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GAO discussed the Department of Defense's (DOD) efforts to consolidate the military services' and the Defense Logistics Agency's (DLA) printing and duplicating operations under the Navy's centrally managed Defense Printing Service (DPS), focusing on: (1) the status of the consolidation efforts; (2) the areas where savings will occur; and (3) conditions that will affect the assumptions on which DOD bases its future savings estimate. GAO noted that: (1) DPS reported a 3-month loss of about $2 million despite a 10-percent increase in prices to cover the cost of purchasing equipment; (2) consolidation has not affected printing quality, timeliness, or customer service; (3) consolidation has resulted in customer concerns over printing costs and billing procedures; (4) DOD commercial printing and duplicating contracts, which are required to go directly to the Government Printing Office (GPO), are currently routed through DPS, often incurring excessive surcharges; (5) plans to achieve annual expected savings include acquiring new productivity-enhancing equipment and reducing facility and space costs; and (6) annual estimated savings will be difficult to achieve due to a 25-percent reduction in force, the impact of industrial funding of marginal requirements, and work that DPS contracts to GPO.

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