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DOD Contract Management: Greater Attention Needed to Identify and Recover Overpayments

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Report Type Reports and Testimonies
Report Date July 19, 1999
Report No. NSIAD-99-131
Subject
Summary:

GAO reported in 1997 that from October 1992 through April 1997, defense contractors refunded more than $5 billion to the Defense Finance and Accounting Service's Columbus Center, the military's largest payment center. GAO updated this information and found that between fiscal years 1994 and 1998, defense contractors returned about $4.6 billion to the Columbus Center--$746 million in fiscal year 1998 alone. Center officials said that most of the returned money was due to factors outside of their control, although 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 still retained overpayments totaling $1.1 million. The Center has a sizable and growing backlog of contracts waiting to be examined to ensure that contractors were properly paid--a process called reconciliation.

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