General Accounting Office Reviews of Department of Defense Procurement in the United States

A large proportion of GAO work in procurement is concerned with defense procurement. A distinction is made between the acquisition of major defense systems and contracting. Management of acquisitions deals with such problems as defining needs and analyzing costs and effectiveness. Auditing the contracting process emphasizes selection of sources of supply, proposal evaluation, pricing negotiations, and matters of contract administration. A good portion of GAO work on major weapons systems is concerned with providing information to Congress on individual systems for which funds are being requested. A step-by-step approach is generally favored in weapons acquisition, including defined milestones for proceeding to each phase. Examples of audit work in this type of acquisition were the cruise missile and the MX missile system. Because of the complexity of weapons systems, formally advertised contracts account for less than 10 percent of defense procurement although competitive procurement can usually result in substantial savings to the Government. GAO audits of noncompetitive procurements are designed to ensure that reasonable prices are negotiated and that production is efficient and economical. GAO contract pricing reviews led to legislation which required certain contractors to submit certified cost or pricing data. Projects to increase the productivity of defense contractors include new approaches to profit policy, a value engineering program, improved technology, cost programs, and work measurement systems.