Magnitude of Benefits Associated With Consolidation Is Questionable
HEHS-96-30: Published: Mar 19, 1996. Publicly Released: Mar 19, 1996.
- Full Report:
Pursuant to a congressional request, GAO reviewed the Food and Drug Administration's (FDA) plan to consolidate its Office of Regulatory Affairs' (ORA) 18 field laboratories for product testing, focusing on: (1) the validity of projected cost savings and operational efficiencies; and (2) site selection criteria.
GAO found that: (1) the 20-year consolidation plan, known as ORA 21, proposes to create five mega-laboratories and four special-purpose laboratories; (2) ORA based its plan on the belief that its current facilities are old, need costly repairs, and do not meet the needs for conducting regulatory science in the future; (3) ORA may have overstated the consolidation plan's projected cost savings because ORA made several assumptions about replacement costs, construction costs, and space and staffing requirements; (4) the plan's claims for achieving greater operational efficiencies are also questionable, and ORA did not substantiate claims regarding obsolete equipment, supervisor/analyst ratios, laboratory efficiency, and staff relocation; and (5) ORA conducted limited analysis of the relative efficiency of proposed laboratory sites and based its site selections on areas where it believed that it would receive congressional funding approval.
Recommendation for Executive Action
Status: Closed - Implemented
Comments: FDA reevaluated its restructuring plan and concluded that it should continue implementing the plan.
Recommendation: The Commissioner, FDA, should review the restructuring plan to determine whether ORA adequately weighed the benefits of consolidation relative to other alternatives.
Agency Affected: Department of Health and Human Services: Public Health Service: Food and Drug Administration