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DOCUMhET RESUME
01127 - (110Q1683]
Federal Supply .-rvice Not Buying Goods at Lowest Possible
Price. PSAD-77-69; B-114B07. Harnh 4p 1977. 23 pp.
Report to the Congress; by Robert F. Keller, Acting Comptroller
General.
Issue Area: Federal Procurement of Goods and Services:
Reasonableness of Prices Under Negotiated Contracts and
Subcontracts (1904).
Contact: Procurement and Systems acquisition Civ.
Budget Function: General Government: General Prcperty and
Records management (04); General government: tther General
Government (606).
Organization Concerned: General Services Administrati, Federal
Supply Service.
Congressional Relevance: Congress.
Authority: Truth-in-Negotiation Act (P.L. 87-653).
Some contractors charge the Government more for their
products than they charge commercial customers who buy smaller
or conpsrable quantities of those products.
Findlings/Conclusions: Prices charged the Federal Supply Service
(1SS) by 5 of 12 multiple aaA schedule contractors were much
higher than prices charged other customers. This was probably
because the FSS did not have procedures for considering the
total purchases expected under a contract when evaluating offers
and prices. as a result, the P$S did not obtain the voluse
discounts norsally available to other customers. Had it dcne so,
the Pzvernsent could have saved about S1.2 xMllion on pur:hases
totaling S11.,2 million from the five contractors. Although sales
from FSS contracts amounted to $840 million, contractors'
?)roposals were rarely independently audited. Sales and discount
information submitted on 6 of 15 contract proposals was not
accurate, currents or complete. Therefore, the pricing
inforrnation uses by the FSS in evaluating offers and negotiating
prices say have boon inaccurate. Recommendations: The FSS
should ilevelop procedures to enab.e it to obtain discounts given
by contLxctors to other customers buying large quantities uf
qoods anA increase its verification of contractors$ proposals
and audit coverage of completed contracts. The General Services
Administration needs to reevaluate its role and adopt the
concept that it represents the Government as an entity rather
thau as individual purchasing units. (1uthor/QM)](ViewImageLocal?handle=hein.gao/gaobaacax0001&div=1&collection=&method=preview&ext=.png&size=3)