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NSIAD-84-111 1 (1984-08-31)

handle is hein.gao/gaobabetj0001 and id is 1 raw text is: 


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BY THE U.S


IENERAL ACCOUNTING OFFCE


Report To The Honorable David Pryor

United States Senate


Cost Effectiveness Of Dual

Sourcing For Production Price

Competition Is Uncertain


Dual sourcing is a competitive procurement
technique wherein contract awards for a
product are split between two or more
sources, with the larger share usually going
to the lower priced supplier.

Although dual sourcing has been clearly
authorized when justified by national de-
fense or mobilization base needs, authority
for dual sourcing solely to reduce costs had
not been resolved under federal procure-
ment statutes until recently. Public Law 98-
369 authorizes the use of dual sourcing
where it would increase or maintain competi-
tion and likely result in reduced costs, begin-
ning April 1, 1985.

None of the dual sourcing identified in
GAO's study was undertaken solely or pri-
marily for price competition and the cost
effectiveness of this form of competition
remains untested.


'tzzrO r C


GAO/NSIAD-84-1 11
AUGUST 31, 1984


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