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NSIAD-83-70 1 (1983-09-30)

handle is hein.gao/gaobabndi0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON. D.C. 20548 NATIONAL SECURITY ANO INTERNATIONAL AFFAIRS DIVISION 3 0 SEP 1983 B-206570 The Honorable Joseph P. Addabbo Chairman, Subcommittee on Defense Committee on Appropriations House of Representatives 122556 The Honorable Ted Stevens Chairman, Subcommittee on Defense Committee on Appropriations United States Senate Subject: Analysis of Multiyear Procurement Candidates Included in Defense's Fiscal Year 1984 Budget Request (GAO/NSIAD-83-70) In response to your request we have analyzed fiscal years 1983 and 1984 multiyear procurement candidates included in the Department of Defense fiscal year 1984 budget request. We presented our preliminary views in testimony before the Subcommittee on Defense, House Committee on Appropriations, on June 9, 1983. We have, for many years, supported the concept of multiyear contracting but believe that savings must be substantial and sufficient to offset any added risks to the government. During our review we focused on the estimated savings to be achieved from each of the 22 candidates, the degree of confidence in the cost estimates, and possible risks of multiyear contracting-- instability in the program, funding, and design. In our opinion, only one of the proposed candidates fully met all of the legislated criteria for multiyear contracting as of June 1983. Defense's estimated savings for its proposed multiyear candidates are disappointing when compared to its 10-20 percent savings projections when P.L. 97-86 was under consideration. On the average, discounted savings for the 22 candidates is about 7.3 percent. We found many instances of inadequate and tentative cost estimates, instability in requirements and equipment design, and insufficient assurance that funding would be stable. Also, Defense did not rank the candidate programs against all other programs in terms of military need. Accordingly, we believe many of the candidates were submitted prematurely. (942257)

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