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104925 1 (1977-02-03)

handle is hein.gao/gaobacxqg0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE - REGIONAL OFFICE SUrrM s0-, we W. 26TH AVENUE U104925 DENVER, COLORADO 80211 4A 7 Dr. W. R. Lucas, Director George C. Marshall Space Flight Center National Aeronautics And Space Administration Marshall Space Flight Center, Alabama 35812 Dear Dr. Lucas: The General Accounting Office has completed a review of Contract HAS 8-31665 awarded August 13, 1975, by the Marshall Space Flight Center -Warshall) to the Martin Marietta Corporation (Martin Marietta), Denver Division. The.basic contract was for 322 Pyrotechnic Initiator Controllers (PIC), three test sets and data at a value of $1,900,000. The current value of the contract through modification 30 is $2,600,911. This contract was selected as part of a survey of procedures and practices used by civil agencies to negotiate noncompetitive contracts with prices exceeding $100,000. Our objectives were to determine whether the Marshall Space Flight Center required Martin Marietta to furnish cur- rent, complete, and acturate cast or pricing data as required by Title 10 U.S.C. 2304, Truth in Negotiations Act, and the National Aeronautics and Space Administration's implementing procurement regulations, and whether Marshall evaluated and relied upon that data in negotiating the contract price. The Truth in Negotiations Act, requires that with certain exceptions, contractors be required to submit coat or pricing data in support of pro- posed prices for noncompetitive contracts and contract modifica:ions expected to exceed $100,000. In addition, contractors are required to certify at the time of negotiations that data submitted is current, complete, and accurate. A clause is inserted in the contract which gives the Government a right to a price reduction where it is determined that the price was increased because the data subm:tted were not in accord with the certification. Our conclusions and recommendations are summarized below. Briefly, we believe that had Martin Marietta provided current, complete, and accurate data concerning the cost reduction studies ongoing at the time of negotiations, the contracting officer would have had a sound basis for reducing the current price by $83,649.-Additionally, Martin Marietta will realize-a substantial unanticipated profit resulting from savings on material purchases, because the contracting officer at Marshall failed to follow up on recommendations contained in the Defense Contract Audit Agency (DCAA) audit report. I 4 1 9 .

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