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B-173637 1 (1972-05-09)

handle is hein.gao/gaobaaglm0001 and id is 1 raw text is: COMPTROLLER GENERAL OF TH- U D f iz WASHINGTON. D.C. B- 173637 M 9 Dear Senator Proxmire: LM096578 Your letter of July 9, 1971, referred for our attention an accompanying letter regarding claimed irregularities in R? the procurement and use of materials by the Service Technol- I ogyCorporation (STC), a contractor at the Manned Spacecraft Center (MSC) of the National Aeronautics and Space Adminis- 34 Ztration (NASA) at Houston, Texas. The results of our review are discussed below. STC's work at MSC included maintenance of all buildings, grounds, and utility systems; engineering, design, and con- struction of hardware; alterations to buildings; technical writing and editing; and publications distribution services. In addition, STC maintained a warehouse of stocked materials and purchased these and other materials, unless they were provided by MSC, as required for supporting its work at MSC. STC has performed such services for MSC since December 1967 at an average annual cost of $12 million. Our review was made to examine into the claimed irregu- larities that (1) STC had purchased significant amounts of materials locally that were available from Federal supply sources at substantial savings, (2) STC had overestimated the material requirements for individual jobs and subsequently returned the excess materials to inventory for reissue with- out deducting the cost from the initial jobs, and (3) STC had tremendous material shortages and its material disbursement procedures allowed for covering up the shortages. We held discussions with MSC and STC officials and ex- amined pertinent documentation, primarily for procurement actions and work projects completed during the period Decem- ber 1969 through March 1971. During our review we were advised by the MSC Associate Director that, because of irregularities found in STC's opera- tions by prior NASA-directed reviews, a special MSC management review team had been appointed to conduct an overall review of STC's operations. The MSC management team's review was completed in January 1972, and its findings are discussed in appropriate sections of this report. ~7~4~= o%517?~ (?7 F

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