Contract Pricing: DOD Management of Contractors With High-Risk Cost-Estimating Systems
NSIAD-94-153
Published: Jul 19, 1994. Publicly Released: Aug 18, 1994.
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Highlights
Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) efforts to ensure that high-risk contractors reduce the government's vulnerability to contract overpricing, focusing on the: (1) extent to which contractors are correcting significant cost-estimating system deficiencies; (2) actions DOD contracting officers are taking to encourage contractors to improve their cost-estimating systems; and (3) adequacy of DOD controls to ensure that deficiencies are timely corrected.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | The Secretary of Defense should direct the Director of DLA to implement procedures to ensure that significant cost-estimating system deficiencies are corrected more expeditiously. Such procedures should include the implementation of routine followup by DLA district offices and headquarters to determine why long-standing deficiencies have not been corrected, and the establishment of specific frames as to when contracting officers are required to seek guidance about using more severe remedies that are already available and when higher level management must become involved in finding solutions to such significant deficiencies. |
Closed – Implemented
DLA/DCMC has taken steps to increase oversight of defense contractor cost estimating systems deficiencies.
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Topics
Accounting systemsContract administrationContract costsContract oversightContracting officersCost accounting standards complianceDefective pricingDefense procurementDepartment of Defense contractorsContract award