Army Contracts Overpriced Due to Misapplication of Spares Formula Pricing Factor

Gao ID: NSIAD-85-27 March 22, 1985

GAO examined selected pricing aspects of five Army contracts for the production of spares for the UH-60 helicopter. Specifically, GAO determined the reasons for any price differences and the reasonableness of the prices the Army paid.

GAO found that the contracts were overpriced by about $872,000 because the contractor did not give Army contracting officials information relative to the use of a spares formula pricing factor. Although the use of the factor was not appropriate, certain of its elements would have been appropriate for pricing both spares and complete end items.

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) 275-4141


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