A prime contractor developing high speed diesel engines for the Army is awarded a cost plus, sole source contract over $25,000,000. The prime contractor awards a subcontract to a vendor to deliver fuel pumps at a price of $500 per unit. The proposal used to negotiate the diesel engine contract's price under the Truth in Negotiation Act (TINA) is based on a price of $750 per unit for the fuel pumps.

The contracting officer determines after discussions with the contractor and research that this is an overcharge.

What should occur after this determination?

(Provide references)