Army Justification for Awarding a Sole Source Contract for Automated Calibration Equipment

NSIAD-84-8: Published: Oct 17, 1983. Publicly Released: Oct 17, 1983.

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Pursuant to a congressional request, GAO reviewed the award of a sole-source contract by the Army to Julie Research Laboratories, Incorporated for automated calibration equipment to determine whether the sole-source award was justified.

GAO found that the Army justified the sole-source award on the grounds that Julie Research Laboratories was in a precarious financial condition and would have ceased production of the calibration system without an immediate order. GAO believes that, while the Department of Defense (DOD) and the Army have legal authority to make sole-source awards, this award was questionable because: (1) DOD and the Army did not assure themselves that Julie would have ceased production without the award; and (2) the Army had a requirement for only one unit for test purposes, but ordered six units. Despite the Army's justification of the award, GAO found that the Army did not: (1) identify a specific need for the system; (2) verify Julie's claim that essential personnel were being lost; or (3) evaluate the production line for the system to determine what actions were necessary to maintain the availability or production capability of the system.

Recommendations for Executive Action

  1. Status: Closed - Implemented

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

    Recommendation: The Secretary of Defense should direct the Secretary of the Army to delay further procurement of automated calibration equipment, other than those needed for test purposes, until the Army determines its requirements.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

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

    Recommendation: The Secretary of Defense should direct the Secretary of the Army to delay further procurement of automated calibration equipment, other than those needed for test purposes, until the Army determines its requirements.

    Agency Affected: Department of Defense: Department of the Army

 

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