About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline

LOG IN
LOG IN


NSIAD-84-33 1 (1984-01-17)

handle is hein.gao/gaobabnfx0001 and id is 1 raw text is: IUNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON. D.C. 20548 k~nofo sacyy mo JANUARY 17. 1984 IVTUNNAOAL AFFAIMS DMSON B- 205555 Ih IB ' The Honorable Bob Packwood 123285 United States Senate Dear Senator Packwood: Subject: Air Force Decision to Produce Liquid Oxygen In-Rouse at Andersen Air Force Base, Guam (dAO/NSIAD-84-33) In your letters of November 24, 1982, and March 11, 1983, you expressed concern that the Air Force may have violated Office of Management and Budget (ORB) Circular A-76 which prescribes the policies for acquiring commercial products and services needed by the government. In particular, you were con- cerned that the cost comparison which was the basis for the decision to produce liquid oxygen (LOX) in-house appeared to contain many serious flaws and that the Air Force did not pro- perly notify the supplier, Island Equipment Company, of the results of the cost comparison in time for the company to appeal the results. You requested that we review this matter. FINDINGS AND CONCLUSIONS In our opinion, the Air Force complied with the provisions of OMB Circular A-76 and performed its cost comparison in accordance with the circular. We believe that several adjust- ments of various cost items in the comparison were warranted which would have reduced the estimated savings of in-house performance. However, even with these adjustments, the cost comparison still showed in-house production to be less costly. The Air Force cost comparison showed that over a 3-year period about $487,000 could be saved from the contracting cost of $1.9 million by producing LOX in-house. We estimate a potential savings of about $316,000. Island Equipment was also concerned that because it was not properly notified of the results of the cost comparison, it was not afforded the opportunity to appeal the results. As required by Defense Acquisition Regulations, the Air Force announced the results of the cost comparison at bid opening. Although Island §4IUCTED - Not to be released o f Amreumt!n Ofice except on t'-e - 942278 by U,,, O. e of Co--gresstotai RELEASED !51 .q1