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089006 1 (1977-07-27)

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UNITED STATES GENERAL  ACCOUNTING  OFFICE
            REGIONAL  OFFICE
            5705 THURSTON AVENUE
       VIRGINIA BEACH, VIRGINIA 23455


May 27, 1977


Rear Admiral C. C. Heid, Commander
Atlantic Division
Naval Facilities Engineering Command
Norfolk Naval Base
Norfolk, Virginia  23511


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Dear Admiral Heid:

     We have completed an  examination of a project to remodel an enlisted
men's dining facility at the Norfolk Naval  Base, Norfolk, Virginia, as
requested by members of the Congress.   Our purpose was to assess the
validity of alleged irregularities  and inadequacies in the management of the
project; more specifically, construction  contract N62470-73-C-1223.  We
reviewed contract files, obtained  costs, and interviewed management
officials associated with the project.

     To a limited extent, our  examination substantiated the allegation
in that the Atlantic Division, Naval  Facilities Engineering Command did
not always attempt to determine responsibilities  for design errors and
deficiencies and did not  adequately document the basis for all change orders
to the remodeling contract.

BACKGROUND


     Almost $2 million can be associated  with remtodeling
as shown in the following table.

          Item                                Item cost


Design contract
Net change orders

Construction contract
Net change orders


S   15,175,00
    45,575.00

$1,403,000.00
   154,489.00


the dining facility,


           Total cost


        $   60,750.00


        1,562,489.00


Government furnished equipment

Dining facility portion of
roofing  contract for
three  buildings

Nat change -orders for
dining  facility

Estimated cost for the Navy to
modify  exhaust system for
dishwashers

     Project cost


239,106.72


$   96,892.00


       895.00


    07,787.00



    13,400.00

S1,973,532.72


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