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089013 1 (1977-05-10)

handle is hein.gao/gaobacvab0001 and id is 1 raw text is: ICD SM UNITED STATES GENERAL ACCOUNTING OFFICE REGIONAL OFFICE ROOM 201 415 FIRST AVENUE NORTH SEATTLE, WASHINGTON 98109 MAY 10 1977 Di. W R Lucas Director, (DA0I) George C. Marshall Space Flight Center National Aeronautics and Space Administration Marshall Space Flight Center, Alabama 35812 Dear Dr Lucas We recently completed a survey of the pricing of contract NAS 8- 31722 awarded by your office to the Eldec Corporation, Lynnwood, Washington, for production of the Dedicated Signal Conditioners and Sagnal Conditioner Modules These are parts of the Solid Rocket Booster, a component of the Space Shuttle Orbiter. This firm fixed price contract was selected as part of a nationwide survey by our office of the pricing of negotiated, noncompetitive contracts over $100,000 awarded by civil agencies Our survey was made at the Eldec Corporation. We also considered the preaward audit work of the Defense Contract Audit Agency and the technical analysis report developed by your staff The results of our survey were presented to Eldec and its comments have been considered in developing this report A copy of these comments is enclosed Our survey showed that the negotiated contract price was overstated by at least $65,000 for part numbers 5-684 and 5-685 because (1) the formula Eldec used to compute proposed labor hours overstated the hours required and (2) Eldec did not use accurate data when computing the pioposed labor hours Eldec's final price proposal, dated July 3, 1975, was $1,358,292, including a profit of $202,485 Price negotiations, concluded on August 27, 1975, resulted in a negotiated price of $1,190,000 There was no agreed allocation of this price to cost and profit elements. Public Law 87-653, in essence, requires prime contractors and subcontractors to submit cost or pricing data in support of proposed pices for noncompetitive contracts and subcontracts expected to exceed $100,000 and to certify that this data is accurate, complete, and current Contract prices can be adjusted when the price to the Government has been increased significantly because the contractor or subcontractor furnished data that was inaccurate, incomplete, or noncurrent as certified ~~/OelolJ

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