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![handle is hein.gao/gaobaawmf0001 and id is 1 raw text is:
DOCUMENT RESUME
04683 - [BO064r,48]
The Navy's Proposed Procurement of Oilers. PSAD-78-64; B-133170.
Ianuaxy 3, 1978. 5 pp. + 4 enclos:ires (7 pp.).
Report to SE-cretary, Department of Defense; by Richard W.
G-utmUknn, Directoz, Procurement and Sistems Acquisition Div.
Issue Area: Federal Prccuregent of Goods and Services (1900).
Contact: Procu-emant ar | Systems Acquisition Div.
Budget Function: National D .fsnse: Department of Pefense -
Prccurement & Contzacts (058).
Organization Concerned: Department of the Navy; Avondale
: h pyards, Inc.
Congressional Re)evance: House Committe* on Armed Services;
S.nate Committee on Armed Servj.cas.
In August 1976 the Navy avarded a $1523 millicn contract
to Avondale Shipyards, Inc., to construct two auxiliary oilers,
and in January 1977 exercis d an option for a third oiler at a
cost of $63 million. By August 1977, 54 changes to the contraict
had beEn proposed, And Avondale had sq;bmitted proposals for
charnges Exceeding $5 million. Findings/Conclusicns; An
examinaticn of six of these changes showed that four resultei
from defective specifications, plans, and data piovided by the
Navy. The other two resulted from basic design changes that the
Navy was considering at the time the contract was awarded.
According to cognizdnt iavy pecsonnel, tL- defects were not
identified before contract award because iler design was not as
extensively reviewed as higher pricrity combat ships. The Navy
issued a request for projosai in August 1977 for construction of
two additional oilers and since this time has issued four
amendments and taken ccrrective action on design defectE. The
critical potential risk areas are txaose where the shipbuli.der
trarslates the contract specifications and prelivinary drawings
into detailed arawings and specifications. As of September 30,
1977, about 60% of basic design drawing work was complete in
three areas.. but a c9reat deal of design wcrk remains for aix
o2her ar-as. Although the Navy believes that there were no
high-ri3k areas remaining in the major ship syst as, GAO
qIesticned 4hether the overall risk of additional major problems
was low enough to warrant proceeding with the proposed
procurcment. Recommendations: Procu.ement of the new oiiers
shoulO be delayed until significant defects in Navy-furnished
specifications, plans, and data howe been identified and
resolved. The Navy shculd assure that, before awarding any
turther contracts for construction of ships, such plans and
specification- ate adequately reviewed. (Author/hTW)](ViewImageLocal?handle=hein.gao/gaobaawmf0001&div=1&collection=&method=preview&ext=.png&size=3)