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DOCUMENT iBSUME
02621 - [1912?4b]
Potential for Contracting Selected Operations at the Air Force
Academy Cadet Dininq Hall. FPCD-77-57; B-15S219. June 20, 1977.
Peleased June 27, 1iS7. 3 pp. + appendices (14 pp.).
Report to Rep. Frank a. Evans; by Elmer B. Staats, Comptroller
General.
Issue Area:- Personnel fanaqeaent ard Compensation (300); Feierat
Procurement of Goods and Services: O3B Guidelines for
Relying on the Private Sector to Supply Federal Needs
(1906) -
Contact: Federal Personnel and Compensation Div.
Budget Fonctior: National Defense: Department of Defense -
ilitary (except procurement & contracts) (051) ; National
Defense: Department of Defense - Procurement & Contracts
(058).
Organizaticn Concerned: Department of Defense; Air Force
Academy; Department of tne Air Force; Civil Service
Commis sion.
Congressional Relevance: Rep. Frank F. Evans.
Authority: P.L. 92-392. 5 U.S.C. 5341. OMB Circular A-76.
A zeview of proposed contracting oF sanitation and
supply services at the Air Force Academy Cadet Dining Hall was
conducted in response to ccncerns about possible job losses,
validity of cost analysis, and the quality of contract services.
Th- Office of Management and Budget Circular A-76 established
the policy that Federal agencies shall rely on private
enterprise for commercial products and services unless in-house
services are justified. When justified because of lower costs,
in-house services must bc supported by periodic cost analyses.
Fildings/Conclusions: In response to former GAC recommendations,
the Academy negotiated for services, but negotiations were
canceled after the propriety of procurement techniques were
questioned. Cost analysis techniques were found to be in general
accordance with requirements. It indicated that contracting
services would offer approximately 34 savings over in-house
costs, primarily because of lower wage rates and benefits paid
by the contractor. GAO believed that additional annual savings
of $845,000 could be realized by contractino fer waiter
servnces. Although there was no basis for evaluating comparative
quajity of services, it was believed that initially contract
services are lower in quality but improve with experience. Tt
was estimated that 61 people would have lost their Federal
positions if procurement had neen orplete,. Those 'orking for
the contractor would have been paid lower wages, which would
have affected the local conomy. recommendations: The Academy
superintendent should: use formal advertising procedures in
making the analysis required by Circular A-76, and justify any
continued in-house operations of the cadet dining hall; and
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