Contract Pricing

Defense Contract Audit Agency's Estimating Reports Can Be Improved Gao ID: NSIAD-91-241 August 1, 1991

Pursuant to a congressional request, GAO evaluated 101 Defense Contract Audit Agency (DCAA) reports reviewing defense contractors' cost-estimating systems.

GAO found that: (1) DCAA has a key role in assessing the adequacy of contractor estimating systems and correcting significant and widespread estimating deficiencies; (2) the DCAA estimating-system reports that identified subcontract-estimating deficiencies did not always demonstrate and emphasize to administrative contracting officers and contractors the need to correct such deficiencies; (3) many DCAA reports did not illustrate the potential cost impact of the identified deficiencies or include the required recommendations for disapproving inadequate systems; (4) as a result of GAO efforts, DCAA increased emphasis on ensuring that it included appropriate recommendations in estimating-system reports when it identified significant deficiencies; and (5) DCAA officials began monitoring all estimating survey and follow-up reports after February 12, 1991, to ensure compliance with the DCAA audit manual.

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.

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