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B-219768 1 (1985-09-18)

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               COMPTROLLER 'GENERAL OF THE UNITED STATES  . 7
                         WASHINGTON'D.C. 20548


                             r
B-219768                        September 18, 1985




The Honorable Mack Mattingly
United States Senator
380 Interstate North, Suite 1,95
Atlanta, Georgia 30339

Dear Senator Mattingly:

     This is in response to your letter to our Office dated
July 22, 1985, asking that we review concerns of federal
employees at Fort Gordon, Georgia, regrding our decision in
Pan Am World Services, Inc., B-215829YJune 24, 1985, 85-1
C.P.D. ii 712 (copy enclosed).

     We held in the Pan Am decision that the Army had
conducted an improper cost homparison in deciding whether to
contract for services at Fort Gordon, and we recommended
that the Army recalculate the estimated cost of continuing
in-house performance and then compare that cost with Pan
Am's proposal. This new cost comparison, not yet finalized,
could result in an award to Pan Am which, in turn,
apparently could result in the displacement of a number of
the federal employees now performing the covered services.
Some employees assert that any such award would be based on
allegedly outdated cost data, and may not result in the
lowest cost to the government.

     Our decision and recommendation in Pan Am were
necessitated by our finding that the Army's estimated cost
for in-house performance of the work had not been calculated
in accordance ith the procedures outlined in the OMB
Circular A-764ost Comparison Handbook governing the pro-
curement and that, as a result, the in-house cost unfairly
had been materially understated. Under these circumstances,
the only appropriate remedy was to conduct a new comparison
using a properly calculated in-house estimate and decide
whether to award a contract based on the new result. As
with any bid protest, ,our decision was based on all infor-
mation and arguments presented by the protester and
contracting agency.

     Our Bid Protest Regulations provide for reconsideration
of our decisions where one of the interested parties timely


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