Awarding of Requirement-Type Contracts for Repair of Electrical Equipment

PSAD-77-136: Published: Jul 29, 1977. Publicly Released: Jul 29, 1977.

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At present, the lack of adequate controls provides an opportunity for contractors to win awards of requirement-type contracts for the repair of electrical equipment by bidding low labor rates and high parts discounts and to subsequently charge higher prices for the work performed.

Deficiencies exist in the procedures and practices followed by the ordering offices in evaluating contractor repair estimates for individual purchase orders. The contractors' records are not being examined by the General Services Administration to verify the accuracy of billings. Purchase-order pricing guidance would be improved if contractors were required to quote labor and material prices separately to the ordering offices. The use of only the contracted labor-hour rates and contracted parts discount rates by the ordering offices in preparing their independent cost estimates would provide a more reliable method for evaluating contractors' proposed prices for individual orders.

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