DOD IG recommends stricter cost analysis, documentation in C-5 parts report

By Rachel Cohen / February 9, 2017 at 12:26 PM

A new Pentagon inspector general's report shows the Air Force Life Cycle Management Center did not find the fairest and most reasonable prices for 11 commercial spare parts for the C-5 Lot 7, valued at $67 million, because the contracting officer lacked enough commercial sales data to negotiate cost.

The Air Force disagreed with that assessment but concurred with each of the watchdog's recommendations in the Feb. 7 report, including the need to require contracting officers to have "sufficient" commercial sales data when comparing prices of sole-source commercial items, and to ask for other data when that sales information is inadequate.

The inspector general also said contracting officers should have to look at whether asking for a $5.3 million refund from Lockheed Martin Aeronautics Co. to repay excess contract funding is needed; to create policy and standard operating procedures that ensure contracting officers validate documented price analyses; and to implement policy and procedures that ensure contracting officers follow federal acquisition regulations for keeping price analysis results and other supporting information in the contract file.

Air Force officials did not elaborate on what steps would be taken to achieve those objectives other than continuing with current practice.

Upgrading 11 C-5 military transport aircraft in Lot 7 cost more than $1 billion, including the cost of spare parts, according to the report.

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