ADVISORY REPORT ON REVIEW OF PROPOSED PRICING FORMULA PERIOD: 1 FEBRUARY 1959 TO 30 JUNE 1959 HYCON MFG. COMPANY PASADENA, CALIFORNIA CONTRACT NO. HF-CT-696

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89B00709R000400850032-7
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 22, 2016
• Document Release Date: January 12, 2011
• Sequence Number: 32
• Publication Date: May 27, 1959
• Content Type: MEMO

Sanitized Copy Approved for Release 2011/01/12 : CIA-RDP89B00709R000400850032-7
DEPARTMENT OF THE AIR FORCE
HEADQUARTERS UNITED STATES AIR FORCE
WASHINGTON 25, D. C.
DPD-
27 M
357.-59
ay 1959
#48$
REPL
Audi
Comp
East
Liai
P.O.
Wash
Y TO:
tor General
troller, USAF
ern District
son Office
Box 8155, S.W. Station
ington, D. C.
SUBJECT
TO
: Advisory Report on Review of Proposed Pri
Period: 1 February 1959 to 30 June 1959
Hycon Mfg. Company
Pasadena, California
Contract No. HF-CT-696
: Contracting Officer
cing Formula
REFERENCE : DPD-2597 dated 17 April 1959
1. An examination has been made of the contractor's records to de-
termine the reasonableness of the proposed rates under the subject con-
tract for the period 1 February 1959 to 30 June 1959. No recommendations
are included which relate to the 10% profit factor, 'which is subject to
approval by the Contracting Officer.
(a) Hourly direct Labor Rates. The proposed direct labor rates
are reasonable and are recommended for acceptance.
(b) Burden. The proposed 155% M&O burden rate is recommended
for acceptance based on tests. The contractor's proposed 170% Shop
Burden rate is recommended for acceptance, based on an experienced
rate of 196% for the three months period ended 30 April 1959.
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 Sanitized Copy Approved for Release 2011/01/12 : CIA-RDP89B00709R000400850032-7
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(c) General and Administrative Expenses. The contractor's;
book rate for the three months period ended 30 April 1959 is 15.6f
7o.
Based on the experienced disallowances and upon information obtained
from Navy Audit, the auditor recommends a rate of 14R6 for acceptance.
(d) Burden on Material and Purchased Parts Outside Processing
and Subcontracts. The auditor recommends a 1 material handling
rate, based on a book rate of 14.1% for the three months ended
30 April 1959, in addition to information obtained from the resident
Navy Audit Office relative to workload and backlog.
(e) Hourly Rates - Leadman. The proposed .250 per hour increase
for leadmen conforms with the latest agreement between the contractor
and its union.
Audit Liaison Officer
Eastern District
Auditor General
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