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089645 1 (1975-10-02)

handle is hein.gao/gaobacvru0001 and id is 1 raw text is: .> UNITED STATES.,GENERAL ACCOUNTING OFFICE WASHINGtON REGIONAL OFFICE FIFTH FLOOR 803 WEST BROAD STREET FALLS CHURCH, VIRGINIA 22046 OCT 2 1975 Commanding Officer Naval Training Equipment Center Orlando, Florida 32813 Dear Sir: As part of our review of the pricing of Department of Defense noncompetively awarded contracts, we examined the Naval Training Equipment Center's (NTEC) actions in nego- tiating contract modification P00009 of contract N61339-73- C-0076. This contract was awarded to Simulation Engineering Corporation (SECOR) and provides for the design, construction, and installation of two A4M Operational Flight Trainers. The contract was originally awarded as a competitive fixed- price contract on December 22, 1972, in the amount of $1.8 million. More specifically, our review of this modification was directd toward change order ECP 2F108-1 and evolved from a survey undertaken to determine the completeness of the contractor's cost or pricing data used in support of his cost proposals. Our review disclosed that SECOR, on two different occasions, failed to disclose to NTEC information that may have resulted in a reduction of contract price. We found that contractor-proposed material costs, in the amount of $10,227, were higher than indicated by current cost data available at the time of negotiation. In addition, we found that materials amounting to $6,400 were proposed but later deleted by the contractor without notifying NTEC's contracting officer. Further, we noted that SECOR's actual material costs were $107,417 less than the amount negotiated with NTEC. We believe this resulted because NTEC's contract- ing officer had no firm basis for negotiating material at proposed contractor prices. Consequently, we would appreciate obtaining your comments and proposed actions to be taken on this matter. A brief discussion of our findings is presented in the following sections.

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