Contracting for Support Services and Competitive Procurement Practices at the Navy's Pacific Missile Test Center, Point Mugu, CA

PLRD-82-126: Published: Sep 28, 1982. Publicly Released: Sep 28, 1982.

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In response to a congressional request, GAO investigated contracting practices at the Pacific Missile Test Center (PMTC). It was alleged that the Navy had not complied with Office of Management and Budget (OMB) Circular A-76 by failing to make cost comparisons to determine whether performance of functions by contract or by Government employees was more economical. It was further alleged that support service contracts had been awarded without following competitive bid procedures.

A data processing service center operation previously performed by Government employees was converted to a contractor operation. Since the center was a new organization, the agency considered this to be a new start not requiring a cost comparison. However, as OMB Circular A-76 defines conversion as a transfer of work, this was a conversion, and the cost comparison should have been made. The agency also neglected to conduct a cost comparison on a planned conversion of additional data processing service center functions. Installation of new range display and target control systems had not involved a conversion to contractor performance; therefore, a cost comparison was not required in this case. Two of the five support service contracts which GAO reviewed had been awarded on the basis of adequate price competition. Two other contracts had been awarded on a sole-source basis that was justified by the facts and circumstances in those cases. One contract awarded on a sole-source basis was questionable, since the agency had not assessed in-house capability to do the work and no effort had been made to identify other qualified sources. Three of the five contracts had been extended beyond the original completion dates. Because of inadequate advance procurement planning, competitive solicitations were not made for follow-on contracts. Therefore, the benefits of price competition were not realized.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Commander, PMTC, should monitor the new reporting procedure to preclude the necessity of requesting contract extensions to see that it is effectively implemented.

    Agency Affected: Department of Defense: Department of the Navy: Naval Air Systems Command: Pacific Missile Test Center

  2. Status: Closed - Not Implemented

    Comments: The agency did not agree with this recommendation stating that it disagreed that a cost comparison was necessary. Since the contract has already been awarded and because of the subjectiveness of the issue, GAO sees no reason to pursue the matter further.

    Recommendation: The Commander, PMTC, should defer the award of the data processing service center facilities management contract scheduled for October 1, 1982, until required cost comparison is made in accordance with OMB Circular A-76.

    Agency Affected: Department of Defense: Department of the Navy: Naval Air Systems Command: Pacific Missile Test Center

  3. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Commander, PMTC, should monitor the recently promulgated procedure designed to ensure compliance with OMB Circular A-76 to see that it is effectively implemented.

    Agency Affected: Department of Defense: Department of the Navy: Naval Air Systems Command: Pacific Missile Test Center

 

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