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NSIAD-85-111 1 (1985-07-26)

handle is hein.gao/gaobabnua0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 NATIONAL SECURITY AND J 2 1985 INTERNATIONAL AFFAIRS DIVISION July 2 , 9 B-219187 Admiral K. R. McKee, Deputy Commander for Nuclear Propulsion Naval Sea Systems Command Nuclear Propulsion Directorate Dear Admiral McKee: Subject: Observations on Two Naval Nuclear Propulsion Program Procurement Practices (GAO/NSIAD-85-111) This report discusses two Naval Nuclear Propulsion Pro- gram procurement practices. They are procurement of long lead material and split and source maintenance awards. Our observations on these areas are being provided for your consid- eration. The Directorate relies extensively on two prime contrac- tors--General Electric Company's Machinery Apparatus Operation and Westinghouse Electric Corporation's Plant Apparatus Divi- sion--to support the day-to-day procurement activities of the program. These contractors' activities include nuclear reactor component procurenent and extensive engineering support. The Directorate has onsite representatives who monitor both contrac- tors' activities and review and approve operating budgets and all purchases valued at $25,000 or more. Funding for procure- ment of nuclear reactor components for new construction and fleet support totaled almost $990 million in fiscal year 1983. PROCUREMENT OF LONG LEAD MATERIAL Over the years, General Electric and Westinghouse--with the Directorate's approval--have followed a policy of purchasing long lead material needed to manufacture reactor components through their component manufacturers, rather than directly from subtier suppliers. When purchasing long lead material, component manufacturers provide services similar to those provided by the two contractors, including engineering effort, contract administration, and technical review of drawings/ graphics. General Electric and Westinghouse believe that (942214) 128190

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