OMB Circular A-76:

Flaws in Cherry Point Comparison Preclude Validation of Contracting Decision

NSIAD-92-38: Published: Oct 18, 1991. Publicly Released: Oct 18, 1991.

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Pursuant to a congressional request, GAO reviewed an 8-year Office of Management and Budget (OMB) Circular A-76 cost study at the Marine Corps Air Station in Cherry Point, North Carolina, which concluded in July 1990 that the station's facilities maintenance, utilities, and motor transportation functions could be performed more economically by a contractor.

GAO could not clarify whether services could be performed more efficiently by the contractor or whether savings estimates would be realized due to: (1) use of an outdated performance work statement that did not reflect changes in the work requirements; (2) a specification format that did not correspond to the source selection plan format; and (3) the contractor's failure to demonstrate acceptable, specific experience and comprehension in mission-critical work requirements.

Recommendation for Executive Action

  1. Status: Closed - Not Implemented

    Comments: The statutory and conference report on the fiscal year 1992 Department of Defense Appropriations Act rules out notice to proceed and precludes demonstration contemplated by the recommendation.

    Recommendation: The Secretary of the Navy should direct the head of the contracting activity to ensure that notice to proceed with performance of the current contract is withheld until the Commandant of the Marine Corps: (1) determines what impact noted deficiencies had; and (2) can demonstrate that proceeding with the current contract would be the most advantageous course of action.

    Agency Affected: Department of Defense: Department of the Navy


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