Defective Pricing: Management Tools for Case Resolution

摘要

The 1962 Truth in Negotiations Act was a legislative attempt to put the government and the contractor on an equal negotiating basis. It requires the contractor to provide accurate, current, and complete information to the government negotiator during negotiations. Defective pricing occurs when the contractor violates this tenant. The time frame and milestone sequence currently being followed in resolving these cases has drawn considerable top level interest. The six month time criteria, established by DODD 7640.2, is being exceeded in a majority of the cases. This study was designed to accomplish three goals: to analyze the current procedures being used in the Systems and Logistics Commands during the post-award audit phase of the resolution process; to identify deficiencies, bottlenecks, and ineffective procedures which are present; and to develop management tools that will assist the government in resolving these cases in a timely and effective manner. A survey of regulations, directives, and policy letters was conducted in conjunction with interviews with field experts and key personnel in the defective pricing arena within AFSC and AFLC. A comprehensive case study analysis revealed that the current procedural sequence and time frames being followed have several inherent weaknesses and problems. A logical and effective set of milestone guidelines, to be used as management tools, were developed along with other recommendations designed to strengthen the government's position in resolving defective pricing cases. Keywords include: Audit, Defective Pricing, Overages, Public Law 87-653, Resolution, Truth-In-Negotiations.