Actions to Establish Final Indirect Cost Rates on Reportable Contract Audit Reports by the Supervisor of Shipbuilding, Conversion and Repair, Groton, Connecticut
Abstract
For semiannual reporting periods ending between September 30, 2004, and March 31, 2007, we evaluated the actions taken by contracting officials at the Supervisor of Shipbuilding, Conversion and Repair, Groton, Connecticut, to establish final indirect cost rates on cost reimbursable-type contracts. We reviewed certain Memoranda of Agreement for compliance with procurement regulations and performed an in-depth review of contracting officer actions taken to liquidate contract debts totaling $3.8 million. Final indirect cost rates established by contracting officials since the 1970s at the Supervisor of Shipbuilding, Conversion and Repair, Groton, Connecticut, did not comply with the Federal Acquisition Regulation and the Cost Accounting Standards. Groton contracting officials had not taken action to resolve an allegation of noncompliance with the Cost Accounting Standards reported by the Defense Contract Audit Agency. Groton contracting officials had not justified their actions when executing Memoranda of Agreement with the contractor with approved business clearance memoranda. Groton contracting officials had improperly liquidated contractor debt totaling $3,882,926 against two unpaid bills totaling $3,615,860. One unpaid bill was for a funding shortfall of $1,696,860 on a submarine overhaul contract and represented a potential Antideficiency Act violation. We concluded the other unpaid bill, said to equal $1,919,000 for contractor pension costs, was in effect consideration given to the contractor for agreeing to circumvent the legally binding requirements of an existing Advance Agreement on Pension Cost when entering into the SSN-23 SEAWOLF Contract. We find no provision in the Federal Acquisition Regulation that would allow for the use of such an arrangement as the basis for offsetting a legitimate contractor debt.
Document Details
- Document Type
- Technical Report
- Publication Date
- Sep 24, 2010
- Accession Number
- ADA578154
Entities
People
- Randolph R. Stone
Organizations
- Office of the Inspector General, U.S. Department of Defense