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PSAD-77-57 1 (1977-02-28)

handle is hein.gao/gaobaacau0001 and id is 1 raw text is: DOCUIT RESOKI 01124 - (AO891521 geed to Prevent Department of Defense from Paying Some Costs for Aircraft Engines That Contractors Should Pay. VSAD-77-57; B-164912. February 20. 1977. 23 pp. + appendices (11 pp.). Report to the Congress; by Robert F. Kellerp Deputy Comptroller General. Issue Area: Federal Pzocurement of Goods and Services: Reasonableness of frices Under Negotiated Contracts ind Subcontracts (1904); Science and Technology: Federal Laboratories and Federally Supported Organizations Performing Research and Development (2003). Contact: --ocueiaent cad Systems Acquisition Div. Budget Function: National Defense: Department of Defense - Procurement & Contracts (058). Organi.ation ConcerneA: Department of Defense; Department of the Navy; Department of the Air Force. Congressional Relevance: House Committee on Armed Services; Senate Committee ca Armed Services; Congress. Authority: P.L. 91-441, sec. 203. The Department of Defense (DOD) needs to tighten its controls oier the allowability on Government ccntracts of certain technical costs incurred by aircraft manufacturers. Four managacturers of aircraft or eagines were investigated to determine whether the Government was paying more than its appropriate share of such costs. Findings/Conclusions: Some contractors are usi g independent r3search and development (IR&D) funds for questionable purposes. Technical work known as production support to bring producto in use up to specifications has been charged to IR&D. GAO believes such costs should be paid by the company. Because of the difficulty in ottaining records anC the questionable adequacy of records provided by the contractors* DOD will have to modify its planned questionnaire to allow Government access to commercial records to verify the certified data and obtain other data not covered Jn the gucutionnaire. Recomnendations: DOD should monitor the revision of the Armed Services Procurement Regulation (ASPR) to ensure that contractors and Government employees have a clear definition of XR&D that excludes commercial product support, and technical work implicitly required to fulfill a purchaser's contract requirement. The questionnaire project should be monitored to ensure that Government reviewers will be able to verify the allowability of nosts. Otherwise, the ASPR should requize that advance IR&D agreements permit Government review of commercial records. Contractors should be required to keep records in enough detail to allow evaluators to determine whether IRSD charges are allowable. (Din)

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