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Government Operations: Unallowable Costs and Penalties

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Report Type Reports and Testimonies
Report Date July 6, 1994
Report No. NSIAD-94-204R
Subject
Summary:

Pursuant to a congressional request, GAO reviewed the extent to which the Department of Defense (DOD) uses the penalty provision in the DOD Authorization Act of 1986 to deter defense contractors from submitting unallowable and questionable cost claims. GAO noted that: (1) the information that the Defense Contract Management Command (DCMC) collected on the use of penalties was limited; (2) a more complete and better organized system for collecting and analyzing penalty information would be cost beneficial as a basis for DCMC oversight; and (3) a more formal system for maintaining penalty data could help DCMC manage DOD contracting officers' use of the penalty provision.

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