United States General Accounting Office

GAO Report to Congressional Committees

February 1995 GOVERNMENT

PRINTING

Comparison of DOD

and GPO Prices for

Printing and

Duplicating Work

GAO/NSIAD-95-65

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-259522 

February 17, 1995

Congressional Committees

As set forth by the House report accompanying the fiscal year 1994

Department of Defense (DOD) Appropriations Act and as requested by the

former Chairmen of the Subcommittee on Defense and the Subcommittee

on Legislative, House Committee on Appropriations, we reviewed issues

related to the costs, prices, services, and operations of the Government

Printing Office (GPO) and the Defense Printing Service (DPS). Our

April 1994 report addressed issues related to GPO and DPS costs, services,

and operations.1

 In this report, we address the prices charged to

customers for acquiring printing and duplicating work from those

agencies. Our objective was to determine whether there was a difference

in the prices charged by the two agencies. As stated in our April 1994

report, questions about the adequacy of DPS’ cost information precluded a

cost comparison of the agencies’ operations.

Background In our April 15, 1994, report, we reported that in recent years, controversy

has arisen over the printing operations of various agencies. This was

because some agencies wanted to publish their work independent of GPO

involvement. This controversy is largely the result of significant advances

in publishing technologies. In presenting matters for congressional

consideration, we noted that the framework of laws and regulations used

to manage the government’s publishing activities has been in place for

many years and now seems the appropriate time for a reassessment. We

further stated that as Congress continues to review the various legislative

proposals, it may wish to consider an alternative framework built on

sound business processes and changing publishing technologies. Appendix

I is an extract from our April 15, 1994, report.

By law, GPO, a legislative branch agency, provides printing-related services

to all branches of the federal government—either by producing the work

in-house or contracting with private vendors. For the most part, GPO uses

its in-house resources to produce printing-related work for Congress,

while it contracts with the private sector to provide similar services for

executive branch agencies. In fiscal year 1994, GPO provided $724.4 million

in printing-related services for the government—$197.6 million through

in-house resources and $526.8 million through commercial procurement.

1

Government Printing: Legal and Regulatory Framework Is Outdated for New Technological

Environment (GAO/NSIAD-94-157, Apr. 15, 1994).

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B-259522 

DPS is DOD’s single manager for printing and duplicating operations. It was

established in April 1992 when the printing-related operations of the

military services and defense agencies were consolidated. At its inception,

DPS had an authorized staffing level of 3,694 persons and 350

printing-related facilities. DPS has since reduced its infrastructure as DOD

continues to downsize. As of January 1995, DPS reported that it had 2,343

persons on its staff and 256 printing-related facilities. Under current

procedures, DOD customers submit printing-related requirements to DPS,

which satisfies most of these needs either through its in-house resources

or through GPO contracts with the private sector. In fiscal year 1994, DPS

produced $220.4 million of work in-house and procured $177.4 million of

work—$167.8 million of the latter was procured through the GPO.

2

DPS sends the majority of its printing work to private vendors on contract

to the GPO and maintains most of its duplicating work in-house. For the

most part, in-house work comprises relatively low dollar value work. For

example, in fiscal year 1993, 75 percent of the DPS’ duplicating requisitions

were priced under $103, and about 50 percent were under $28.

The prices DOD customers pay for their printing and duplicating work vary

according to the nature of the work, the provider of the work, and the

business arrangements in place to provide it. For work performed in DPS

facilities, DPS uses a uniform nationwide pricing schedule that is based on

the various production processes and costs associated with producing a

product. Customers are charged schedule prices, which are adjusted

annually, and the revenue is used to offset costs associated with producing

the work. Prices are adjusted throughout the year to reflect changes in

paper prices. For work procured under GPO contracts, customers are

usually charged a private vendor’s fee and administrative surcharges

assessed by GPO and DPS. Contractor prices are largely dictated by the

economic forces of the marketplace. In those cases in which GPO decides

to produce the work in-house rather than contract for it, GPO most often

prices the work at a level to cover the production costs. However, in some

cases, it offers discounts and may charge the prevailing commercial rate.

By comparing prices charged to the customer rather than costs of the

services provided, our analysis took the perspective of the DOD customer

who is interested in obtaining a particular service at the lowest price. To

determine the extent to which price differences reflect differences in costs

would require a detailed analysis of GPO’s and DPS’ cost accounting

2

The DPS in-house figure includes $29.6 million of cost-per-copy contract work and self-service

copying.

Page 2 GAO/NSIAD-95-65 Government Printing
B-259522 

systems. As discussed in our April 1994 report on government printing

issues, we attempted but could not make a meaningful comparison of GPO

and DPS costs because (1) the two agencies capture costs differently and

(2) there are concerns regarding the completeness, accuracy, and

reliability of DPS’ cost accounting system.

Price Comparison

Methodology

Whether DOD customers would be best served by having their printing and

duplicating work produced in DOD facilities or provided by GPO has been

the subject of debate for many years. Several price comparison studies

have been performed in recent years; however, because of perceived or

actual limitations in the conduct of these studies, none has been widely

accepted.

As we developed our price comparison methodology, we took into

account the criticisms of prior studies, the concerns of GPO and DPS, and

the comments of external printing consultants. Our methodology was

(1) based on a representative sample of DPS’ $221 million fiscal year 1993

nationwide in-house workload, (2) designed to capture prices based on

existing business conditions, and (3) reviewed by the consultants. During

the conduct of the study, we also implemented various controls to

minimize the possibility of agency bias on the results.

Once we developed our sampling framework, our overall conceptual

approach for performing the price comparison was to have DPS send the

sample requisitions actually received from its customers during fiscal year

1994 to GPO, who for the most part contracted to have the work done. The

contractors actually performed the work and billed GPO for that work. We

then took the price charged by GPO to DPS’ customers and compared it with

the price DPS estimated it would have charged to have performed the work.

The results of this sample comparison were then projected against DPS’

fiscal year 1994 workload.

Our price comparison was based on a statistically representative sample of

303 printing and 685 duplicating DPS customer-requested requisitions

produced between April and September 1994. Collectively, these

requisitions represented 327 printing and 1,193 duplicating products. We

based our conclusions on a dollar-weighted sample of printing and

duplicating requisitions. The fiscal year 1994 customer-requested products

submitted by DPS plant officials were based upon criteria that we

established from the products described on a set of validated fiscal year

1993 requisitions.

Page 3 GAO/NSIAD-95-65 Government Printing
B-259522 

The submissions were reviewed by an in-house panel of printing and

methodology specialists and the consultants. As DOD customers routinely

submitted requisitions, DPS officials chose those requisitions that were

similar to our criteria and, rather than producing the work in DPS facilities,

sent it to GPO, who largely had the work produced by contractors. Plant

officials sent us the documentation associated with this work. Work

passing our panel’s and consultants’ review was used as the sample for

this study. The GPO bills for our sample were then compared with the

prices DPS would have charged if it had done the work in-house. 

Appendix II contains a technical description of our methodology and lists

the external consultants we used.

Results in Brief A meaningful cost comparison of the services provided by GPO and DPS

cannot be made because these agencies capture costs differently and there

are longstanding questions regarding the reliability of DPS’ cost accounting

system. Consequently, as agreed, we used price as a comparative measure.

We recognize that a price comparison does not show which agency’s

services are more economical to the government. Instead, it shows what

customers are paying for services. Table 1 shows the DPS’ 1993 workload

and the results of our price comparison projected to DPS’ 1994 workload.3

Table 1: Analysis of GPO and DPS

Prices

1993 DPS workload 1994 price difference

Dollars in millions

Dollar value of

requisitions Dollars

Number of

requisitions Favors

By

percent

By

dollarsa

Printing

Over $500 $19.5 11,000 GPO 21.0 to 21.6 $4.2

$500 or less 5.4 51,000 DPS 30.5 to 31.3 1.7

Total $24.9 62,000 GPO 9.9 to 10.1 $2.5

Duplicating

Over $500 $178.0 25,700 GPO 0.6 to 0.8 $1.3

$500 or less 17.6 286,800 DPS 57.0 to 57.6 10.1

Total $195.6 312,500 DPS 4.0 to 5.0 $8.7

Note: The terms “printing” and “duplicating” represent our categorization of DPS’ workload. See

appendix II.

aTotals may not add due to rounding.

3

For purposes of our analysis, we assumed the workload mix was the same in 1994 as it was in 1993.

Page 4 GAO/NSIAD-95-65 Government Printing
B-259522 

During our review, GPO officials pointed out that they believed if more use

were made of term contracts rather than one-time buys, there would be a

potential for lower contract prices through GPO. Term contracts provide

for the purchase of specific products or classes of products from vendors

during a specified period of time. Our analysis included a

post-stratification of the 1994 DPS sample products to find out the extent to

which DPS’ use of term contracts resulted in savings to DPS customers. We

found that GPO contractor prices were significantly—about

37 percent—lower than DPS printing prices. However, we did not find

significant differences between GPO’s duplicating term contracts and DPS’

prices.

GPO provided price estimate information based on term contracts used by

DOD or other federal agencies. This information indicated that, in most

cases, these term contract prices would be lower than DPS’ prices.

However, whether suitable term contracts could be established to handle

the DPS workload and satisfy specific customer needs (e.g., quick

turnaround) at the projected prices is uncertain.

Lastly, because our study was based on a fiscal year 1994 sample, it

represents the situation for that period. Relative price differences will

change as prices are adjusted by GPO, GPO contractors, or DPS. The

magnitude and direction of the changes are difficult to predict because of

uncertainty in the marketplace. Recent information shows that GPO and DPS

will both experience price increases during fiscal year 1995.

DPS and GPO Prices

Under Existing

Conditions

Our analysis showed that, under conditions existing during our sample

period, GPO’s prices for printing work were about 10 percent lower than

those of DPS’. For printing requisitions more than $500, GPO’s prices were

about 21 percent lower than DPS’ prices. For requisitions $500 and less, DPS’

prices were about 31 percent lower than GPO’s. We estimate that, in

aggregate, GPO’s prices for DPS’ fiscal year 1994 printing workload would

have been about $2.5 million lower than those of DPS’.

DPS’ prices for duplicating requisitions were about 4 to 5 percent lower

than GPO’s prices. For those requisitions priced over $500, there was about 

0.7 percent difference favoring GPO, and for those $500 or less the

difference was about 57 percent in favor of DPS. We estimate that, in

aggregate, DPS’ prices for its fiscal year 1994 duplicating workload would

have been about $8.7 million lower than the GPO’s prices.

Page 5 GAO/NSIAD-95-65 Government Printing
B-259522 

Printing Our analysis of printing prices was based on a sample of 303 requisitions

representing 327 products that we categorized as printing. The sample

comprises large (more than $500) and small (equal to or less than

$500) dollar requisitions. About 96 percent of the work was done through

private vendors on contract to GPO; the remainder was produced in one or

more of GPO’s facilities. Although we could not conclusively determine the

major factors for the price difference for printing, our results show that

large dollar requisitions were about 21 percent lower at GPO, representing

about 78 percent of the printing dollars. However, the price difference for

small dollar requisitions showed that DPS’ prices were about 31 percent

lower. About 82 percent of DPS’ fiscal year 1993 workload for printing was

for small dollar requisitions, but this category contained about 22 percent

of the total printing dollars.

Duplicating Our analysis of duplicating prices was based on a sample of 685

requisitions representing 1,193 products that we categorized as

duplicating. Like printing, the sample comprises large and small dollar

requisitions, many of which required quick turnaround times. Our analysis

of DPS’ fiscal year 1993 workload for duplicating showed that small dollar

requisitions accounted for about 92 percent of the requisitions, but

9 percent of the duplicating dollars. Large dollar requisitions accounted for

8 percent of the requisitions, but 91 percent of the duplicating dollars.

For low dollar requisitions, DPS’ prices were about 57 percent lower than

GPO’s prices. For high dollar requisitions, GPO’s prices were about

0.7 percent lower than the DPS’ prices.

GPO Believes That

Using Term Contracts

Would Result in

Lower GPO Prices

During the course of our review, GPO officials stated that they believed that

making maximum use of term contracts could provide DPS with

significantly lower prices for its printing and duplicating work. GPO

officials told us that about 75 percent of its work for government agencies

is performed under term contracts. According to GPO officials, vendors

may not have charged the favorable rates available on term contracts for

the one-time buys that were part of our study. Although not part of our

price comparison methodology, GPO asked that we include in this report a

discussion of how the use of long-term contracts might affect contractors’

prices.

During our test period, about 46 percent of the printing products and

41 percent of the duplicating products produced by GPO contractors were

Page 6 GAO/NSIAD-95-65 Government Printing
B-259522 

completed under term contracts. The remaining products were completed

using one-time buys. Because GPO believes that term contracts with its

vendors result in substantial savings to the government, we reanalyzed our

data to try to detect these savings. For printing, our data supported the

conclusion that savings could accrue. We found a significant

difference—about 37 percent—between GPO’s contractor prices under

printing term contracts and DPS’ printing prices. However, we did not find

significant differences when duplicating term contracts were used.

Under another approach, which is the most optimistic scenario, GPO

repriced our sample requisitions using prices from its term contracts in

existence across the country—even though they may have been for

agencies other than DOD. We examined GPO’s repricing effort to determine

the relative level of GPO’s prices versus those of DPS’. We found that GPO’s

prices were lower than DPS’ prices for 940 of 1,157 sample items that GPO

repriced and were in our analysis. Moreover, GPO’s prices resulting from

the repricing effort were often lower than actual GPO’s prices for sample

items procured under GPO term contracts during our study. This occurred

in 495 of 630 cases where a term contract was used.

We selectively verified orders repriced by GPO and found a number of

errors. Although these errors would not appear to materially alter the

supposition of lower prices, the errors do raise questions about the

relative magnitude of the prices. Some of the deficiencies we identified

included

• minor errors in pricing various printing or duplicating processes,

• omission of applicable GPO surcharges, and

• misapplication of selected contracts for repricing estimates.

Lastly, whether suitable term contracts could be established to handle DPS’

workload and satisfy specific customer needs (e.g., quick turnaround) at

competitive prices is uncertain. GPO was unable to reprice 48 of the sample

requisitions because there were no existing term contracts in effect that

were appropriate for pricing purposes. In previous price comparison

studies and in DPS’ comments on our current analysis, the use of GPO’s

prices based on existing term contracts with other agencies was

questioned.

Page 7 GAO/NSIAD-95-65 Government Printing
B-259522 

Recent DPS and GPO

Vendor Price

Increases

Our analysis was based on DPS’ and GPO’s prices for work during the latter

half of fiscal year 1994 and, therefore, represents a point-in-time

comparison. Recent price increases taking effect during fiscal year 1995

could change the relative price difference between GPO- and DPS-provided

work. The magnitude and direction of the difference is difficult to predict,

however, because of uncertainty in the marketplace.

In October 1994, DPS increased its overall prices by 18.5 percent and its

surcharge for processing work to GPO from 1.83 percent to 5.5 percent.

According to DPS officials, the increases were intended, in large part, to

offset prior years’ printing-related operation losses. DPS is part of the

Defense Business Operations Fund—a revolving fund that is used to fund

operations for DPS and many other DOD activities.

In an August 1994 correspondence to the Joint Committee on Printing, GPO

forecasted that GPO prices obtainable through private contractors would

most likely increase by about 3.8 percent during fiscal year 1995. However,

in October 1994, GPO officials advised agencies that private sector price

increases may be greater. This was because of substantial paper cost

increases. GPO officials stated that prices in new term contracts involving

significant amounts of paper could experience 20 to 40 percent price

increases. Paper cost increases may also affect DPS’ prices, because DPS

can adjust the price it charges its customers during the fiscal year to

reflect paper price increases.

Agency Comments

and Our Evaluation

In its official comments on a draft of this report, DOD agreed with our audit

methodology, execution, and conclusions. The comments are included as

appendix III.

GPO, in its official comments, did not agree with many aspects of our

report and the methodology we used to perform our work. The comments

are reprinted in their entirety as appendix IV. GPO commented that our

draft report contained material deficiencies that provided an undue bias in

favor of DPS and that understated the cost-effectiveness of the GPO Printing

Procurement Program and its private sector printers. GPO cited a number

of methodological concerns (such as our reliance on what GPO

characterizes as an incomplete and questionable DPS database) that it

believed raise questions about the reliability of our work. Further, GPO

stated that we did not always exercise due professional care during the

planning and performance of the study. To illustrate this point, GPO stated

that we (1) allowed DPS to select the sample for the study, (2) accepted

Page 8 GAO/NSIAD-95-65 Government Printing
B-259522 

sample jobs outside the criteria established for selecting the sample,

(3) allowed DPS to control the timing and means for delivering sample jobs

to GPO, and (4) allowed DPS to provide the source documentation for the

comparative price analysis.

We disagree with GPO’s primary concerns. We believe that our draft report

does not contain material deficiencies and that we exercised all due care

in the conduct of our work. Because of the sensitivity and continuing

controversy surrounding various printing and duplicating management

issues, we exercised extreme care in the planning and conduct of our

work in order to provide results that are indicative of real world

conditions. With regard to GPO’s specific concerns, we disagree for the

reasons as detailed in the succeeding paragraphs.

We did not, as GPO stated, use data from a questionable database without

first testing the reliability of the data we needed for our study. For

example, in using the fiscal year 1993 DPS management information

database as a baseline for our work, we selected 440 printing and 300

duplicating automated requisition entries and subsequently compared the

associated automated data with data found on the corresponding

hard-copy requisitions. In over 90 percent of the cases, the data were

appropriate and we judged them to be reliable for the purposes of our

study.

We disagree that DPS selected the sample for our study and that we

accepted many jobs that, GPO states, were not “twins” based on our job

specification criteria. If DPS were permitted to select jobs without proper

controls, it would have created an opportunity for unwanted bias. To avoid

this, we had DPS plant officials nominate candidate jobs for our sample,

using preestablished criteria that we provided to them. The criteria

provided to DPS were never intended to restrict DPS to obtaining exact

matches, or twins as GPO states. Certain specifications (e.g., major

production processes used, estimated price, classification level, and time

available to produce the job) were key to DPS’ sample nomination process.

Other criteria (e.g., technical job characteristics such as stitching) were

provided as guidelines for DPS to use in attempting to nominate products

that were similar, but not necessarily a direct match. We subsequently had

DPS’ nominations reviewed by two panels to ensure that the nominations

(1) fit within the statistical model for our work and (2) did not have any

technical printing requirements or other considerations that would unduly

bias either agency. One panel consisted of internal printing and

methodology specialists, while the other comprised external printing

Page 9 GAO/NSIAD-95-65 Government Printing
B-259522 

consultants. As a result of these reviews, we rejected about 9 percent of

DPS’ sample candidates. For rejected cases, we asked DPS to submit

additional candidates, which were subjected to the same review process.

With regard to GPO’s statement that DPS controlled the timing and means of

delivering sample jobs to GPO, we believe we exercised proper oversight of

the process. We instructed DPS to use its normal business procedures to

obtain its work through GPO so that our comparison was realistic. To

ensure that DPS did not unduly delay the delivery of jobs to GPO, we

examined, through the panel process, the timing (DPS receipt of a customer

request and subsequent submission to GPO) for each job in our sample. We

also conducted a separate subsample analysis to further examine the

issue. Our analysis showed no systemic bias in the process. As to the

means of delivering jobs to GPO, we have no indication that DPS

intentionally biased the process, given the requirement to meet the

customers’ request dates.

GPO stated that DPS provided the source documentation to us for the

comparative analysis. However, while DPS did provide much of the data

related to the customer requisitions, DPS price estimates, and GPO billings,

we also obtained source documentation from GPO. We examined and

verified the source documentation where reasonable and where we

determined the risk of bias was high. For example, we had external

printing consultants review DPS’ price estimates. To verify the GPO invoice

prices provided by DPS, we extracted GPO bills from database files provided

by GPO. We also performed a quality assurance analysis to examine cases

where it appeared that discrepancies in our data may exist. Where errors

were detected, we made the appropriate corrections in our database.

GPO also questioned our presentation of information in the report. For

example, GPO believes that our interchangeable use of such terms as

“requisitions,” “jobs,” and “orders” in our draft report created confusion.

Further, GPO stated that our draft methodology did not sufficiently disclose

what we actually did during the review. Because of GPO’s apparent

misunderstanding of our methodology, we have included a more technical

description of our methodology and clarified our report presentation.

GPO also questioned whether it was appropriate for us to have GPO

comment on our report prior to the completion of all audit work. While we

agree that this situation was not ideal, we did not release the draft report

for comment until we had sufficient data to project the results of our

Page 10 GAO/NSIAD-95-65 Government Printing
B-259522 

work. The small amount of additional data collected after we released our

draft report for comment did not materially affect the results of our study.

As to specific concerns noted in GPO’s official comments, we have

annotated the comments and have provided our views following the

reprint of GPO’s comments in appendix IV.

We are sending copies of this report to the Secretary of Defense, the

Public Printer of the United States, the Director of DPS, the Director of the

Office of Management and Budget, and other appropriate congressional

committees. We will also make copies available to others upon request.

The report was prepared under the direction of Donna M. Heivilin,

Director, Defense Management and NASA Issues, who can be reached on

(202) 512-8412 if you or your staff have any questions. Other major

contributors are listed in appendix V.

Henry L. Hinton, Jr.

Assistant Comptroller General

Page 11 GAO/NSIAD-95-65 Government Printing
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List of Congressional Committees

The Honorable Strom Thurmond

Chairman

The Honorable Sam Nunn

Ranking Minority Member

Committee on Armed Services

United States Senate

The Honorable Ted Stevens

Chairman

The Honorable Daniel K. Inouye

Ranking Minority Member

Subcommittee on Defense

Committee on Appropriations

United States Senate

The Honorable Floyd Spence

Chairman

The Honorable Ronald V. Dellums

Ranking Minority Member

Committee on National Security

House of Representatives

The Honorable C. W. Bill Young

Chairman

The Honorable John P. Murtha

Ranking Minority Member

Subcommittee on National Security

Committee on Appropriations

House of Representatives

The Honorable Ron Packard

Chairman

The Honorable Vic Fazio

Ranking Minority Member

Subcommittee on Legislative

Committee on Appropriations

House of Representatives

Page 12 GAO/NSIAD-95-65 Government Printing
Page 13 GAO/NSIAD-95-65 Government Printing
Contents

Letter 1

Appendix I 

Extract From Our

April 15, 1994, Report

on Government

Printing

16

Appendix II 

Scope and

Methodology

27

Study Approach 27

Structuring the Fiscal Year 1994 Price Comparisons 31

The Analysis 37

Quality Assurance Efforts 38

Appendix III 

Comments From the

Department of

Defense

40

Appendix IV 

Comments From the

Government Printing

Office

41

Appendix V 

Major Contributors to

This Report

99

Tables Table 1: Analysis of GPO and DPS Prices 4

Table II.1: DPS’ Major Production Processes 29

Table II.2: Sample Used to Validate PRMIS 30

Table II.3: Sample Overview 34

Table II.4: Sampled Duplicating Requisitions by DPS Area 34

Table II.5: Categories of Nonresponse 37

Table II.6: Effect of Term Contract Use 38

Page 14 GAO/NSIAD-95-65 Government Printing
Contents

Figure Figure II.1: Sample Form Listing Attributes of a Printing

Requisition

32

Abbreviations

DCI data collection instrument

DOD Department of Defense

DPS Defense Printing Service

GPO Government Printing Office

NCA National Capital Area

PRMIS Printing Resources Management Information System

Page 15 GAO/NSIAD-95-65 Government Printing
Appendix I 

Extract From Our April 15, 1994, Report on

Government Printing

Page 16 GAO/NSIAD-95-65 Government Printing
Appendix I 

Extract From Our April 15, 1994, Report on

Government Printing

Page 17 GAO/NSIAD-95-65 Government Printing
Appendix I 

Extract From Our April 15, 1994, Report on

Government Printing

Page 18 GAO/NSIAD-95-65 Government Printing
Appendix I 

Extract From Our April 15, 1994, Report on

Government Printing

Page 19 GAO/NSIAD-95-65 Government Printing
Appendix I 

Extract From Our April 15, 1994, Report on

Government Printing

Page 20 GAO/NSIAD-95-65 Government Printing
Appendix I 

Extract From Our April 15, 1994, Report on

Government Printing

Page 21 GAO/NSIAD-95-65 Government Printing
Appendix I 

Extract From Our April 15, 1994, Report on

Government Printing

Page 22 GAO/NSIAD-95-65 Government Printing
Appendix I 

Extract From Our April 15, 1994, Report on

Government Printing

Page 23 GAO/NSIAD-95-65 Government Printing
Appendix I 

Extract From Our April 15, 1994, Report on

Government Printing

Page 24 GAO/NSIAD-95-65 Government Printing
Appendix I 

Extract From Our April 15, 1994, Report on

Government Printing

Page 25 GAO/NSIAD-95-65 Government Printing
Appendix I 

Extract From Our April 15, 1994, Report on

Government Printing

Page 26 GAO/NSIAD-95-65 Government Printing
Appendix II 

Scope and Methodology

Debate continues as to whether DOD can save money by contracting its

printing and duplicating work through GPO rather than producing it

in-house. Several studies have been conducted on this topic, but they do

not support generalizable findings. Accordingly, we set out to determine

whether DOD customers would pay more or less to obtain printing and

duplicating services through GPO and its private sector contractors rather

than through DPS.

Study Approach Our study is based on the printing and duplicating workload undertaken

by DPS in response to customer requisitions received during fiscal year

1993. Because it is requisition based, the study excludes consideration of

that portion of DPS’ workload associated with self-service or copy center

operations. Work performed in overseas plants is also excluded because

GPO does not typically service those locations. DPS’ fiscal year 1993

workload is used to specify a statistically matched set of fiscal year 1994

requisitions. The difference between DPS’ and GPO’s fiscal year 1994 prices

for this matched set serves as the basis for the study’s price comparisons.

Our work was conducted between September 1993 and January 1995 in

accordance with generally accepted auditing standards.

Terminology Differences In recent years, the proliferation of computers, laser printers, and other

digital technologies has blurred the distinctions between printing and

duplicating. Today the terms are often used synonymously, but their

precise definition has been the subject of disagreement within the printing

community. DPS, for example, may classify a piece of work as duplicating,

while GPO might classify the identical product as printing. Similarly, DPS

and GPO frequently disagree about the production processes required to

produce products at different quality levels.

Our study is based on DPS’ workload, and we used DPS’ production

classifications. Accordingly, the projected price differences for printing or

duplicating are expressed in terms of DPS’ classifications. Our price

comparisons, however, are product-based. Thus, while DPS and GPO may

disagree as to whether a particular work process should be classified as

printing or duplicating, this study reports solely the price differences

charged for products that the customer would perceive as identical.

Page 27 GAO/NSIAD-95-65 Government Printing
Appendix II 

Scope and Methodology

Geographic Considerations During our sample period, DPS comprised a headquarters and field

activities located within eight areas. DPS prices in-house work at the time a

requisition for printing or duplicating is accepted using a standard rate

schedule. DPS uses this schedule to price each of the processes used to

produce a job. With the exception of paper prices, the rate schedule is

identical for all areas and is updated on an annual basis. Paper prices are

set at the plant level and may vary throughout the year.

GPO also has a headquarters and regional structure. For executive agency

printing and duplicating work, GPO usually contracts the work with local or

regional commercial vendors. Consequently, GPO’s prices are affected by

market conditions. The price for identical work may vary between regions

and, seasonally, within the same region. The final invoice (including GPO’s

contract administration surcharge) is provided after completion of the

work and receipt of the contractor’s billing.

GPO’s regional boundaries do not coincide with the geographic boundaries

of the DPS areas. Thus, there is not a one-to-one relationship between a DPS

area office and a GPO regional office. A DPS area office may contract

support from multiple GPO regions, and a single GPO region may support

multiple DPS area offices.

Defining DPS’ Fiscal Year

1993 Workload

Members of the printing community often assert that every printing and

duplicating product is unique. Although the products may be unique, it is

clear that there is a finite, countable sequence of production steps

involved in their manufacture. The identification of these sequences is the

core of our statistical design.

DPS’ Printing Resources Management Information System (PRMIS) tracks

requisitions and prices for 184 separate work processes that may be

involved in providing customers with requested products. We realigned

DPS’ fiscal year 1993 PRMIS data to reflect DPS’ job pricing system—one that

is designed to capture the prices charged for the various manufacturing

processes used to produce a product. By tracking requisitions through the

various processes, we were able to categorize DPS’ overall fiscal year 1993

in-house workload into nine major production processes. Table II.1 lists

these processes and the revenue associated with them in fiscal year 1993.

Each of these major processes was further stratified to reflect additional

production processes (e.g., stitching) and price strata. In total, our study

comprised 37 printing and 32 duplicating strata.

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Scope and Methodology

Table II.1: DPS’ Major Production

Processes (Fiscal Year 1993) Dollars in millions

Major production process Requisitions Price

Printing

1 10x15/11x17 press 38,503 $5.0

2 Offset press 14x19 width 17,095 9.6

3 Offset press 22x29/22x34 3,675 5.8

4 Offset press 35x45 896 2.0

5 Two-color press 35x45 911 1.8

6 Roll-fed 22x34 116 0.5

7 Thermo/envelope/letterpress 999 0.2

Duplicating

8 Electrostatic duplicating 276,812 188.0

9 Offset duplicating 10x15/11x17 35,724 7.6

Total 374,731 $220.5

Note: Overseas plant figures are excluded.

Validation of DPS’ PRMIS

Database

We relied extensively on computer-processed data contained in the DPS’

PRMIS database. We assessed the reliability of the data by comparing them

with data from fiscal year 1993 hard-copy requisitions. This comparison

was conducted using a statistically valid sample. Table II.2 lists the sample

sizes by major production process.

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Scope and Methodology

Table II.2: Sample Used to Validate

PRMIS Dollars in millions

Major production process Requisitions Sample size

Printing

1 10x15/11x17 press 38,503 123

2 Offset press 14x19 width 17,095 93

3 Offset press 22x29/22x34 3,675 69

4 Offset press 35x45 896 45

5 Two-color press 35x45 911 35

6 Roll-fed 22x34 116 25

7 Thermo/envelope/letterpress 999 25

Subtotal 415

Duplicating (National Capital and Western areas)

8 Electrostatic duplicating

National Capital Area 13,679 38

Western Area 94,056 112

9 Offset duplicating 10x15/11x17

National Capital Area 536 38

Western Area 7,426 112

Subtotal 300

Total 177,892 715

Note: Overseas plant work is excluded.

With regard to printing, all fiscal year 1993 requisitions were grouped

according to DPS’ seven major printing production processes and stratified

into 37 cells to reflect the influence of production line characteristics

(major combinations of press requirements, offset plates, etc.) and

requisition price (greater than $500 or $500 and less). Statistics for each

cell were derived, and a hard copy of the original customer request was

obtained for a dollar-weighted sample of requisitions.

With regard to duplicating, PRMIS provided a count of requisitions and

prices for electrostatic and offset duplicating work in all DPS areas.

However, only the National Capital and Western areas retained the

individual hard-copy requisitions needed to support our validation. Thus,

our validation of the PRMIS’ duplicating workload focused on DPS’ National

Capital and Western areas. Within these areas, duplicating requisitions

were grouped according to DPS’ two major production processes and

stratified by requisition price (greater than $500 or $500 and less).

Statistics for each cell were derived, and a hard copy of the original

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Scope and Methodology

customer request was obtained for a dollar-weighted sample of

requisitions.

We concluded that the data were sufficiently complete and accurate and

thus could serve as a reliable description of DPS’ fiscal year 1993 workload.

Hard-copy requisitions for 385 of the 415 sampled PRMIS printing records

were obtained and found to validate the PRMIS’ data on price, production

sequence, and requisition number. We obtained hard-copy requisitions for

273 of the 300 sampled duplicating records and validated the PRMIS’ data on

price, production sequence, and requisition number.

Structuring the Fiscal

Year 1994 Price

Comparisons

Our analysis assumes that DPS’ fiscal year 1993 workload is characteristic

of DOD’s annual demand for printing and duplicating services. This is not to

say that DPS will complete the same volume of work each year, but rather

that its mix of work will remain relatively constant.

We took a statistically representative sample of DPS’ mix of work from the

fiscal year 1994 incoming work requests. DPS priced the requisitions

according to its rate schedule and then sent them to GPO for production.

GPO provided an initial price estimate upon acceptance of the work and a

final invoice price (the contractor’s price plus a surcharge for GPO’s

administration of the contract) following completion of the work.

Protection Against

Selection Bias

To match fiscal year 1994 jobs with the fiscal year 1993 work mix, we

sought to ensure requisite statistical conditions (necessary for the

preservation of fiscal year 1993 strata properties) and reduce or eliminate

any perception of selection bias on the part of DPS or GPO.

The criteria for a matched requisition were specified by the statistical cell

from which a fiscal year 1993 requisition was drawn. Attributes obtained

from the fiscal year 1993 requisition (e.g., number of copies, original

impressions, available workdays to perform the work, paper weight and

finished size, type of binding, and distribution) served as subordinate

guidelines to protect against selection bias. We listed these attributes on

the data collection instrument (DCI) that DPS plant officials used to

nominate a requisition for inclusion in our study. An example of the DCI

used for a printing requisition is shown in figure II.1.

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Scope and Methodology

Figure II.1: Sample Form Listing Attributes of a Printing Requisition

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Scope and Methodology

After DPS plant officials identified a requisition that met the parameters of

our DCI, they submitted the requisition to GPO for production and then

provided us with documentation to support their nomination (a completed

copy of the DCI, the customer’s requisition, and DPS’ schedules used for

pricing the product). Before including the nominations in our sample, we

tasked a panel comprising our personnel with printing, evaluation, and

methodological expertise to examine them. The panel ensured that the

nominations fit the necessary statistical parameters and that, from the

viewpoint of the printing community, the selection would not put GPO at a

disadvantage. All acceptable matches were subsequently reviewed by

external consultants with printing expertise. Specifically, we used two

private sector consultants—Willard Brown, Printing Consultant, and

Herbert Langford, Langford and Associates. They validated the panel’s

decisions and reviewed DPS’ price estimates, thereby providing an

additional safeguard against systemic bias on the part of DPS areas or

plants.

About 9 percent of DPS-proposed matches failed the review process. In

these cases, the work was not included in our sample and DPS plant

officials were requested to nominate replacements that more accurately

reflected the statistical criteria and attributes specified within our DCI.

The Fiscal Year 1994

Sampling Frame

Table II.3 presents an overview of the study’s sampling frame. The table is

organized by major production process and lists the sample size,

responses, and the number of individual products produced using each

process.

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Scope and Methodology

Table II.3: Sample Overview (Fiscal

Year 1994) Requisitions

Major production process Sample Responses

Number of

products

Printing

1 10x15/11x17 press 115 96 98

2 Offset press 14x19 width 90 74 77

3 Offset press 22x29/22x34 61 44 53

4 Offset press 35x45 39 30 30

5 Two-color press 35x45 33 25 35

6 Roll-fed 22x34 24 17 17

7 Thermo/envelope/

letterpress 23 17 17

Duplicating

8 Electrostatic duplicating 661 571 946

9 Offset duplicating

10x15/11x17 147 114 247

Total 1,193 988 1,520

Printing Sample We asked DPS to match 385 of our validated fiscal year 1993 printing

requisitions (stratified by major product line, subproduct, and requisition

price) with incoming fiscal year 1994 requisitions. DPS successfully

matched 316 of the 385 requisitions, but at the conclusion of our study,

GPO’s contractors had provided final invoices for only 303 requisitions.

Thus, we used a 79-percent response rate in estimating differences

between the DPS’ printing price and GPO’s final invoice.

Duplicating Sample An overview of our sampling scheme for duplicating requisitions is shown

in table II.4.

Table II.4: Sampled Duplicating

Requisitions by DPS Area Electrostatic duplicating Offset duplicating

DPS area Sample size Responses Sample size Responses

Central Area 91 67 16 8

National Capital Area 31 25 38 35

Northeast Area 91 68 16 12

Northwest Area 91 86 16 10

Southeast Area 80 78 14 11

Southern Area 91 83 16 11

Southwest Area 91 78 16 13

Western Area 95 86 15 14

Total 661 571 147 114

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Scope and Methodology

Because the National Capital Area (NCA) was unique in its distribution of

duplicating work, we treated it separately from the other DPS areas—both

in our validation of the PRMIS’ workload and in the selection of requisitions

for our fiscal year 1994 sample. We asked DPS to match 69 of our validated

fiscal year 1993 requisitions from NCA (31 electrostatic and 

38 offset duplicating, as stratified by major production process and

requisition price) with an incoming fiscal year 1994 duplicating requisition

from the same plant.

To protect against selection bias in the remaining DPS areas, we used the

properties of the Western Area’s validated requisitions to create templates

for our DCIs. This allowed us to control DPS’ nominations. We sent a

combined total of 739 requisitions to the seven areas (excluding NCA).

From our prior work with PRMIS, we knew the statistical properties of the

mix of work for each of these areas. Using the statistical properties of the

mix of work from each of the areas, we calculated our estimates.

Combined Billings and Open

Requisitions

In the process of validating PRMIS, we identified two classes of requisitions

that deserved special treatment. The first class, combined billings, was

made up of a collection of individual products that were batched for

production on a single requisition. The second class, open requisitions,

usually comprised multiple products or recurring tasks for the same

customer that were billed to the same account. Open requisitions were, in

effect, term contracts to provide continuing support to one customer over

a period of time.

In our validation of PRMIS, we found 13 combined billings (2 printing and 

11 duplicating requisitions). These requisitions consisted of 59 individual

products, each with its own attributes. For data collection purposes, we

separated each combined billing into an individual DCI for each product.

The responses to these DCIs were ultimately combined to reflect the

original 13 combined billing requisitions.

In our validation of PRMIS, we found 26 open requisitions (2 printing, and 

24 duplicating requisitions). These requisitions were different in that, as

blanket purchase agreements, their attributes were more those of a

contract than an individual product. For sampling purposes, we asked DPS

to match the original fiscal year 1993 requisition with a fiscal year 1994

open requisition having approximately the same dollar value and requiring

similar production processes and delivery schedules—preferably a fiscal

year 1994 contract supporting the same customer. As with individual

requisitions, each of DPS’ open requisition nominations were subject to the

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Scope and Methodology

review and approval of our panel. In our study, DPS successfully matched

23 of the 26 open requisitions (1 printing and 22 duplicating requisitions,

collectively representing a total of 310 products).

For each requisition that was approved by the panel, we identified a start

date and tasked DPS to provide for our sample a prescribed sequence of

products submitted against that contract. As products were submitted

against these requisitions, DPS forwarded the work to GPO for production

and provided us with the customer’s requisition and DPS’ schedules used

for pricing the product.

Though open requisitions are analogous to GPO’s direct-deal term

contracts, DPS does not provide a price reduction on these requisitions. GPO

states that if the work were done by GPO, however, the DOD customer

would receive a price discount. For this reason, we asked two agencies to

price all of the open requisition products as though the work were

performed under their existing GPO direct-deal term contracts. Thus, we

obtained three sets of prices for each open requisition: DPS’ price, GPO’s

final invoice price, and the agencies’ direct-deal contract price. The

direct-deal price was used as a surrogate for GPO’s price in our basic price

comparisons. GPO’s final invoice was used to support a separate analysis of

term contract prices. Because open requisitions are billed monthly, we

integrated the prices obtained for each sample in order to reflect the

monthly charge for each requisition.

Sample Nonresponse To maximize response rates, we visited 47 of the 99 DPS plants involved in

our study to review the progress DPS was making with its nominations. On

a continuing basis, we made phone calls to encourage high response rates.

Weekly, we informed DPS area officials of the number of successful

nominations made by their subordinate plants. We investigated apparent

difficulties or inadequacies in achieving our response goals. Through these

efforts, we achieved an 83-percent response rate for the combined count

of printing and duplicating requisitions. To ensure that the missing

requisitions did not change the representativeness of our sample, we

examined the potential bias that might be introduced by nonresponse.

Categories of nonresponse are shown in table II.5.

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Table II.5: Categories of Nonresponse

Nonresponse reason

Number of

requisitions Direction of bias

Sensitive or classified material 43 Favors GPO: Production of

classified or sensitive material

would likely increase the

contractor price.

Downsizing 24 No apparent bias.

GPO rejected production 32 Favors GPO: Most cases were

the result of our demand for a

requisition with a rapid

turnaround time.

Miscellaneous 76 No apparent bias: Nonresponse

was related to sample size in

each area.

Missing GPO final invoice 30 No apparent bias: DPS’ last day

for data collection was

September 30, 1994. The final

invoices were not received by

January 15, 1995.

As may be seen, except for the special provisions needed to safeguard

national security and other sensitive materials, our research did not

indicate the presence of systemic bias against GPO in our sample. Thus, the

study’s final estimates were calculated by reweighting the sample to ignore

nonresponse.

The Analysis DPS’ fiscal year 1993 mix of work was used to define a statistically matched

set of fiscal year 1994 requisitions. The difference between DPS’ prices and

GPO’s invoice prices for this set served as the basis for the study’s price

comparisons. Based on dollar-weighted sampling strata, requisition price

differences were used to estimate the fiscal year 1994 population values.

Post-Stratification and the

Analysis of Term Contracts

GPO officials stated that about 75 percent of GPO contract work for

government agencies is done through term contracts rather than through

one-time purchases. These officials pointed out that these contracts

usually result in considerably lower prices for the agencies. Our analyses

included a post-stratification of the 1994 DPS products, as distinct from

requisitions, to determine the extent to which DPS’ use of term contracts

resulted in savings to the DPS customer. Table II.6 shows the results of

these analyses.

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Table II.6: Effect of Term Contract Use

Term contract type

GPO price index based on

DPS price = 100 Sampling error

Printing 63 31

Duplicating 112 35

GPO’s Repricing Effort At the request of GPO officials, we allowed GPO to use any of its term

contract information to reprice the DPS work—after GPO had completed

and billed DPS for our test cases. GPO officials believed that, in most cases,

they could have provided DPS with more favorable prices if term contracts

had been in place and used to price the work. According to GPO, about

75 percent of its commercial work is done through term contracts—at

prices considerably lower than the prices charged for one-time purchases.

We selectively verified the pricing of a sample of the jobs that were

repriced by GPO, and we compared those findings with the results of our

own independent analysis of term contract prices that was described

earlier.

Quality Assurance

Efforts

The structured DCIs, our internal review panel, the printing consultants,

and the site visits of our staff played an important role in ensuring the

credibility of the data that were finally used in our analyses. These efforts

were supported by additional quality assurance efforts. Specifically, we

took two samples. One was a statistical subsample of our fiscal year 1994

responses. The other was a sample of instances in which we found

extreme percentage differences between the DPS and GPO duplicating

prices. Our goal was to examine product quality, timing, and pricing issues

to detect errors and any indication of bias.

Statistical Subsample

Analysis

We took a subsample of 60 of our fiscal year 1994 responses. We compared

requisition information from DPS with GPO’s product information database

to determine whether (1) GPO was given the DCI-specified time to perform

the work and (2) the number of GPO’s and DPS’ product copies were the

same. In all but one case, GPO’s data agreed with the range specified on our

DCI.

We also used the GPO product information database to determine the

extent to which DPS requested quality level III work. (GPO’s technical

specifications range from quality level I for highest quality to quality 

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Scope and Methodology

level V for lowest.) GPO told us that by specifying quality level III work, DPS

forced GPO commercial vendors to print the work rather than duplicate it.

GPO states that this would put them at a disadvantage in some cases. We

found four jobs in our subsample where DPS requested quality level III

work—about 7 percent of our sample. The majority of the work requested

by DPS in our subsample consisted of quality levels IV and V.

Extreme Percentage

Differences Between DPS’

and GPO’s Duplicating

Prices

We looked at 104 requisitions with extreme price differences (in

percentages). We used GPO’s product information database to verify

requisition information and obtain both quality levels and pertinent dates

to determine whether there was any bias against GPO with respect to

quality levels of work requested and the amount of time given GPO to

produce the work. We located 96 of the requisitions in the database and

investigated each of these cases with telephone calls to the DPS plants from

which they originated. Where we detected errors, we made appropriate

changes.

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Comments From the Department of Defense

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Office

Note: GAO comments

supplementing those in the

report text appear at the

end of this appendix.

See comment 1.

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Office

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See comment 2.

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See comment 3.

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Office

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See comment 4.

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Office

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Office

See comment 5.

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Office

See comment 6.

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Office

See comment 7.

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Office

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Office

See comment 8.

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Office

See comment 9.

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Office

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Office

See comment 10.

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Office

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See comment 11.

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Office

See comment 12.

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Office

See comment 13.

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Office

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See comment 14.

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Office

See comment 15.

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Office

See comment 16.

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Office

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Office

See comment 17.

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Office

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Office

See comment 18.

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See comment 19.

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See comment 20.

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Office

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See comment 21.

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See comment 22.

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Office

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See comment 23.

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Office

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See comment 24.

See comment 25.

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See comment 26.

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Office

See comment 27.

See comment 28.

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See comment 29.

See comment 30.

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The following are GAO’s comments on the Government Printing Office’s

(GPO) letter dated February 8, 1995.

GAO Comments 1. The points raised in GPO’s transmittal letter are addressed in the

Agency Comments and Our Evaluation section of this report.

2. In our April 1994 report, we noted that the emergence of various

electronic technologies has blurred the distinction between printing and

duplicating. We also stated that the legal and regulatory framework used

to manage many aspects of government publishing has become outdated.

For the purposes of our study, we chose to replicate DPS’ fiscal year 1993

mix of work. Therefore, we selected our sample based on DPS’ printing and

duplicating processes, and have annotated table 1 to reflect this. The

definitions for these services may differ from those established by the

Joint Committee on Printing. See appendix II for additional details on our

methodology.

3. As stated in our April report, we are aware of the limitations in DPS’

accounting system. It is for this reason that we were unable to perform a

meaningful cost comparison. We chose, with full agreement from our

congressional requesters, to perform a strictly controlled pricing study.

The requesters’ staffs were briefed on the reasons for and the limitations

of this pricing study.

4. GPO’s statement that we did not assess the reliability of DOD workload

data is not correct. When we initially received the database from DPS, we

reorganized it so that we could select our fiscal year 1993 sample. We

selected our sample and then asked DPS to find the actual fiscal year 1993

requisition that matched our selection. DPS was able to find the identical

requisition from its printing facilities that matched our request in over

90 percent of the cases. Likewise, the dollar amounts of these requisitions

substantially agreed with calculations we initially developed. The fact that

we found requisition and dollar amounts that were accurate assured us

that DPS’ fiscal year 1993 database was reliable and accurate enough that

we could base our work on it.

5. We agree with GPO’s comments in this section and have made

appropriate clarifications in the report.

6. This concern is addressed in the body of the report.

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7. The data we requested from DPS did not include self-service

duplicating. The only work included in our sample was work sent to DPS

printing facilities on a requisition. We disagree with GPO that we should

exclude all DPS requisitions with prices under $25 because we believe this

would not reflect DPS’ actual work mix.

8. Appropriate changes have been made in the report text.

9. GPO’s statement that our classification of DPS’ workload was simplistic

is incorrect. We chose to report our results in only four categories out of

concern for the clarity of the report. Our analysis of the DPS database,

however, entailed the examination of 37 printing and 

32 duplicating strata, as described in our methodology.

10. As reported in our April 1994 report, the distinction between printing

and duplicating has become blurred. We discussed quality level issues with

our in-house printing staff, printing consultants, and with DPS and GPO

officials. They told us that the differences between quality levels were not

always readily distinguishable without the benefit of specialized

inspection. Newer technology enables non-printing processes to produce

print-quality work. Our post-analysis review showed about 7 percent of DPS

requisitions listed as duplicating, which GPO believed required contractors

to produce at quality level III (“good” quality as defined by GPO’s Quality

Assurance Through Attributes Program). We reviewed instances where

GPO was concerned with quality level III selections and found no evidence

of systemic bias attempts by DPS. Furthermore, in several instances, DPS

plant personnel told us that their equipment could produce the quality

necessary to satisfy the customer.

11. We disagree with GPO’s statement that we allowed DPS to choose our

sample, and we discuss this in the Agency Comments and Our Evaluation

section of this report.

12. We disagree with GPO’s statement that we allowed DPS to control the

timing and means of delivering sample jobs to GPO. Again, we discuss this

in the Agency Comments and Our Evaluation section of this report. We

partially agree with GPO that DPS provided the source documentation for

our analysis. GPO was also the source of some documentation. Where we

thought there was a risk for bias, we attempted to verify both DPS and GPO

source documentation.

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Comments From the Government Printing

Office

13. We understand GPO’s concerns about paper price increases; however,

this is a situation that affected both GPO contractors and DPS during the

course of our study. We have no evidence to either disagree or agree with

GPO’s concern that commercial vendor prices are more sensitive to paper

price changes than are DPS’ prices. Much like GPO contractors, DPS paper

prices are not set on a nationwide basis, but are established individually by

each DPS printing facility. DPS printing facilities charge according to a

rolling average price, which is maintained for each type of paper in their

inventory. The price level changes as paper purchases are added and as

paper inventories are used.

14. We did not test our methodology prior to implementing the survey.

We did take several steps, however, to assure ourselves that we could

gather the information we needed. First, we prepared a methodology plan

that was discussed extensively with GPO and DPS, and reviewed by our

methodologists, printing professionals, and external consultants. Second,

we designed our DCI based on the same characteristics as the DCI used in

our last printing survey. We pretested the DCI with DPS plant officials and

provided GPO with examples of our DCI. After these reviews, we made

necessary changes to the forms and procedures that we believed were

warranted on the basis of the information and comments we received.

15. We used the distribution of duplicating work processes within DPS’

Western Area fiscal year 1993 workload to select a sample of duplicating

requisitions from each of DPS’ areas, except for the NCA. We obtained

requisitions from DPS’ Western Area fiscal year 1993 workload to

determine how many products were included in the sample and

summarized these products on our DCIs. These were sent to seven DPS

areas, where plant officials nominated requisitions from incoming requests

and priced and forwarded them to GPO for production following normal

plant procedures. Thus, while the sampling criteria were derived from

Western Area’s workload, the actual fiscal year 1994 requisitions came

from seven DPS areas and were produced by GPO contractors serving those

areas. We also used the distribution of duplicating work processes within

DPS’ NCA fiscal year 1993 workload to select a sample of duplicating

requisitions from that area.

16. When we sampled the duplicating requisitions, we obtained 26 open

requisitions. These open requisitions represented an ongoing relationship

between a DOD customer and a DPS plant; they were customer specific

rather than product specific. In replicating these requisitions, the mix of

products requested by the customer was more important than the type of

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Comments From the Government Printing

Office

products. Thus, we needed DPS to nominate products from the same or a

similar customer based upon the mix and volume of the customer’s work.

Because this process was customer driven, the open requisitions could not

be assigned to areas other than those from which they were selected. We

recognize that open requisitions exist in other DPS areas. Under our

assumption that work in the Western Area was similar to work in the other

areas, we simulated the Western Area open requisitions in six other areas.

These open requisitions were the only requisitions that were, as GPO states,

“cloned.”

17. We disagree, as explained in the Agency Comments and Our

Evaluation section of this report.

18. We disagree. In our post-analysis review of a subsample of items in

our database, information obtained from GPO’s database did not reveal any

situations where GPO was allotted significantly less time than required by

our product parameters. Our “outlier” review yielded similar results. In

addition, it should be noted that our comments cited by GPO in its review

of our database were for the use of the internal panel and were not a final

determination by the panel as to whether an actual problem existed. For

example, GPO cites sample NEA14-31-186 as having the comment “GPO

received less than a ’fair share’ time allotment.” This meant that the

number of days GPO was allowed to perform the work (in this case, 

10 days) was lower than the number of days suggested on the fiscal 

year 1994 Job Request form (again in this case, over 10). For this particular

requisition cited, GPO was allotted 10 days to produce 200 copies of a

1-page document. We did not provide comments for the panel’s use if the

number of days allowed for GPO to perform the work was greater than the

number suggested because we did not view this as a situation where DPS

was attempting to bias a selection.

19. See comment 10.

20. See comment 7.

21. DPS plant officials price their work using a standardized pricing

schedule. The schedule contains a detailed listing of the various

production processes—including items such as sundry labor and hand

assembly. Contrary to GPO’s statement, we noticed that charges for these

processes were included in DPS sample prices. Regarding rush charges, DPS

financial records show that less than 0.5 percent of its in-house costs are

for rush work. Any omission of these charges in the price estimates would

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Office

therefore have had a negligible effect on our results. Because the DPS’

prices were derived using the normal DPS pricing schedule, the prices

would have been the actual prices charged by DPS if it had produced the

work.

We did not provide GPO access to DPS’ prices until receipt of final GPO

invoice prices. This was done to prevent any potential GPO bias in

manipulating final prices. However, once the final GPO invoice price was

received, we provided GPO with all data upon request.

22. GPO’s statement that we did not look at unreasonable price

differences until GPO reported them is not correct. When we completed our

data gathering, we began a post-analysis review to look at

“outliers”—requisitions that exhibited a large percentage difference

between DPS’ and GPO’s prices on both ends of the spectrum—and some

errors were found on both DPS’ and GPO’s prices. Corrections were made to

the data when appropriate.

23. See comment 21. In addition, GPO was provided all sample

requisitions for which we had obtained final GPO invoice prices. Those

sample jobs not provided to GPO did not have final GPO invoice prices and

therefore were not included in our final analysis.

24. As stated above, we did deny GPO access to DPS’ prices until receipt of

final GPO invoice prices. This was done to prevent any potential GPO bias in

manipulating the final price. However, once the final GPO invoice price was

received, we provided GPO with all data upon request. Moreover, GPO

received timely access to all of our workpapers as requested. For example,

out of eleven items GPO requested at the initial meeting following the

release of our draft report, we satisfied eight of them either that same day

or the next, including our entire database. All remaining items were

provided within a week.

25. We disagree. See our Agency Comments and Our Evaluation section.

26. This is addressed in the body of our report.

27. This is addressed in the body of our report.

28. Our effort to collect fiscal year 1994 sample requisitions from DPS

ceased on September 30, 1994. However, because of a time lag in receiving

final GPO invoice prices from contractors, our analysis could not be

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Comments From the Government Printing

Office

completed. The report was drafted and sent to GPO and DPS for comment

only after we had received enough responses and corresponding final GPO

invoice prices to satisfy our standards.

29. Appropriate changes have been made in the report.

30. This issue is addressed in the body of the report.

Page 98 GAO/NSIAD-95-65 Government Printing
Appendix V 

Major Contributors to This Report

National Security and

International Affairs

Division, Washington,

D.C.

David R. Warren, Associate Director

John Klotz, Assistant Director

Waverly Sykes, Technical Director

James Reifsnyder, Evaluator-in-Charge

David Combs, Senior Evaluator

Dennis Fauber, Senior Evaluator

Nancy Lively, Senior Evaluator

Richard Meeks, Senior Evaluator

Yolanda Elserwy, Evaluator

Roberta Gaston, Evaluator

David Keefer, Evaluator

Paul Newton, Evaluator

Arthur James, Mathematical Statistician

Mae Jones, Communications Analyst

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