Missile Defense Agency officials overpaid for a contract by millions of dollars because they ignored the findings of the Pentagon office charged with overseeing such negotiations.
A *report from the Department of Defense‘s inspector general found MDA officials submitted a request to the Defense Contract Audit Agency for a $2 billion anti-warhead project.
While the DCAA looked over the proposal to ensure the costs were kept as low as possible, MDA officials forged ahead with contract negotiations and slashed the scope of the project by half without notifying their auditors.
The inspector general said the missile agency entered into the eventual $1 billion contract before the final DCAA audit was complete, ignoring preliminary findings that would have saved the Pentagon millions.
Among other missteps, the MDA paid out $73 million to the contractor it should have withheld due to government rules that dictate how to compensate companies for work performed before a contract is reached.
The provision, known as a “letter contract,” is meant to protect the government’s interests in cases where a project must begin immediately and prevents agencies from paying contractors more than 85 percent before an agreement is finalized.
However, the missile agency paid the defense contractor in full before signing the contract.
The audit agency had concerns about $224 million of the costs included in the original contract before ending its audit because missile agency officials had already signed with the contractor.
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