DOD Contract Management: Greater Attention Needed to Identify and Recover Overpayments.
Abstract
In October 1997, we reported to you that from October 1992 through April 1997, defense contractors refunded $5.1 billion to the Defense Finance and Accounting Service's (DFAS), Columbus Center; the largest Department of Defense (DOD) payment center; and we discussed the reasons for the refunds. As requested, we (1) updated this information through fiscal year 1998 and (2) visited 13 contractor locations to ascertain if the contractors were retaining overpayments and how quickly overpayments were refunded. We also obtained information on the backlog of contracts waiting to be examined for possible overpayment. In the 5 years between fiscal year 1994 and 1998, defense contractors returned about $4.6 billion to the Columbus Center-in fiscal year 1998, $746 million. The Center attributes most of the returned money to overpayments caused by factors outside its control. However; payment errors by the Center were also a factor. It took about a year; on average, before the 13 contractors refunded overpayments of $56.2 million to the Center. In addition, four of the contractors were still retaining overpayments totaling $1.1 million. After we brought these overpayments to the contractors' and the government's attention, the contractors refunded the overpayments. A Defense Contract Management Command area office also instructed its personnel to ask contractors reporting overpayments to immediately return the money In some cases, government personnel were aware of overpayments, but they did not take timely action to obtain recovery Under current law, there is no requirement for contractors who have been overpaid to notify the government of overpayments or to return overpayments prior to the government issuing a demand letter
Document Details
- Document Type
- Technical Report
- Publication Date
- Jul 01, 1999
- Accession Number
- ADA366304
Entities
Organizations
- United States Government Accountability Office