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B-158685 1 (1978-05-22)

handle is hein.gao/gaobachlt0001 and id is 1 raw text is: ,oC- UUNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 ovfrICEOF GNERAL COU~NSELa185 M Ay 2 2 7 7 Mr. T.O. Cassidy Acting Chairman, ASPR Committee Office of the Under Secretary of Defense Dear Mr. Cassidy; By letter dated March 10, 1978 you transmitted for t our comment proposed policies and procedures for Govern- ment versus industry contract support which incorporates the use of a firm cost concept. This concept would be used in determining whether the Department of Defense should use industry contract support or maintain in-house services for various requirements. The proposal contains a requirement that bidders be placed on notice that a specific solicitation is subject to a Government cost comparison to determine the economic feasibility of accomplishing the work in-house or by con- tract. A government in-house cost estimate is prepared and submitted as a bid to the contracting officer. This Government estimate is opened at the time of bid opening, supplemental calculations are accomplished, a comparison is made with the apparent low bid submitted and a deter- mination made to maintain in-house services or to contract out. In comparing contractor cost proposals and the written Government estimate, the proposed language requires that the ceiling price be considered the contractor's quoted price. In our report, Row to Improve Procedures for Deciding Between Contractor and in-house Military Base Support Services, (LCD-76-347; March 28, 1977), we commented that the use of firm bids (costs) was superior to the use of estimates or informational quotes of contrAct costs for the purpose of making cost comparisons u4uired by Office of Management and Budget Circular A-76

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