United States General Accounting Office Jfa GAO Office of Public Information Reports Issued in February 1987 National Ikfenw 1 International Affairs 4 Social Services 13 15 1G HOWto Obtain GAO Reports and Testimony In per-son: I3y mail: Reports Issued in February 1987 National Defense -- -- Nuclear Weapons: Ace. No. 132187 (GAO/NSI~D-8i’-15), Feb. 10. Emergency Preparedness Nuclear weapons will be carried on some of the ships the Navy plans to Planning for Accidents Can add to existing and new J!.S. homeports. Coordination and planning with Be Better Coordinated states and localities for public safety in the event of a nuclear weapon accident varies by service. The Navy and Army generally have not coor- dinated this planning as they have for other types of disasters because they believe to do so would compromise national security. The Air Force coordinates its emergency planning for all types of disasters. XX) believes that while it is possible for Navy homeports to coordinate preparedness plans on an unclassified basis it is not possible to do so at nuclear weapon storage sites because of security constraints. -.~.--. Weapon Performance: CAO/NYIAD-87-67, Dec. 23. Operational Test and Evaluation Can Contribute The usefulness of operational test and evaluation in estimating a weapon system’s performance has been limited because of long-standing More to Decisionmaking problems in test planning, test conduct, and the reporting of test and evaluation results. For example, selection of test sites have not always been representative of operating environments; test objectives and eval- uation criteria have not always been established; test resources have not always been available or adequate; and test reports have lacked com- plete, current or accurate data. GAO recommends that the Department of Defense require agencies to (1) state whether or&~:demonstrated that the system met operational requirements, (2) discuss the operational effect of significant test limitations and adverse test results on system performance, and 13) clearly state whether a system is operationally effective and slritable. Chemical Warfare: GAO/NSIAD-87-%T~R. Jan. 13. The Chemical Warfare Review Commission Did Not The President created the Chemical Warfare Review Commission to review the adequacy of the JJS. chemical warfare capability. GAO found Comply With the Federal that, the CWKC(1) did not maintain detailed minutes of meetings; (2) Advisory Committee Act neglected to designate a federal official to attend each meeting; (3) dis- posed of government funds improperly; and (4) did not publish advance notices of all meetings. GAOalso found that the financial records did not Page 1 provide a complete accounting of the CWKC funds and that the Office of the Secretary of Defense’s management of the CWRC differed from two other presidential commissions in that both had complied with the major accountability provisions of the act. _- Hazardous Waste: GAO/NSIAU-87-45, L)eC. 15. DOD Efforts to Preclude Army policy requires t,hat a records search and a visual inspection will Disposal of Contaminated be made and documented to identify potential hazardous waste contami- Property Need nation. Air Force policy requires a records search. Current Navy policy Improvement does not specify what actions should be taken to identify potential con- tamination. The services reported excess real property that was poten- tially contaminated but! in most cases, information on the potential contamination was incomplete. The inadequacy of this information is due! in some cases, to the poor quality of the services’ inspections when the properties were declared excess. Most excess real properties GAO reviewed are parcels of act,ive installations and are sometimes located in the vicinity of the installations potential hazardous waste sites, Possible contamination migration from these sites may be affecting excess real property; however, the services’ policies do not consider such effects. Procurement: Act. pie. 132169 !~;noi~sr4n-~7-7), Feb. 13. Opportunities to Use More Preferred Practices for Base The Department, of Defense identified 64 “umbrella” contracts valued at $3.5 billion, which the military services used to provide support services Support Contracts on military bases during FY 1977 through 1983. tinder this approach, one contractor supplies a wide range of services rather than a single service. The use of thcsc contracts grew from $20 million in FY 1977 to more than $1 billion in FY 1983. The number of bases using them could nearly triple by E’Y 1988. Most of the work done under umbrella con- tracts was routim or predictable However, the military services awarded most of the contracts using contracting practices more suited for obtaining technical, nonroutine work. The military services provided little or no support for many of their decisions to use the less preferred contracting practices. They said they used them mainly to have flexi- bility, to get. the best service, and to save time in the contracting process, However, the preferred practices have been used successfully in awarding some umbrella contracts. In addition, single function con- tracts, covering many similar types of work as the umbrella contracts, have often been based on t,hc preferred practices. Page 2 --- Reports Issued in February 1987 Contract Pricing: Act. No. 132139 (GAO/NSIAD-87-31),Feb. 11 Material Prices Overstated GAO reviewed five subcontract prices for the production of the Standard on Standard Missile and Missile and the Phalanx weapon system at General Dynamics Corpora- Phalanx Systems tion, Pomona Division in California. GAO found that the five contracts were overpriced by about $1.9 million because General Dynamics did not disclose, prior to reaching price agreement with the government, the most accurate. c*omplcte.and current subcontrac*t cost or pricing data for 14 of the 66 subcontract items. In addition, Navy contracting officers did not obtain evaluations from General Dynamics on 21 of 23 major noncompetitive subcontract price proposals for use in prime contract negotiations, as required by regulations. GAO recommends recovery of funds from General Dynamics. DOD Inflation: Ace. No. 132219 (GAC)/NSlAD-87-71), Feb. 23. Updated Estimates of DOD’s Fuel Inflation Dividends In July 1986 the Office of Management and Budget projected that FY 1986 fuel prices would probably decline by 29.4 percent from the actual fuel prices in FY 1985 and decline an additional 20 percent in FY 1987. The Department of Defense used these percentage changes in fuel prices to calculate potential fuel inflation dividends for FY 1986 and 1987. OMB then projected that fuel prices for FY 1986 would probably decline by 33.3 percent from the actual prices in FY 1985. It also projected that fuel prices in FY 1987 would probably decline in additional 24 percent from the FY 1986 prices. Congress reduced the rxx budgets for FY 1986 and 1987 fuel procurements by $3.46 billion. GAO calculated the total amount of fuel inflation dividends for FY 1982 through 1987 to be $8.94 billion. DOD'S estimation of the actual and projected fuel inflation divi- dends for FY 1982 through 1987 is $7.68 billion. The total inflation reduction of $7.45 billion, which the Congress made to the fuel budget requests for FY 1982 through 1987, is 97 percent of the amount that DOD estimated for file1 inflation dividends. Radio Frequencies: Act. No. 132122 ((;~olr;s~nr)-87-42), Feb. 9. Earlier Coordination Could Improve System Use and Because the Department of Defense has generally processed requests for host nation coordination on frequency applications when communica- Save Costs tion systems are in the final stage of their acquisition cycle, systems were either delayed for use in Europe or they did not use their full Page 3 Reports Issued in Febru& 1987 capacity, or they were required to have extensive and costly modifica- tions. In some cases, systems were placed in Europe without coordina- tion or approval from the host nation. Use of these systems could interfere with other critical systems or preclude their operation during wartime. Weaknesses in the coordination process have contributed to these problems. MO’S work in the Pacific theater confirms that the fre- quency coordination problem is more widespread than just systems placed in Europe. Navy Printing: GAO/KSIAD-~‘~‘-~~FS, Jan. 2. Information on Sales and For the 3-month period ending Dec. 1985 the Navy Publications and Purchases Printing Service had sales of about $198,000 and about $158,000 to non- Department of Defense federal government and nonappropriated fund customers, respectively. Printing services purchased from commercial sources and sold by ~‘1%totaled about $3.7 million for the same 3 months. Rlanket, Purchase Agreements printing service purchases were about $1.0 million during the same 3-month period. International Affairs Foreign Assistance: ~~O/hs1~~-87-76, Jan. 31. Analysis of Cost Estimates for Israel’s Lavi Aircraft Israel is developing the Lavi fighter aircraft to replace its aging U.S.- produced A-4 Skyhawks and Israeli-produced Kfirs. So far, it has been financed predominantly ($1.3 billion) from U.S. assistance funds. GAO found that even the lowest estimate of the funding required to produce the planned 300 Lavi aircraft will exceed the spending cap set by Israel and consume an increasingly larger share of Israel’s defense resources The annual cash flow requirements for the Lavi is estimated at over $1 billion in 1990 and could exceed $1.4 billion by 2000. The significant differences between the Department of Defense and Israeli estimates are due to engineering change orders not included in Israel’s estimate and to the unavailability of specific Israeli data which caused DOD to draw on U.S. aircraft production experience. Neither estimate provides for sig- nificant slippages or other unforeseen problems, which could increase costs. Page 4 Rqm-ts Issued in February 1987 Foreign AID: Act.