartime Unit Price Change Patterns

NSIAD-92-196: Published: Jun 18, 1992. Publicly Released: Jul 6, 1992.

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Pursuant to a congressional request, GAO examined unit prices of certain Department of Defense (DOD) purchases made to support Operations Desert Shield and Desert Storm, to determine whether contractors took advantage of a wartime environment to inflate prices.

GAO found that: (1) of the estimated $4.6 billion in Desert Storm purchases it evaluated, about $2.7 billion, or 60 percent, represented purchases that were within the range of lowest to highest peacetime unit prices for like items, about $1.4 billion, or 30 percent, represented purchases where unit prices were more than the highest peacetime price, and about $514 million, or 11 percent, represented purchases where unit prices were less than the lowest peacetime price; (2) most of the price increases were the result of the additional costs associated with rush deliveries of urgently needed items; and (3) the pattern of unit price increases and decreases during Desert Storm was similar to that of unit price changes during peacetime, and price changes often appeared to be more favorable to the government during Operation Desert Storm than during peacetime.

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