Need To Reevaluate The Proposed Relocation Of The Navy's Fleet Missile Systems Analysis And Evaluation Group

B-168700: Published: Nov 1, 1974. Publicly Released: Nov 1, 1974.

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Pursuant to a congressional request, GAO evaluated the proposed relocation of the Navy's Fleet Missile Systems Analysis and Evaluation Group from Corona to Seal Beach, California, focusing on the: (1) adequacy and propriety of studies on the costs to relocate and the savings to be achieved; (2) suitability of facilities at Seal Beach as compared to the facilities at Corona; (3) effects of relocation on computer operations; and (4) effects of relocation on employment and employees.

GAO noted that: (1) the Navy estimated that relocating the Fleet Missile Systems Analysis and Evaluation Group (FMSAEG) from Corona to Seal Beach would save $446,200 annually and result in one-time costs of about $2.7 million; (2) the Navy's estimates of savings and costs: (a) lacked documentation in support of most of the estimates; (b) differed from GAO estimates for some items; and (c) did not account for all aspects of the relocation; (3) the Navy's economic analysis also used an apparently inappropriate basis for comparison and did not employ present value analysis; (4) the structures to be used by FMSAEG at Corona would provide more space and appear to be better suited for accomplishing FMSAEG's missions; (5) the possibility of losing stored data while moving the computer appears remote; (6) about 10 percent of FMSAEG's employees said they will terminate employment or retire if FMSAEG is relocated to Seal Beach; (7) Navy officials believe other potential factors will affect FMSAEG's relocation to Seal Beach, including: (a) a loss of efficiency for certain activities at Seal Beach; and (b) loss of efficiency and productivity by the private contractor who provides various support services to FMSAEG; (8) excluding the economic considerations, consolidation of FMSAEG at Corona appears to be a better alternative than relocation to Seal Beach; and (9) because of questions concerning the Navy's economic analysis, GAO is unable to conclude that the Navy has adequately justified the proposed relocation.

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