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B-145455 1 (1973-05-29)

handle is hein.gao/gaobaageg0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 '7 LOGISTICS AND COMMUNICATIONS DIVISION MAY 2 s 1973 B- 145 455 The Honorable I[IIIIIU ~II II III III II 111 The Secretary of Defense LM096349 Dear Mr. Secretary: We have monitored the Military Sealift Command's (MSC's) ine. itionand administration of contracts with Sea-Land ,. Service, Inc., which were [W-enff-f i'--rng the period from 1966 through 1973. These contracts--MST-SC-182(x), SA-1029, CA-1380, and CA-1580--were negtigk,_ tdprimarily for the trans- por-ttion of containerized military cargo from the west coast of the._Unit-ed States to Ok hawa_ the Phiiippin6s, and Vietnam. MSC paid Sea-Land about $278 million for service under the first three contracts. The current contract, 1580, be- came effective on July 1, 1971, and will remain in effect un- til June 30, 1973. Sea-Land received approximately $36.4 mil- lion during the first year of this contract. We monitored MSC's procurement of contract container service because of the increased use of containers for trans- porting commercial cargo and because of the potential long- range effects of the Government's initial contracting efforts in the container transportation field. Information gathered during our study indicated that the container method of shipping resulted in significant opera- tional and cost advantages to the Government. For example, the Joint Logistics Review Board, which was established by the Department of Defense, found that port congestion in the ocean pipeline to Vietnam was relieved and that maximum use of con- tainerization in support of Vietnam could have saved in excess of $800 million during the period 1965 through 1968. The Board also found that containerization reduced cargo damage and pilferage. However, MSC could have added to these advantages by improving its negotiating practices and by strengthening its administrative procedures. Our primary concern is that the A~Aq6 7y

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