HUB AEROSPACE | My Assignment Tutor

HUB AEROSPACEReview this case carefully and answer the questions at the end of the case in detail.Hub Aerospace, Inc. was awarded a fixed-price-incentive contract for jet aircraft engines. The engines were assembled by Hub from components furnished by subcontractors. Hub had received competitive bids on all their components, which they had compiled, to come up with the bid price. Included in a number of these components was one termed a -chamber.’” Hub’s make-or-buy study in the pre-contract phase had concluded with the decision to buy 70 chambers from one of its subcontractors.Mr. Brosky. the contracting officer, had reduced the target price by $58,751 pursuant to the clause on price reductions for defective cost or pricing data. His decision to take this action was based on information furnished him by the GAO, who found in their post-award audit under PL 87-653 that Hub had failed to disclose price quotations submitted by a subcontractor, Steele Tube and Pipe Company, in competition for the chambers. This subcontractor’s quotation of 1 February 19X0 to Hub had been a unit price of $16,211. Hub’s proposal to the government was based on the unit price of $17,000 submitted by the Weller Steel Tube Company. The difference between these two vendor prices of $789, adjusted by contract pricing arrangement of 75/25, G&A and profit was the basis of Mr. Brosky’s price adjustment.Also at issue is a substantial increase in the amount of price reduction based on another undisclosed quotation of $15,451, 3 June 19X0. This quotation was submitted by Steele after the prime contract negotiations were completed and after Hub had executed its certificate of current pricing but before signing the prime contract. Hub then awarded the subcontract to Steele at the reduced price.The circumstances preceding award of the government’s contract to Hub Aerospace, Inc. were substantially as follows:The number of chambers to be purchased or to be made in-house under the make-or-buy program was uncertain. Changes were made in the program and in the quantities to be quoted on by the subcontractors. In January 19X0, the range of prices per unit for chambers was as follows:Quanta Steele Weller76 $18,463.51 $19,283.00 102 18,278.90 18,835.00 128 18,186.59 18,486.00 154 18,094.29 18.228.00 180 17,909.68 17,990.00


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