Contract Pricing:

Overpricing of Joint Cruise Missiles Automatic Test Equipment

NSIAD-89-9: Published: Oct 24, 1988. Publicly Released: Oct 24, 1988.

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GAO reviewed a Navy contract for automatic test equipment to determine whether the contractor complied with the Truth in Negotiations Act by providing accurate, complete, and current cost data.

GAO found that the contractor overstated the contract price by $1,239,361 because: (1) the subcontractor did not provide it with the most current pricing information for materials; and (2) it did not use the most current pricing information it had for five power management centers.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: The Naval Air Systems Command recovered $1,239,361, which is the amount that GAO identified as contract overpricing. An accomplishment report is being prepared.

    Recommendation: The Director of the Cruise Missiles Project of the Naval Air Systems Command should initiate action to recover the overstated price from the contractor.

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


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