The primary objective of this thesis is to identify the principal problems encountered by a Navy ship repair facility during the administration of engineering and technical service contracts. A background discussion of contract types and the applicable regulations is provided. The identification of the principal problems is accomplished through a review of historical audit results. This review focuses on the principal problem areas of: (1) vague Statements of Work, (2) incomplete or biased independent Government cost estimates, (3) failure to properly perform Contracting Officer's Technical Representative (COTR) duties. The study then determines the frequency and severity of these problems areas at the site studied. An analysis of the background causes of these problems and their impact upon the ship repair facility is presented. A discussion of recommendations that would reduce or avoid the problem areas is offered.