Question

Your auditor has notified you that while conducting an audit of a hide-um corp proposal for the same product you currently have on contract with them, the auditor found information that the contractor may have intentionally submitted vendor quotes that were significantly higher than his actual costs. you double check your file and verify that hide-um did submit certified cost or pricing data which you used to negotiate the final contract price. choose the reason why this scenario would put the contractor in debt with the government.

Answer 1

The most common reason as to why the contractor may be indebted to the Government is because of defective pricing. Defective pricing usually occurs when a contractor fails to submit or to even disclose pricing data or the government cost in which is even complete or accurate in reaching the agreed price. This is usually found at post-award audits in which the data are being analyzed.