Inventory Management:

Purchasing Parts From Contractor-Operated Stores and Commercial Sources

NSIAD-95-176: Published: Sep 11, 1995. Publicly Released: Sep 11, 1995.

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Pursuant to a legislative requirement, GAO compared the cost of vehicle repair parts purchased from Air Force Contractor Operated Parts Stores (COPARS) with those purchased directly from commercial suppliers and provided information on whether the provisions of Office of Management and Budget (OMB) Circular A-76 are to be applied when terminating a COPARS contract.

GAO found that: (1) GAO's review showed that the most cost-effective method for purchasing vehicle repair parts can vary from base to base; (2) every base is unique in terms of the mission that it must support and the nature of its local economy; (3) factors such as the types of vehicles in the fleet, volume of business conducted, vendor availability in the community, vendor delivery preferences, and vendor payment preferences differ among bases and affect the price of parts; (4) also, various mission-related factors, such as deployments, may affect the availability of personnel needed to manage a commercial-source parts procurement operation; (5) given these differences, installation commanders are in the best position to determine which approach for acquiring parts will best meet their needs; (6) in making this decision, the commanders would need to thoroughly analyze all relevant factors to arrive at a reasonable judgment of the preferred purchase option; (7) GAO's cost analyses at two bases showed that controlling personnel costs is key to determining whether savings could be achieved in a commercial-source procurement system; (8) to achieve savings, maintenance units would need to: (a) perform the purchasing function with approximately the same number of personnel as the COPARS contractor; and (b) assign personnel in mid-level enlisted pay grades; (9) because neither base has initiated a commercial-source procurement system, it is unknown whether bases can operate within these parameters; (10) OMB Circular A-76 does not apply to the Air Force's vehicle repair parts support decision; (11) the establishment of a commercial-source procurement system is simply an alternative way of doing business; (12) the Air Force is not replacing a COPARS with an identical in-house service; and (13) as a result, no study is required.

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