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092939 1 (1971-03-19)

handle is hein.gao/gaobacwux0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE REGIONAL OFFICE ROOM 7068. FEDERAL BUILDING 300 NORTH LOS ANGELES STREET Los ANGELES, CALIFORNIA 90012 MAR 19 1971 Brigadier General Peter G. Olenchuk Commanding Officer U. S. Army Ammunition Procurement and Supply Agency Joliet, Illinois 60436 Dear General Olenchuk: As part of our review of the negotiation of contract prices under the provisions of Public Law 87-653, we have examined into the prices proposed and negotiated for firm fixed-price contracts DAAA9-68-C-0317 and DAAAO9-69-C-0107 awarded to Alcan Aluminum Corporation, Riverside, California, by the U. S. Army Ammunition Procurement and Supply Agency (APSA). Contract -0317 was awarded on January 31, 1968, in the amount of $1,191,970 and provided for the contractor to furnish 346,000 Rocket Motors, HE,66MM, M545,MPTS. Contract -0107 was awarded on December 30, 1968, in the amount of $4,631,031 and provided for the contractor to furnish 1,390,700 M54 Rocket Motors. Contract -0107 was negotiated by the Los Angeles Procurement Agency (LAPA) at APSA's request. Our examination was primarily concerned with the reasonableness of the price negotiated in relation to cost or pricing data available at the date of contract negotiations and the adequacy of technical and audit evaluations of the contractor's cost proposals. We found that proposed costs for contract -0317 were based on the most current, complete, and accurate cost or pricing data at the time of contract negotiations with the exception of tool maintenance costs which were apparently understated. With respect to contract -0107, we found that proposed labor costs were higher than indicated by cost information available at the date of contract negotiations by about $31,400, including applicable overhead and profit. Also, proposed tool maintenance costs may have been understated. The evaluations of the contractor's cost proposals were not performed in sufficient depth to determine whether the proposed contract prices were based on the most current, complete, and accurate cost or pricing data. The results of our review are discussed below. 50TH ANNIVERSARY 1921-197 ..2II.

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