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093932 1 (1972-11-29)

handle is hein.gao/gaobacxij0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE o< REGIONAL OFFICE ROOM 7054 FEDERAL BUILDING 300 NORTH LOS ANGELES STREET 3IS Los ANGELES, CALIFORNIA 90012 0 NOV 2 9 1972 Lieutenant General Kenneth W. Schultz Commander, Headquarters, Space and Missile Systems Organization (AFSC) Post Office Box 92960 0 o ; Worldway Postal Center DLc, '> 65, Los Angeles, California 90009 Dear General Schultz We have completed a review of compliance by contracting officers with the subcontract cost or pricing data requirements of the Armed Services Procurement Regulation (ASPR) at the Space and Missile Systems Organization (SAMSO), El Segundo, and Norton Air Force Base, Califo a. Our review was part of an overall evaluation of the Department of GCOO5 / Defense compliance with subcontract data requirements in the pricing of noncompetitive contracts. The primary objectives of our review were to determine whether (1) subcontract cost or pricing data are being obtained as required by the procurement regulation, and (2) these data and the results of cost analysis are effective aids to contracting officers in negotiating fair and reasonable prime contract prices. Our review included 32 subcontract proposals amounting to $74.6 million for which cost or pricing data was required under prime contracts totaling $368.5 million awarded during fiscal year 1972. The results of our review were discussed with members of your staff at the completion of this assignment. The following matters, however, are being brought to your attention for further consideration an improving the procurement process at SAMSO. SUBCONTRACT COST OR PRICING DATA SUBMISSIONS Our review showed that 10 of 24a subcontract proposals did not contain adequate identification of the bases for proposed costs as required by ASPR and provided for in the Contract Pricing Manual. Consequently, the contracting officers did not have adequate knowledge of the factual and verifiable data upon which the cost estimates and management judgments anight of 32 subcontract proposals were not obtained for evaluation purposes.

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