Contract Pricing: Overpricing of Joint Cruise Missiles Automatic Test Equipment

The Truth in Negotiations Act (Public Law 87-653), as amended, requires that with certain exceptions, contractors submit cost or pricing data in support of proposed prices for noncompetitive contracts. The act also requires contractors to certify that data submitted are accurate, complete, and current. Noncompetitive contracts are required to include a clause that gives the government a right to a price reduction if it is determined that the price was overstated because the data submitted were not accurate, complete, or current. The Joint Cruise Missiles Project Office awarded a noncompetitive letter contract-N00032-86-C-6125-to Williams International Corporation for automatic test equipment on June 27, 1986. On September 19, 1986, the Joint Cruise Missiles Project Office and Williams agreed to a price of $14,604,291. Williams provided a Certificate of Current Cost or Pricing Data on September 22, 1986, and certified that the data submitted were accurate, complete, and current as of the price agreement date.