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B-173237 1 (1972-01-31)

handle is hein.gao/gaobaaemb0001 and id is 1 raw text is: 





                     UNITED STATES GENERAL ACCOUNTING OFFICE
                               WASHINGTON, D.C. 20548


DEFENSE DIVISION

        B-173237                                              JAN 31 i972



        Dear Mr. Sanders:

             During our survey of the planning for, and construction of facili-
        ties relating to the Navy's Shipyard Modernization Program (assignment
        code 76207) we noted that the Philadelphia Naval Shipyard used Naval
        industrial funds to perform work which apparently should have been per-
        formed with military construction funds. The pertinent facts related to
        this case are presented below.

             In September 1968, the Congress approved a project to alter a build-
        ing at the shipyard to provide for a hydraulic repair and test facility.
        This project--identified as line item number P-235--was estimated to
        cost $305,000. Of this amount, $59,000 was designated as the estimated
        cost of a 750 KVA electrical substation. We were advised, however, that
        the $59,000 was not used for the electrical substation but was used to
        cover other costs of the new facility.

             Between January 1968, when project P-235 was submitted to the Con-
        gress for approval, and September 1968, when the Congress approved the
        project, two significant events occurred. We were told that first, the
        shipyard decided to install some additional equipment in the new facility
        and concluded that the 750 KVA substation would not be adequate. We
        were also advised that later (in May 1968) the shipyard decided that
        instead of procuring a new substation, it would use a 1000 KVA substation
        which it had obtained in 1966 as surplus from another defense activity.
        We were told that it was then too late to change the request submitted
        to the Congress.

             One fact regarding the switch to the 1000 KVA substation was over-
        looked by shipyard officials and according to the officials was not
        discovered until the fall of 1968--the 1000 KVA substation the shipyard
        had on hand was not an outdoor type and would require construction of a
        permanent protective housing. The shipyard used an estimated $30,000
        of Naval industrial funds to perform this construction.

             The permanent protective housing for the electrical substation
        .clearly appears to constitute either a public building or a public /
        improvement within the meaning of those terms as used in section 3733,
        Revised Statutes, 41 U.S.C. 12, which provides that--



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