Contract Pricing:

Opportunities to Reduce Dual-Source Contract Prices

NSIAD-91-159: Published: Mar 28, 1991. Publicly Released: May 22, 1991.

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Pursuant to a congressional request, GAO reviewed six Department of Defense (DOD) dual-source contracts, focusing on contracting officers' bases for negotiating prices.

GAO found that: (1) the contracting officers relied on price analysis techniques to ensure the fairness of proposed prices; (2) the contracting officers could have reduced the prices of four of the contracts by about $6 million if they had obtained insight into the contractors' estimating methodologies, pricing strategies, and supporting cost information; and (3) DOD revised the Defense Federal Acquisition Regulation to instruct contracting officers to exercise deliberation and thorough review in making adequate price competition decisions on dual-source contracts.