Review of Navy Contracting Procedures and Decision To Overhaul Ship Equipment Using Contractor Rather Than Naval Shipyard Employees

PSAD-77-150: Published: Aug 11, 1977. Publicly Released: Aug 11, 1977.

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A review of a Navy contract award to a company to repair equipment aboard the U.S.S. Kitty Hawk was based on information which indicated that the contract award would result in a higher cost to the government than if Puget Sound Naval Shipyard, Naval Sea System Command, did the work.

The Naval Sea Systems Command determined that the company was the only source capable of doing the work without making a detailed analysis of the Shipyard's capabilities or soliciting offers from other commercial sources. Navy officials stated that detailed specifications were not available for use by other commercial sources because the Navy's drawings and data package had not been kept up to date. GAO believed that the Navy had sufficient time before the award to evaluate the Shipyard's capability to do the work and to take action necessary to develop any additional capability needed. Since cost estimates had not been prepared, GAO could not determine what the cost of the work would have been, but it was believed that the unofficial estimate was understated. In addition, GAO stated that the Navy should have evaluated relative costs before, rather than after, contracting with the company and that other sources should have been solicited.

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