Army Procurement: No Savings From Contracting for Support Services at Fort Eustis, Virginia
NSIAD-89-25
Published: Oct 25, 1988. Publicly Released: Oct 31, 1988.
Skip to Highlights
Highlights
Pursuant to a congressional request, GAO reviewed the Army's contract for Directorate of Logistics support services at Fort Eustis, focusing on the: (1) comparison of estimated in-house and contractor costs; (2) cost growth since the contract award; and (3) fort's use of a cost-plus-award-fee contract instead of a fixed-price contract.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of the Army | The Secretary of the Army should direct the Commanding Officer, Fort Eustis, to take the following actions for the follow-on Directorate of Logistics contract and future cost comparisons and contracts: (1) in accordance with FAR, expedite the preparation of a requirements work statement that will permit contracting functions on a fixed-price basis as soon as the statement is available rather than exercising follow-on options on a cost-reimbursement basis; (2) ensure that cost comparisons include all probable costs for in-house and contract performance; and (3) ensure that variations between proposed costs and the most probable cost developed by the fort's Source Selection Board are negotiated with the contractor or otherwise resolved prior to any contract award. |
The Department of Defense (DOD) agreed to direct Fort Eustis to obtain workload data needed for fixed-price contracting and to ensure that cost variations are negotiated with the contractor prior to award. DOD, however, did not agree that cost comparison should include all probable costs. This matter will be addressed further in future A-76 work.
|
Full Report
Public Inquiries
Topics
Army procurementContract administrationContract costsCost effectiveness analysisCost plus award fee contractsFixed price contractsMilitary cost controlPrivatizationQuestionable procurement chargesService contracts