Contract Pricing:

GBU-15 Bomb Components Overpricing

NSIAD-89-10: Published: Nov 2, 1988. Publicly Released: Nov 2, 1988.

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GAO reviewed an Air Force procurement for components for the GBU-15 Modular Guided Weapon System, to determine whether the contractor complied with the Truth in Negotiations Act and provided accurate, complete, and current cost data.

GAO found that the contractor: (1) did not disclose accurate, complete, and current pricing information for seven materiel items, resulting in contract overpricing of $1,008,854; (2) allegedly orally disclosed lower vendor prices for three materiel items, but could not provide any supporting evidence; (3) agreed that it did not disclose lower available prices for three other materiel items, but did not believe that the nondisclosure resulted in contract overpricing; and (4) agreed that the contract was overpriced for the remaining item.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: The Department of Justice has notified the contractor of its intent to pursue recovery through the False Claims Act. The Department of Justice and the contractor agreed to a $5.1 million settlement based on this report and NSIAD-89-125.

    Recommendation: The Commander, Ogden Air Logistics Center, should initiate action to recover the overstated materiel prices from the contractor.

    Agency Affected: Department of Defense: Department of the Air Force: Air Force Logistics Command: Air Logistics Center, Hill AFB, UT


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