Allegations Of An Inappropriate Army Sole-source Award For Commercial Construction Equipment V. PLRD-82-13

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PLRD-82-13 1 (1981-10-15)

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UNITED STATES GENERAL ACCOUNTING OFFICE
WASHINGTON. D.C. 20546
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B-205147

October 15, 1981

The Honorable Carl Levin
Ranking Minority Member, Subcommittee
on Oversight of Government Management
Committee on Governmental Affairs
United States Senate

Dear Senator Levin:

Subject:

Allegations of an Inappropriate Army Sole-Source
Award for Commercial Construction Equipment
(PLRD-82-13)

On April 24, 1981, you asked us to assess the Department
of the Army's decision to buy commercial construction equipment
from Caterpillar Tractor Company on a sole-source basis.

The Army's justification for this sole-source procurement
is based on Defense Acquisition Regulation (DAR) 3-210-2(i)
which allows competition to be waived when supplies or service
can be obtained from only one person or firm (sole source of
supply). However, we found that several other suppliers could
have furnished the equipment and that the Army had ample oppor-
tunities to solicit this procurement competitively. By using
a fleet-buy concept (restricting consideration only to those
firms that could manufacture all of the desired pieces of
equipment), the Army eliminated several potential suppliers.

Also, because the award had not yet been made to Caterpil-
lar at the time of our review, we discussed our findings with
U.S. Army Tank-Automotive Command (TACOM) officials and sug-
gested they resolicit the procurement on a competitive basis.
They declined to do so because the equipment is urgently needed
for the Army's rapid deployment force and because, in their
view, a delay of up to a year for a resolicitation, negotiation,
and award would seriously jeopardize the Army's mission.

OBJECTIVE, SCOPE, AND METHODOLOGY

Our objective was to assess the appropriateness of and
justification for the Army's decision to buy construction equip-
ment from Caterpillar Tractor Company on a sole-source basis.
To accomplish our objective, we reviewed (1) Army procurement
regulations and policy concerning sole-source procurements, (2)
the proposed contract and support files at TACOM and the

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