Public-Private Competitions

The Defense Department (DOD) determined that workloads now being performed at the closing San Antonio, Texas, and Sacramento, California, Air Force maintenance depots cannot be performed as logically and economically without combination. GAO's January 1998 report (GAO/NSIAD-98-76) concluded that DOD's decisions to combine workloads were not adequately supported. In February, DOD provided Congress and GAO with additional support for its determination. This report addresses the reasons that the Air Force believes that it is more logical and economical to combine the workloads and presents GAO's views on the rationale for DOD's determinations and the information provided to support this rationale.

GAO noted that: (1) the Air Force's support for DOD's determinations that it is more logical and economical to combine the workloads being competed at the closing depots is based on a wide variety of information accumulated during the acquisition strategy development process started in September 1995; (2) while GAO recognizes that the determinations ultimately represent a management judgment based on various qualitative and quantitative factors and that DOD's determinations may well be appropriate, the rationale presented in the February 24, 1998, Sacramento white paper and San Antonio report for combining the workloads in single solicitations at each location is not well supported; (3) GAO's assessment indicates that there are significant weaknesses in logic, assumptions, and data; (4) DOD did not consider other alternatives that appear to be logical and potentially cost-effective, and its assumption that efficiencies from shared personnel and facilities are best achieved with a single solicitation for combined workloads at each location is questionable; (5) also, the Air Force's claim that the effects of sequential personnel reductions and transition delays can be problematic is questionable in view of DOD's demonstrated success in the past handling multiple transitions and sequential reductions; (6) in addition, the workload stability rationale for Sacramento is questionable because the inherent inefficiencies of the commodity workload are not likely to be improved by combination with the more predictable and consistent aircraft workload; and (7) finally, the Air Force's cost analysis, which concluded that workload combination would save $22 million to $130 million at Sacramento and $92 million to $259 million at San Antonio, is questionable because it did not consider all cost factors, such as the cost benefits of increased competition resulting from solicitations for individual workloads.