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Contract Management: DOD's Use of Recovery Auditing

NSIAD-00-134 Published: Jun 05, 2000. Publicly Released: Jul 06, 2000.
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Highlights

Pursuant to a congressional request, GAO provided information on the Department of Defense's (DOD) use of recovery auditing, a process that identifies and collects overpayments made to vendors, focusing on DOD's: (1) progress in recovering overpayments and the reasons for any delays; and (2) use of recovery auditing.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense To minimize disagreements between DOD and vendors in the future, after the Armed Services Board of Contract Appeals rules on the appeals, the Secretary of Defense should examine the need to clarify price warranty provisions in its contracts.
Closed – Implemented
Contracts using price warranty provisions were transferred from the Supply Center to the Defense Commissary Agency. The Defense Commissary Agency held discussion with industry representatives and developed a new warranty clause. The new clause has been in use since January 2002.

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Topics

Auditing and Financial Management
Contract oversightContractor paymentsDefense auditsDepartment of Defense contractorsInternal controlsOverpaymentsAppealsArmed ServicesWorking capital fundInternational relations