Contract Pricing:

Material Prices Overstated on Ground/Vehicular Laser Locator Designators

NSIAD-88-25: Published: Oct 13, 1987. Publicly Released: Oct 13, 1987.

Additional Materials:


Paul F. Math
(202) 512-4587


Office of Public Affairs
(202) 512-4800

GAO reviewed the pricing of an Army contract for Ground/Vehicular Laser Locator Designators to determine whether the: (1) contractor complied with the Truth in Negotiations Act in providing accurate, complete, and current cost or pricing data; and (2) contracting officer negotiated fair and reasonable prices.

GAO found that the contractor overstated target prices by $2,339,601, including overhead and profit, because it: (1) failed to disclose current materiel prices; (2) made a computation error; and (3) failed to disclose an updated bill of materiel. GAO also found that contract prices were overstated by an additional $1,777,396, including overhead and profit, because the contracting officer: (1) did not rely on an audit recommendation regarding anticipated materiel price reductions between the contractor and its vendors; and (2) accepted escalation on materiel costs that the contractor had based on firm vendor quotations.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: The contractor has claimed substantial offsets to the GAO claim for defective pricing and the Command has made a decision to close this case without reducing the price of the contract.

    Recommendation: The Commander, U.S. Army Missile Command, should initiate action to recover these funds from the contractor.

    Agency Affected: Department of Defense: Department of the Army: U.S. Army Missile Command


Explore the full database of GAO's Open Recommendations »

Jan 21, 2021

Jan 19, 2021

Jan 14, 2021

Jan 12, 2021

Dec 10, 2020

Dec 2, 2020

Nov 20, 2020

Nov 19, 2020

Looking for more? Browse all our products here