Proposal To Convert Base Support Functions From In-house to Contract Operations

LCD-78-320: Published: Jul 27, 1978. Publicly Released: Aug 28, 1978.

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The Army has proposed to convert 19 base support functions at Fort Gordon, Georgia, from in-house to contract operations. A 1977 feasibility study showed potential cost savings of about $5.5 million by converting to contracting. The Army's study, however, did not accurately estimate the costs of in-house and contract performance. For contract costs, the study used an unreliable estimating technique instead of firm bids and incorrectly determined the one-time retirement cost or savings for civil service employees chargeable to a contract operation. For in-house costs, it did not include all military personnel benefit costs and incorrectly determined benefits for temporary civilian employees. In-house personnel costs were based on a combination of military and civilian personnel. Since it is widely recognized that a civilian work force is cheaper to maintain than is a military work force, Fort Gordon should convert the military spaces in its cost study to civilian spaces and, if less costly, compare the civilian work force operation to contract performance. This would insure that the least costly form of staffing is identified. The Secretary of the Army should insure that, in considering contracting, Fort Gordon should determine the least costly form of staffing in-house operations and correct its comparative cost study to properly estimate personnel retirement costs and temporary civilian employee benefit costs.

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