Navy Ships:

Evaluating Bids for Maintenance to Be Performed Away From Home Ports

NSIAD-89-101: Published: Feb 28, 1989. Publicly Released: Mar 15, 1989.

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Pursuant to a congressional request, GAO provided information on interport differential costs (IDC), which are the costs involved in moving Navy ships from their home ports to other locations for overhaul and repair work, and other unconsidered costs that might affect the outcome of awards.

GAO found that: (1) the Navy decreased the number of IDC it used in evaluating competing shipyards' proposals from 11 elements to 5 elements, although GAO identified 14 potential IDC elements; (2) it could not determine actual IDC incurred by the government because the Navy did not account for IDC costs on a ship-by-ship basis; (3) IDC not considered by the Navy could have affected the outcome of some awards; (4) crew relocation was the largest IDC element not considered by the Navy, but GAO agreed with the Navy that those costs were too difficult to accurately predict; and (5) the Navy's foreseeable costs could have little effect on future awards, because more maintenance work will likely be done at home ports.

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