Contract Pricing in the Meals-Ready-To-Eat Program
NSIAD-83-29
Published: Aug 08, 1983. Publicly Released: Aug 08, 1983.
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Highlights
GAO examined the pricing of a contract for the assembly of individual combat meal packages awarded by the Defense Personnel Support Center (DPSC).
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Defense Logistics Agency | The Director, Defense Logistics Agency (DLA), should direct DPSC to determine the extent to which the government is entitled to a price adjustment on this contract. |
Thus far, DLA collected $77,272 from the contractor applicable to the first contract, MRE-I. The government contracting officer issued Finding of Fact and Decision confirming a demand for $471,857 on MRE-I and $2,612,007 on MRE-II from the contractor. The contractor can appeal this decision at the Armed Services Board of Contract Appeals, and even, subsequently, through the courts.
|
| Defense Logistics Agency | The Director, DLA, should request that an audit be made to review the pricing of the other MRE program contracts to identify any overpricing or defective pricing and obtain appropriate price adjustments, where indicated. |
Audits were completed and negotiations are underway for recovery of defective pricing amounts from the contractor. An accomplishment report will be prepared when monies are recovered.
|
| Defense Logistics Agency | The Director, DLA, should ensure that its proposed pricing data evaluation on future MRE contracts include an analysis of the acceptability of the contractors' estimated costs, which should eliminate overpricing and defective pricing as discussed in this report or identified in the recommended review. |
An accomplishment report will be issued as a consequence of the first recommendation. DLA is now considering a different type of contract to fill its needs.
|
| Defense Logistics Agency | The Director, DLA, should ensure that the contracting officer prepares and maintains accurate and complete records of negotiations as required by DAR. |
There was a requirement to prepare and maintain accurate and complete records of negotiations. The Director, DLA, merely called attention to the need to follow this requirement. Whether improvements have resulted would be a matter of verification through audits, but none are planned at this time.
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Contract costsDefense procurementFixed price contractsNegotiated procurementPrice adjustmentsProcurement practicesWaiversOverhead costsSeverance paySubcontractors