Contract Pricing

Material Prices Overstated on Tank Thermal Sights Gao ID: NSIAD-88-54 February 5, 1988

GAO reviewed the Army's contract for the production of tank thermal sights, to determine whether the: (1) contractor provided accurate, complete, and current cost data in compliance with the Truth in Negotiations Act; and (2) contracting officer used the data to negotiate fair and reasonable prices.

GAO found that the: (1) contractor's cost and pricing data generally complied with the act; (2) contract price was overstated by $6.1 million; (3) Army did not correctly use the contractor's specific purchase order and vendor option data; (4) Army did not use the final materiel update that the contractor submitted; and (5) Army did not require the contractor to maintain verifiable records to substantiate its overage and scrap rates.



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