About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

093173 1 (1974-05-14)

handle is hein.gao/gaobacxat0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE REGIONAL OFFICE ROOM 717 GATEWAY II BUILDING 4TH AND STATE KANSAS CITY, KANSAS 66101 May 1L, 1974 o 3J7 Space and Missile Systems Organization Air Force Systems Command Norton Air Force Base, California 92409 Dear Commander: We have examined the pricing of firm-fixed price subcontract (No. 037- W20313) awarded to the Brunswick Corporation, Lincoln, Nebraska, on Decem- ber 8, 1970, by the General Electric Company, Philadelphia, Pennsylvania, under its prime contract for Minuteman missiles. This examination was performed as part of a broad review of the reasonableness of subcontract estimates included in noncompetitive prime contract prices negotiated under the provisions of Public Law 87-653. The noncompetitive prime contract, number F04701-68-C-0178, amendment P00171, was awarded by the Space and Missile Systems Organization. The price of the subcontract, which provided for 123 shrouds or component parts of the missile, was later included as an estimated cost in General Electric's proposal. We performed this examination to deter- mine whether the subcontract estimate was reasonable in relation to cost or pricing data available to the subcontractor at the time the subcontract price was established. We examined the evaluation of the subcontractor's proposal performed by General Electric and the Government, the cost or pricing data submitted in support of proposed subcontract costs, the nego- tiation process between the subcontractor and General Electric, and, on a selective basis, the costs incurred. We noted two matters which we believe warrant your attention. First, the prime contractor was not required to submit complete subcontract cost or pricing data in support of the costs included in the subcontract price; and second, the subcontractor failed to disclose pertinent information to the prime contractor relating to estimated sales, quality control cost and scap cost. Had such information been furnished and evaluated, there would have been a sound basis to negotiate a lower price for the shrouds. INCOMPLETE DArA SUBMITTED Brunswick proposed a price of 1,131,075 in September 1970, for 122 shrouds, at $9,271 a shroud. General Electric made a limited review of the proposal but did not ask the Defense Contract Audit Agency to review it. Subsequently, Brunswick revised its proposal to $1,418,064 for 132 shrouds at $10,743 per shroud. During negotiations in January 2971, the lImQ,^3/757

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most