Allegations of an Inappropriate Army Sole-Source Award for Commercial Construction Equipment

Gao ID: PLRD-82-13 October 15, 1981

Pursuant to a congressional request, GAO reviewed the Army's decision to buy commercial construction equipment on a sole-source basis. The proposed procurement is designed to replace outdated earth moving equipment because the present equipment, purchased between 1962 and 1969, had an expected life ranging from 8 to 10 years. Because of the age of this equipment, maintenance is hampered due to the shortage of spare parts. Thus, the rapid deployment mission is or could be adversely affected.

To meet its rapid deployment mission, the Army requested that the equipment be procured under a fleet-buy concept. Under this concept, all of the pieces of equipment would be obtained from one manufacturer. The Army believed that its mission capability would be increased if only one supplier was responsible for parts supply, training, and equipment maintenance. After preparing industry surveys and equipment specifications and considering industry comments regarding these specifications, the Army decided to buy the equipment from one manufacturer. This decision was attributable to the restrictive interpretation of the fleet-buy concept adopted by the Army for this procurement, wherein the Army required that a successful bidder must have manufactured or marketed all of the vehicles in the fleet. Other manufacturers questioned the Army's justification for the sole-source suppliers. GAO concluded that the Army's decision to negotiate a sole-source contract is not adequately justified and lacks sufficient support documenting the proposed awardee as the only capable and willing manufacturer and supplier of the construction equipment in question. By restricting consideration to only those firms that could manufacture all the equipment to be purchased, the Army eliminated several potential suppliers which do not manufacture all the pieces of equipment or could not meet vehicle specifications with their own equipment. GAO believes that, in the future, this procurement and others of a similar nature should be procured competitively.

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