FDA Laboratories

Magnitude of Benefits Associated With Consolidation Is Questionable Gao ID: HEHS-96-30 March 19, 1996

Because many of the Food and Drug Administration's (FDA) 18 testing laboratories across the country are old and need repair. FDA plans to replace old labs with five "megalabs" and four special-purpose facilities. GAO found, however, that projected cost savings of about $91 million may be based on assumptions that inflate the cost of replacing the existing labs. Moreover, current FDA workload data indicate that medium-sized labs--those having about 50 analysts per lab--are more efficient and effective than existing larger labs. In selecting sites for its megalabs, FDA did little analysis of the relative efficiency of alternative sites. FDA placed little emphasis on such factors as proximity to ports of entry and quantity of nearby food and other relevant businesses. Instead, FDA site selections were based mainly on where it thought it would receive congressional funding approval.

GAO found that: (1) the 20-year consolidation plan, known as ORA 21, proposes to create five mega-laboratories and four special-purpose laboratories; (2) ORA based its plan on the belief that its current facilities are old, need costly repairs, and do not meet the needs for conducting regulatory science in the future; (3) ORA may have overstated the consolidation plan's projected cost savings because ORA made several assumptions about replacement costs, construction costs, and space and staffing requirements; (4) the plan's claims for achieving greater operational efficiencies are also questionable, and ORA did not substantiate claims regarding obsolete equipment, supervisor/analyst ratios, laboratory efficiency, and staff relocation; and (5) ORA conducted limited analysis of the relative efficiency of proposed laboratory sites and based its site selections on areas where it believed that it would receive congressional funding approval.

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