Cost or Pricing Data Should Be Required Relating to Split Awards to Other Than Low Offerors and Single Source Awards

PSAD-79-96: Published: Aug 2, 1979. Publicly Released: Aug 2, 1979.

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As part of a continuing program to monitor procedures of the Department of Defense (DOD) in negotiating contract prices, a review was made of negotiations at eight Army, Navy, and Air Force procurement offices. The negotiations at these eight locations involved a significant percent of the dollar value of total competitively negotiated DOD fixed-price contracts for fiscal year 1978.

Eighty-eight percent of the 75 contract-related actions reviewed by GAO had been awarded to the lowest offeror. Sixty-seven percent of the total awards resulted from solicitations that brought in only two proposals. Nine contracts, however, were awarded to contractors other than the low offeror. Six of these contracts were split awards, where each of the offerors were assured of receiving part of the overall requirement. GAO believed that awarding contracts to other than the low responsive and responsible offerors without evaluating cost or pricing data was contrary to good procurement practice.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: In order to increase the assurance that the Government will negotiate fair and reasonable prices in those instances of split awards and sole-surviving contractors after attempting to obtain competition, DOD should emphasize to all procurement personnel of the need to obtain and evaluate cost or pricing data. Appropriate evaluation of data should usually involve the services of the Defense Contract Audit Agency and technical, engineering-type Government personnel.

    Agency Affected:


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