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B-172707 1 (1972-02-14)

handle is hein.gao/gaobabldi0001 and id is 1 raw text is: by the COMPTROLLE IR GENERAL OF T UNITE STA RELEASED WASHINGTO 548 Dear Senator Pearson: As you requested in your letter of December 23, 1971, we initiated a Lreview of the Army's decision to terminate i ).produ tion at the Kansas Army munition Plant, Parsons, , - Kansas. In accordancewitl- grngements made with your of- fice, this letter discusses several specific matters concern- ing the closure of the Kansas plant. BASIS FOR THE ARMY'S DECISION The Commanding General of the Army Munitions Command made the decision to place the Kansas plant in an inactive status. The decision was made on the basis of production needs and cost effectiveness, as set out in the Army Munitions Command's study of the fiscal year 1972 ammunition work load at Government-owned, contractor7operated plants. The Assis- tant Secretary of the Army (Installations and Logistics) and officials of the Army Materiel Command were advised. of and consented to the decision prior to the Army's announcement on December 3, 1971. In its study the Army considered several alternatives for allocating the fiscal year 1972 production program for 40 mm, 81 mm, and 105 mm ammunition and other ammunition items among the Kansas, Joliet, Lone Star, and Milan plants. The production and transportation costs and the costs to maintai'nin'active facilities were compiled for each of the alternative plans. The alternative showing the lowest cost to the Govern- ment provided for phasing out Kansas production, producing all 40 mm and 81 mm ammunition at Milan, and sharing produc- tion of 105,mm ammunition between Joliet and Lone Star. This alternative showed monthly savings of $169,000 ($2 million a year) over another alternative which provided for scheduling production at all four plants as was done in the 1971 produc- tion program. Our examination showed that elements of the Army's study were questionable and that, if they were in fact invalid, they would have had the effect of nullifying the annual sav- ings of $2 million attributed by the Army to closing the Kan- sas plant. The questionable elements and related costs are listed below. Zo9 O_7:? i

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