Use of Work Measurement System Data in Negotiating With Prime Contractors
Abstract
A work measurement system is a compilation of techniques for setting time standards, collecting data on hours worked, and analyzing the variance between actual and standard hours. If work measurement systems are properly implemented, management uses the resulting data to evaluate productivity and to determine where improvements are needed to avoid inefficient or uneconomic production. The use of work measurement data within DOD was incorporated through Military Standard 1567A, which was designed to improve productivity and efficiency in contractor industrial operations and to reduce weapon systems costs. Defense Federal Acquisition Regulation Supplement (DFARS) section 215.876, "Work Measurement Systems," was added in May 1989, requiring the use of the Work Measurement System (WMS) when appropriate, to provide data for use in planning, estimating cost, and monitoring contractor performance. Objectives. The audit objectives were to determine the extent that Government procurement contracting officers (PCOs) requested, analyzed, and used contractor work measurement data in their contract cost analyses to negotiate production costs; to influence improved contractor performance and efficiency; to ensure compliance with DoD regulations; and to determine whether internal controls were in place and being followed. Audit Results. PC0s did not request, analyze, or use WMS data to negotiate production costs, even though all contractors visited had some type of WMS in place. Internal Controls. The audit identified a material internal control weakness. Adequate administrative procedures were not established to ensure that DFARS provisions were followed. PCOs did not use WMS data in contract cost analyses or contract price negotiations. Refer to the internal controls section in Part I, page 3 of this report. Potential Bene
Document Details
- Document Type
- Technical Report
- Publication Date
- Dec 18, 1991
- Accession Number
- ADA378681
Entities
Organizations
- Office of the Inspector General, U.S. Department of Defense