Contracting Out Base Operating Support Functions at the Navy's Pacific Missile Test Center, Point Mugu, California

An investigation was made of allegations by Federal employee union representatives concerning inefficiencies in the contracting-out process at the Navy's Pacific Missile Test Center (PMTC). The allegations considered were: (1) that contracts for some support services were more costly than when previously provided by civil service employees; and (2) that proposed service contracts were not cost effective. PMTC claimed that the contract awards were justified because of reduced personnel authorizations imposed by higher officials, and that cost comparisons were not required because no civil service personnel were adversely affected by the decisions to contract out.

GAO disagreed and found that without cost comparisons, there was no assurance that the lowest cost alternative was chosen to accomplish the base operating support functions. Moreover, the contracting decisions were made without the approval of higher Navy authority. In addition, the conversion of keypunch services from in-house to contract violated the 1978 Department of Defense Appropriation Act which prohibits the use of funds to convert base operating support functions to commercial contract during the fiscal year.