Contract Pricing:

Material Prices Overstated on the Amphibious Assault Vehicle Contract

NSIAD-86-123: Published: May 16, 1986. Publicly Released: May 16, 1986.

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GAO reviewed subcontract pricing on the Navy's 1984 option buy of amphibious assault vehicles to determine if the contractor complied with contract pricing laws in providing accurate, complete, and current pricing data in its prime contract.

GAO found that the contractor: (1) overstated the proposed prices it gave the Navy for two of its eight subcontracted items; (2) in one case, received lower quotations, but did not disclose them to the Navy or base the contract price on the lowest quotation; and (3) in the second case, acknowledged a lower available price and proposed a contract price reduction, but had not begun negotiations for the reduction.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: An accomplishment report is being prepared to recognize these real dollar savings.

    Recommendation: The Commander, Naval Sea Systems Command, should initiate action to obtain recovery of funds from the contractor.

    Agency Affected: Department of Defense: Department of the Navy: Naval Sea Systems Command


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