Contract Pricing:

Improving Defense Management and Oversight

T-NSIAD-92-40: Published: Jun 4, 1992. Publicly Released: Jun 4, 1992.

Additional Materials:


Office of Public Affairs
(202) 512-4800

GAO discussed Department of Defense (DOD) contract pricing, focusing on DOD: (1) vulnerability to contract overpricing; and (2) efforts to address overpricing. GAO noted that: (1) DOD revised its regulations to require major contractors to establish, maintain, and disclose adequate cost-estimating systems; (2) the regulation also requires that the Defense Contract Audit Agency (DCAA), along with contract administration personnel, regularly audit the adequacy of contractor estimating systems; (3) although DCAA identification of defective pricing declined between 1987 and 1991, the amount of defective pricing that DCAA reports remains significant, particularly for certain contractors; (4) subcontractors pose a major risk for defective pricing, since DOD relies heavily on the prime contractor and the quality of its cost-estimating system to ensure reasonable subcontract prices; (5) as a result of changes in the way DCAA identifies high-risk contractors, some contractors may receive reduced audit coverage even though they may have a history of frequent and significant overpricing; (6) DCAA is unaware of many subcontractors subject to audit under the Truth in Negotiations Act; and (7) some DOD contracting officers are not ensuring that contractors correct problems that have led to overpricing, and information on high-risk contractors in the DOD audit follow-up system is inaccurate and incomplete.

Mar 13, 2018

Feb 28, 2018

Feb 16, 2018

Feb 15, 2018

Feb 6, 2018

Jan 31, 2018

Jan 18, 2018

Jan 10, 2018

Looking for more? Browse all our products here