Contract Pricing: Material Prices Overstated on Standard Missile and Phalanx Systems
NSIAD-87-31
Published: Feb 11, 1987. Publicly Released: Feb 11, 1987.
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Highlights
As part of a nationwide review, GAO examined subcontract pricing on five prime contracts for the production of the Standard Missile System and the Phalanx Weapon System to: (1) determine whether the contractor complied with the Truth in Negotiations Act in providing accurate, complete, and current pricing data; and (2) assess whether Navy contracting officers implemented subcontract pricing requirements designed to ensure the negotiation of fair and reasonable prices.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Naval Sea Systems Command | The Commander, Naval Sea Systems Command, should use the results of the GAO review as a basis for initiating action to recover funds from the contractor. |
Closed – Implemented
Collection made through contract modification for all five overpriced contracts was identified.
|
| Naval Sea Systems Command | The Commander, NAVSEA, should take action to obtain recovery of funds from the contractor. |
Closed – Implemented
The contractor revised its procurement department instructions to provide for tracking price proposal submissions and the submission of written analyses to the contracting officer. NAVPRO subsequently told the contractor of the need to submit cost/price analyses for use in prime contract price proposal evaluations and stressed that compliance would be monitored closely.
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Topics
Contract administrationContract costsDepartment of Defense contractorsNaval procurementOverpaymentsSubcontractorsWeapons systemsContract negotiationsCost estimatesContracting officers