Procurement:

State Department's Purchase of Silverware for Overseas Missions

NSIAD-87-47: Published: Mar 10, 1987. Publicly Released: Mar 10, 1987.

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In response to a congressional request, GAO examined the Department of State's procurement of silverware for its overseas diplomatic missions, focusing on State's: (1) silverware needs; (2) procurement procedures; and (3) control over its current silverware inventory.

GAO noted that State's Office of Foreign Buildings Operations (FBO) was responsible for procuring silverware and initiating a silverware standardization program. GAO found that: (1) FBO violated the applicable procurement regulation in the initial contract award, resulting in contract provisions that did not ensure State ownership of the tools and dies needed to provide continuity in manufacturing the standard pattern; (2) FBO had inadequate controls over the contractor's and the diplomatic missions' silverware inventories; and (3) many missions failed to follow regulations regarding the disposal of silverware that the standard pattern replaced.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: No new contracts are being proposed at this point, but State has been evaluating whether it should own tools and dies. On June 16 and 17, 1987, a State official met with the Chairman of the Board and President of Lunt Silversmith's in Massachusetts to discuss a number of issues concerning the tools and dies, including the initial and replacement costs, as well as maintenance expenses.

    Recommendation: The Secretary of State should direct the Director, FBO, to: (1) require future contracts, if any, for silverware procurement to clearly provide for FBO ownership of the tools and dies necessary to maintain the standard pattern.

    Agency Affected: Department of State

  2. Status: Closed - Implemented

    Comments: State issued a procedures manual and all posts were advised to take all necessary steps to ensure full compliance with the regulations. Key elements of the program include: (1) management and control of State's reserve stock; and (2) stringent enforcement that annual reconciled inventories be submitted. State officials conducted an inventory of flatware stored at the contractor's plant.

    Recommendation: The Secretary of State should direct the Director, FBO, to comply with State policies and regulations concerning taking, reconciling, and reporting inventories at overseas posts and contractors' plants, and authorized allowances.

    Agency Affected: Department of State

  3. Status: Closed - Implemented

    Comments: State advised the Chairman, House Committee on Government Operations, that: (1) purchases of sterling silver flatware had been suspended; (2) State would decide if additional silverware is needed only after information on current inventories had been fully compiled and evaluated; and (3) FBO would ensure that any future silverware procurement is in compliance with federal procurement regulations.

    Recommendation: The Secretary of State should direct the Director, FBO, to suspend further purchases of silverware until the present dispute is resolved and use the excess quantities of silverware that posts have accumulated above the authorized levels to meet replacement needs.

    Agency Affected: Department of State

 

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