Navy Has Housing Problems at Virginia Beach and Scrap Metal Disposal Problems at Sewells Point

PSAD-80-73: Published: Sep 19, 1980. Publicly Released: Sep 19, 1980.

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Although it is less than 2 years old, Carper housing complex has had numerous maintenance problems. The total amount of maintenance costs could not be validated because of errors in the Navy's cost accounting systems. At Sewells Point, the Navy is violating DOD regulations by letting a contractor keep valuable scrap metal. Excess personal property, including scrap metal, should be turned into a Defense Property Disposal Office.

The Navy is not turning the scrap metal in because it believes it is more cost effective to contract for disposal. Lack of information on the amount and value of scrap metal makes it impossible for the Navy to ensure that the Government is getting fair value on its disposal. Regulations clearly state that it is the agency's responsibility to segregate scrap and waste to the maximum extent feasible and to turn the scrap metal into a Defense Property Disposal Office. Navy officials state they are now requiring the scrap contractor to keep a log and will use that data to make another economic study of the costs. The scrap metal contractor told GAO that it will be impossible for the Navy to assess the value of the scrap metal from the data being collected. Although construction standards exist for many of the major problem areas at Carper, they are not always adequate to ensure quality housing. Standards existed for some problem areas, and none existed for others. Even when standards were specific, they were not always sufficient or enforced. The system for evaluating proposals encourages contractors to include amenities rather than raise construction quality above the minimum standards. At Carper inspection was inadequate. Inspectors from other Navy housing projects noted inadequacies with the construction standards and with the contractors' inspection program. GAO concluded that the Navy's experience at Carper was not unique. GAO believes that the Navy should contact manufacturers to repair products under warranty or insist that the construction contractor do so.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of the Navy should identify when planning new housing projects, based on past experience and expected use, those items likely to require considerable maintenance if only the minimum standards are met. Within funding constraints, he should specify higher requirements in requesting contract proposals for those items whose expected maintenance costs over the life of the project exceed the additional cost of the more durable items. He should summarize for the Department of Defense (DOD) the problems experienced with marginal construction standards, the bid evaluation system, and the contractor quality control programs, including Carper, and suggest to DOD that it determine whether these problems are widespread and need correction. The Secretary should require that inspectors and maintenance personnel contact manufacturers before paying for problems which should have been covered by warranty, but which the contractor refuses to do. He should require construction personnel to provide maintenance personnel with a complete list of applicable warranties at the time of occupancy to reduce the likelihood of paying for work which should be covered by warranty. He should require maintenance personnel to keep records of all work paid for which should have been covered by warranty so that claims or counterclaims can be instituted by the Government. The Secretary of the Navy should direct the Commander of the Atlantic Division, Naval Facilities Engineering Command, to use either Navy personnel or to pay a contractor to collect, sort, and deliver the scrap metal from Sewells Point to the Defense Property Disposal Office, or request an exemption to the DOD regulations for a contractor to keep the scrap metal only if the Public Works Center (1) collects adequate data to show the cost effectiveness of doing so, and (2) establishes an adequate system to monitor the contract and assess the value of scrap metal being collected.

    Agency Affected:


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