Army Procurement:

The Selection of a Manufacturer for the 120-mm Mortar

NSIAD-89-178: Published: Jul 18, 1989. Publicly Released: Aug 17, 1989.

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Pursuant to a congressional request, GAO reviewed the Army's comparison of its and a private manufacturer's costs for producing its 120-millimeter mortar system.

GAO found that: (1) in March 1988, after competitive testing, the Army selected one of three firms which responded to its November 1985 solicitation for the mortars; (2) after comparing the firm's total production costs with its arsenal's out-of-pocket costs, the Army selected the arsenal to produce the mortars; (3) the Army Audit Agency, an Army Armament, Munitions, and Chemical Command team, and an independent award advisory team conducted separate reviews of the arsenal's cost estimates and found them to be appropriate, reasonable, and consistent; and (4) the arsenal's' estimate to produce 2,816 mortars over an 8-year period was $23.2 million, or 34 percent, less costly than the firm's estimate. GAO believes that the Army's thorough examination of the arsenal's cost estimate policies, practices, and methodologies complied with the applicable regulations regarding cost comparisons between firms and arsenals.

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