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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