Contract Overpriced Because of Duplicate Labor Hours and Excessive Material Pricing Rates

Gao ID: PLRD-83-93 July 7, 1983

GAO reviewed the pricing of a contract awarded by the Army Missile Research and Development Command.

GAO found that the contract target price was overstated by $472,000 because: (1) the contractor submitted cost data resulting in the Government's accepting duplicate fabrication and assembly hours for a number of major assemblies; and (2) the contracting officer did not rely on the most recent contractor cost data available in negotiating material attrition and line flow material rates. The overstatement in the target price resulted in increased costs to the Government totaling $265,000.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Henry W. Connor Team: General Accounting Office: National Security and International Affairs Division Phone: (202) 275-4268


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