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LCD-77-304 1 (1976-11-23)

handle is hein.gao/gaobaacad0001 and id is 1 raw text is: t3UNITED STATES GENERA? ACCOUNTING OFFICE WASHINGTON, D.C. 20M LM101107 .B-118623 NOV 23 1976 The Honorable Jack Eckerd Admin-strator of General Services Dear Mr. Eckerd: Our survey of selected construction contracts awarded and administered by the General Services Administration (GSA) disclosed that the method GSA uses to establish prices for charge orders which reduce the scope of work needs to be change#. Under existing GSA practice, a contractor is not required to give the Government ccedic for overhead, profit, and commission on work deleted from the contract. On the other hand, it is the practice of the Army Corps of Engineers to obtain a credit for overhead and prbfit if the scope of work is reduced. When change'orders add work to be performed, GSA allows for overhead, profit, and commission in negotiating the total amount due the contractor. Most GSA construction contracts ace firm fixed price contracts awarded to the lowest responsive bidder after for- mal advertising. Few, if any, construction contracts are completed without change and a net increase in cost. Federal procurement regulations ace silent on .the method for pricing construction contract change orders. GSA contract provisions state that allowances for overhead, profit, and commission shall be negotiated for contract changes. The per- centages for each may vary depending upon the nature and com- plexity of the wock but in no case should it exceed the following: LCD-77-304 !i

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