Contract Pricing

Material Prices Overstated on Ground/Vehicular Laser Locator Designators Gao ID: NSIAD-88-25 October 13, 1987

GAO reviewed the pricing of an Army contract for Ground/Vehicular Laser Locator Designators to determine whether the: (1) contractor complied with the Truth in Negotiations Act in providing accurate, complete, and current cost or pricing data; and (2) contracting officer negotiated fair and reasonable prices.

GAO found that the contractor overstated target prices by $2,339,601, including overhead and profit, because it: (1) failed to disclose current materiel prices; (2) made a computation error; and (3) failed to disclose an updated bill of materiel. GAO also found that contract prices were overstated by an additional $1,777,396, including overhead and profit, because the contracting officer: (1) did not rely on an audit recommendation regarding anticipated materiel price reductions between the contractor and its vendors; and (2) accepted escalation on materiel costs that the contractor had based on firm vendor quotations.


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: Team: Phone:

The Justia Government Accountability Office site republishes public reports retrieved from the U.S. GAO These reports should not be considered official, and do not necessarily reflect the views of Justia.