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092812 1 (1970-11-25)

handle is hein.gao/gaobacwrs0001 and id is 1 raw text is: ( 6/ UNITED STATES GENERAL ACCOUNTING OFFICE REGIONAL OFFICE ROOM 7054, FEDERAL BUILDING LM092812 300 NORTH LOS ANGELES STREET Los ANGELES, CALIFORNIA 90012 NOV 25 1970 Mr. J. 0. Welden, General Manager The Bendix Corporation, Electrodynamics Division xi6oo Sherman Way North Rollywood, California 91605 Dear Mr. Weldon; This is to advise yOU that we have completed our review of the prices negotiated for contract Noo6o-68-c-o453 and purchase order ) 8129K1G22 awarded to the Bendix Corporation, Flectrodynamics Division. \f The contract was issued by the U. S, Naval Supply Center, Pearl Harbor,V Hawaii, on April 19, 19(8, for the overhaul and repair of 135 submarine cA6 valres. The purchase order was issued by Pan American World Airways, Inc., on May 8, 1968, under a prime contract with the Air Force Eastern Test oy2 Range, Patrick Air Force Base, Florida. The purchase order was for 20 $ acoustic transponders. Our review was directed towards determining the reasonableness of proposed contract costs in accordance with the require- ments of Public Law 87-653. We found that the proposed material costs for contract -0453 were higher than indicated by available cost information by about $8,900, including applicable overhead and profit. With respect to purchase order 8129K41G22, we identified cases where the most current, complete, and accurate cost information was not used in estimating proposed mateiial costs resulting in an increase in the purchase order price of about $1,200. The results of our review, which were discussed with the Division Controller and other company officials at the completion of our work, are discussed in greater detail as follows. Contract =0004-68-C-0453 We found that material costs were proposed on the basis of existing information contained in estimating files from prior proposals. In many cases, the information was not updated to reflect the most current purchase history although the data was often 3 and 4 years old. Por example, a unit cost of $6.h1 was proposed for part number 3058945 based on a price paid in 1964 for 5 units. However, the most recent f9A~ It

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