Public-Private Competitions

This testimony focuses on issues related to the public-private competitions for workloads at the Sacramento, California, and San Antonio, Texas, maintenance depots slated for closure as part of the 1995 base realignment and closure process. GAO explains the problems it has confronted in obtaining access to Defense Department (DOD) information on these competitions that GAO needs to meet its reporting responsibilities under the 1998 Defense Authorization Act. GAO also discusses (1) the recent competition for C-5 aircraft workload; (2) the adequacy of DOD's support for its contention that competing combined, rather than individual, workloads of each maintenance depot is more logical and economical; and (3) concerns that participants have raised about the upcoming competitions for the workloads at the air logistics centers in Sacramento and San Antonio.

GAO noted that: (1) its lack of access to information within DOD is seriously impairing its ability to carry out its reporting requirements; (2) GAO completed, with difficulty, its required report to Congress concerning DOD's determination to combine individual workloads at two closing logistics centers into a single solicitation at each location; (3) if DOD continues to delay and restrict GAO's access to information it needs to do its work, GAO will be unable to provide Congress timely and thorough responses regarding the competitions for the Sacramento and San Antonio depot maintenance workloads; (4) in assessing the competition for the C-5 aircraft workloads, GAO found that: (a) the Air Force provided public and private sources an equal opportunity to compete for the workloads without regard to where the work could be done; (b) the Air Force's procedures for competing the workloads did not appear to deviate materially from applicable laws or the Federal Acquisition Regulation; and (c) the award resulted in the lowest total cost to the government, based on Air Force assumptions at the time; (5) for the remaining workloads at Sacramento and San Antonio, DOD reports and other data do not support the Defense Secretary's determination that using a single contract with combined workloads is more cost-effective than using separate contracts for individual workloads; (6) much remains uncertain about the upcoming competitions for the Sacramento and San Antonio depot maintenance workloads; (7) potential participants have raised several concerns that they believe may affect the conduct of the competitions; (8) one concern is the impact of the statutory limit on the amount of depot maintenance work that can be done by non-DOD personnel; (9) the Air Force has not yet determined the current and projected public-private sector workload mix using criteria provided in the 1998 Defense Authorization Act, but is working on it; (10) nonetheless, preliminary data indicates there is little opportunity to contract out additional depot maintenance workloads to the private sector; (11) another concern is the Air Force's proposed change in the overhead savings the Department may factor into the cost evaluations; (12) for the C-5 workload competition, overhead savings were considered for the duration of the performance period; and (13) however, for the Sacramento and San Antonio competitions, the Air Force is considering limiting overhead savings to the first year and possibly reducing the savings for the second year.