Defense Contracting

Key Data Not Routinely Used in Progress Payment Reviews Gao ID: NSIAD-92-1 January 14, 1992

Congress recently expressed concern about excessive progress payments made by the Navy to contractors associated with the A-12 (an advanced-attack aircraft) program. The administrative contracting officers in charge of various contracts GAO reviewed had not routinely used the most timely indications to spot cost overruns and thus were not in the best position to prevent overpayments. As a result of problems with the A-12, the Defense Contract Management Command recently issued guidance requiring the Defense Plant Representative Offices to use this information in quarterly program assessments and in annual progress payment reviews but not as part of monthly reviews of progress payments.

GAO found that: (1) the administrative contract officers (ACO) monitoring the contracts reviewed were not in the best position to prevent overpayments, since they did not use available cost and performance data to identify cost overruns; and (2) the Defense Contract Management Command issued guidance requiring Defense Plant Representative Offices (DPRO) to use available cost and performance data in quarterly program assessments and annual progress payment reviews, but not as a part of monthly progress payment reviews.

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