Potential for Contracting Selected Operations at the Air Force Academy Cadet Dining Hall

FPCD-77-57: Published: Jun 20, 1977. Publicly Released: Jun 27, 1977.

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A review of proposed contracting of sanitation and supply services at the Air Force Academy Cadet Dining Hall was conducted in response to concerns about possible job losses, validity of cost analysis, and the quality of contract services. The Office of Management and Budget Circular A-76 established the policy that Federal agencies shall rely on private enterprise for commercial products and services unless in-house services are justified. When justified because of lower costs, in-house services must be supported by periodic cost analyses.

In response to former GAO recommendations, the Academy negotiated for services, but negotiations were canceled after the propriety of procurement techniques was questioned. Cost analysis techniques were found to be in general accordance with requirements. It indicated that contracting services would offer approximately 34 percent savings over in-house costs, primarily because of lower wage rates and benefits paid by the contractor. GAO believed that additional annual savings of $845,000 could be realized by contracting for waiter services. Although there was no basis for evaluating comparative quality of services, it was believed that initially contract services are lower in quality but improve with experience. It was estimated that 61 people would have lost their Federal positions if procurement had been completed. Those working for the contractor would have been paid lower wages, which would have affected the local economy.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Academy Superintendent should: use formal advertising procedures in making the analysis required by Circular A-76, and justify any continued in-house operations of the cadet dining hall; and review the justification for military positions and use civilian employees where possible. The Chairman of the Civil Service Commission should expand wage surveys to include laundry and food service industries.

    Agency Affected:

 

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