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NSIAD-92-301R 1 (1992-09-03)

handle is hein.gao/gaobackda0001 and id is 1 raw text is:                                                         1I b I j'
GAo          United States
             General Accounting Office
             Washington, D.C. 20548

             National Security and
             International Affairs Division

             B-242859                                         jtj jill 101 ii


             September 3, 1992                                    147491


             Mr. William H. Reed
             Director, Defense Contract Audit Agency

             Dear Mr. Reed:

             In May 1992 we reported to Senator John Glenn, Chairman,
             Senate Committee on Governmental Affairs, that the Defense
             Contract Audit Agency (DCAA) was unaware of 186, or
             88 percent, of the subcontracts in our sample of 211
             negotiated subcontracts that were contained in four major DOD
             prime contracts. Our report' discussed the reasons why the
             DCAA inventory of subcontracts subject to the Truth in
             Negotiations Act was incomplete.

             In addition to those issues, we also came across several
             deficiencies that pertain to the 25 subcontracts from our
             sample that were included in the inventory, which DCAA was
             aware of. The purpose of this letter is to inform you of
             these deficiencies.

             We found that DCAA field offices are not fully complying with
             DCAA guidance when developing their defective pricing
             inventories. DCAA field offices are

             -- not including subcontracts in their inventories in a timely
                manner;

             -- not retaining all subcontracts in their inventories for a
                full 3 years; and

             -- in one field office, combining subcontracts and subcontract
                modifications rather than listing each separately.







             Contract Pricing: DCAA's Audit Coverage Lowered by Lack of
             Subcontract Information (GAO/NSIAD-92-173, May 29, 1992).

                                GAO/NSIAD-92-301R DCAA Subcontract Inventory



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