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092940 1 (1971-03-19)

handle is hein.gao/gaobacwuy0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE REGIONAL OFFICE 10 ROOM 7068. FEDERAL BUILDING 300 NORTH LOS ANGELES STREET Los ANGELES, CALIFORNIA 90012 March 19, 1971 Mr. Alex Sol1liiilii Regional manager l1llll11111111111111111 111l ll 111lll Los Angeles Region LM092940 Defense Contract Audit Agency 1340 West 6th Street, Second Floor Los Angeles, California 90017 Dear Mr. Soll: 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 DAAAO9-68-C-0317, DAAAO9-69-C-0107, and N00104-69-C-0092 awarded to Alcan Aluminum Corporation, Riverside, California. Contracts -0317 and -0107 were issued by the U. S. Army Ammunition Procurement and Supply Agency, Joliet, Illinois, in the amount of $1,191,970 and $4,631,031, respectively, for the production of Rocket Motors, HE,66MM,M54,MPTS. Contract -0092 was issued by the U. S. Navy Ships Parts Control Center, Mechanicsburg, Pennsylvania, in the amount of $1,642,500 for the production of Zuni Rocket Motors, 5.0,MK 16, Mod. 1. The results of our review were discussed with your staff at the Ontario Branch Office. Enclosed for your information are copies of our letter reports to the Commanding Officer, U. S. Army Ammunition Procurement and Supply Agency, and the Commanding Officer, U. S. Navy Ships Parts Control Center, which summarize the results of our review. During our recent coordination meeting, we advised you that our review indicated a need for improved coverage during preaward audits at Alcan. In addition to the examples cited in the enclosed letters, we also found that the audit staff did not evaluate the reasonableness of other proposed costs for these contracts. Our review, however, disclosed that these proposed costs appeared to be reasonable based on our evaluation of the most current data at negotiations. The Branch Manager agreed that a need exists to more clearly document in the working papers the scope of the audits and the rationale for not reviewing certain proposed costs. He also agreed that, as a minimum, the preaward audit reports should have been qualified in those cases where significant proposed costs were not audited. SO Tr ANNIVEZRSARY 1921- 1971-

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