Air Force Procurement

In response to a congressional request, GAO reviewed an Air Force procurement of steel ammunition storage containers for which the contractor obtained most of the labor and materials from a West German subcontractor and its Polish licensee.

GAO found that: (1) there were no significant problems involving the solicitation, award, or contract administration during 1986 and 1987; (2) no law or regulation precluded contract or subcontract awards to firms located in Poland or any other member of the Warsaw Pact; (3) there were no significant problems with the 360 containers delivered under the 1986 contract; (4) the first 800 of the 1,640 containers ordered under the 1987 contract had a delivery date of September 1988; and (5) the Air Force did not plan to award a 1988 contract for this type of container. GAO also found that: (1) in 1986, the contractor failed to follow contract and statutory requirements to use only U.S. flag vessels for the ocean transportation of the containers; (2) the Air Force recently negotiated an equitable adjustment of about $10,000, which the contractor paid to correct its omission; and (3) the Maritime Administration considered the adjustment a proper resolution for the improper shipment of 21 containers, and is still reviewing the shipment of 55 other containers to determine whether another adjustment is required.