Improvements Needed in the Department of the Interior's Acquisition of Geophysical Data

RCED-85-9: Published: Nov 20, 1984. Publicly Released: Dec 20, 1984.

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In response to a congressional request, GAO reviewed the Department of the Interior's policies and practices for acquiring geophysical data which are important to the Minerals Management Service (MMS) in its evaluation of the petroleum potential of offshore lands.

Companies which conduct exploration and development of offshore oil and gas are required to provide geophysical data to Interior upon request, and Interior pays companies for the reasonable costs of processing and reproducing, but not for acquiring, such data. GAO found that, in 2 of the 95 contracts which MMS issued for acquiring geophysical data from 1981 through 1983, MMS paid companies for acquisition costs which were not allowed by the Outer Continental Shelf Lands Act Amendments or Interior regulations. GAO also found that MMS paid widely varying prices for similarly processed geophysical data and could not explain the variations. Although MMS adopted the Federal Procurement Regulations as a basis for contracting for geophysical data, it did not always follow them. For example, contracting officers often did not require cost or pricing information and rarely requested audits of proposed contracts. GAO also found that contracting officers did not separately identify acquisition and processing costs as required by regulations. Implementation of a new policy and procedures memorandum may help ensure that payments for data are reasonable and comply with applicable regulations; however, the memorandum does not provide guidance in paying reproduction costs.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: On December 20, 1985, Interior's appropriation was enacted. It contained a provision that the Secretary pay only the reasonable cost of reproducing such data and information. MMS has estimated that this will reduce funding from a fiscal year (FY) 1985 level of $7.4 million to a base-level funding of $2 million by FY 1989 as less data acquired by MMS will require reimbursement.

    Matter: Congress should amend the Outer Continental Shelf Lands Act to require that, whenever any data or information are provided to the Secretary of the Interior, both permittees and lessees be reimbursed only for the reasonable cost of reproducing such data and information if it is in the form and manner normally used by the company. If the Secretary requests the data in another form or manner than used by the lessee or permittee in its normal course of business, the Secretary must pay the reasonable costs attributable to this processing and reproduction.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Policies and Procedures Memo is being followed. MMS initiated an internal review of FY 1982 through 1984 geological and geophysical contracts and developed a Policy and Procedures Memorandum dated July 11, 1985, which prescribes a standard method for evaluating reproduction costs for geological and geophysical data.

    Recommendation: The Secretary of the Interior should require the Director, MMS, to monitor the implementation of the April 1984 Policies and Procedures Memorandum governing the acquisition of geological and geophysical data. In addition, MMS should establish guidelines for reproduction costs based on the cost per square foot in various regions as a standard for future purchases of data.

    Agency Affected: Department of the Interior

  2. Status: Closed - Implemented

    Comments: As noted in the report, MMS has made one recovery of about $90,000. Since the report, MMS has recovered $12,717 from another contractor.

    Recommendation: The Secretary of the Interior should direct the Director, MMS, to take whatever actions are necessary to recover the nonallowable costs attributable to those contracts discussed earlier in this report and as otherwise appropriate.

    Agency Affected: Department of the Interior


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