Opportunity To Reduce Cost of the Navy's Contract for Patrol Hydrofoil Missile Ships
PSAD-80-3
Published: Oct 18, 1979. Publicly Released: Oct 18, 1979.
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Highlights
A review of a Navy fixed-price contract found a contract price overstatement due to use of the ceiling price for a subcontract rather than the target price. The examination was part of a contract pricing review of contracts awarded to major Department of Defense (DOD) contractors with the objective of determining the reasonableness of contract price as it relates to pricing data available to the contractor at the time of contract negotiation.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | The Secretary of Defense should direct the contracting officer to consider the information presented herein and take appropriate action to adjust the contract targets for: (1) the cost overstatement resulting from Boeing's failure to obtain and furnish to the Government accurate, current, and complete cost or pricing data; and (2) an equitable credit resulting from the deletion of spare items that the contractor will not be required to deliver to the Navy. |
Closed – Implemented
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
|
| Department of Defense | The Secretary of Defense should direct that guidance be issued on how incentive-type subcontract prices are to be included in incentive-type prime contracts. |
Closed – Not Implemented
Due to age and significance of recommendation, additional followup is not warranted.
|
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Topics
Cost plus incentive fee contractsCost reimbursement contractsFixed price contractsNaval procurementPrice adjustmentsSole source procurementMilitary vesselsMilitary forcesSubcontractorsGovernment procurement