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AFMD-82-112 1 (1982-09-30)

handle is hein.gao/gaobabmqe0001 and id is 1 raw text is: 
                   COMPrtROLLEAR GENERAL OF THE UNITED STATES
                            )WASI4INGTON D.C.        REA
             ~RELEASED


B-206386                                           SEPTEMBER 30,1982



The Honorable Jack Brooks     PVq'0'rCTED - Not to be released outside the General
Chairman, Committee on        I           : except on the basis ef speific approval
  Government Operations       hip       w Congressonal Relations.
House of Representatives

Dear Mr. Chairman:

     Subject: Air Force Teleprocessing Services Procurement
                for the COPPER IMPACT System Should be Reopened
                (GAO/AFMD-82-112)

     In your January 7, 1982, letter (encl. I), you asked us to
review the award of teleprocessing services contracts for the Army
REQUEST-RETAIN and Navy PRIDE systems. Our report on these con-
tracts (AFMD-82-51) was sent to you on March 24, 1982. Your let-
ter also asked for a longer term review to determine if a similar
pattern of abuse exists in other agencies. As part of this longer
term project, we reviewed the Air Force COPPER IMPACT contract
F49642-82-D0012 awarded to Boeing Computer Services Company
(Boeing) on March 1, 1982.

     Teleprocessing services provided by this contract could cost
the Government far more than has been estimated. The increased
cost could result from the fact that the contract contains an
unbalanced pricing structure. (Unbalanced pricing allows the
cost to increase disproportionately or the discount to decrease
as the level of use increases.) The problem created by unbalanced
pricing was compounded by the fact that the Air Force did not use
a representative system workload for the benchmarking test, and
actual use may well exceed that expected. We are making this in-
terim report because we believe immediate action should be taken
to terminate this contract for the convenience of the Government
and to reopen the procurement.

OBJECTIVES, SCOPE, AND METHODOLOGY

     This review was performed in accordance with GAO's current
'Standards for Audit of Governmental Organizations, Programs,
Activities, and Functions. The objectives of this review were
to determine whether the contract

     --contains unbalanced pricing and

     --could result in excessive costs to the Government.


                                        I II 11111I I 111111(913690)

                                           119648

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