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NSIAD-84-138 1 (1984-06-19)

handle is hein.gao/gaobabnke0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON. D.C. 9054 JiiIN 194 WArIOWM. SGGUAWY AWO *?IfiWA tAA. APFAO O8OW B-214275 The Honorable William V. Roth, Jr. I Chairman, Committee on Governmental Affairs I1 I United States Senate 124493 Dear Mr. Chairman: Subject: Analysis of Selected Sections of DOD's Revised Breakout Regulation (GAO/NSIAD-84-138) In response to your August 26, 1983, request, subsequent correspondence, and discussions with your office, we have examined selected areas of the Department of Defense's (DOD's) revised breakout regulation to determine if they inhibit or pro- mote competition. We also examined issues associated with DOD's implementation of breakout efforts. Breakout of a part refers to competing an acquisition, or purchasing directly from the contractor that actually manufac- tures the part. Successful breakout of a part generally means acquisition of the part from a contractor other than the prime contractor, unless the prime contractor actually manufactured the part. During our review, we examined thb revised and previous breakout regulations and interviewed DOD and National Tooling and Machining Association (NTMA) officials. In our efforts to be responsive to your request, we relied primarily on work we have previously conducted in this area. We also reviewed and referenced DOD reports as appropriate. DOD has experienced longstanding problems in achieving greater competition through the breakout program. The revised breakout regulation contains changes designed to improve break- out and competition. The revised regulation, however, must be properly implemented with the necessary commitment and resources to ensure increased opportunities for breakout. DOD has done this to some extent with the creation of the Competition Advo- cate's Office, which will provide additional full-time resources for breakout efforts. We believe DOD should reassess its definition of actual manufacturer. Use of the phrase as introduced in the revised breakout regulation may innibit breakout because a contractor who controls the design, but does not actually produce the part, 0 qpc4)

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