Pursuant to a congressional request, GAO reviewed certain Navy procedures used to award a solicitation under a contract which will affect family housing maintenance, warehousing and supply operations, and vehicle operation and maintenance functions now being performed by Federal civilian personnel at the Naval Weapons Center (NWC) in China Lake, CA.

GAO found that the NWC estimate of the in-house cost to perform the necessary functions was about $2.8 million less than the contract cost. However, when appeals from both the low bidder and Federal civilian employees were made, a Naval review board ruled that the Navy would save about $364,000 by contracting the services. GAO found that differences in computing the costs of repositioning, retraining, and laying off the Federal civilian employees whose jobs would be affected by the contract award greatly affected the cost estimates. GAO questioned the fact that the appeals officer who was responsible for the decision on the low bidder's appeal reviewed his own decision in the appeal filed by the Federal civilian employees and that new data related to the first appeal could not be reviewed in the second appeal.

Status Legend:

Review Pending-GAO has not yet assessed implementation status.

Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.

Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.

Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.

• Review Pending
• Open
• Closed - implemented
• Closed - not implemented

Recommendation for Executive Action

Recommendation: The Secretary of the Navy should defer award of the contract for support services until the cost comparison has been thoroughly reevaluated and should revise the policy and procedures used in handling second appeals to: (1) require that a different appeals officer be appointed; and (2) allow elements in a first appeal to be reviewed again when new data are presented.

Agency Affected: Department of Defense: Department of the Navy

Status: Closed - Implemented

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