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PLRD-83-15 1 (1982-11-12)

handle is hein.gao/gaobabmry0001 and id is 1 raw text is: n/ UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 PROCUREMENT, LOGISTICS. AND READINESS DIVISION B-209739 November 12, 1982 The Honorable Alan Cranston//I//i///'//Ilul United States Senate 119942 The Honorable Paul S. Sarbanes United States Senate Subject: Navy Procedures Used In Awarding Solicitation #62474-82-R-0051 at the Naval Weapons Center, China Lake, California (GAO/PLRD-83-15) In your September 27, 1982, letter, you asked us to review certain Navy procedures used to award solicitation #62474-82-R-0051. The contract resulting from the solicitation will affect family housing maintenance, supply operations and warehousing, and vehicle operations and maintenance functions now being performed by Federal civilian personnel at the Naval Weapons Center (NWC), China Lake, California. Your letter expressed concern that the Navy initially decided it would cost almost $3 million less to perform these functions in-house rather than by contract as sub- sequently decided. You asked us to respond to specific questions in your letter before the contract is awarded. On November 8, 1982, we sent a letter to the Secretary of the Navy recommending that he defer the award of the contract until our report has been received and reviewed. BACKGROUND NWC prepared its cost estimate to perform the support services in-house and had the estimate reviewed and certified by the Naval Audit Service. Bids were opened on June 29, 1982. NWC announced that based on a cost comparison the in-house cost to perform family housing maintenance, supply operations and warehousing, and vehicle operations and maintenance functions was about $2.8 million less than the cost of contracting. Pan Am World Services, Inc., the low bidder, filed an appeal in July 1982, alleging deficiencies with the NWC in-house cost estimate. An appeals officer from the Naval Material Command (NAVMAT) in Washington, D.C., was appointed to review the appeal. A review team was established to assist the appeals officer. In August 1982 the appeals officer concluded that after adjustments, which he had applied, the cost of contracting was $364,000 less than the in-house estimate. Consequently, the (942216) 0 , qq I

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