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092767 1 (1970-02-04)

handle is hein.gao/gaobacwre0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. Z0548 CIVIL DIVISION FEB 4 1970 Dear Dr. Paine: The General Accounting Office (GAO) has reviewed selected aspects of the procurement of guidance and navigation (G&N) systems for the Apollo spacecraft by the Manned Spacecraft Center (MSC). Our review was made pursuant to the Budget and Accounting Act of 1921 (31 U.S.C. 53); the Accounting and Auditing Act of 1950 (31 U.S.C. 67); and the authority of the Comptroller General to examine contractors' records as set forth in contract clauses prescribed by the United States Code (10 U.S.C. 2131(b)). Our review was conducted at MSC, Houston, Texas; NASA Headquarters, Washington, D.C.; and the prime contractor's plant, and included an exam- ination of pertinent records at each location and discussions with respon- sible NASA and contractor officials. On the basis of our review of the available records relating to the consolidation of G&N industrial support contracts in 1964, we concluded that (1) NASA did not fully consider all alternative means of procuring Apollo G&N systems, (2) the cost of the G&N project will be higher than necessary as a result of contract consolidation, and (3) the contract fee that can be earned by the G&N system prime contractor is higher than war- ranted for the degree of risk the contractor assumed as a result of con- tract consolidation. A draft report on the results of our review was submitted to NASA in April 1969 and NASA's comments on the draft report were furnished to us on December 12, 1969. In addition, a meeting was held in August 1969 at which NASA Headquarters and MSC officials presented additional informa- tion bearing upon the matters discussed in our draft report. In the comments furnished us on December 12, 1969, NASA disagreed with the conclusions in our draft report and expressed the opinion that all available alternative contractual modes had been considered and that the fee paid to the G&N system prime contractor was not unreasonable considering the additional responsibilities and risks assumed by the con- tractor. In essence, the difference in GAO's and NASA's conclusions stems from a paucity of records relating to the decision to consolidate the G&N system contracts and the fact that the existing records are incomplete and/or inaccurate.

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