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089053 1 (1976-09-16)

handle is hein.gao/gaobacvbi0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE REGIONAL OFFICE 003 Pox PLAwA. osMo MA~e snE T E-r, | lll SAN FRANCISCO, CALIrORmsA 9411102 IlllI W REPLY RFR TO: 950261 SEP 16 1976 Major General E.A. Rafalko Commander, Ogden Air Logistics l Hill Air Force Base, Utah 84406 LMOB9053 Dear General Rafalko: The General Accounting Office (GAO) has completed a pricing review of firm fixed price contract F42600-74-1894, awarded by Ogden Air Logistics Center (OALC), on February 20, 1974, to California Microwave, Inc. (CMI). The contract, as amended, was for the purchase of 284 microwave signal analyzers, six radar simulators, and various data a: a negotiated price of $6,769,943. At the time of our review, delivery of an initial 125 signal analyzers, priced at $3,143,875, had been completed. Based on CMI's actual costs to date,-and projected estima:es to completion, it does not appear the overall contract price will be excessive. However, we are concerned that the procedures followed by OALC in evaluating the contractor's proposal and negotiating the contra:: were not in accordance with provisions of the Armed Services Procurenet Regulations (ASPR). In summary, we found the contractor's proposal OALC's evaluation of it to be inadequate. The ASPR requires that cost or pricing data submitted by a contractor in support of its proposal include--all facts which can reasonably be expected to contribute to sound estimates of future costs as well as to the validity of costs already incurred. This should include data relating to any anticipated change in production.methods as well as data upon which the contractor's judgment of estimated future costs are based. The ASPR also requires that DOD perform a cost analysis of the contractor's cost or pricing data to form an opinion as to'the reasonable- ness of the proposed costs. The ASPR further requires that the cost analysis include a review and evaluation of the judgmental factors applied by the contractor in projecting from historical data to costs estimated under the contract. 3li .ill.uludig..

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