GAO

United States General Accounting Office

Report to Congressional Committees

May 1999 PUBLIC-PRIVATE 

COMPETITIONS

Reasonable Processes 

Used for Sacramento 

Depot Maintenance 

Award

GAO/NSIAD-99-124

United States

General Accounting Office

Washington, D.C. 20548 Letr

Page 1 GAO/NSIAD-99-124 Public-Private Depot Competitions

GAO

National Security and

International Affairs Division

B-281525.2 Letter

May 12, 1999

The Honorable John Warner

Chairman

The Honorable Carl Levin

Ranking Minority Member

Committee on Armed Services 

United States Senate

The Honorable Floyd Spence

Chairman

The Honorable Ike Skelton

Ranking Minority Member

Committee on Armed Services

House of Representatives

This report is a redacted version of a report issued on November 23, 1998, 

which contained sensitive and protected information. The report responds 

to one of several requirements in the National Defense Authorization Act 

for Fiscal Year 1998 relating to depot maintenance activities.1 

As required, we reviewed the Air Force’s selection of a source of repair for 

depot maintenance work at the closing Sacramento Air Logistics Center 

(ALC), McClellan Air Force Base, California. Specifically, we assessed 

whether the (1) Air Force’s procedures for conducting the Sacramento 

competition provided substantially equal opportunity for the public and 

private offerors to compete for the work without regard to performance 

location, (2) procedures for conducting the competition were in 

compliance with 10 U.S.C. 2469a and other applicable laws and regulations, 

(3) appropriate consideration was given to factors other than cost, and

(4) award resulted in the lowest total cost to the Department of Defense 

(DOD) for performance of the work. 

Results in Brief Our review of the Air Force’s competition for work at the Sacramento ALC 

showed that (1) the competition procedures provided an equal opportunity 

for public and private competitors without regard to where the work could 

be performed; (2) the procedures did not appear to deviate in any material 

respect from applicable laws and regulations; (3) the Air Force 

1

Appendix I lists the depot maintenance reporting requirements contained in the act.
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appropriately considered factors other than cost in the selection; and

(4) within the framework set forth for the competition, the award resulted 

in the lowest total cost to DOD for performance of the work.2

 We also 

identified several issues that may be useful for the Air Force to consider in 

future competitions. 

Background As a result of a 1995 Base Realignment and Closure (BRAC) Act decision, 

the Sacramento and San Antonio ALCs, including their maintenance 

depots, are to close by 2001. To mitigate the impact of the closings on the 

local communities and employees, the administration announced its 

intention to maintain employment levels by privatizing the maintenance 

depots’ workloads in place at each location. The Air Force followed by 

announcing a strategy to privatize in place five prototype depot 

maintenance work packages at the two closing centers. In response to 

congressional concerns regarding this strategy, the Air Force decided to 

use public-private competitions to determine the most cost-effective 

source of repair for the closing maintenance depots’ work. Appendix II 

provides a more detailed description of the closure history for both the 

Sacramento and San Antonio centers.

On March 20, 1998, the Air Force issued a solicitation for the purpose of 

conducting a public-private competition for various aircraft and 

commodity depot maintenance workloads being performed at the 

Sacramento ALC.3

 The Air Force received one private sector proposal 

from Lockheed Martin Corporation, which had AAI Aerospace Corporation 

and GEC-Marconi Avionics Incorporated as major subcontractors, and one 

public sector proposal from the Air Force’s Ogden ALC, which was teamed 

with Boeing Aerospace Corporation. After performing technical and cost 

evaluations, on September 21, 1998, the Air Force selected the Ogden ALC’s 

proposal as the best value to the government. Following

2In our previous report entitled Public-Private Competitions: Review of Sacramento Air Force Depot 

Solicitation (GAO/OGC-98-48, May 4, 1998) and in a bid protest decision, Pemco Aeroplex, Inc., cited 

earlier, we concluded that the Air Force had not provided a sufficient basis to show that the combined 

workloads were necessary to meet its needs. We have not changed our view. 

3

Some of Sacramento’s maintenance work was to be transferred to other DOD depots outside the 

competition process. For example, the BRAC Commission required that ground communications and 

electronics work be transferred to the Tobyhanna Army Depot in Pennsylvania. The Air Force F-15 

repair work has been consolidated with other F-15 work at the Warner Robins ALC in Georgia, and 

software work has been transferred to the Ogden ALC in Utah. 
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resolution of a bid protest filed with our Office, the Air Force proceeded to 

award the work to Ogden, on October 9, 1998.4 

Sacramento Air Force 

Depot Competition 

Placed No Limitation 

on Performance 

Location

Under 10 U.S.C. 2469a(d), a competitor must be allowed to perform at the 

location of its choosing and is not to be given preferential treatment for, or 

be limited to, performing the work in place or at any other single location. 

On the basis of our review of the Air Force’s evaluation and selection 

documents related to the Sacramento competition, we found no basis to 

conclude that the procedures did not provide a substantially equal 

opportunity for the offerors to compete without regard to performance 

location. For example, while, in its evaluation, the Air Force expressed 

concerns about the risks inherent in Ogden’s plan to transition the 

workloads to facilities at San Antonio, Texas, and Ogden, Utah, these 

concerns were based upon legitimate performance considerations related 

to the transition plan and did not reflect a bias toward performing the work 

at the closing Sacramento facility. Appendix III provides the details of our 

analysis.

Competition 

Procedures Complied 

With Applicable Laws 

and Regulations

Overall, the Air Force’s evaluation and selection of Ogden appeared to be 

reasonable, fair, and consistent with the solicitation and depot competition 

procedures. We found no reason to conclude that the competition 

procedures used in selecting Ogden deviated in a material way from

10 U.S.C. 2469a and other applicable laws and regulations. (See app. III for 

our detailed analysis.) In assessing the Air Force’s compliance with 

applicable laws and regulations relating to the competition for 

Sacramento’s work, we reviewed the Air Force’s evaluation of the 

proposals and the selection in the context of applicable laws and 

regulations. This review included examining documents, reviewing 

processes and procedures, and discussing the competition with Air Force 

and DOD officials. 

4

Pemco Aeroplex, Inc. (B-280397, Sept. 25, 1998). On June 17, 1998, Pemco Aeroplex, Inc. (Pemco), 

filed a protest of the provisions of the solicitation with our Office under 31 U.S.C. 3551-3556. Pemco 

objected to the solicitation of the workloads on a combined basis. In a decision dated September 25, 

1998, our Office sustained the protest, concluding that the Air Force was unable to show that combining 

the requirements was reasonably required to satisfy its needs and recommending that the agency cancel 

the solicitation and resolicit its requirements without bundling the workloads. On October 9, 1998, the 

Air Force decided to proceed with the award to Ogden. On October 13, 1998, Pemco filed civil action 

no. Cv.98-B-2584-S, in the U.S. District Court for the Northern District of Alabama, Southern Division, 

seeking a declaration that the award is void and an injunction preventing the Air Force from moving 

forward with performance.
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Competition Procedures Pursuant to 10 U.S.C. 2469a and its depot competition procedures, the Air 

Force issued the solicitation in accordance with the Federal Acquisition 

Regulation (FAR), part 15, which sets forth the source selection procedures 

for competitively negotiated acquisitions. The solicitation called for 

proposals from public and private sector sources for some of the aircraft 

and commodity work currently being performed at the closing Sacramento 

ALC at McClellan Air Force Base. The solicitation also provided for award 

to the public or private competitor that was responsible and whose 

proposal conformed with the solicitation and represented the best value to 

the government. The proposals were to be evaluated using transition, 

operation, and cost criteria; a risk assessment; and other general 

considerations.

Applicable Laws and 

Regulations

Several statutes, in particular, 10 U.S.C. 2469a, govern the solicitation and 

award process for public-private competitions for the depot workloads of 

the closing Sacramento and San Antonio ALCs. Because the Air Force used 

the competitive acquisition system, the standards in chapter 137 of title 10 

of the United States Code and the FAR apply to the extent they are 

consistent with 10 U.S.C. 2469a and the other applicable provisions relating 

to the outsourcing of depot workloads. 

Consistent with these standards, the Air Force followed the criteria 

announced in the solicitation, which in this case included those required by 

10 U.S.C. 2469a, and exercised its judgment in a reasonable manner in 

selecting the successful competitor. 

Air Force Considered 

Factors Other Than 

Cost

While the competitor selected represented the lowest evaluated cost to the 

government, the Air Force considered the relative merits of the technical 

and management approaches of both proposals. For example, the Air 

Force considered the private competitor’s plan to recruit and maintain the 

existing work force in place at the Sacramento facility was beneficial. On 

the other hand, the Air Force concluded that Ogden’s plans for relocating 

the workloads to San Antonio and Ogden were risky. Thus, for these and 

other reasons, we found no basis to conclude that factors other than cost 

were not appropriately considered. 
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Evaluation Resulted in 

the Lowest Total Cost 

to the Government

The Air Force’s award of aircraft and commodity depot maintenance work 

previously performed at the Sacramento depot was made to the Ogden 

ALC. The award, which was valued at $1,794,488,861, was made in 

accordance with the provisions of the solicitation and resulted in the 

lowest total cost to the government.5

 Overall, the cost evaluation results 

appear reasonable. However, while not affecting the selection, we do 

question some of the estimates supporting the evaluation. However, the 

selection decision would not have been affected by these questions. 

Questions relate to estimating costs for (1) overhead, (2) commodity rate 

risk, (3) warehousing, (4) base operating support, and (5) material 

surcharge. 

Cost Evaluation Appears 

Reasonable

Ogden’s total evaluated cost of $1,794,488,861 for the competed 

Sacramento depot maintenance workloads was about 6 percent less than 

Lockheed’s evaluated cost of $1,902,848,080. The Ogden proposal, after 

cost comparability adjustments provided for in the solicitation and the 

depot maintenance cost comparability handbook, was determined by the 

source selection authority to offer the lowest total evaluated cost to the 

government. Both before and after the cost comparability adjustments, the 

Ogden proposal was evaluated lower than the private sector proposal. 

We examined the accuracy and soundness of the data, assumptions, and 

methodology supporting a number of these adjustments, including an 

analysis of the various cost elements in each proposal and the final 

adjustments made by the cost evaluation team in its proposal analysis 

report. For our analysis, we selected cost elements having variances of

10 percent or more between the competitors or between amounts 

contained in the competitors’ final proposals versus the final evaluated cost 

estimated by the evaluation team. For these cost elements, we (1) 

discussed with members of the evaluation team, the methodology they 

used in determining the evaluated cost; (2) reviewed the calculations and 

supporting documentation for the various cost elements; (3) attempted to 

independently collect data to corroborate the evaluated cost estimates, 

where warranted; and (4) offered to discuss competition issues with both 

the public and private sector competitors. In some instances, our review 

5

As we have previously reported, we were concerned that because the Department bundled the aircraft 

and commodity workloads, competition may have been limited. Consequently, there may have been 

opportunities for increased savings had there been more competition. Notwithstanding this, we based 

our review of costs under the terms of the existing solicitation.
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was limited by a lack of supporting source data. Notwithstanding this 

limitation, our analysis did not disclose any material weaknesses in the 

overall cost evaluation. However, as discussed below, in several cases, we 

identified weaknesses in the evaluated cost estimates. 

Cost Estimate Issues While the overall cost evaluation was reasonable, we question several of 

the cost estimates. In each case, these questions relate to actions that 

would have decreased the evaluated cost of the public sector's offer. 

Therefore, these cases had no impact on the award decision. However, we 

present them as potential opportunities for improving cost estimates for 

future competitions. These issues relate primarily to refining cost 

estimating methodologies and using more accurate data. 

Overhead Savings The Air Force evaluation team reduced Ogden’s projection of overhead 

savings by 85 percent—from $294.5 million to $46.2 million.6

 The team 

based the reductions primarily on (1) the Defense Contract Audit Agency’s 

(DCAA) assessment of Ogden’s overhead savings analysis, (2) its decision 

to limit the number of years overhead savings would be considered, and

(3) its assessment of Boeing Aircraft’s proposed cost savings on the C-17 

maintenance program.7 The first two adjustments were based on 

conservative assumptions and likely understated the savings between the 

proposals. Also, in some cases, supporting documentation was lacking or 

inconsistent approaches to estimating costs were used. Given these issues, 

we did not attempt to determine a cumulative effect of these adjustments.

Directions regarding the preparation of overhead savings were provided in 

the Sacramento solicitation. It stated that the evaluation of overhead 

savings would emphasize a competitor's analysis and documentation of 

proposed management initiatives to ensure that the projected savings 

would occur—particularly those predicted for more than 24 months after 

6Ogden’s projection of $294.5 million in overhead savings over the performance period consisted 

primarily of savings for existing maintenance workloads performed at the Ogden depot as a result of 

the consolidation of the competition work at that facility, a lesser amount in overhead savings on the

C-17 aircraft maintenance program proposed by Boeing Aerospace Corporation as a result of 

consolidating the KC-135 work with the C-17 and KC-10 work at its new San Antonio facility, and a 

minor amount in contractor engineering technical support at Sacramento that would no longer be 

needed if the KC-135 workload was performed by Boeing, the original equipment manufacturer.

7

The evaluation team did not include the proposed savings in the total evaluated cost because the 

evaluators concluded that they were not adequately supported in the proposal. Air Force officials 

stated that they intend to pursue this issue further with the C-17 Program Office. 
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award. The solicitation evaluation criteria provided that the proposed

first-year savings, if determined to be reasonable, would be allowed. The 

second-year savings, if supportable, would also be allowed but discounted 

for risk. The solicitation also stated that proposed savings for 3 years and 

beyond might be allowed if clearly appropriate but would be considered 

under the best-value analysis. 

Ogden used a regression-based methodology to develop its estimate of 

projected overhead savings that should result from consolidating the 

commodity and A-10 aircraft work with existing work at Ogden. Ogden 

based its analysis on 8 years of historical data to capture the relationship 

between changing workloads and their effect on overhead rates. In its 

assessment, Ogden normalized the data to reflect cost accounting changes 

that occurred over the 8-year period. 

After reviewing Ogden’s projections, the Air Force evaluation team 

concluded that the regression methodology was an adequate starting point 

for projecting future overhead and general and administrative savings. 

However, they expressed concern about Ogden’s application of this 

methodology and asked DCAA to evaluate Ogden’s overhead savings 

analysis. DCAA concurred with the use of the regression methodology but 

questioned the workload baseline Ogden used in developing the savings 

estimate. DCAA found that in establishing the baseline, Ogden did not 

include all the workload that is expected to be transferred into the depot 

separate from the competition process.8

 The evaluation team reduced 

Ogden’s proposed overhead savings for the commodity and A-10 workload 

by a significant amount over the 8-year performance period. The team said 

they based this reduction on a more realistic projection of Ogden’s baseline 

due to the transition of workloads transferring separate from the 

competition. We were unable to reconstruct how this figure was derived 

because the Air Force did not provide supporting documentation. 

After making this adjustment, the evaluation team determined the number 

of years that overhead savings would be allowed. Team members said they 

had a general lack of confidence in the regression analysis, the overhead 

8

The Air Force’s plan for transitioning workloads from the closing Sacramento and San Antonio depots 

includes the transfer of core workloads to remaining military depots outside the competition process. 

For example, Sacramento’s F-15 aircraft were transferred to Warner Robins and San Antonio’s gas 

turbine engines will be transferred to Ogden. Additionally, Ogden is expected to receive depot 

maintenance work from other sources during the performance period. About 1.6 million hours of work 

is expected to be transferred to Ogden separate from the competition process. 
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rates, and the application of savings beyond the initial years of the 

performance period. They said that all overhead fixed costs associated 

with excess capacity would be eliminated in the long run. Consequently, 

the team said that production overhead savings would occur only on a 

prorated basis for the first 3 years.9 Likewise, the team estimated general 

and administrative savings for 8 years—with the annual amount prorated 

progressively beginning with the second year.10 Taken together these 

estimates represent the evaluation team's $46.2 million estimate for 

overhead savings. 

The Air Force’s estimate of overhead savings is conservative and is likely 

understated. We question the Air Force’s assumption that overhead fixed 

costs associated with excess capacity would be eliminated beginning in the 

first and second year through reductions in force or attrition. For example, 

a significant percentage of Ogden’s proposed production overhead cost 

savings were related to nonpersonnel costs such as facilities and capital 

equipment, which by their nature are long-term assets and would not likely 

be eliminated in the evaluators’ estimated time frame. Additionally, the 

projected organizational structure in the directorates and divisions 

projected to gain competition work showed that some positions have only 

one person assigned and that the costs associated with these positions 

would likely remain fixed for the life of the requirement. Therefore, it 

appears reasonable to assume that some level of overhead savings relative 

to these positions would be achieved during the entire performance period. 

We noted an inconsistency in how the evaluation team treated Ogden's 

regression analysis. On the one hand, the evaluation team accepted the 

proposed overhead costs for the competition workload that had been 

developed using Ogden’s regression analysis. DCAA officials expressed 

confidence in this procedure and stated that it provided a reasonable 

estimate of savings and is applied fairly regularly to commercial firms. On 

the other hand, when assessing the overhead savings associated with 

existing workload at the Ogden facility, the evaluation team expressed a 

lack of confidence in the same regression analysis and, based on these 

concerns, prorated projected overhead savings associated with this 

9Using the recalculated production overhead cost savings, the evaluation team estimated 75 percent 

savings the first year, 50 percent the second, and 25 percent the third. The evaluation team estimated 

no production overhead savings for the remaining 5 years. 

10Using the recalculated general and administrative overhead cost savings, the evaluation team gave 

full credit for the first year of the performance period. The team estimated 75 percent the second year, 

50 percent the third year, and 25 percent for each of the remaining 5 years of the performance period. 
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workload. This approach also likely resulted in underestimating overhead 

savings. 

Commodity Rate Risk Commodity rate risk refers to the uncertainty the evaluation team placed in 

Ogden’s proposed overhead rates on the commodity workloads. The 

evaluation team did not question Ogden’s identification of projected 

overhead costs for the combined competition and noncompetition work, 

but it was concerned that not enough of the total overhead had been 

allocated to the competition work. Consequently, it made an adjustment to 

increase Ogden’s proposed overhead costs for the competed commodity 

workloads. However, the team did not make a corresponding adjustment 

to reduce the overhead costs for the noncompetition work to fairly 

represent the total government cost. Consequently, this resulted in a 

corresponding overstatement of the noncompetition overhead costs and a 

corresponding understatement of overhead savings for the noncompetition 

workloads. While making this corresponding adjustment would not have 

had a material effect on the selection, it would have increased overhead 

savings. Ensuring that adjustments of this nature are made correctly is 

important in future competitions.

Warehouse While an upward cost adjustment to the Ogden proposal for the 

warehousing function was appropriate, the method the evaluation team 

used for making this adjustment could have been more accurate. As a 

result of the adjustment, the team significantly overstated costs. 

The Defense Logistics Agency (DLA) provides the Air Force material 

storage, warehousing, and issuing and receiving support. DLA accumulates 

costs for these services and allocates them to its customers based on 

standard prices that are computed annually for each type of service. The 

solicitation required that competitors for the Sacramento workloads 

provide these services as a part of their proposals. 

The evaluation team concluded that Ogden’s offer did not represent all the 

costs associated with the warehousing, storage, and receipt and issuance 

services. The team estimated that DLA’s full costs to support the competed 

workload at the closing Sacramento depot would be significantly higher 

than Ogden’s proposed costs. Air Force evaluators said that while it is 

possible that Ogden could add the competed work to its existing workload 

at a marginal cost, they had no basis for estimating the incremental costs of 

the Ogden warehouse operations. Therefore, they used the full costs of the 

Sacramento operations. 
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After considering cost information and discussions with agency officials, 

we estimated that not more than about half of DLA’s costs for the 

warehousing function are variable. Consequently, the added warehousing 

costs were overstated by a significant amount.

Base Operating Support The evaluation team added a cost comparability adjustment to capture 

base operating support costs not included in Ogden’s proposal. The 

methodology used to make this estimate was inappropriate, and as a result, 

the adjustment was overstated by almost half.

“The Defense Depot Maintenance Council Cost Comparability Handbook” 

provides procedures and techniques to address cost comparability when 

competing depot maintenance workloads between the public and private 

sectors. Base operating support cost is one cost category recognized by 

the handbook. According to the Air Force’s evaluation report, DCAA 

performed a review of base operating support costs and recommended an 

adjustment. However, we found no references to base operating support 

costs in DCAA’s report. Additionally, DCAA officials said that they had not 

recommended any adjustments in this area.

Evaluation team members said that their adjustment was based on 

McClellan Air Force Base operating support costs for 1996. They said that 

they did not collect base operating support cost data for Hill Air Force Base 

because there should be no difference in the base operating support costs 

at the two locations. A more appropriate approach would be to use 

reported costs at the location being evaluated. Based on reported Hill Air 

Force Base operating cost data for 1996, we estimated that the 

comparability adjustment should have been about half of the evaluation 

team’s adjustment.

Material Surcharge The evaluation team disallowed Ogden’s proposed cost comparability 

adjustment for a material surcharge. While this action was appropriate for 

this competition, one technical issue may be important for future 

competitions. The team said that it disallowed the adjustment because 

Ogden did not include material in its cost proposal. The more appropriate 

rationale for disallowing this adjustment was that the cost of government 

furnished material was added as an adjustment to both proposals. 

Therefore, there was no need for a comparability adjustment. While this 

was not a factor for this competition, it may be relevant for future 

competitions if a private competitor chooses to use contractor furnished 

material. 
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Conclusions The Air Force met the requirements of applicable laws and regulations in 

the competition for depot maintenance work at the Sacramento ALC. 

However, the process used for estimating overhead, commodity rate risk, 

warehousing, base operating support, and material surcharge costs 

provides issues for the Air Force to consider in its future competitions. 

Specifically, the evaluation team could have better documented support for 

certain key cost estimates, followed more appropriate or consistent 

approaches for estimating costs, and used more accurate or appropriate 

data. 

Agency Comments and 

Our Evaluation

We provided a draft copy of this report to the Air Force for comment and 

review for procurement sensitive information. Responsible officials stated 

that they did not have sufficient time to review and comment on the report. 

As agreed with the responsible committees, to respond to the 

congressionally mandated reporting date, we issued prepublication and 

printed copies of this report with appropriate markings to indicate that the 

report contained procurement sensitive information that must be 

safeguarded. Subsequently, Air Force officials identified specific data that 

they said should be removed from the published report. We have removed 

the sensitive data identified by the Air Force from this version of the report. 

Scope and 

Methodology

In conducting our work, we obtained information from and interviewed 

officials at the Air Force Headquarters, Washington, D.C.; the Air Force 

Materiel Command Headquarters, Wright Patterson Air Force Base, Ohio; 

the Sacramento ALC, McClellan Air Force Base, California; and the Ogden 

ALC, Hill Air Force Base, Utah. We also discussed contracting issues with 

DCAA officials. We offered to discuss the Sacramento competition and 

award with both the public and private sector competitors; however, 

because of the pending litigation the Air Force has not provided either 

competitor with a debriefing. Since the competitors were not familiar with 

the specifics of the evaluation, they could not provide us with detailed 

concerns regarding the evaluation process. Particularly, when we 

contacted the private-sector competitor, its representative stated that 

discussions of the selection with our Office, without the benefit of a 

debriefing, would not be productive. 

To analyze the Air Force’s decision to award the Sacramento depot 

maintenance workload to the Ogden ALC, we interviewed officials and 

collected relevant documents from Headquarters, Department of the Air 
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Force; Headquarters, Air Force Materiel Command; Air Force source 

selection team members; representatives from the two competitor; and 

DCAA. To verify compliance with the Sacramento competition and 

selection with applicable laws and regulations, our Office of the General 

Counsel performed a legal compliance review. To determine whether cost 

elements considered in the source selection evaluation were complete and 

reasonable, we discussed the selection structure with cognizant Air Force 

and DOD officials, as well as the qualified competitors. We also reviewed 

the Air Force evaluation team's calculating methods for the various cost 

estimates for reasonableness and compared the cost elements between 

competitors to identify material drivers and to further test for 

reasonableness. We discussed with the evaluation team members their 

rationale for treating cost elements in the evaluation and in some cases 

recalculated cost estimates. A list of our related reports is provided at the 

end of this report. 

We performed our review between September and November 1998 in 

accordance with generally accepted government auditing standards.

We are sending copies of this report to the Honorable William S. Cohen, 

Secretary of Defense; the Honorable F.W. Peters, Acting Secretary of the 

Air Force; the Honorable Jacob J. Lew, Director, Office of Management and 

Budget; and interested congressional committees and members. We will 

also make copies available to others upon request.

Please contact me at (202) 512-8412 if you or your staff have questions 

concerning this report. The major contributors to this report are listed in 

appendix IV.

David R. Warren, Director

Defense Management Issues 
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Page 14 GAO/NSIAD-99-124 Public-Private Depot Competitions

Contents

Letter 1

Appendix I

Summary of Depot 

Reporting 

Requirements in the 

National Defense 

Authorization Act for 

Fiscal Year 1998

16

Appendix II

San Antonio and 

Sacramento Air 

Logistic Centers’ 

Closure History

18

Appendix III

Legal Review of 

Competition for 

Sacramento Air 

Logistics Center 

Workloads

23

Appendix IV

Major Contributors to 

This Report

47

Related GAO Products 49
Contents

Page 15 GAO/NSIAD-99-124 Public-Private Depot Competitions

Table Table III.1: Cost Adjustments Adopted by the SSA 41

Abbreviations

ALC Air Logistics Center

BRAC Base Realignment and Closure

CCH Cost Comparability Handbook

DCAA Defense Contract Audit Agency

DLA Defense Logistics Agency

DOD Department of Defense

FAR Federal Acquisition Regulation

GFE government furnished equipment

GFM government furnished material

GKDC Greater Kelly Development Corporation

RIF reduction-in-force

RFP request for proposals

SSA source selection authority

SSAC source selection advisory council

SSEB source selection evaluation board
Page 16 GAO/NSIAD-99-124 Public-Private Depot Competitions

Appendix I

Summary of Depot Reporting Requirements in 

the National Defense Authorization Act for 

Fiscal Year 1998 ApIexndi

The National Defense Authorization Act for Fiscal Year 1998 contained the 

following depot-related reporting requirements for our Office.

I. Report on DOD's Compliance with 50-Percent Limitation (Section 358)

The act amended 10 U.S.C. 2466(a) by increasing from 40 to 50 percent the 

amount of depot-level maintenance and repair workload funds that the 

Department of Defense (DOD) can use for contractor performance and 

revised 10 U.S.C. 2466(e) by requiring the Secretary of Defense to submit to 

Congress by February 1, 1998, a report identifying the percentage of funds 

expended for contractor performance.

Within 90 days of DOD’s annual report to Congress, we were required to 

review DOD’s report and inform Congress whether DOD had complied with 

the 50-percent limitation.

II. Reports Concerning Public-Private Competitions for the Depot 

Maintenance Workloads at the Closing San Antonio and Sacramento Air 

Logistics Centers (Section 359)

The act added section 2469a to title 10 the United States Code to provide 

for special procedures for public-private competitions concerning the 

workloads of these two closing depots. It also required us to issue four 

reports.

First, within 60 days of its enactment, the 1998 Defense Authorization Act 

required us to review the C-5 aircraft workload competition and 

subsequent award and report to Congress on whether (1) the procedures 

used provided an equal opportunity for offerors to compete without regard 

to performance location, (2) the procedures complied with applicable law 

and the Federal Acquisition Regulation (FAR), and (3) the award resulted 

in the lowest total cost to DOD.

Second, the act required the Secretary of Defense to submit a 

determination to Congress if any of the workloads were bundled in a single 

solicitation. We were required to report our views on the DOD 

determination within 30 days.

Third, the act required us to review all DOD solicitations for the workloads 

at the San Antonio and Sacramento ALCs and report to Congress within 45 

days of the solicitations’ issuance whether the solicitations provided 

“substantially equal” opportunity to compete without regard to 
Appendix I

Summary of Depot Reporting Requirements 

in the National Defense Authorization Act 

for Fiscal Year 1998

Page 17 GAO/NSIAD-99-124 Public-Private Depot Competitions

performance location and otherwise complied with applicable laws and 

regulations.

Fourth, the act required us to review all DOD awards for the workloads at 

the two closing ALCs and report to Congress within 45 days of the contract 

award whether (1) the procedures used complied with applicable laws and 

regulations and provided a “substantially equal” opportunity to compete 

without regard to performance location, (2) “appropriate consideration 

was given to factors other than cost” in the selection, and (3) the selection 

resulted in the lowest total cost to DOD for performance of the workloads. 

This report addresses the fourth requirement for the award of the 

Sacramento aircraft and commodity workloads.
Page 18 GAO/NSIAD-99-124 Public-Private Depot Competitions

Appendix II

San Antonio and Sacramento Air Logistic 

Centers’ Closure History ApIexndi

The 1995 Base Realignment and Closure (BRAC) Commission 

recommended closing the Sacramento and San Antonio Air Logistics 

Centers (ALC) and transferring their workloads to the remaining depots or 

to private sector commercial activities. In making these recommendations, 

the Commission considered the effects of the closures on the local 

communities, on workload transfer costs, and the potential effects on 

readiness and concluded that the savings and benefits outweighed the 

drawbacks. The Commission’s report noted that given the significant 

amount of excess depot capacity and limited DOD resources, closure was a 

necessity and would increase the use of the remaining centers and 

substantially reduce DOD operating costs. The specific Commission 

recommendations were as follows:

• Realign Kelly Air Force Base, including the ALC; disestablish the 

defense distribution depot; consolidate the workloads to other DOD 

depots or to private sector commercial activities as determined by the 

Defense Depot Maintenance Council;1 and move the required equipment 

and personnel to the receiving locations. 

• Close McClellan Air Force Base, including the ALC; disestablish the 

defense distribution depot; move the common-use ground 

communication electronics to Tobyhanna Army Depot, Pennsylvania; 

retain the radiation center and make it available for dual use and/or 

research, or close as appropriate; consolidate the remaining workloads 

with other DOD depots or private sector commercial activities as 

determined by the Council; and move the required equipment and any 

required personnel to receiving locations. All other activities and 

facilities at the base were to close.

In considering the BRAC recommendations to close the two centers, the 

President and the Secretary of Defense expressed concerns about the

near-term costs and potential effects on local communities and Air Force 

readiness. In response to these concerns, the President, in forwarding the 

Commission’s recommendations to Congress, indicated that the ALCs’ 

work should be privatized in place or in the local communities. He also 

directed the Secretary of Defense to retain 8,700 jobs at McClellan Air 

Force Base, which had been recommended for closure, and 16,000 jobs at 

Kelly Air Force Base, which had been recommended for realignment, until 

2001 to further mitigate the closures’ impact on the local communities. 

1

The Defense Depot Maintenance Council is a senior-level council established to advise the Deputy 

Under Secretary of Defense for Logistics on depot maintenance within DOD.
Appendix II

San Antonio and Sacramento Air Logistic 

Centers’ Closure History

Page 19 GAO/NSIAD-99-124 Public-Private Depot Competitions

Additionally, the size of the workforce remaining in the Sacramento and 

San Antonio areas through 2004 was expected to remain above 4,350 and 

11,000, respectively. 

The Air Force initially focused on privatizing five prototype workloads—

three at Sacramento (for hydraulics, electric accessories, and software) 

and two at San Antonio (for C-5 aircraft paint/depaint and fuel 

accessories). The Council approved the Air Force’s plans for the five 

prototype workloads on February 1, 1996. The prototype workloads 

involved about 11 percent of the San Antonio depot’s maintenance 

personnel and about 27 percent of the Sacramento depot’s personnel.2

Shortly after the Council approved the prototype program, the concept’s 

appropriateness was questioned. Community and industry groups 

expressed an interest in having larger packages, and DOD officials were 

concerned about the cost of administering a large number of smaller 

contracts. Implementation of the prototype concept was put on hold in 

May 1996 as the Air Force considered various options. In April 1996, we 

testified that, if not effectively managed, privatizing depot maintenance 

activities, including the downsizing of remaining DOD depot infrastructure, 

could exacerbate existing excess capacity problems and the inefficiencies 

inherent in underused depot maintenance capacity. Privatizing workloads 

in place at two closing Air Force depots would not reduce the excess 

capacity in the remaining depots or the private sector and consequently 

would not be a cost-effective approach to reducing depot infrastructure.3

 

Later that year, we reported that privatizing in place, rather than closing 

and transferring the depot maintenance workloads at the Sacramento and 

San Antonio centers, would leave the Air Force with costly excess capacity 

at its remaining depots that a workload consolidation would mitigate.4

 

Our analysis showed that transferring the depot maintenance workloads to 

other depots could yield additional economy and efficiency savings of over 

$200 million annually. 

2

The BRAC report specified that the Council should determine where depot maintenance workloads 

from closing Air Force depots should be moved.

3Defense Depot Maintenance: Privatization and the Debate Over the Public-Private Mix

(GAO/T-NSIAD-96-146, Apr. 16, 1996) and (GAO/T-NSIAD-96-148, Apr. 17, 1996).

4

Air Force Depot Maintenance: Privatization-in-Place Plans Are Costly While Excess Capacity Exists 

(GAO/NSIAD-97-13, Dec. 31, 1996).
Appendix II

San Antonio and Sacramento Air Logistic 

Centers’ Closure History

Page 20 GAO/NSIAD-99-124 Public-Private Depot Competitions

We recommended that the Secretary of Defense require the Secretary of the 

Air Force to take the following actions:

• Before privatizing any Sacramento or San Antonio center workload, 

complete a cost analysis that considers the savings potential of 

consolidating the two centers’ depot maintenance workloads at other 

DOD depots, including savings that can be achieved for existing 

workloads by reducing overhead rates through more efficient capacity 

utilization of fixed overhead at underused military depots that could 

receive this workload.

• Use competitive procedures, where applicable, for determining the most 

cost-effective source of repair for workloads at the closing Air Force 

depots. 

In August 1996, the Air Force announced a revised strategy for allocating 

the depot workloads at the Sacramento and San Antonio centers. The 

strategy involved several large consolidated work packages, essentially one 

at Sacramento and two at San Antonio (one for the C-5 aircraft and one for 

engines). In December 1996, the Air Force issued procedures to conduct 

public-private competitions for the workloads and to allow one of the 

remaining public depots to compete with the private sector for each of the 

three workload packages. The Air Force's procedures allowed evaluation 

credit for public and private sector proposals that offered overhead savings 

to other government workloads. 

In February 1997, the Air Force issued a request for proposals for the C-5 

aircraft depot maintenance workload. In September 1997, the Air Force 

awarded the C-5 workload to the Warner Robins Air Logistics Center based 

on the Air Force conclusion that it had the lowest total evaluated cost. As 

required by the 1998 Defense Authorization Act, we reviewed the C-5 

award, issuing our report on January 20, 1998. We concluded that (1) the

C-5 competition procedures provided an equal opportunity for public and 

private offerors to compete without regard to where the work could be 

performed; (2) the procedures did not appear to deviate in any material 

respect from the applicable laws or the FAR; and (3) based on Air Force 

assumptions and conditions at the time of award, the award resulted in the 

lowest total cost to the government.5

5

Public-Private Competitions: Processes Used for C-5 Aircraft Award Appear Reasonable

(GAO/NSIAD-98-72, Jan. 20, 1998).
Appendix II

San Antonio and Sacramento Air Logistic 

Centers’ Closure History

Page 21 GAO/NSIAD-99-124 Public-Private Depot Competitions

On December 19, 1997, DOD submitted to Congress a determination and 

report to support bundling the engine workloads at the San Antonio depot 

and a determination and report to support bundling the commodity and 

aircraft workloads at the Sacramento depot. DOD was required to submit 

these documents before issuing single solicitations at each location for the 

combined work. In response to 1998 Authorization Act requirements and 

subsequent requests from the Senate Committee on Armed Services and 

the House Committee on National Security, we issued two reports and two 

testimonies providing our assessment of DOD’s determinations that it was 

more logical and economical to combine the workloads being competed at 

the closing depots.6 We reported that:

• the determination and reports contained significant weaknesses in logic, 

assumptions, and data; 

• DOD had not considered alternatives that appeared to be logical and 

potentially cost-effective;

• DOD’s assumption that efficiencies from shared personnel and facilities 

would be best achieved with a single solicitation for combined 

workloads at each location was questionable; and 

• the Air Force’s conclusion from its cost analysis that the workload 

combination would save $22 million to $130 million at Sacramento and 

$92 million to $259 million at San Antonio was questionable because the 

Air Force did not consider all cost factors, such as the cost benefits of 

increased competition resulting from solicitations for individual 

workloads.

On March 20, 1998, the Air Force issued a solicitation for the combined 

aircraft and commodity workloads at the Sacramento depot and on

March 30, 1998, issued a solicitation for the combined engine workloads at 

the San Antonio depot. We issued our required report on the Sacramento 

solicitation on May 4, 1998.7

 We concluded that the Air Force had not 

provided a sufficient basis to show that soliciting the workloads on a 

combined basis was necessary to satisfy its needs. Otherwise, we found 

that the solicitation complied with applicable laws, including 10 U.S.C. 

6Public-Private Competitions: DOD’s Determination to Combine Depot Workloads Is Not Adequately 

Supported (GAO/NSIAD-98-76, Jan. 20, 1998); Public-Private Competitions: Access to Records Is 

Inhibiting Work on Congressional Mandates (GAO/T-NSIAD-98-101, Feb. 24, 1998) and

GAO/T-NSIAD-98-111, Mar. 4, 1998); and Public-Private Competitions: DOD’s Additional Support for 

Combining Depot Workloads Contains Weaknesses (GAO/NSIAD-98-143, Apr. 17, 1998).

7

Public-Private Competitions: Review of Sacramento Air Force Depot Solicitation (GAO/OGC-98-48, 

May 4, 1998).
Appendix II

San Antonio and Sacramento Air Logistic 

Centers’ Closure History

Page 22 GAO/NSIAD-99-124 Public-Private Depot Competitions

2469a. On May 14, 1998, we issued our report on the San Antonio 

solicitation, similarly concluding that the Air Force had not provided a 

sufficient basis to show that soliciting the workloads on a combined basis 

was necessary to satisfy its needs but that otherwise the solicitation 

complied with applicable laws, including 10 U.S.C. 2469a.8

8

Public-Private Competitions: Review of San Antonio Depot Solicitation (GAO/OGC-98-49, May 14, 

1998).
Page 23 GAO/NSIAD-99-124 Public-Private Depot Competitions

Appendix III

Legal Review of Competition for Sacramento 

Air Logistics Center Workloads ApIexndi

On March 20, 1998, the Department of the Air Force, Sacramento ALC at 

McClellan Air Force Base, California issued requests for proposal (RFP) 

No. F04606-98-R-0007 for the purpose of conducting a public-private 

competition for the depot-level workloads being performed at the closing 

Sacramento ALC. The Air Force received proposals from one private 

sector offeror—Lockheed Martin Corporation (Lockheed)—and from one 

public offeror—the Air Force’s Ogden ALC. Following technical and cost 

evaluations, the Air Force selected Ogden ALC to perform the Sacramento 

workloads on the basis that its proposal represented the best value to the 

government. The Ogden ALC proposal also represented the lowest “most 

probable total evaluated” cost at $1,794,488,861 over the 9-year 

requirement.1

Section 359 of the National Defense Authorization Act for Fiscal Year 1998, 

Public Law 105-85 (1998 Authorization Act), added section 2469a to title 10 

of the United States Code, which provided for special procedures for 

public-private competitions for the workloads at the closing Sacramento 

and San Antonio ALCs. Section 2469a also requires us to review the 

selection process for the awards made for the workloads at the two closing 

ALCs and report to Congress within 45 days of each award on whether (1) 

the procedures used to conduct the competition provided a substantially 

equal opportunity for offerors to compete without regard to performance 

location and complied with 10 U.S.C. 2469a and all applicable laws and 

regulations, (2) appropriate consideration was given to factors other than 

cost in the selection, and (3) the award resulted in the lowest total cost to 

the DOD for the performance of the workloads.2

Our review is based on the record of the proposal evaluation and the 

selection. In addition, we spoke to Air Force officials and considered 

concerns raised informally by one of the competitors. We recognize that an 

offeror may file a protest with our Office pursuant to 31 U.S.C. 3551-3556, 

or with the courts, or may file an objection to the award with DOD under

10 U.S.C. 2469a(h). If a protest is filed, factual information, issues, and 

arguments raised by the interested parties will be reviewed in the context 

of an adversarial process. For that reason, the result of a protest may differ 

from that of our current review. Similarly, the result of an objection filed 

with DOD may differ from our review.

1The “most probable total evaluated cost” represents the offeror’s proposed costs as adjusted by cost 

comparability factors as well as a range of “dollarized” discriminators and projected overhead savings.

2

Our analysis of the cost of the award is contained in the body of the report.
Appendix III

Legal Review of Competition for Sacramento 

Air Logistics Center Workloads

Page 24 GAO/NSIAD-99-124 Public-Private Depot Competitions

Based on our review of the procedures the Air Force used to conduct the 

Sacramento competition in context of the concerns that were raised by the 

competitor, we found no basis to conclude that (1) the procedures did not 

provide a substantially equal opportunity for the offerors to compete 

without regard to performance location, (2) appropriate consideration was 

not given to factors other than cost in the selection, and (3) the procedures 

used in selecting the successful offeror deviated in any material respect 

from the applicable laws and regulations. While not affecting the legal 

sufficiency of the selection, we nevertheless identified several issues 

related to the estimates supporting the cost evaluation. These issues are 

discussed in the body of the report.

In an earlier review of the Sacramento solicitation, we concluded that the 

Air Force had not provided a sufficient basis to show that soliciting the 

workloads on a combined basis was necessary to satisfy its needs. We also 

concluded that the solicitation was otherwise in compliance with 

applicable laws, including the provisions of 10 U.S.C. 2469a, and that it 

provided a substantially equal opportunity for offerors to compete without 

regard to performance location.3

 

On June 17, 1998, Pemco Aeroplex, Inc. (Pemco) filed a protest of the 

solicitation’s provisions with our Office pursuant to 31 U.S.C. 3551-3556. 

Pemco objected to the solicitation of the workloads on a combined basis. 

In a decision dated September 25, 1998, our Office sustained the protest, 

concluding that the Air Force was unable to show that combining the 

requirements was reasonably required to satisfy its needs and 

recommending that the agency cancel the solicitation and resolicit its 

requirements without combining the workloads.4

 On October 9, the Air 

Force decided to proceed with the award to Ogden ALC notwithstanding 

the protest recommendation. On October 13, Pemco filed civil action

no. Cv. 98-B-2584-S in the United States District Court for the Northern 

District of Alabama, Southern Division, seeking a declaration that the 

award is void

310 U.S.C. 2469a(g) provides that we review all solicitations issued for the workloads at the two closing 

ALCs and report to Congress within 45 days of the solicitations’ issuance regarding whether the 

solicitations (1) are in compliance with the provisions of section 2469a “and all applicable provisions of 

law and regulations” and (2) provide a substantially equal opportunity for offerors to compete without 

regard to performance location. The review of the Sacramento solicitation was the subject of our 

report entitled Public-Private Competitions: Review of Sacramento Air Force Depot Solicitation

(GAO/OGC-98-48, May 4, 1998). 

4

Pemco Aeroplex, Inc., B-280397, Sept. 25, 1998.
Appendix III

Legal Review of Competition for Sacramento 

Air Logistics Center Workloads

Page 25 GAO/NSIAD-99-124 Public-Private Depot Competitions

and an injunction preventing the Air Force from going forward with 

performance.5

The following describes the legal standards applicable to the Sacramento 

competition, relevant aspects of the solicitation and evaluation procedures 

the Air Force used, and our analysis of those procedures under the 

applicable legal standards.6

Applicable Legal 

Standards

The basic authority for the Sacramento workload competition is 10 U.S.C. 

2469a, which provides procedures for public-private competitions for the 

workloads of the closing Sacramento and San Antonio ALCs that are 

proposed to be outsourced after the November 18, 1997, enactment of the 

1998 Authorization Act. Section 2469a sets forth a number of requirements 

that the Air Force must satisfy in the solicitations it issues and the source 

selection process it uses, to make awards for the specified workloads. 

Particularly, the solicitation and the source selection process must (1) 

permit both public and private offerors to submit offers; (2) take into 

account the fair market value of any land, plant, or equipment at a closed or 

realigned military installation that is proposed to be used by a private 

offeror in the performance of the workload; (3) take into account the total 

estimated direct and indirect costs that will be incurred by DOD and the 

total estimated direct and indirect savings (including overhead) that will be 

derived by DOD; (4) use cost standards to determine the depreciation of 

facilities and equipment that provide, to the maximum extent practicable, 

identical treatment to public and private offerors; (5) permit any offeror, 

whether public or private, to team with any other public or private entity to 

perform the workload at any location or locations of their choosing; and

5Because of the pending litigation, the Air Force did not provide either competitor with a debriefing. 

Consequently, the competitors were not familiar with the specifics of the evaluation and were unable to 

provide us with detailed concerns regarding the evaluation process. Also, the private-sector offeror’s 

representative stated that discussions of the selection with us, without the benefit of a debriefing, 

would not be productive. 

6

As stated earlier, in the prior reviews of the Sacramento solicitation in our report, Public-Private 

Competitions: Review of Sacramento Air Force Depot Solicitation, and in a bid protest decision, Pemco 

Aeroplex, Inc., we found that the Air Force did not provide a sufficient basis to show that the combined 

workloads were necessary to meet its needs. We have not changed our view. However, in the review of 

the selection process, we will not again address the issue of the bundled workloads in the solicitation, 

as our position on the matter is clear and the subject of our review is the selection, not the solicitation.
Appendix III

Legal Review of Competition for Sacramento 

Air Logistics Center Workloads

Page 26 GAO/NSIAD-99-124 Public-Private Depot Competitions

(6) ensure that no offeror may be given any preferential consideration for, 

or in any way be limited to, performing the workload in place or at any 

other single location.7

 

In addition to 10 U.S.C. 2469a, there are a number of other laws that are 

generally applicable to the outsourcing of government-performed depot 

workloads. One of the principal laws is 10 U.S.C. 2469, which provides for 

the use of “competitive procedures for competitions among private and 

public sector entities” when DOD contemplates changing the performance 

of a depot workload, valued at $3 million or more, to contractor 

performance. In addition, section 8039 of the Department of Defense

Appropriations Act for Fiscal Year 1998, Public Law 105-56, authorizes 

public-private competitions for depot workloads as long as the “successful 

bids" are certified to "include comparable estimates of all direct and 

indirect costs for both public and private bids.” Both provisions state that 

Office of Management and Budget Circular A-76 is not to apply to the 

competitions. Other than the reference in section 8039 to the use of 

comparable estimates of all costs, neither provision prescribes the 

elements that constitute a competition. Further, 10 U.S.C. 2470 provides 

that depot-level activities are eligible to compete for depot workloads.8 

There are other provisions that apply, generally, to converting DOD 

functions to private-sector performance. Section 8014 of the 1998 DOD

Appropriations Act requires that DOD certify its in-house estimate to 

congressional committees before converting any activity performed by 

7

In addition, 10 U.S.C. 2469a(e) provides that DOD may issue a solicitation for multiple workloads 

under 10 U.S.C. 2469a only if DOD first determines that individual workloads cannot as logically and 

economically be performed without combination by potentially qualified sources and submits a report 

to Congress setting forth the reasons for the determination. The provision also requires us to review 

and provide our views on the DOD report. DOD decided to issue RFPs, including the one here, 

containing combined workloads and submitted the required determinations and reports on

December 19, 1997. We reported on January 20, 1998, that the DOD reports did not support the 

determinations. See Public-Private Competitions: DOD’s Determination to Combine Depot Workloads 

Is Not Adequately Supported (GAO/NSIAD-98-76, Jan. 20, 1998). Under 10 U.S.C. 2469a(e), DOD must 

wait 60 days from the submission of its report to issue an RFP containing combined workloads. There 

is no other restriction in subsection (e). The Air Force issued the Sacramento solicitation containing 

multiple workloads on March 20. After our January report, the Air Force provided additional 

supporting rationale for the combined workloads. We reported that the additional rationale was not 

well-supported. See Public-Private Competitions: DOD’s Additional Support for Combining Workloads 

Contains Weaknesses (GAO/NSIAD-98-143, Apr. 17, 1998). 

8

We see nothing in the other applicable provisions governing the outsourcing of depot workloads that is 

inconsistent with 10 U.S.C. 2469a. In fact, the use of comparable cost estimates and the participation of 

DOD depot-level activities are provided for in 10 U.S.C. 2469a. Consequently, consistent with the rule of 

statutory construction that statutes be construed harmoniously to give effect to all provisions whenever 

possible, all of the above-cited provisions are effective and applicable to the Sacramento competition. 

See Posadas v. National City Bank, 296 U.S. 503-504 (1936); 53 Comp. Gen. 853 (1974). 
Appendix III

Legal Review of Competition for Sacramento 

Air Logistics Center Workloads

Page 27 GAO/NSIAD-99-124 Public-Private Depot Competitions

more than 10 civilian employees to contractor performance; the provisions 

of 10 U.S.C. 2461 require that whenever a DOD-performed function, such as 

the workloads involved in this competition, is converted to performance by 

a contractor, DOD must provide to Congress a cost comparison that shows 

that a savings will result. Under 10 U.S.C. 2462, DOD is generally required 

to contract with the private sector if a source can provide the supply or 

service at a lower cost than DOD can and to ensure that all costs 

considered are realistic and fair.9

The Air Force implements these outsourcing authorities through the Air 

Force Materiel Command’s Procedures for Depot Level Public-Private 

Competition, December 20, 1996 (Depot Competition Procedures). The 

procedures are supplemented by the “Defense Depot Maintenance Council 

Cost Comparability Handbook” (CCH), including the January 28, 1998, 

revision, the Air Force Materiel Command “Guide to the Cost 

Comparability Handbook” and the SAF/AQ Public-Private Competition 

Cost Procedures of February 21, 1998. The procedures provide for issuing 

a solicitation calling for offers from public and private sector sources and 

establish the criteria, including those listed in 10 U.S.C. 2469a, for deciding 

how the Air Force will select a source from either sector to perform depot 

workloads. According to these procedures, a competitive solicitation is to 

be issued in accordance with the applicable provisions of the FAR, which 

set forth uniform policies and procedures for the competitive acquisition 

system that all executive agencies use and implements the provisions of 

chapter 137 of title 10 of the United States Code, which govern DOD 

acquisitions.

This use of the competitive acquisition system subjects a depot workload 

competition to the applicable provisions of chapter 137 and the FAR to the 

extent that they do not conflict with the public-private competition statutes 

cited previously. (Newport News Shipbuilding and Dry Dock Company,

B-221888, July 2, 1986, 86-2 CPD 23.) Further, aspects of a competition that 

fall outside the competitive acquisition system's parameters as defined by 

chapter 137 and the FAR, such as the comparison of public and private 

offers for the workloads from the two closing ALCs, are governed by

10 U.S.C. 2469a and the other statutes applicable to public-private depot 

competitions as implemented by the Air Force. 

9

Again, these provisions do not conflict with the six 10 U.S.C. 2469a competition requirements listed 

previously and are also applicable to the Sacramento competition. See Posadas v. City Bank, cited 

above.
Appendix III

Legal Review of Competition for Sacramento 

Air Logistics Center Workloads

Page 28 GAO/NSIAD-99-124 Public-Private Depot Competitions

In general, the standards in chapter 137 and the FAR (1) require that a 

solicitation clearly and unambiguously state what is required so that all 

offerors can compete on an equal basis and (2) allow restrictive provisions 

to be included only to the extent necessary to satisfy an agency’s needs. 

Under these standards, an agency must follow the criteria announced in the 

solicitation, which in this case include those required by 10 U.S.C. 2469a, 

and exercise its judgment in a reasonable manner in determining which of 

the competing offers is to be selected. (Dimensions International/QSOFT, 

Inc. , B-270966.2, May 28, 1996, 96-1 CPD 257.) 

Solicitation The RFP for the Sacramento workloads provides for the award of several 

line items representing various performance phases for each of the 

different workloads to be competed. For example, line item no. 0001, 

among other things, calls for offers on a cost-plus-award fee basis10 for the 

transition period for the KC-135 aircraft, the A-10 aircraft, and 

commodities, including hydraulics, instruments/electronics, electrical 

accessories, and nonrouted backshop/manufacturing. Other line items 

provide for firm-fixed priced offers for the performance of these various 

workloads, including “over and above” work,11 once the transition is 

completed, and for other miscellaneous work requirements. The RFP also 

provides for a transition period, which is to begin at the award and to end 

by September 30, 1999, a 5-year basic performance period, and up to

3 additional years based upon the performance of the awardee. The line 

items representing the work for the KC-135 aircraft and the A-10 aircraft 

during the basic performance period are to be awarded on a multi-year 

basis, with guaranteed minimum quantities, while the other workloads are 

to be awarded on a requirements-type basis, with no minimum quantity 

guaranteed.12

10Public sector offers are to be on a cost reimbursement basis. Public offerors will not be paid an 

award fee.

11“Over and above” work consists of work items that are not included in the basic work requirements 

but are within the scope of the award and may be ordered on the basis of a fixed hourly rate.

12The requirements type line items provide that the Air Force will order all the work specified under a 

particular line item that it needs during the performance period. The estimated quantities stated in the 

solicitation are for information only; they do not constitute an order obligation. See FAR 16.503. On the 

other hand, under the multiyear line items, the Air Force is obligated to order the minimum quantity or 

be subject to cancellation charges that represent costs incurred that would have been amortized over 

the multiyear period plus a reasonable profit. See 10 U.S.C. 2306(g) and FAR part 17. 
Appendix III

Legal Review of Competition for Sacramento 

Air Logistics Center Workloads

Page 29 GAO/NSIAD-99-124 Public-Private Depot Competitions

According to the solicitation, the competition is to be conducted in 

accordance with FAR 15.101, which sets forth the source selection 

processes and techniques to be used in competitive negotiated 

acquisitions, as well as the applicable Air Force and Air Force Materiel 

Command supplements. Further, the solicitation provides that the Depot 

Competition Procedures, the CCH, and their updates are to govern the 

selection. 

The solicitation states that the award will be made to the offeror—either 

public or private—who is deemed responsible in accordance with the 

FAR,13 whose proposal conforms with the solicitation and is judged to 

represent the best value to the government. According to the RFP, the 

Source Selection Authority (SSA) will integrate the source selection team's 

assessments of the proposals under the evaluation criteria listed in the 

solicitation to arrive at a best value selection. 

The evaluation criteria consist of criteria for transition, operations, cost, 

and assessment. Transition is made up of the integrated master plan, 

personnel plan, and integrated master schedule. The operations criteria 

consist of five factors representing the major workloads: (1) KC-135 

aircraft, (2) hydraulics, (3) instruments/electronics, (4) electrical 

accessories, and (5) A-10 aircraft. The assessment criteria, which will be 

used for measuring the extent to which a proposal meets the transition, 

operations, and cost criteria, are made up of two parts: (1) understanding 

of/compliance with the solicitation requirements and (2) soundness of 

approach. 

Under the cost criteria, proposals will first be assessed for completeness, 

realism, and reasonableness.14 Then each offeror’s total proposed cost is 

to be determined by calculating the various cost estimates, unit prices, and 

hourly rates proposed for the different line items. Next, the offerors’ total 

alternative cost is to be developed by factoring in the numerous 

adjustments to public and private offerors’ total proposed cost in 

accordance with the CCH and the RFP. Finally, the offerors’ total evaluated 

13According to FAR subpart 9.1, a responsible prospective contractor is one that meets the standards in 

FAR 9-104, which include having adequate financial resources or the ability to obtain them; the ability to 

comply with the performance schedule; a satisfactory performance record; and the necessary facilities 

and equipment or the ability to obtain them.

14Under FAR 15.404-1(d), a cost realism analysis is the process of reviewing and evaluating specific 

elements of an offeror’s cost estimate to determine whether the proposed elements are realistic for the 

work to be performed. According to FAR 15.404-1, reasonableness is to be assessed through an analysis 

of either cost elements or overall price. 
Appendix III

Legal Review of Competition for Sacramento 

Air Logistics Center Workloads

Page 30 GAO/NSIAD-99-124 Public-Private Depot Competitions

cost is to be determined by adjusting the total alternative cost to reflect the 

“dollarized impact of significant discriminators, to the extent that a dollar 

value can be assigned to such discriminators, based on identified proposal 

strengths, weaknesses and risks.”15

Further, the RFP provides for the evaluation of general considerations such 

as the results of preaward surveys, site visits, and “fair market value.” In 

addition, the proposals are to be the subject of two risk assessments: 

proposal and performance. A proposal risk assessment is to measure the 

risk that is associated with an offeror’s proposed approach to 

accomplishing the solicitation requirements relating to each of the three 

transition area factors and each of the five operations area factors. A 

performance risk assessment is to assess, based on an offeror’s present and 

past performance, the probability of the offeror successfully accomplishing 

the proposed effort. 

Finally, the solicitation provides that in the SSA’s best value assessment, the 

criteria for transition and operations areas, and cost criteria are to be 

equally important, while the general considerations are to be “considered 

substantially less important than Cost, Transition, or Operations.” 

According to the RFP, this assessment is also to include “as appropriate” 

items listed in the solicitation as “Other Considerations.” This category 

essentially reiterates five of the six requirements for the competition listed 

in the 1998 Authorization Act.16 

The proposals were first evaluated by specialized teams, which reported to 

a source selection evaluation board (SSEB), which in turn, reported its 

conclusions to a source selection advisory council (SSAC). The SSAC then 

advised the SSA, who made the final selection decision on the merits of the 

proposals.

15“Dollarized impact,” as we understand it, is the assignment of an estimated dollar value to the 

assessment of the benefit or detriment to the Air Force that would result from aspects of an offeror’s 

proposal in calculating the offeror’s total evaluated cost.

16 The one requirement not listed in section M-903 of the RFP is the one that the cost standards used to 

determine the depreciation of facilities and equipment provide, to the maximum extent practicable, 

identical treatment to public and private offerors. This requirement is addressed in the RFP at 

paragraph 6.1.5.6 of section L and paragraph 1.2b(6) of section M-901.
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Evaluation of 

Proposals

Two offerors submitted proposals in response to the solicitation. Ogden 

ALC, the public depot chosen by the Air Force to submit the public sector 

offer, proposed (1) to perform the commodities work and the A-10 aircraft 

work at its facilities in Utah and (2) to have the KC-135 aircraft work 

performed by the Boeing Aerospace Corporation (Boeing) at the Boeing 

Aerospace Support Center located at the closing San Antonio ALC at Kelly 

Air Force Base. Boeing, a partner to Ogden in the public sector offer, 

proposes to use the San Antonio facilities that have been transferred by the 

Air Force to the Greater Kelly Development Corp. (GKDC) and leased by 

GKDC to Boeing. The private sector offeror, Lockheed, proposed to 

perform all of the work at the closing Sacramento ALC at McClellan Air 

Force Base, where the workloads are currently being performed by 

government employees. The Sacramento ALC facilities are to be 

transferred by the Air Force to Sacramento County. Under the Lockheed 

proposal, the facilities would be leased by the county to Lockheed. 

Lockheed’s major subcontractors are AAI Aerospace Corporation (AAI) for 

the hydraulics workload and GEC-Marconi Avionics Incorporated

(GEC-Marconi) for the instruments/electronics and the electrical 

accessories. 

The proposals were initially evaluated to determine whether they were to 

be included in the competitive range in accordance with FAR 15.306(c) and 

considered for award.17 On June 23, 1998, the Air Force determined both 

proposals to be within the competitive range. 

Accordingly, discussions were held with the offerors consisting of written 

evaluation notices raising concerns about each of the proposals and

face-to-face and telephone exchanges about the concerns. As a result, each 

offeror submitted proposal revisions. The Air Force requested final 

proposal revisions on August 26, which were the subject of the Air Force's 

final cost adjustments and evaluation. Based on the results of the 

evaluations and cost adjustments, the advice of the SSAC, and the SSA's 

own analysis in the context of the RFP evaluation criteria, the SSA decided 

that the Ogden ALC proposal met all of the RFP requirements and 

represented the best value to the government over the life of the 

requirement. The SSA’s conclusion was based upon Ogden ALC’s “slight 

advantage” in the operations area and its lower “most probable total 

17FAR 15.306(c) provides that the contracting officer shall determine which proposals are in the 

competitive range for the purpose of conducting discussions.
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evaluated cost” of performance. Consequently, the SSA selected Ogden 

ALC to perform the Sacramento workloads. 

Technical Evaluation As noted previously, the solicitation evaluation criteria provided that the 

offerors’ management approaches were to be evaluated in the transition 

and operations areas. Under transition, three factors were to be evaluated: 

(1) integrated master plan, (2) personnel plan, and (3) integrated master 

schedule. Operations included five factors: (1) KC-135 aircraft,

(2) hydraulics, (3) instruments/electronics, (4) electrical accessories, and 

(5) A-10 aircraft. Under each of the factors, the proposal risk was assessed.

Transition The first factor under transition, integrated management plan, was to 

assess the management, transition activities, and logistics plans and 

activities of the offerors. Under this factor, the SSA noted that both 

offerors had been assigned a green, or acceptable, rating, with low risk by 

the SSAC. The SSA stated that Lockheed’s approach, which was to perform 

all of the work at the Sacramento ALC facilities, had less potential for 

disruption to the ongoing operations than the Ogden ALC plan, which 

involved the transition of the KC-135 aircraft work to the Boeing facility at 

the San Antonio ALC. The A-10 aircraft and the commodities work was to 

be done at the Ogden ALC facilities in Utah. While recognizing that the 

Ogden ALC approach was sound and would minimize disruption to 

workload production, the SSA nevertheless concluded that the Lockheed 

plan, which would maintain the existing, experienced government 

workforce in place at Sacramento “was a benefit.” Since the SSA 

concluded that neither offeror had significant strengths or weaknesses 

under this factor, she did not propose to make a “dollarization” adjustment. 

Under the personnel plan factor, an offeror was to provide a plan that 

detailed the staffing necessary to perform the workloads and a plan to 

acquire, train, and maintain the staff. The SSA concurred with the SSAC's 

green rating for both proposals and the assignment of a low risk rating to 

the Lockheed proposal and a moderate risk rating to the Ogden ALC 

proposal. The SSA noted that Lockheed would use the trained and 

experienced workforce at the Sacramento ALC. The SSA believed that 

there was risk that some of the current workforce would not wish to leave 

government service but concluded that a significant portion would want to 

continue working at the Sacramento location. On the other hand, the SSA 

had concerns about the Ogden ALC’s ability to hire 328 people from the 

Sacramento workforce to work on the commodities at Ogden. In this 
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regard, the SSA noted that Boeing intended to hire its workforce for the 

KC-135 aircraft from San Antonio, Texas, and Wichita, Kansas, where it 

currently maintains a facility. The SSA found “real differences” between 

the proposals under this factor, concluding that the weakness in the Ogden 

ALC proposal regarding the availability of the experienced workforce 

resulted in a moderate risk rating. Consequently, the SSA concluded that 

the risk should be offset by an upward “dollarization” cost adjustment18 in 

the determination of Ogden ALC’s most probable total evaluated cost.

Under the integrated master schedule factor, an offeror was to submit a 

comprehensive transition time line based on the integrated master plan 

that identified all tasks and major event milestones required to transition 

all of the workloads. Both offerors were given green, or acceptable, ratings 

with a low risk by the SSAC. The SSA had a concern with the Ogden ALC 

approach, which would transfer the workload to two locations: Ogden, 

Utah, for the commodities and the A-10 aircraft and San Antonio, Texas, for 

the KC-135 aircraft, which would involve completely a new workforce for 

the KC-135. This concern did not raise to the level of a weakness because 

the SSA had confidence in Ogden ALC's risk mitigation strategy of using 

intense integrated product team oversight. Overall, the SSA considered 

both offerors to be equal under this factor and saw no need for a 

“dollarization” adjustment.

Operations Under the KC-135 factor, an offeror must submit a contractor work 

specification that will become the contract statement of work, define all of 

the work requirements, and identify work flow and processes to reflect the 

offeror’s specific approach to accomplishing the work. Other information 

to be provided includes (1) a work activity flow plan for one complete 

aircraft to show the sequence of movement through the required processes 

and (2) “waterfall” plans, which are to describe the work flow activity using 

the number of aircraft represented by the best estimated quantity and, in 

the alternative, the maximum order quantity. In addition, any process 

improvements to current practices of performing the work are to be 

explained under this factor.19 

18As discussed later, the cost evaluators developed proposed “dollarization” cost adjustment figures 

under the appropriate factors, which were provided to the SSA. 

19The submission of similar information was required under each of the operations factors; however, 

“waterfall” plans only were required for the aircraft workloads.
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For the KC-135 aircraft, the SSAC rated both proposals as blue 

(exceptional) and assigned Ogden ALC a low risk rating and Lockheed a 

low/moderate rating. In adopting the ratings, the SSA noted that both 

proposals contained strengths concerning the reduction of the flowdays 

needed for the programmed aircraft depot maintenance. She nevertheless 

concluded that the Ogden ALC proposal was the strongest under this 

factor.20 According to the SSA, this advantage was grounded in Ogden 

ALC’s proposal to exceed the RFP flowday requirement of 175 days by 

contractually committing to a reduction to 150 days by fiscal year 2002 and 

to 140 days by fiscal year 2003. In addition, the SSA was impressed by 

Ogden ALC’s proposal to use in-line jacking to accomplish “over and above” 

structural work concurrently with the planned programmed work and its 

plan to use a continuous fluid sampling analysis to ensure early recognition 

of defects. The SSA, however, did note a weakness in Ogden ALC’s 

approach concerning its plan to use fewer labor hours than considered 

readily achievable by the evaluation team. The SSA concluded that this 

risk could be mitigated by normal monitoring and was not significant 

enough for a moderate risk rating. 

The SSA recognized that Lockheed also had proposed to reduce the 

required flowdays (to 165 in fiscal year 2002 and to 155 by fiscal year 2004), 

but Lockheed’s approach, which involved using two shifts, had some risk 

because Lockheed had not documented the availability of the workforce 

for the extra shift or the way the proposed productivity increases would be 

achieved. Another element contributing to Lockheed’s low/moderate risk 

rating was the SSA’s concern about the plan to use field team employees to 

meet the proposed productivity increases and flowday reductions. The 

SSA decided that Ogden ALC’s superior flowday reduction could not be 

“dollarized” because the KC-135 was not an aircraft that generated revenue 

for the Air Force. However, the SSA recognized that this was a significant 

benefit and concluded that Ogden ALC offered an approach to the KC-135 

aircraft work that had greater strengths and was more advantageous than 

Lockheed’s approach.

Under the hydraulics factor, the SSA concurred with the SSAC’s rating of 

each proposal as green and low risk. The SSA concluded both proposals 

were essentially equal and proposed no “dollarization.”

20Boeing was to perform this work under the Ogden ALC proposal.
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Under the factor for instruments/electronics, the SSA agreed with the 

SSAC’s ratings of both proposals as green and low risk. Again, the SSA 

concluded that both offerors were essentially equal and proposed no 

“dollarization.” 

Under the electrical accessories factor, the SSAC rated both proposals as 

green; Lockheed was given a low risk rating, while Odgen ALC was rated as 

a moderate risk. This rating was caused by a process improvement 

concerning the pretesting of oil-cooled generators and a change in the 

painting sequence of the repair process. According to the SSA, the new test 

process could create production bottlenecks due to test equipment 

constraints with the potential of increased flowdays and the new paint 

process could increase flowtime. Thus, the SSA concluded that to offset 

this moderate risk, an upward “dollarization” adjustment to the evaluated 

cost of the Ogden ALC proposal would be added. This adjustment would 

reduce, in the SSA's view, the risk rating to low. 

Under the A-10 aircraft factor, the SSA concurred with the SSAC's ratings 

of both proposals as blue and low risk. The SSA concluded that both had 

equal strengths and proposed no “dollarization.” 

Risk and General 

Considerations

Under the performance risk analysis for the transition, operations, and cost 

areas, the SSA determined that each represented a low risk and that there 

was not a discriminator among them. Further, under the general 

consideration category, the SSA concluded that both offerors meet all 

solicitation and responsibility requirements and had acceptable small 

business plans.

The SSA agreed with the SSAC’s analysis of fair market value of the assets 

of the closing McClellan Air Force Base that were to be transferred to 

Sacramento County and then leased to Lockheed to perform the 

workloads. According to the SSA, Lockheed would lease the facilities at a 

composite rate of $0.33 per square foot a month, the local market rate for 

similar industrial facilities. Further, the SSA concluded that the Air Force 

would transfer the facilities to the County at fair market value. Finally, the 

SSA agreed that the SSAC’s $25,038,804 adjustment to Lockheed’s cost 

proposal for depreciation of the government furnished equipment (GFE) 

reflected the fair market value of the equipment.

The SSA also evaluated Boeing’s lease of the closing San Antonio ALC 

facility in connection with its performance of the KC-135 aircraft work 
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under the Ogden ALC proposal and concluded there was no basis to make 

any further adjustment (other than that already made for GFE) to either 

proposal for fair market value. In this regard, the SSA concluded that the 

lease between GKDC and Boeing was an “arms length” transaction, not 

contingent on the competition, made at a fair market price. 

Cost Evaluation As noted previously, the cost evaluation consisted of (1) an assessment of 

the realism and reasonableness of the cost proposals; (2) a determination 

of the “total alternative cost” of each proposal, calculated through 

adjustments required by the CCH and RFP; and (3) a determination of the 

total evaluated cost of each proposal, calculated by taking the total 

alternative cost and adjusting it to reflect the “dollarization” of significant 

discriminators among the proposals. In determining the total evaluated 

cost, the evaluators used ranges based on different estimates for overhead 

savings and risk “dollarization.” The results for each of these analyses 

conducted by the cost evaluators are summarized below.21

Realism and 

Reasonableness Evaluation

The cost team evaluators initially reviewed each offeror’s cost proposal to 

determine its completeness, realism, and reasonableness. The evaluators 

ultimately were satisfied that each cost proposal met these standards. In 

accordance with the Depot Competition Procedures, the Defense Contract 

Audit Agency (DCAA) audited the Ogden ALC cost proposal and reviewed 

the public offeror’s disclosure statement22 and accounting and estimating 

systems. The disclosure statement was found to be adequate and the 

proposal was determined to be realistic. 23

21The calculation of the various cost adjustments and ranges for overhead savings and “dollarization” 

was made by the cost team and approved by the SSAC. As discussed later, the SSA adopted the 

adjustments and chose from the ranges for overhead savings and “dollarization” for use in the selection. 

22The Depot Competition Procedures require that a public offeror provide a disclosure statement of its 

cost accounting practices in accordance with the requirements of the Cost Accounting Standards 

Board.

23As stated in the Air Force’s February 1998 Competition Cost Procedures, a public offeror is 

considered to have a funding advantage over the private-sector offeror under the fixed price portions of 

the requirement in that cost overruns may be paid for by the government through the working capital 

fund. Thus, in “dollarizing” the risks inherent in the Ogden ALC proposal, the evaluators proposed an 

upward adjustment of $37,373,690 to represent the risk of cost overruns. This seems to have been in 

lieu of adjustments to the Ogden ALC cost proposal during the initial evaluation. It is different from the 

other “dollarization” adjustments as it relates to the method of developing the cost estimates rather 

than a quantification of a technical performance risk. The body of the report contains a further 

discussion of this adjustment. 
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DCAA also reviewed Ogden ALC’s accounting and estimating systems and 

found in a report dated December 22, 1997, that the accounting system was 

inadequate, in part, for assuring that all workload costs are properly 

recorded and that the estimating system was also inadequate, in part, 

because it relied on accounting system data. Nevertheless, we were 

informed by the DCAA auditors who performed the review that these 

inadequacies did not affect the validity of the Ogden ALC cost proposal. 

Determination of Total 

Alternative Cost

The cost evaluators determined each offeror’s total alternative cost by first 

calculating the offeror’s “customer cost”--in essence, its proposed price for 

performing the requirement, and then making upward and downward 

adjustments to this figure in accordance with the RFP and the CCH. Ogden 

ALC’s customer cost was calculated to be $1,097,615,652. Lockheed’s 

customer cost was $1,256,721,586. 

Using the customer cost for each offeror as a base, the evaluators made the 

comparability adjustments called for in the CCH and the RFP. Two sets of 

adjustments were made. The first set, required by form number 1 of the 

CCH,24 encompassed adjustments to the public sector offer and the second 

set, required by form number 2 of the CCH, governed adjustments 

applicable to the public and private sector proposals. 

The CCH form number 1 adjustments made to the Ogden ALC proposal 

included upward and downward changes in a number of categories.25 The 

most significant were upward adjustments for base operating support, 

unfunded civilian retirement, and retiree health benefits. The upward and 

downward adjustments resulted in an adjusted cost of $1,153,415,260 to the 

proposal. The adjusted cost was lower than Lockheed's customer cost of 

$1,256,721,586. 

24Since Ogden ALC proposed to have a private firm, Boeing, perform the KC-135 aircraft work, the 

portion of the Ogden ALC cost proposal that represented the work Boeing was to perform was not 

subject to the form number 1 adjustments. The Boeing portion was, however, subject to the form 

number 2 adjustments applicable to private offerors.

25Upward adjustments were made for state unemployment payments, unfunded civilian retirement, 

depreciation for military construction program facilities, casualty insurance, other recurring costs 

consisting of impact aid, retiree health benefits, and base operating support. A downward adjustment 

was made for military nondepot costs (time military members of depot staff spend on nondepot military 

duties). For each form number 1 category, the public offeror submitted a proposed adjustment in its 

offer, which was subject to evaluation and adjustment by the SSAC and the SSA. 
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Some CCH form number 2 adjustments were made to both proposals. 

Upward adjustments were made to both types for GFM for both the 

commodities and the KC-135 aircraft, contract administration, reduction-inforce (RIF) costs; costs associated with the transition of government 

personnel (i.e., costs of retaining current work force at McClellan that will 

be subject to a RIF and not be rehired by the new source after the workload 

is transitioned pending their separation); and costs of performing the work 

in process during the transition that each offeror elected not to perform. 

Most of these adjustments were similar in size for both proposals. The 

largest difference was in the RIF cost adjustment, resulting in increases to 

Ogden ALC’s and Lockheed’s costs. Examples of downward adjustments 

were those made for the payment of federal income tax on profits to the 

Lockheed and Ogden ALC proposals.26

Form number 2 also provided for a downward adjustment for a public or 

private offeror that proposed and supported overhead savings to other 

government work resulting from the increased work from the competition 

sharing the costs of fixed assets.27 While no such savings were proposed 

by Lockheed, the evaluators determined that a downward adjustment of 

between $70,357,189 and $24,665,837 could be applied to the Ogden ALC 

proposal to represent the savings applicable to other workloads at the 

Ogden ALC facility during the performance period.28

The net result of the form number 2 comparability analysis for the 

Lockheed proposal was an upward adjustment of $630,058,494. The form 

number 2 upward adjustments to the Ogden ALC proposal included the 

high and low ranges for overhead savings. 

This final cost adjustment resulted in a total alternative cost for Lockheed 

of $1,886,780,080 and a range of between $1,694,862,974 and $1,740,554,326 

for Ogden ALC. No single adjustment accounts for the cost difference at 

26Since this adjustment was for private offerors, it only was applied to the Boeing portion of the Ogden 

ALC proposal.

27The solicitation provided that an offeror’s proposed overhead savings for its workloads performed 

outside of the competition would be allowed for the first year if determined to be reasonable, while 

second year savings, if supportable, would also be allowed, but discounted for risk. The solicitation 

explains that proposed savings for 3 years and beyond “may be allowed if clearly appropriate, but in any 

event will be considered under the best value analysis.” 

28The range set by the evaluators represented a considerable reduction of Ogden ALC’s proposed 

overhead savings of $294.5 million. A detailed discussion of this adjustment is contained in the body of 

the report. 
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this point, and at the highest range for Ogden ALC, its alternative cost was 

more than $140,000,000 lower than Lockheed's. 

Determination of Total 

Evaluated Cost

To arrive at the total evaluated cost of each proposal, the evaluators took 

the total alternative cost and applied “dollarization” adjustments. 

The initial aspect of the Ogden ALC proposal that was considered to be 

suitable for quantification was the transition risk as it related to both the 

KC-135 aircraft and the commodities.29 The first concern was Ogden ALC's 

proposal to have the workforce at the closing Sacramento depot perform 

most of the work in process on the KC-135 aircraft before the workload 

was transitioned to the Boeing facility at San Antonio. While the 

adjustment for this work in form number 2 assumed normal workforce 

efficiency (80 percent), the evaluators, based on the experience of previous 

transitions from closing depots, concluded that it was likely that the 

closing depot would experience declining efficiency. Consequently, the 

evaluators calculated the impact of a lower efficiency rate (45 percent) on 

the work to be completed at Sacramento. This rate resulted in a 

quantification of the risk of performing the remaining KC-135 work at 

Sacramento. Next, the evaluators added another adjustment that 

represented the risk that Boeing would not achieve its proposed

90-percent efficiency rate as it began the KC-135 aircraft work at its new 

facility. 

The evaluators were similarly concerned about the transition risks in the 

Ogden ALC proposal for commodities workload. The evaluators calculated 

the Sacramento efficiency rate for the completion of commodities work in 

process to be 65 percent.30 Further, the evaluators reduced the efficiency 

rate proposed for the new commodity work to be performed by the 

combined workforces at Sacramento and Ogden.31 The total 

recommendation for “dollarized” transition risk for all the affected 

workloads (KC-135 aircraft and commodities) under the Ogden ALC 

proposal was $20,732,000.

29There does not appear to have been “dollarization” calculations for transition risk associated with the 

A-10 aircraft for either offeror.

30The evaluators assumed that since the commodities transition would be to another public depot the 

efficiency would not decline as drastically as was the assumption for the KC-135 aircraft work.

31As we understand it, during the transition Ogden ALC will assume responsibility for the commodity 

work at Sacramento, which will be gradually transitioned to the Ogden ALC facility. 
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The evaluators were also concerned about transition risk in connection 

with the Lockheed proposal. Their concerns centered around the 

efficiency of the Sacramento workforce in accomplishing the work in 

process for both the KC-135 aircraft and commodity workloads. In both 

cases the evaluators assumed a Sacramento efficiency rate of 65 percent 

(higher than the rates of Ogden ALC and its partner Boeing, as Lockheed 

proposed to perform the work at the closing Sacramento facility using 

much of the current workforce). Further, for both workloads, the 

evaluators did not think that Lockheed could achieve its proposed 

efficiency rates at the start of full performance. The calculations resulted 

in a proposed total “dollarization” of $16,068,000 for the Lockheed 

proposal. 

The evaluators concluded that the risks inherent in two aspects of Ogden 

ALC’s proposed performance of the commodities workload after transition 

should be “dollarized.” The first risk involved Ogden ALC’s process 

improvements and whether those improvements (particularly those in the 

electrical accessories area) would result in a reduction of workhours. The 

evaluators were skeptical that the reduction could be achieved, and they 

consequently calculated a proposed upward “dollarization” adjustment of 

$17,380,738 to represent the risk that the predicted reduction would not 

occur. 

The second risk related to the nature of the public depots’ funding under 

the working capital fund and the possibility that the government will have 

to shoulder the additional cost if Ogden ALC cannot perform at its 

proposed labor rates. The evaluators requested DCAA to conduct a raterisk analysis on the Ogden ALC cost proposal, comparing the proposed 

rates to Ogden ALC’s current and past labor rates. DCAA calculated what it 

believed to be more realistic rates and concluded that its rates would result 

in a $37,373,690 increase in Ogden ALC's cost. The evaluators concluded 

that a “dollarized” risk range representing the high and low historical rates 

analyzed by DCAA should be established for this factor.32 

As the result of these evaluations, the SSAC presented the SSA with a 

recommended total evaluated cost range for each offeror. The 

recommendation consisted of a high range, including the lowest overhead 

savings, if any, combined with the highest upward “dollarization” 

32As discussed earlier, this proposed “dollarization” adjustment was different from the others as it was 

based on the Ogden ALC cost proposal rather than the offeror's proposed technical performance.
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adjustments, and a low range consisting of the highest overhead savings, if 

any, and the lowest upward “dollarization” adjustments.33 The high range 

was $1,819,717,982, and the low range was $1,707,243,712 for Ogden ALC. 

The high range for Lockheed was $1,902,848,080, while the low range was 

$1,886,780,080. Ogden ALC's high range is below Lockheed's low range by 

over $65,000,000.

The SSA reviewed the recommended total evaluated ranges and concluded 

that the high range estimate for Lockheed of $1,902,848,080, including the 

recommended $16,068,000 “dollarization” for transition risk represented 

Lockheed's most probable cost. The SSA concluded that the most probable 

cost for Ogden ALC was $1,794,488,861, about $25,000,000 below the 

SSAC's high range. The SSA’s estimate for Ogden ALC included $46,217,730 

for overhead savings (about midway between the SSAC high and low 

ranges), the total amounts recommended by the SSAC for transition risk 

($20,732,000) and for performance risk related to commodity workload 

process improvements ($17,380,738) and the DCAA recommendation of 

$37,373,690, for overall cost risk for the workloads to be performed at the 

public depot. A summary of the cost adjustments adopted by the SSA is 

shown in table III.1.

Table III.1: Cost Adjustments Adopted by the SSA

aThis includes the $37,373,690 adjustment to Ogden ALC’s cost proposal to represent the risk of 

overruns.

33There were no recommended downward “dollarization” adjustments.

Ogden ALC Lockheed

Total Customer Cost $1,097,615,652 $1,256,721,586

Cost Adjustments

 Form 1 Adjustments 55,799,608 0

 Overhead Savings (46,217,730) 0

 Form 2 Adjustments 611,804,903 630,058,494

Total Alternative Cost 1,719,002,433 1,886,780,080

Total “Dollarized” Adjustmentsa 75,486,428 16,068,000

Most Probable Total

 Evaluated Cost $1,794,488,861 $1,902,848,080
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Award Based on the evaluation results, the SSA concluded that the offerors were 

“essentially equal” in performance risk and general considerations. The 

SSA noted that Lockheed had a slight advantage in transition, while Ogden 

ALC had a slight advantage in operations. The SSA selected Ogden ALC 

for award, as the competitor representing the best value to the government 

based upon the public offeror’s operations advantage combined with its 

lower most probable total evaluated cost.

GAO Analysis As discussed previously, several statutes govern the solicitation and award 

process for public-private competitions for the depot workloads of the 

closing Sacramento and San Antonio ALCs. In particular, 10 U.S.C. 2469a 

sets forth the elements that must be considered in selecting the public or 

private source to perform the workloads. Further, because the Air Force 

used the competitive acquisition system, the standards in chapter 137 of 

title 10 of the United States Code and the FAR apply to the extent they are 

consistent with 10 U.S.C. 2469a and the other applicable provisions relating 

to the outsourcing of depot workloads and to conversions of DOD 

functions to private-sector performance. See (Newport News Shipbuilding 

and Dry Dock Co.,) cited above.

In addition to reviewing the evaluation and selection records, we spoke to 

relevant Air Force officials and to the public-sector offeror. While the 

public offeror won the competition, it still had some concerns that 

primarily centered around its preliminary understanding of the treatment 

of its proposed overhead savings and some of its proposed cost 

adjustments. 

Reviewing the Sacramento competition in this context, we found no basis 

to conclude that the procedures used in selecting the successful offeror 

deviated in any material respect from the section 2469a requirements or 

other applicable laws or relevant provisions of the FAR. The Air Force 

issued a competitive solicitation in accordance with FAR part 15, which 

provided for the participation of a public sector depot. We found no basis 

to conclude that the selection did not provide for a substantially equal 

opportunity for public and private offerors to compete without regard to 

performance location or that appropriate consideration was not given to 

noncost factors in the selection. Overall, the evaluation process appeared 

to be reasonable, fair, and consistent with the evaluation scheme in the 

solicitation, the Depot Competition Procedures, and the CCH. While not 

affecting the legal sufficiency of the selection, we nevertheless identified 
Appendix III

Legal Review of Competition for Sacramento 

Air Logistics Center Workloads

Page 43 GAO/NSIAD-99-124 Public-Private Depot Competitions

several issues related to the estimates supporting the cost evaluation. 

These issues are discussed in the body of the report.

Performance Location Subsection (g) of 10 U.S.C. 2469a provides that our report on the 

competitive procedures is to include our view as to whether the procedures 

“provided substantially equal opportunity for public and private offerors to 

compete for the contract without regard to the location at which the 

workload is to be performed.” In addition, 10 U.S.C. 2469a(d), which lists 

the requirements for the selection process, provides that a public or private 

competitor must be permitted to perform at the location of its choosing and 

a competitor is not to be given preferential treatment for, or be limited to, 

performing the workload in place or at any other single location.

As stated in our prior review of the solicitation for the Sacramento 

workloads, we found no provisions in the solicitation that designated a 

particular location at which performance was required or preferred or that 

evidenced a bias toward any particular performance location.34 Similarly, 

in our review of the selection process, we found nothing to indicate that a 

particular performance location was required or that there was a bias 

toward a particular location in the evaluation of the proposals or the 

selection of Ogden ALC.

In the selection, the SSA expressed concern about the risks inherent in the 

Ogden ALC plan for transitioning the workloads from the Sacramento 

facility to the San Antonio and Ogden performance locations. The SSA 

concluded that Lockheed’s proposal to perform at the closing Sacramento 

facility gave that firm a slight advantage in the transition area. As we 

understand the 10 U.S.C 2469a provisions concerning performance 

location, they are to prevent the Air Force from creating an advantage for a 

particular location for reasons that are not reasonably related to 

performance or cost.35 We believe that the SSA’s concerns in the 

evaluation, which centered on Ogden ALC's ability to convince more than 

300 experienced Sacramento workers to relocate to Ogden, Utah, were 

34Public-Private Competitions: Review of Sacramento Air Force Depot Solicitation, cited above. In this 

review, we also concluded that the solicitation’s improper workload combination did not favor an 

offeror proposing to perform at the Sacramento facility. 

35The statement of managers accompanying the 1998 DOD Authorization Act provides that the Air 

Force “would be expected to consider real differences between bidders in cost or capability to perform 

the work based on factors that would include the proposed location or locations of the workloads.” 

(Conf. Rept. No.105-340 on H.R. 1119, at 717 (1997)).
Appendix III

Legal Review of Competition for Sacramento 

Air Logistics Center Workloads

Page 44 GAO/NSIAD-99-124 Public-Private Depot Competitions

based upon legitimate performance considerations related to Ogden ALC’s 

transition plan and did not reflect bias towards performance at 

Sacramento. 

Consideration of Noncost 

Factors

In accordance with 10 U.S.C. 2469a(g), our review of the selection process 

is to include our view as to whether “appropriate consideration was given 

to factors other than cost in the selection of the source for performance of 

the workload.” We found no basis to conclude that the Air Force did not 

give “appropriate consideration to noncost factors in the selection 

process.”36

As discussed in our review of the Sacramento solicitation,37 the selection 

was to be based upon “the best value to the Government.” This selection 

scheme integrated a relative assessment of such noncost factors as 

transition, operations, and risk along with a extensive evaluation of the 

proposed costs. Under this evaluation method, the entity selected might, 

or might not, be the competitor whose proposal was determined to 

represent the lowest total evaluated cost. 

The selection of Ogden ALC was based on the SSA’s assessment that the 

public offeror’s slight advantage in the operations area (a noncost 

consideration) combined with its lower evaluated cost resulted in the best 

value to the government. The evaluation and selection record shows an 

intensive assessment of the noncost elements of each of the proposals. For 

example, the SSA considered Lockheed’s plan to recruit and maintain the 

existing workforce in-place at the Sacramento facility to be a benefit; on 

the other hand, she concluded that Odgen ALC’s plans for relocating the 

workloads to San Antonio and Ogden were risky. The record also shows 

36We consider noncost factors in this competition to include all of the elements that were evaluated 

under the transition and operation factors as well as such more general considerations as past 

performance. Cost factors include all of the elements under the solicitation’s cost criterion. The Air 

Force “dollarized”, or assigned an estimated dollar value to the benefit or detriment believed to be 

inherent in particular aspects of the offerors’ technical or management approaches under the transition 

and operations factors. As we understand the provision in 10 U.S.C. 2469a(g) regarding the evaluation 

of noncost factors, it was to ensure that the Air Force placed the proper emphasis on matters such as an 

offeror’s management approach to the transition of the workloads and its technical capability to 

perform. We do not think the “dollarization” of some of the results under these factors changes the 

nature of this portion of the evaluation, which was to measure technical and management aspects of a 

proposal, rather than cost. On the other hand, we believe the “dollarization” of the risk determined by 

the SSA to be inherent in Ogden ALC’s labor rates in its cost proposal was, in fact, the evaluation of a 

cost factor. 

37Public-Private Competitions: Review of Sacramento Air Force Depot Solicitation, cited above.
Appendix III

Legal Review of Competition for Sacramento 

Air Logistics Center Workloads

Page 45 GAO/NSIAD-99-124 Public-Private Depot Competitions

that the SSA considered and favorably noted Boeing’s (Ogden ALC’s 

partner) technical approach for performing the KC-135 aircraft work but 

expressed concern about the feasibility of Ogden ALC’s plans to implement 

process improvements in performing the electrical accessories work. 

While the offeror selected did represent the lowest evaluated cost to the 

government, as the examples show, the SSA and the other evaluators 

considered the relative merits of the technical and management 

approaches of the offerors. Thus, the record provides no basis for us to 

conclude that factors other than cost were not given appropriate 

consideration as required by 10 U.S.C. 2469a.

Compliance With Other 

Applicable Provisions of

10 U.S.C. 2469a

In addition to addressing the section 2469a provisions, including 

performance location and consideration given to factors other than cost, 

we reviewed the Sacramento competition to determine whether it 

otherwise complied with the requirements of section 2469a. As noted 

previously, 10 U.S.C. 2469a sets forth six requirements that must be 

satisfied in the Sacramento solicitation and selection process.38

Reviewing the evaluation and selection records in the context of the

10 U.S.C. 2469a requirements, we found that the six requirements were 

addressed during the evaluation and selection process in a manner that was 

consistent with the solicitation evaluation provisions.39 Thus, we found no 

basis to conclude that the Sacramento selection process deviated in any 

material respect from the requirements of 10 U.S.C. 2469a. 

Compliance With Other 

Applicable Provisions of 

Law

As stated earlier, the provisions of 10 U.S.C. 2461 requiring a notice to 

Congress of the savings to be achieved from a conversion of a DOD 

function to private-sector performance, and the requirement in 10 U.S.C. 

2462 that DOD is to contract with the private sector if a private firm can 

provide the supply or service needed at a lower cost, apply generally to 

conversions of DOD functions such as these workloads. Whether the Air 

Force must comply with either statute in a particular competition depends 

38As discussed earlier, in our prior review of the solicitation in Public-Private Competitions: Review of 

Sacramento Air Force Depot Solicitation, cited above, we concluded that all of the 10 U.S.C. 2469a 

requirements were specifically acknowledged in the solicitation. 

39An agency has the discretion to adopt any particular evaluation approach, as long as the approach is 

fair, reasonable, and consistent with the solicitation evaluation criteria. See Universal Shipping Co., 

Inc., B-223905.2, April 20, 1987, 87-1 CPD 424.
Appendix III

Legal Review of Competition for Sacramento 

Air Logistics Center Workloads

Page 46 GAO/NSIAD-99-124 Public-Private Depot Competitions

upon whether a public or private offeror is selected. In this case, the Air 

Force selected the proposal of the public-sector offeror, Ogden ALC, which 

represented the lowest total evaluated cost for the performance of the 

workloads. As we understand it, while the public offeror will use a private 

firm to perform the KC-135 aircraft portion of the requirement, Ogden ALC 

retains the overall responsibility for the performance of all of the 

workloads. 

Section 2469a, which provides specific authority for the Sacramento 

competition, authorizes a public entity to use a private-sector firm as a 

participant in its proposal. In view of this special authority, and 

considering that the Ogden ALC proposal represented the overall lowest 

evaluated cost, we do not believe that either 10 U.S.C. 2461 or 2462 requires 

that portions of the proposal representing work to be performed by the 

public offeror or by its private partner be the subject of separate analyses. 

We, thus, conclude that, in this case, the selection of the low-cost public 

offeror was consistent with 10 U.S.C. 2462 and did not trigger the notice 

requirements of 10 U.S.C. 2461.40

Other Matters While we found no basis to conclude that the evaluation and selection 

process deviated in any material respect from the provisions of 10 U.S.C. 

2469a and other applicable provisions of law, we identified several issues 

related to the estimates used in the cost evaluation. These issues are 

discussed in the body of the report.

40Similarly, we believe that the requirement to certify the government estimate in section 8014 of the 

1998 Appropriations Act is not triggered, as the award is one to the public-sector at the lowest 

evaluated cost. Further, we do not think that the evaluation and selection was inconsistent with section 

8039 of the act regarding the use of “comparable estimates” for public and private offers. 
Page 47 GAO/NSIAD-99-124 Public-Private Depot Competitions

Appendix IV

Major Contributors to This Report ApVIenxdi

National Security and 

International Affairs 

Division, Washington, 

D.C.

Barry Holman, Associate Director

Julia Denman, Assistant Director

Office of the General 

Counsel, Washington, 

D.C.

John Brosnan, Assistant General Counsel

Dallas Field Office John Strong, Evaluator-in-Charge

Penney Harwell, Evaluator

Larry Junek, Evaluator

Pam Valentine, Evaluator

Lret
Page 48 GAO/NSIAD-99-124 Public-Private Depot Competitions
Page 49 GAO/NSIAD-99-124 Public-Private Depot Competitions

Related GAO Products

Army Industrial Facilities: Workforce Requirements and Related Issues 

Affecting Depots and Arsenals (GAO/NSIAD-99-31, Nov. 30, 1998).

Navy Depot Maintenance: Weaknesses in the T406 Engine Logistics 

Support Decision (GAO/NSIAD-98-221, Sept. 14, 1998). 

Defense Depot Maintenance: Public and Private Sector Workload 

Distribution Reporting Can Be Further Improved (GAO/NSIAD-98-175,

July 23, 1998).

Defense Depot Maintenance: Contracting Approaches Should Address 

Workload Characteristics (GAO/NSIAD-98-130, June 15, 1998).

Public-Private Competitions: Review of San Antonio Depot Solicitation

(GAO/OGC-98-49, May 14, 1998).

Defense Depot Maintenance: Use of Public-Private Partnering 

Arrangements (GAO/NSIAD-98-91, May 7, 1998).

Public-Private Competitions: Review of Sacramento Air Force Depot 

Solicitation (GAO/OGC-98-48, May 4, 1998).

Navy Ship Maintenance: Temporary Duty Assignments of Temporarily 

Excess Shipyard Personnel Are Reasonable (GAO/NSIAD-98-93, Apr. 21, 

1998).

Public-Private Competitions: DOD’s Additional Support for Combining 

Depot Workloads Contains Weaknesses (GAO/NSIAD-98-143, Apr. 17, 

1998).

Defense Depot Maintenance: DOD Shifting More Workload for New 

Weapon Systems to the Private Sector (GAO/NSIAD-98-8, Mar. 31, 1998).

Depot Maintenance: Lessons Learned From Transferring Alameda Naval 

Aviation Depot Engine Workloads (GAO/NSIAD-98-10BR, Mar. 25, 1998).

Public-Private Competitions: Access to Records Is Inhibiting Work on 

Congressional Mandates (GAO/T-NSIAD-98-111, Mar. 4, 1998).

Force Structure: Army’s Efforts to Improve Efficiency of Institutional 

Forces Have Produced Few Results (GAO/NSIAD-98-65, Feb. 26, 1998).

Letr
Related GAO Products

Page 50 GAO/NSIAD-99-124 Public-Private Depot Competitions

Public-Private Competitions: Access to Records Is Inhibiting Work on 

Congressional Mandates (GAO/T-NSIAD-98-101, Feb. 24, 1998).

Public-Private Competitions: DOD’s Determination to Combine Depot 

Workloads Is Not Adequately Supported (GAO/NSIAD-98-76, Jan. 20, 1998).

Public-Private Competitions: Processes Used for C-5 Aircraft Award 

Appear Reasonable (GAO/NSIAD-98-72, Jan. 20, 1998).

Defense Depot Maintenance: Information on Public and Private Sector 

Workload Allocations (GAO/NSIAD-98-41, Jan. 20, 1998).

Air Force Privatization-in-Place: Analysis of Aircraft and Missile System 

Depot Repair Costs (GAO/NSIAD-98-35, Dec. 22, 1997).

Outsourcing DOD Logistics: Savings Achievable But Defense Science 

Board’s Projections Are Overstated (GAO/NSIAD-98-48, Dec. 8, 1997).

Navy Regional Maintenance: Substantial Opportunities Exist to Build on 

Infrastructure Streamlining Progress (GAO/NSIAD-98-4, Nov. 13, 1997).

Air Force Depot Maintenance: Information on the Cost-Effectiveness of B-1 

and B-52 Support Options (GAO/NSIAD-97-210BR, Sept. 12, 1997).

Navy Depot Maintenance: Privatizing Louisville Operations in Place Is Not 

Cost-Effective (GAO/NSIAD-97-52, July 31, 1997).

Defense Depot Maintenance: Challenges Facing DOD in Managing Working 

Capital Funds (GAO/T-NSIAD/AIMD-97-152, May 7, 1997).

Defense Depot Maintenance: Uncertainties and Challenges DOD Faces in 

Restructuring Its Depot Maintenance Program (GAO/T-NSIAD-97-112,

May 1, 1997) and (GAO/T-NSIAD-97-111, Mar. 18, 1997). 

Navy Ordnance: Analysis of Business Area Price Increases and Financial 

Losses (GAO/AIMD/NSIAD-97-74, Mar. 14,1997).

Defense Outsourcing: Challenges Facing DOD as It Attempts to Save 

Billions in Infrastructure Costs (GAO/T-NSIAD-97-110, Mar. 12, 1997).

High-Risk Series: Defense Infrastructure (GAO/HR-97-7, Feb. 1997).
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Page 51 GAO/NSIAD-99-124 Public-Private Depot Competitions

Air Force Depot Maintenance: Privatization-in-Place Plans Are Costly 

While Excess Capacity Exists (GAO/NSIAD-97-13, Dec. 31, 1996).

Army Depot Maintenance: Privatization Without Further Downsizing 

Increases Costly Excess Capacity (GAO/NSIAD-96-201, Sept. 18, 1996).

Navy Depot Maintenance: Cost and Savings Issues Related to

Privatizing-in-Place at the Louisville, Kentucky Depot (GAO/NSIAD-96-202, 

Sept. 18, 1996).

Defense Depot Maintenance: Commission on Roles and Mission’s 

Privatization Assumptions Are Questionable (GAO/NSIAD-96-161, July 15, 

1996).

Defense Depot Maintenance: DOD's Policy Report Leaves Future Role of 

Depot System Uncertain (GAO/NSIAD-96-165, May 21, 1996).

Defense Depot Maintenance: More Comprehensive and Consistent 

Workload Data Needed for Decisionmakers (GAO/NSIAD-96-166, May 21, 

1996).

Defense Depot Maintenance: Privatization and the Debate Over the

Public-Private Mix and (GAO/T-NSIAD-96-148, Apr. 17, 1996) and

(GAO/T-NSIAD-96-146, Apr. 16, 1996 ).

Military Bases: Closure and Realignment Savings Are Significant, but Not 

Easily Quantified (GAO/NSIAD-96-67, Apr. 8, 1996).

Depot Maintenance: Opportunities to Privatize Repair of Military Engines

(GAO/NSIAD-96-33, Mar. 5, 1996).

Closing Maintenance Depots: Savings, Workload, and Redistribution Issues

(GAO/NSIAD-96-29, Mar. 4, 1996).

Navy Maintenance: Assessment of the Public-Private Competition Program 

for Aviation Maintenance (GAO/NSIAD-96-30, Jan. 22, 1996).

Depot Maintenance: The Navy’s Decision to Stop F/A-18 Repairs at Ogden 

Air Logistics Center (GAO/NSIAD-96-31, Dec. 15, 1995).

Military Bases: Case Studies on Selected Bases Closed in 1988 and 1991

(GAO/NSIAD-95-139, Aug. 15, 1995).
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Page 52 GAO/NSIAD-99-124 Public-Private Depot Competitions

Military Base Closures: Analysis of DOD’s Process and Recommendations 

for 1995 (GAO/T-NSIAD-95-132, Apr. 17, 1995).

Military Bases: Analysis of DOD’s 1995 Process and Recommendations for 

Closure and Realignment (GAO/NSIAD-95-133, Apr. 14, 1995).

Aerospace Guidance and Metrology Center: Cost Growth and Other 

Factors Affect Closure and Privatization (GAO/NSIAD-95-60, Dec. 9, 1994).

Navy Maintenance: Assessment of the Public and Private Shipyard 

Competition Program (GAO/NSIAD-94-184, May 25, 1994).

Depot Maintenance: Issues in Allocating Workload Between the Public and 

Private Sectors (GAO/T-NSIAD-94-161, Apr. 12, 1994).

Depot Maintenance (GAO/NSIAD-93-292R, Sept. 30, 1993).

Depot Maintenance: Issues in Management and Restructuring to Support a 

Downsized Military (GAO/T-NSIAD-93-13, May 6, 1993).

Air Logistics Center Indicators (GAO/NSIAD-93-146R, Feb. 25, 1993).

Defense Force Management: Challenges Facing DOD as It Continues to 

Downsize Its Civilian Work Force (GAO/NSIAD-93-123, Feb. 12, 1993).

(709409) Letr
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