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B-66927 1 (1974-05-30)

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                         WASHINGTON, D.C. 20548

LOGISTICS AND COMMUNICATIONS RLAE
       DIV1SION             REESDMAY 3 0 1974

     B- 669 27



     The Honorable Mike Gravel
     United States Senate

  Q Dear Senator Gravel:

         On March 25, 1974, you requested that we investigate
    why the ,Off e ,ofNaval Petroleum and Oil Shale Reserves
    (ONPR) awarded a contra'qp;t_    ,c , r itects and Engi-
    neers, Incorporated (PAE), to drill two wells in Naval Pe-
    troleum Reserve No. 4 in Alaska. You questioned the award
    because it was your understanding that the firm had no prior
    drilling experience. We have inquired into the award of
    this contract and have discussed it with officials of ONPR.

         The cost-plus-fixed-fee contract, NOd-10056, estimated
     at $904,000, was awarded to PAE on January 31, 1974, for
     drilling gas wells numbers 11 and 12 in Naval Petroleum
     Reserve No. 4, if thawing conditions seemed likely to per-
     mit satisfactory completion by April 30, 1974.

         The solicitation of proposals was published in
    Alaskan newspapers December 3 through 7, 1973. The re-
    quest for proposals was mailed on December 10, 1973, to
    17 prospective contractors. The deadline for submitting
    proposals was January 7, 1974. The proposals were to in-
    clude plans; estimates of mobilization costs, wage rates,
    and man-hours; costs of contractor-furnished equipment;
    and the amount of the expected fee.

         Only two firms, PAL and Nabors Alaska Drilling, Inc.,
     submitted proposals. Nabors' proposal was determined non-
     responsive because it did not include:

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