Contracting Out of Selected In-House Commercial and Industrial-Type Activities at the U.S. Military Academy, West Point, New York

PSAD-81-4: Published: Dec 4, 1980. Publicly Released: Dec 9, 1980.

Additional Materials:

Contact:

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

An audit was performed of the costs of performing four functions with in-house personnel, and by contract. The functions were: custodial services, laundry and drycleaning, and refuse collection at the U.S. Military Academy (USMA); and maintenance services at the Stewart Army Subpost (STAS). The maintenance services at STAS had been contracted out for over a year, and the other three functions at USMA were being contracted out after cost comparisions were made in accordance with the Office of Management and Budget (OMB) Circular A-76.

The actual first year savings at STAS exceeded the cost comparison estimated savings, and the laundry and drycleaning contract and refuse contract will result in sufficient savings to justify contracting out. The custodial services cost comparison indicated that contracting out would not generate sufficient savings to meet the minimum OMB requirements. Because of time constraints, the USMA estimate of first year costs for in-house performance was not verified. The original estimate prepared under the old A-76 guidance was reviewed, and results indicated that the current estimate could have been even higher under the current A-76 guidance, thereby increasing the savings by contracting out. Certain elements in the cost comparison for custodial services were found to be questionable. The proposed contract price for the services was understated due to the outdated wage determination that was supplied to the offerors. If the offerors had been supplied with the correct wage determination, their proposed prices could have increased considerably. The cost of contract administration was understated because USMA determined the cost by taking 4 percent of the contract cost instead of the actual expected cost of contract administration. OMB Circular A-76 requires that cost comparisons be aimed at the full cost, to the maximum extent practical in all cases. Because of these changes, other adjustments to the cost of contracting out would also be necessary.

Recommendations for Executive Action

  1. Status: Closed

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

    Recommendation: The Secretary of the Army should resolicit the requirement using a current DOL wage determination.

    Agency Affected: Department of Defense: Department of the Army

  2. Status: Closed

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

    Recommendation: The Secretary of the Army should prepare an updated cost comparison which uses the actual expected cost of contract administration.

    Agency Affected: Department of Defense: Department of the Army

  3. Status: Closed

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

    Recommendation: The Secretary of the Army should direct USMA to cancel the request for proposals for custodial services, since it does not contain the appropriate wage determination.

    Agency Affected: Department of Defense: Department of the Army

 

Explore the full database of GAO's Open Recommendations »

Sep 23, 2016

Sep 21, 2016

Sep 7, 2016

Aug 30, 2016

Aug 11, 2016

Jul 22, 2016

Jul 21, 2016

Jul 6, 2016

Looking for more? Browse all our products here