Report to the Secretary of Energy

United States General Accounting Office

GAO

June 2001 DEPARTMENT OF

ENERGY

Opportunities Exist to

Improve Los Alamos'

Equipment Purchasing

Practices

GAO-01-426
Page i GAO-01-426 Los Alamos Fire Replacement Purchases

Letter 1

Appendix I Los Alamos National Laboratory Equipment Price

Comparison 13

Appendix II Scope and Methodology 14

Appendix III Comments From the Department of Energy 15

Abbreviations

DOE Department of Energy

GSA General Services Administration

Contents
Page 1 GAO-01-426 Los Alamos Fire Replacement Purchases

June 4, 2001

The Honorable Spencer Abraham

The Secretary of Energy

Dear Mr. Secretary:

In fiscal year 2000, the Department of Energy (DOE) received $13.2 million

in supplemental funding to replace equipment lost in the May 2000 Cerro

Grande fire that damaged the Los Alamos National Laboratory. Because of

congressional concerns about whether these funds would be spent in the

most economical fashion, we reviewed the practices used by the

contractor that operates the laboratory—the University of California—to

make the replacement purchases. In late 2000, we briefed congressional

staff on the need for, and scope of, supplemental funding at the laboratory.

In the course of our work since then, however, we noted several

opportunities for Los Alamos to improve its purchasing of computers,

printers, and digital cameras that we wanted to bring to your attention.

While the laboratory spent about $350,000 on such items as a result of the

fire, it spends millions of dollars annually on similar purchases.

This report discusses how the contractor can improve its purchasing

practices by (1) expanding possible supply sources for equipment

purchases, (2) establishing mandatory performance standards for

equipment purchases, and (3) standardizing the brands and models of

computer and computer-related equipment the laboratory uses. To identify

these opportunities, we reviewed the purchases of 17 replacement items:

computers, printers, and digital cameras. For each item, we requested

information from Los Alamos contracting officials on performance

specifications, procurement source, and price paid. We independently

attempted to determine if each item could have been procured at a lower

price, met existing laboratory performance standards, and adhered to any

laboratory-imposed limit on purchasing various brands and models of the

same equipment. In addition, we reviewed in detail one DOE report on

computer acquisitions at the Department’s Idaho National Engineering and

United States General Accounting Office

Washington, DC 20548
Page 2 GAO-01-426 Los Alamos Fire Replacement Purchases

Environmental Laboratory.1 (See app. II for details of our scope and

methodology.)

Opportunities exist for the Los Alamos contractor to save money by

modifying its purchasing practices in three areas. First, the contractor

could expand its use of supply sources. About 25 percent could have been

saved on certain items if the laboratory had used the General Services

Administration (GSA) or additional suppliers that advertise over the

Internet. In response to our review, Los Alamos officials said they would

give greater consideration to using GSA for future equipment purchases.

Second, the contractor could establish mandatory maximum performance

standards, such as defining the size of the hard drive, for computer

purchases. Los Alamos has established voluntary minimum performance

standards for its computer purchases, but no maximum standards. All

computers we reviewed had performance capabilities that exceeded Los

Alamos’ minimum standards. Because Los Alamos does not require that

such purchases be formally reviewed, we could not determine if the higher

cost Los Alamos paid for computers with enhanced capabilities was

justified. In contrast, the contractor at DOE’s Idaho National Engineering

and Environmental Laboratory requires that all purchases of computers

that exceed its mandatory performance standards be formally reviewed by

management.

Third, the contractor could benefit by increasing its use of a standard

brand of computer and computer-related equipment. In general, Los

Alamos does not limit the variety of brands and models of equipment that

are purchased. As a result, the contractor may not be taking full advantage

of discounts associated with making multiple purchases of the same item.

In addition, purchasing different brands and models of equipment means

that prices can vary. For example, one desktop computer brand we

reviewed cost about $2,900, while another brand with enhanced

capabilities cost about $2,600. According to officials at Los Alamos, its

employees were using different brands and models of equipment before

the fire, and the items purchased were intended to be nearly identical

replacements for the ones that had been destroyed. Los Alamos officials

 1

DOE, Office of Inspector General, Audit of Desktop Computer Acquisitions at the Idaho

National Engineering and Environmental Laboratory, WR-B-97-07 (Albuquerque, New

Mexico: DOE, Aug. 25, 1997).

Results in Brief
Page 3 GAO-01-426 Los Alamos Fire Replacement Purchases

also told us that uniformity of computer type and brand across the more

than 40 organizations at the laboratory would not meet the needs of the

diverse applications and functions involved in experimental work.

However, two Los Alamos divisions—Business Operations and Facility

and Waste Operations—have begun using a standard brand of computer,

and it has dramatically reduced support costs. Los Alamos has not

formally evaluated the feasibility of adopting this approach for more of its

organizations.

We are making several recommendations to improve the way Los Alamos

purchases equipment. DOE reviewed a draft of this report and generally

agreed with its recommendations.

The Los Alamos National Laboratory, located in New Mexico, is charged

with enhancing the security of nuclear weapons and nuclear materials

worldwide. On Thursday, May 4, 2000, Bandelier National Monument

workers in the Cerro Grande Mountain area set fire to a portion of the

monument’s land to thin uncontrolled forest growth. The fire rapidly grew

out of control, and during the 2-week period that followed, over 47,000

acres of national forest, county, pueblo, and laboratory land burned. The

laboratory later reported that 8,000 acres of its land had been damaged,

39 structures had been destroyed, and almost $130 million in fire-related

costs had been incurred. The laboratory was officially closed from May 8

until May 22 but, according to Los Alamos officials, remained in a state of

emergency because of damage caused by the fire and the threat of flooding

until August 2000.

After the fire, the laboratory’s Cerro Grande Rehabilitation Project office

contacted divisions that had lost equipment in the fire and required that

they submit detailed lists of their losses to obtain the release of fire

recovery funds from DOE. Seven divisions indicated that they needed a

total of $13.2 million in fiscal year 2000 and $15 million in subsequent

years to recover from the fire.2

 Each division provided information on the

equipment that had been damaged or destroyed by the fire, the estimated

cost of replacement equipment, and the actual cost of replacement

equipment that had already been purchased. The equipment needing

 2

In addition to the $13.2 million, DOE received about $125 million in fiscal year 2000

supplemental funding for other laboratory activities, such as controlling erosion, restoring

utility services, providing emergency response, and carrying out replacement construction

projects.

Background
Page 4 GAO-01-426 Los Alamos Fire Replacement Purchases

replacement included desktop and laptop computers, printers, cameras,

office furniture, scientific equipment, and related supplies.

The laboratory, in general, purchases equipment using several

procurement methods. Each method is intended to obtain goods and

services at the lowest cost, taking into account the cost of procurement

administration.3

 One such method is the laboratory’s just-in-time

subcontracting program. This program, according to laboratory officials,

allows personnel to obtain products from prequalified suppliers at

discounted prices, usually within 24 hours of order placement. Orders and

payments are processed electronically, thereby eliminating the need for

involvement from the procurement staff. Other procurement methods

used by the laboratory include the purchase card program, wherein a

credit card is used, and purchase orders. Through the purchase card

program, laboratory personnel may order supplies and equipment through

the Internet or other available sources of supply. Laboratory officials told

us that the laboratory does not track the total cost of purchases of $25,000

or less made collectively through its just-in-time subcontracting program,

purchase card program, and purchase orders. However, during fiscal

year 2000, Los Alamos’ procurement staff processed over $46 million in

individual purchase orders of $25,000 or less for goods and services,

including personal computers, printers, digital cameras, and related

equipment and supplies.

The DOE Office of Inspector General has issued at least one report on

computer acquisitions. Specifically, in 1997, the DOE Office of Inspector

General performed an audit of desktop computer acquisitions at the Idaho

National Engineering and Environmental Laboratory.4

 The Inspector

General’s report indicated that, in order to reduce costs, DOE’s Idaho

contractor had formally studied its desktop computer acquisition practices

and estimated that establishing a mandatory performance standard for

computers would result in millions of dollars in savings per year.5

 On the

basis of this study, DOE’s Idaho contractor established a mandatory

 3

Los Alamos officials indicated that DOE acquisitions regulations require that DOE and its

contractor obtain products at fair and reasonable pricing.

4

Audit of Desktop Computer Acquisitions at the Idaho National Engineering and

Environmental Laboratory.

5

Desktop Computing Hardware Standardization Recommendation Report for the Idaho

National Engineering Laboratory (Generated by Shain Byington, Configuration

Management, Apr. 28, 1995).
Page 5 GAO-01-426 Los Alamos Fire Replacement Purchases

computer performance standard at the site. The Inspector General

reported that DOE’s Idaho contractor could further improve its computer

acquisition practices by using alternative supply sources, such as GSA,

Small Business Administration contracts, or other desktop computer

vendors. We found no similar DOE reviews regarding the acquisition of

laptop computers, computer printers, or digital cameras for other DOE

sites.

The Los Alamos contractor probably could have saved money by

expanding its possible supply sources. Our review showed that Los

Alamos paid nearly the full retail price or more for many of the items. If

Los Alamos had used more supply sources, it could have saved about

25 percent on certain items. Supply sources that could have been used

include GSA and more suppliers that advertise over the Internet. Recent

literature suggests that using the Internet to expand supply sources and

compare prices can produce savings. Los Alamos officials indicated that

the laboratory has been using the Internet but acknowledged that more

enhancements in Internet procurement were possible.

Because of the difficulty in getting detailed price and product information

for the time period the purchases were made, we reviewed only 17 items

purchased by the laboratory from May through July 2000 (see app. I). We

determined the manufacturer’s suggested retail price (retail price) for

12 of the items: 5 desktop computers, 1 laptop computer, 4 printers, and

2 digital cameras.6

 Of the 12 items, Los Alamos received discounts from

the suppliers it used on only 5. In five cases, Los Alamos paid nearly the

retail price for the items. In two cases, Los Alamos paid more than the

retail price.

In addition to comparing Los Alamos’ purchase prices with retail prices,

we also identified individual suppliers that could have provided certain of

the items at a cost below that paid by Los Alamos. For example, Los

Alamos could have saved about 25 percent in some cases if it had used

other sources. Los Alamos purchased the 17 items from three local New

 6

For two of the items, the manufacturer provided Los Alamos and us conflicting

information regarding the suggested retail price. On the remaining three items, suggested

retail price information was not readily available.

Expanding Possible

Supply Sources for

Equipment Purchases

Los Alamos Paid Nearly

the Full Retail Price or

More for Many of the Items

Using More Supply

Sources Could Have Saved

Money on Certain Items
Page 6 GAO-01-426 Los Alamos Fire Replacement Purchases

Mexico vendors (one of which was a just-in-time contractor), one Internet

vendor, and one computer manufacturer. The laboratory did not attempt

to purchase the equipment items through GSA’s Internet shopping site7 or

from other vendors that advertise their equipment over the Internet.

Laboratory officials told us that, for the items reviewed, they felt most

comfortable dealing with companies they had done business with in the

past.

Because historical prices for computer and electronic equipment are not

readily available, it was difficult to determine what Los Alamos could have

paid for all of the 17 items we reviewed if it had used other vendors. We

were able, however, to develop price comparisons for 4 of the 17 items:

3 printers and 1 digital camera. The total Los Alamos purchase price for

the four items was $2,677, but these items would have cost $2,000 if

purchased at that same time from GSA or from suppliers that advertise

over the Internet, a savings of 25 percent. Although this sample is small, it

shows that expanding supply sources could save money. In commenting

on this information, Los Alamos officials said that the most expensive of

the four items, a digital camera costing about $1,300 and purchased 8 days

after the laboratory reopened, was needed immediately to document the

fire damage and was purchased from a local vendor at a discounted price.

However, we found that this camera could have been purchased directly

from the manufacturer at any time after the fire for about $974 and

received within 2 days with no shipping cost.

Recent literature suggests that using the Internet to expand supply sources

and compare prices can produce savings. For example, according to an

article in the November 2000 issue of Public Management,

8

 Internet

procurement offers a significant opportunity to cut costs, increase

organizational effectiveness, and improve customer service. Internet

procurement, as described in the article, allows agencies to search for

products and services from available suppliers and determine best prices,

 7

GSA’s Internet shopping site is called “GSA Advantage!” According to a GSA handbook on

the site, GSA Advantage! gives the user access to over a million commercial products and

services available from GSA at the lowest possible prices. DOE and its contractors are

authorized to use this site.

8

Kenneth Mitchell, “Instituting E-procurement in the Public Sector,” Public Management

(Nov. 2000).

Internet Usage Can

Expand Supply Sources

and Produce Savings
Page 7 GAO-01-426 Los Alamos Fire Replacement Purchases

product availability, and shipping costs.9 Although Los Alamos used the

Internet to make many of its purchases, it did not use it to compare prices

from available suppliers.

Officials of the laboratory said it has been using the Internet but

acknowledged that more enhancements in Internet procurement were

possible. Los Alamos contracting officials further said that their contract

with DOE encourages but does not require using GSA to purchase

equipment and that they did not consider using GSA for their replacement

purchases. One Los Alamos procurement assistant who was responsible

for procuring many of the equipment items included in our review

indicated that she was not aware that GSA had an online shopping site. In

response to our review, Los Alamos officials said the laboratory would

give greater consideration to using GSA for its future equipment

purchases. Specifically, these officials indicated that people who use

purchase cards now receive training on how to use GSA Advantage! and

will be encouraged to use GSA as an alternative to the laboratory’s just-intime program when appropriate.

The Los Alamos contractor could save money by establishing mandatory

performance standards for computer and computer-related equipment.

DOE’s contractor at the Department’s Idaho laboratory reported that

mandatory standards for computers resulted in cost savings at that

laboratory. Neither Idaho nor Los Alamos has developed performance

standards for computer printers, digital cameras, or other related

equipment. However, consideration of such standards could provide

additional opportunities for cost savings.

According to the Office of Inspector General’s report on computer

acquisitions at DOE’s Idaho laboratory, the contractor there determined

that millions of dollars in cost savings were possible if mandatory

performance standards for purchasing such equipment were implemented.

The computer performance standards in question refer to such things as

the speed of the microprocessor, the size of the random access memory,

and the size of the hard drive. Before October 1994, DOE’s Idaho

 9

The article’s author told us that Internet procurement allows agencies to expand supply

sources, compare prices, and thereby obtain better prices and better deals. He also said

that simply changing procurement practices from a paper-based operation to one whereby

goods and services are ordered electronically will produce only marginal savings.

Establishing

Mandatory

Performance

Standards for

Equipment Purchases
Page 8 GAO-01-426 Los Alamos Fire Replacement Purchases

laboratory had no sitewide standard to govern the acquisition of desktop

computer systems.

To address this issue, the laboratory contractor formed a working group

consisting of representatives from all laboratory departments to study the

situation. The working group developed a specific computer standard and

recommended that it be established laboratorywide. Anticipated benefits

included, for example, lower computer support costs and fewer training

expenses. The laboratory contractor required all departments to comply

with the standard. The contractor also adopted and implemented a policy

that stipulates, in part, that only the contractor’s information resources

management director can approve deviations from the standard. Because

DOE’s Idaho contractor reported cost savings at that laboratory, using

mandatory performance standards may represent a best practice that

could be used by Los Alamos.

At Los Alamos, the contractor has developed minimum voluntary

performance standards for its desktop and laptop computer acquisitions,

but no maximum standards. Also, unlike Idaho, Los Alamos has no

requirement that purchases above the standard receive formal

management review and approval. According to Los Alamos contracting

officials, whenever an employee requests a new computer system, that

request is reviewed by a supervisory official, but the review is not formally

documented.

Of the 17 equipment items we reviewed, 9 were desktop or laptop

computers. All nine computers had performance capabilities that

exceeded Los Alamos’ minimum voluntary standards. For example, one

voluntary standard for laptop computers is having a hard drive of 6.4

gigabytes.10 All three laptop computers in our sample had hard drives of 12

gigabytes or more. Because there is no requirement to document instances

in which capabilities exceed Los Alamos’ voluntary minimum standards,

we could not determine if the enhanced performance capabilities and

extra cost associated with these laptop computers were justified.

Neither Idaho nor Los Alamos has developed performance standards for

computer printers, digital cameras, or other related equipment. However,

 10This standard was in effect at Los Alamos from September 1999 until September 2000 and

covered the period during which the replacement equipment we reviewed was purchased.

In September 2000, Los Alamos revised its standard to allow the acquisition of laptop

computers with 10 gigabytes of hard drive.
Page 9 GAO-01-426 Los Alamos Fire Replacement Purchases

on the basis of our review, such standards may be beneficial. For example,

one equipment item we reviewed was a printer for which Los Alamos paid

more than $1,400. Because of its unique capabilities, such a printer is

normally used to meet the printing needs of a group of individuals

connected to the same network server. In this case, however, the printer

was being used primarily by one technical staff member and one part-time

contractor who was in the office about one-third of the time. Neither

individual needed a printer with unique capabilities. Other technical staff

members we interviewed had printers for their personal use with lesser

speed capabilities that cost between $280 and $700. In addition, we noted

that the clarity and resolution of the $700 printer were similar to those of

the $1,400 printer, but that the $700 printer had less memory. Printer

memory, however, is an issue only when a large number of employees are

queuing up for printing simultaneously.

The Los Alamos contractor could save money if it increased its use of a

standard brand of computer and computer-related equipment. DOE’s

contractor at its Idaho laboratory determined that it could achieve

considerable cost savings by limiting the various brands and models of

desktop computers it purchased. Because of these reported cost savings,

such limitations may be a best practice that could be used by Los Alamos.

In contrast to Idaho, Los Alamos generally allows various brands and

models of the same equipment to be purchased.

Before 1995, according to a report by DOE’s contractor at its Idaho

laboratory, that laboratory allowed many different computer systems to be

purchased. The contractor’s report indicated that this had created a range

of problems: higher costs for maintenance, support, and training;

difficulties in communicating through electronic messaging and using

shared files; and problems in operating among work platforms and

programs. Therefore, when Idaho established its standard for desktop

computers, the contractor took the standard one step further and charged

its procurement division with selecting a computer model that, on the

basis of cost, reliability, serviceability, and other factors, would be in

compliance with the standard. A cost-benefit analysis showed that cost

savings ranging from $5 million to $10 million could be achieved over

10 years if the proposed standard was implemented. Subsequently, the

procurement division awarded a contract to a single vendor to provide one

specific brand of network and laptop computers and one specific brand of

desktop computers.

Standardizing the

Brands and Models of

Computer and

Computer-Related

Equipment
Page 10 GAO-01-426 Los Alamos Fire Replacement Purchases

At Los Alamos, in general, no similar limitations on desktop and laptop

computer acquisitions exist. As a result, the contractor can purchase

different brands and models of computers. For instance, the six desktop

computers we reviewed were all different brands or models, and the three

laptop computers were all different brands. These computers can also vary

in price. For example, one replacement desktop computer cost about

$2,900, while a different brand computer with enhanced capabilities cost

about $2,600. According to Los Alamos contracting officials, the

laboratory’s employees had different brands and models of equipment

before the fire. The items purchased were intended to be nearly identical

replacements for the ones that had been destroyed by the fire. Los Alamos

officials also told us that uniformity in computers across the entire

laboratory would not meet the needs of the diverse applications and

functions involved in experimental work. These officials indicated,

however, that a certain number of the laboratory’s more than

40 organizations have begun using a standard brand of computer to meet

their specific requirements.

We determined that two Los Alamos divisions—Business Operations and

Facility and Waste Operations—-have begun using a standard brand of

computers and it has dramatically reduced support costs.11 However, Los

Alamos has not formally evaluated the feasibility of adopting this

approach for more of its organizations.

While the scope of our review was limited, it raised the possibility that

significant savings could be realized at Los Alamos by adopting revised

procurement practices. If Los Alamos expanded its use of the Internet and,

thereby, considered a broader spectrum of supply sources, including GSA,

significant savings could be possible. Additional savings might also be

possible if Los Alamos adopted the best practices being reported at Idaho.

For example, if Los Alamos established mandatory performance standards

for computer and computer-related equipment purchases, savings could

probably be realized by avoiding purchasing higher-priced equipment that

exceeds the needed capabilities. Furthermore, if Los Alamos limited the

number of brands and models of the same equipment it purchased as at

Idaho, savings could be realized from volume discounts associated with

 11According to the Los Alamos group leader for desktop computer support, about one-third

of computer support is presently done in-house. Los Alamos also uses outside contractors

to provide computer support on an as-needed basis.

Conclusions
Page 11 GAO-01-426 Los Alamos Fire Replacement Purchases

making multiple purchases of the same equipment item and from lower

support costs. DOE’s Idaho contractor reported that these practices have

or likely will result in cost savings.

To improve the economy of equipment purchases at the Los Alamos

National Laboratory, we recommend that you direct the contractor at Los

Alamos to

• develop policies and procedures that encourage greater consideration of

additional supply sources, including GSA and suppliers that advertise over

the Internet;

• establish, to the extent practicable, mandatory performance standards for

computer and computer-related equipment; and

• evaluate, in light of the reported savings at two Los Alamos divisions, the

feasibility of having more of its organizations use a standard brand of

computer and computer-related equipment.

We provided a draft copy of this report to DOE for its review and

comment. DOE stated that the overall finding of potential cost saving

opportunities and the three associated recommendations contained in the

report merit additional management attention. DOE indicated that it was

directing Los Alamos to undertake specific actions in response to each of

the recommendations. While generally agreeing with our

recommendations, DOE pointed out that most of the procurements in

question were made during a regional disaster, and that DOE places a high

value on supporting regional socioeconomic development. In addition,

DOE stressed in its comments that best value includes aspects other than

lowest possible advertised cost. Further, DOE indicated that mandatory

performance standards for computer and computer-related equipment

could potentially affect programmatic or mission requirements.

We believe that adopting our recommendations will not adversely affect

DOE’s ability to purchase equipment during an emergency, promote

regional development, or achieve the best value. We also believe that

mandatory performance standards for computer and computer-related

equipment should be flexible enough to allow exceptions, but that those

exceptions should be formally reviewed. DOE’s complete comments are

presented in appendix III.

Recommendations for

Executive Action

Agency Comments
Page 12 GAO-01-426 Los Alamos Fire Replacement Purchases

We performed our work at DOE’s headquarters and Los Alamos from

August 2000 through March 2001 in accordance with generally accepted

government auditing standards. Additional information on the scope and

methodology of our review is presented in appendix II.

We are sending copies of this report to interested congressional

committees and subcommittees and to the Director, Office of Management

and Budget. We will also make copies available to others on request.

Please call me at (202) 512-3841 if you or your staff have questions about

this report. W. Farrell Fenzel and Robert J. Baney also made key

contributions to this report.

Sincerely yours,

(Ms.) Gary L. Jones

Director, Natural Resources

 and Environment
Appendix I: Los Alamos National Laboratory

Equipment Price Comparison

Page 13 GAO-01-426 Los Alamos Fire Replacement Purchases

Item Los Alamos price Retail price

GSA or Internet lowest

price

Computers/desktops

Apple (G3/400Mhz/64MB/10GB) $1,294 $1,299 a

Apple (G4/450Mhz/128MB/20GB) 2,899 2,999 a

Apple (G4/500Mhz/256MB/ 27GB) 3,494 3,499 a

Dell (Pentium III/866Mhz/128MB/20.4GB) 2,635 2,785 a

Dell (Pentium III/733Mhz/256MB/20GB) 2,843 a a

Hewlett-Packard (Pentium III/733Mhz/128MB/9.1GB) 2,579 2,746 a

Computers/laptops

Apple (G3/500Mhz/128MB/12GB) 3,584 3,599 a

Dell (Pentium III/600Mhz/256MB/18GB) 4,092 a a

Micron (Pentium III/500Mhz/128MB/12GB) 3,263 a a

Printers

Epson 900G Personal Color Inkjet (10ppm color, 12ppm black) 400 429 a

Hewlett-Packard Personal Color Inkjet (8.5ppm color, 11ppm

black)

279 a$236

Hewlett-Packard Personal Color Inkjet (10ppm color, 12ppm black) 399 a 280

Hewlett-Packard Workgroup Color Inkjet (10ppm color, 12ppm

black)

700 589 510

Hewlett-Packard Workgroup Black & White Laserjet (10ppm) 700 859 a

Hewlett-Packard Workgroup Black & White Laserjet (17ppm) 1,430 1,927 a

Cameras

Olympus Digital (1280 x 1024 maximum resolution, 1.40

megapixels)

1,081 999 a

Olympus Digital (1712 x 1368 maximum resolution, 2.50

megapixels)

1,299 1,299 974

Notes: G3, G4, and Pentium are types of microprocessors installed in computers. Mhz is the

abbreviation for megahertz, a unit used to measure the speed of a computer processor. MB, or

megabyte, is a unit used to measure the information storage capacity of the computer’s random

access memory. GB, or gigabyte, is a unit used to measure the information storage capacity of a

computer’s hard drive. PPM stands for pages per minute. Megapixels refers to the number of dots per

square inch.

a

Price was not available.

Source: Los Alamos prices were obtained from officials at the laboratory.

Appendix I: Los Alamos National Laboratory

Equipment Price Comparison
Appendix II: Scope and Methodology

Page 14 GAO-01-426 Los Alamos Fire Replacement Purchases

To determine whether supplemental funding was being spent in the most

economical fashion, we randomly selected 17 items of replacement

equipment that had already been purchased for further review. Of the 17

selected items, 6 were different brands or models of desktop computers, 3

were different brands of laptop computers, 6 were different brands or

models of printers, and 2 were different models of digital cameras. For

each item, we requested a report from Los Alamos’ property management

system regarding the item and the item’s purchase invoice. We used this

information to determine the performance specifications, procurement

source, and price paid for each item. We also, to the extent possible,

examined each item and interviewed the employee to whom each item had

been assigned. Through this process, we were able to determine the exact

configuration of each item, including its peripherals and options. Further,

we independently attempted to determine if each item could have been

procured at a lower price using a supply source other than that used by

the laboratory, such as GSA’s Federal Supply Schedule and private

companies that offer their equipment for sale over the Internet.

We also obtained from Los Alamos contracting officials information on the

laboratory’s requirements regarding equipment purchases. This

information included a copy of the current DOE contract with the

University of California, applicable DOE acquisition regulations, and

laboratory policies and procedures pertaining to purchasing computer and

computer-related equipment and using GSA for equipment purchases.

In addition, we searched for DOE reports on the procurement of computer

equipment by DOE contractors and found a 1997 Office of Inspector

General audit on desktop acquisitions at the Idaho National Engineering

and Environmental Laboratory. We found no other DOE reports on the

acquisition of computers or computer-related equipment.

Finally, we researched available literature for information on the

advantages and disadvantages of Internet procurement. We performed our

work from August 2000 to March 2001 in accordance with generally

accepted government auditing standards.

Appendix II: Scope and Methodology
Appendix III: Comments From the

Department of Energy

Page 15 GAO-01-426 Los Alamos Fire Replacement Purchases

Appendix III: Comments From the

Department of Energy
Appendix III: Comments From the

Department of Energy

Page 16 GAO-01-426 Los Alamos Fire Replacement Purchases
Appendix III: Comments From the

Department of Energy

Page 17 GAO-01-426 Los Alamos Fire Replacement Purchases (141485)

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• Web site: http://www.gao.gov/fraudnet/fraudnet.htm

• E-mail: fraudnet@gao.gov

• 1-800-424-5454 (automated answering system)

Ordering Information

To Report Fraud,

Waste, and Abuse in

Federal Programs