Public-Private Competitions: Reasonable Processes Used for Sacramento Depot Maintenance Award
Published: 1999-05-12T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Pursuant to a legislative requirement, GAO reviewed the Air Force's selection of a source of repair for depot maintenance work at the closing Sacramento Air Logistics Center (ALC), focusing on whether the: (1) Air Force's procedures for conducting the Sacramento competition provided substantially equal opportunity for the public and private offerors to compete for the work without regard to performance location; (2) procedures for conducting the competition were in compliance with 10 U.S.C. 2469a and other applicable laws and regulations; (3) appropriate consideration was given to factors other than cost; and (4) award resulted in the lowest total cost to the Department of Defense (DOD) for performance of the work.
section_title: What GAO Found
paragraphs: GAO noted that: (1) the Air Force's competition for work at the Sacramento ALC showed that: (a) the competition procedures provided an equal opportunity for public and private competitors without regard to where the work could be performed; (b) the procedures did not appear to deviate in any material respect from applicable laws and regulations; (c) the Air Force appropriately considered factors other than cost in the selection; and (d) within the framework set forth for the competition, the award resulted in the lowest total cost to DOD for performance of the work; and (2) GAO also identified several issues that may be useful for the Air Force to consider in future competitions.

section_title: Letter
paragraphs: This report is a redacted version of a report issued on November 23, 1998,  which contained sensitive and protected information.  The report responds  to one of several requirements in the National Defense Authorization Act  for Fiscal Year 1998 relating to depot maintenance activities.
As required, we reviewed the Air Force’s selection of a source of repair for  depot maintenance work at the closing Sacramento Air Logistics Center  (ALC), McClellan Air Force Base, California.  Specifically, we assessed  whether the (1) Air Force’s procedures for conducting the Sacramento  competition provided substantially equal opportunity for the public and  private offerors to compete for the work without regard to performance  location, (2) procedures for conducting the competition were in  compliance with 10 U.S.C. 2469a and other applicable laws and regulations,  (3) appropriate consideration was given to factors other than cost, and (4) award resulted in the lowest total cost to the Department of Defense  (DOD) for performance of the work.
subsections: section_title: Background
paragraphs: As a result of a 1995 Base Realignment and Closure (BRAC) Act decision,  the Sacramento and San Antonio ALCs, including their maintenance  depots, are to close by 2001.  To mitigate the impact of the closings on the  local communities and employees, the administration announced its  intention to maintain employment levels by privatizing the maintenance  depots’ workloads in place at each location.  The Air Force followed by  announcing a strategy to privatize in place five prototype depot  maintenance work packages at the two closing centers.  In response to  congressional concerns regarding this strategy, the Air Force decided to  use public-private competitions to determine the most cost-effective  source of repair for the closing maintenance depots’ work.  Appendix II  provides a more detailed description of the closure history for both the  Sacramento and San Antonio centers.
On March 20, 1998, the Air Force issued a solicitation for the purpose of  conducting a public-private competition for various aircraft and  commodity depot maintenance workloads being performed at the  Sacramento ALC.  The Air Force received one private sector proposal  from Lockheed Martin Corporation, which had AAI Aerospace Corporation  and GEC-Marconi Avionics Incorporated as major subcontractors, and one  public sector proposal from the Air Force’s Ogden ALC, which was teamed  with Boeing Aerospace Corporation.  After performing technical and cost  evaluations, on September 21, 1998, the Air Force selected the Ogden ALC’s  proposal as the best value to the government.  Following resolution of a bid protest filed with our Office, the Air Force proceeded to  award the work to Ogden, on October 9, 1998.
section_title: Sacramento Air Force Depot Competition Placed No Limitation on Performance Location
paragraphs: Under 10 U.S.C. 2469a(d), a competitor must be allowed to perform at the  location of its choosing and is not to be given preferential treatment for, or  be limited to, performing the work in place or at any other single location.   On the basis of our review of the Air Force’s evaluation and selection  documents related to the Sacramento competition, we found no basis to  conclude that the procedures did not provide a substantially equal  opportunity for the offerors to compete without regard to performance  location.  For example, while, in its evaluation, the Air Force expressed  concerns about the risks inherent in Ogden’s plan to transition the  workloads to facilities at San Antonio, Texas, and Ogden, Utah, these  concerns were based upon legitimate performance considerations related  to the transition plan and did not reflect a bias toward performing the work  at the closing Sacramento facility.  Appendix III provides the details of our  analysis.
section_title: Competition Procedures Complied With Applicable Laws and Regulations
paragraphs: Overall, the Air Force’s evaluation and selection of Ogden appeared to be  reasonable, fair, and consistent with the solicitation and depot competition  procedures.  We found no reason to conclude that the competition  procedures used in selecting Ogden deviated in a material way from 10 U.S.C. 2469a and other applicable laws and regulations.  (See app. III for  our detailed analysis.)  In assessing the Air Force’s compliance with  applicable laws and regulations relating to the competition for  Sacramento’s work, we reviewed the Air Force’s  evaluation of the  proposals and the selection in the context of applicable laws and  regulations.  This review included examining documents, reviewing  processes and procedures, and discussing the competition with Air Force  and DOD officials.
subsections: section_title: Competition Procedures
paragraphs: Pursuant to 10 U.S.C. 2469a and its depot competition procedures, the Air  Force issued the solicitation in accordance with the Federal Acquisition  Regulation (FAR), part 15, which sets forth the source selection procedures  for competitively negotiated acquisitions.  The solicitation called for  proposals from public and private sector sources for some of the aircraft  and commodity work currently being performed at the closing Sacramento  ALC at McClellan Air Force Base.  The solicitation also provided for award  to the public or private competitor that was responsible and whose  proposal conformed with the solicitation and represented the best value to  the government.  The proposals were to be evaluated using transition,  operation, and cost criteria; a risk assessment; and other general  considerations.
section_title: Applicable Laws and Regulations
paragraphs: Several statutes, in particular, 10 U.S.C. 2469a, govern the solicitation and  award process for public-private competitions for the depot workloads of  the closing Sacramento and San Antonio ALCs.  Because the Air Force used  the competitive acquisition system, the standards in chapter 137 of title 10  of the United States Code and the FAR apply to the extent they are  consistent with 10 U.S.C. 2469a and the other applicable provisions relating  to the outsourcing of depot workloads.
Consistent with these standards, the Air Force followed the criteria  announced in the solicitation, which in this case included those required by  10 U.S.C. 2469a, and exercised its judgment in a reasonable manner in  selecting the successful competitor.
section_title: Air Force Considered Factors Other Than Cost
paragraphs: While the competitor selected represented the lowest evaluated cost to the  government, the Air Force considered the relative merits of the technical  and management approaches of both proposals.  For example, the Air  Force considered the private competitor’s plan to recruit and maintain the  existing work force in place at the Sacramento facility was beneficial.  On  the other hand, the Air Force concluded that Ogden’s plans for relocating  the workloads to San Antonio and Ogden were risky.  Thus, for these and  other reasons, we found no basis to conclude that factors other than cost  were not  appropriately considered.
section_title: Evaluation Resulted in the Lowest Total Cost to the Government
paragraphs: The Air Force’s award of aircraft and commodity depot maintenance work  previously performed at the Sacramento depot was made to the Ogden  ALC.  The award, which was valued at $1,794,488,861, was made in  accordance with the provisions of the solicitation and resulted in the  lowest total cost to the government.  Overall, the cost evaluation results  appear reasonable. However, while not affecting the selection, we do  question some of the estimates supporting the evaluation.  However, the  selection decision would not have been affected by these questions.   Questions relate to estimating costs for (1) overhead, (2) commodity rate  risk, (3) warehousing, (4) base operating support, and (5) material  surcharge.
subsections: section_title: Cost Evaluation Appears Reasonable
paragraphs: Ogden’s total evaluated cost of $1,794,488,861 for the competed  Sacramento depot maintenance workloads was about 6 percent less than  Lockheed’s evaluated cost of $1,902,848,080.  The Ogden proposal, after  cost comparability adjustments provided for in the solicitation and the  depot maintenance cost comparability handbook, was determined by the  source selection authority to offer the lowest total evaluated cost to the  government.  Both before and after the cost comparability adjustments, the  Ogden proposal was evaluated lower than the private sector proposal.
We examined the accuracy and soundness of the data, assumptions, and  methodology supporting a number of these adjustments, including an  analysis of the various cost elements in each proposal and the final  adjustments made by the cost evaluation team in its proposal analysis  report.  For our analysis, we selected cost elements having variances of 10 percent or more between the competitors or between amounts  contained in the competitors’ final proposals versus the final evaluated cost  estimated by the evaluation team.  For these cost elements, we (1)  discussed with members of the evaluation team, the methodology they  used in determining the evaluated cost; (2) reviewed the calculations and  supporting documentation for the various cost elements; (3) attempted to  independently collect data to corroborate the evaluated cost estimates,  where warranted; and (4) offered to discuss competition issues with both  the public and private sector competitors.  In some instances, our review  was limited by a lack of supporting source data.  Notwithstanding this  limitation, our analysis did not disclose any material weaknesses in the  overall cost evaluation.  However, as discussed below, in several cases, we  identified weaknesses in the evaluated cost estimates.
section_title: Cost Estimate Issues
paragraphs: While the overall cost evaluation was reasonable, we question several of  the cost estimates.  In each case, these questions relate to actions that  would have decreased the evaluated cost of the public sector's offer.   Therefore, these cases had no impact on the award decision.  However, we  present them as potential opportunities for improving cost estimates for  future competitions.  These issues relate primarily to refining cost  estimating methodologies and using more accurate data.
subsections: section_title: Overhead Savings
paragraphs: The Air Force evaluation team reduced Ogden’s projection of overhead  savings by 85 percent—from $294.5 million to $46.2 million.  The team  based the reductions primarily on (1) the Defense Contract Audit Agency’s  (DCAA) assessment of Ogden’s overhead savings analysis, (2) its decision  to limit the number of years overhead savings would be considered, and (3) its assessment of Boeing Aircraft’s proposed cost savings on the C-17  maintenance program.   The first two adjustments were based on  conservative assumptions and likely understated the savings between the  proposals.  Also, in some cases, supporting documentation was lacking or  inconsistent approaches to estimating costs were used.  Given these issues,  we did not attempt to determine a cumulative effect of these adjustments.
Directions regarding the preparation of overhead savings were provided in  the Sacramento solicitation.  It stated that the evaluation of overhead  savings would emphasize a competitor's analysis and documentation of  proposed management initiatives to ensure that the projected savings  would occur—particularly those predicted for more than 24 months after  award.  The solicitation evaluation criteria provided that the proposed first-year savings, if determined to be reasonable, would be allowed.  The  second-year savings, if supportable, would also be allowed but discounted  for risk.  The solicitation also stated that proposed savings for 3 years and  beyond might be allowed if clearly appropriate but would be considered  under the best-value analysis.
Ogden used a regression-based methodology to develop its estimate of  projected overhead savings that should result from consolidating the  commodity and A-10 aircraft work with existing work at Ogden.  Ogden  based its analysis on 8 years of historical data to capture the relationship  between changing workloads and their effect on overhead rates.  In its  assessment, Ogden normalized the data to reflect cost accounting changes  that occurred over the 8-year period.
After reviewing Ogden’s projections, the Air Force evaluation team  concluded that the regression methodology was an adequate starting point  for projecting future overhead and general and administrative savings.   However, they expressed concern about Ogden’s application of this  methodology and asked  DCAA to evaluate Ogden’s overhead savings  analysis.  DCAA concurred with the use of the regression methodology but  questioned the workload baseline Ogden used in developing the savings  estimate.  DCAA found that in establishing the baseline, Ogden did not  include all the workload that is expected to be transferred into the depot  separate from the competition process.  The evaluation team reduced  Ogden’s proposed overhead savings for the commodity and A-10 workload  by a significant amount over the 8-year performance period.  The team said  they based this reduction on a more realistic projection of Ogden’s baseline  due to the transition of workloads transferring separate from the  competition.  We were unable to reconstruct how this figure was derived  because the Air Force did not provide supporting documentation.
After making this adjustment, the evaluation team determined the number  of years that overhead savings would be allowed.  Team members said they  had a general lack of confidence in the regression analysis, the overhead  rates, and the application of savings beyond the initial years of the  performance period.  They said that all overhead fixed costs associated  with excess capacity would be eliminated in the long run.  Consequently,  the team said that production overhead savings would occur only on a  prorated basis for the first 3 years.  Likewise, the team estimated general  and administrative savings for 8 years—with the annual amount prorated  progressively beginning with the second year.  Taken together these  estimates represent the evaluation team's $46.2 million estimate for  overhead savings.
The Air Force’s estimate of overhead savings is conservative and is likely  understated.  We question the Air Force’s assumption that overhead fixed  costs associated with excess capacity would be eliminated beginning in the  first and second year through reductions in force or attrition.  For example,  a significant percentage of Ogden’s proposed production overhead cost  savings were related to nonpersonnel costs such as facilities and capital  equipment, which by their nature are long-term assets and would not likely  be eliminated in the evaluators’ estimated time frame.  Additionally, the  projected organizational structure in the directorates and divisions  projected to gain competition work showed that some positions have only  one person assigned and that the costs associated with these positions  would likely remain fixed for the life of the requirement.  Therefore, it  appears reasonable to assume that some level of overhead savings relative  to these positions would be achieved during the entire performance period.
We noted an inconsistency in how the evaluation team treated Ogden's  regression analysis.  On the one hand, the evaluation team accepted the  proposed overhead costs for the competition workload that had been  developed using Ogden’s regression analysis.  DCAA officials expressed  confidence in this procedure and stated that it provided a reasonable  estimate of savings and is applied fairly regularly to commercial firms.  On  the other hand, when assessing the overhead savings associated with  existing workload at the Ogden facility, the evaluation team expressed a  lack of confidence in the same regression analysis and, based on these  concerns, prorated projected overhead savings associated with this  workload.  This approach also likely resulted in underestimating overhead  savings.
section_title: Commodity Rate Risk
paragraphs: Commodity rate risk refers to the uncertainty the evaluation team placed in  Ogden’s proposed overhead rates on the commodity workloads.  The  evaluation team did not question Ogden’s identification of projected  overhead costs for the combined competition and noncompetition work,  but it was concerned that not enough of the total overhead had been  allocated to the competition work.  Consequently, it made an adjustment to  increase Ogden’s proposed overhead costs for the competed commodity  workloads.  However, the team did not make a corresponding adjustment  to reduce the overhead costs for the noncompetition work to fairly  represent the total government cost.  Consequently, this resulted in a  corresponding overstatement of the noncompetition overhead costs and a  corresponding understatement of overhead savings for the noncompetition  workloads.  While making this corresponding adjustment would not have  had a material effect on the selection, it would have increased overhead  savings.  Ensuring that adjustments of this nature are made correctly is  important in future competitions.
section_title: Warehouse
paragraphs: While an upward cost adjustment to the Ogden proposal for the  warehousing function was appropriate, the method the evaluation team  used for making this adjustment could have been more accurate.  As a  result of the adjustment, the team significantly overstated costs.
The Defense Logistics Agency (DLA) provides the Air Force material  storage, warehousing, and issuing and receiving support.  DLA accumulates  costs for these services and allocates them to its customers based on  standard prices that are computed annually for each type of service.  The  solicitation required that competitors for the Sacramento workloads  provide these services as a part of their proposals.
The evaluation team concluded that Ogden’s offer did not represent all the  costs associated with the warehousing, storage, and receipt and issuance  services.  The team estimated that DLA’s full costs to support the competed  workload at the closing Sacramento depot would be significantly higher  than Ogden’s proposed costs.  Air Force evaluators said that while it is  possible that Ogden could add the competed work to its existing workload  at a marginal cost, they had no basis for estimating the incremental costs of  the Ogden warehouse operations.  Therefore, they used the full costs of the  Sacramento operations.
After considering cost information and discussions with agency officials,  we estimated that not more than about half of DLA’s costs for the  warehousing function are variable.  Consequently, the added warehousing  costs were overstated by a significant amount.
section_title: Base Operating Support
paragraphs: The evaluation team added a cost comparability adjustment to capture  base operating support costs not included in Ogden’s proposal.  The  methodology used to make this estimate was inappropriate, and as a result,  the adjustment was overstated by almost half. “The Defense Depot Maintenance Council Cost Comparability Handbook”  provides procedures and techniques to address cost comparability when  competing depot maintenance workloads between the public and private  sectors.  Base operating support cost is one cost category recognized by  the handbook.  According to the Air Force’s evaluation report, DCAA  performed a review of base operating support costs and recommended an  adjustment.  However, we found no references to base operating support  costs in DCAA’s report.  Additionally, DCAA officials said that they had not  recommended any adjustments in this area.
Evaluation team members said that their adjustment was based on  McClellan Air Force Base operating support costs for 1996.  They said that  they did not collect base operating support cost data for Hill Air Force Base  because there should be no difference in the base operating support costs  at the two locations.  A more appropriate approach would be to use  reported costs at the location being evaluated.  Based on reported Hill Air  Force Base operating cost data for 1996, we estimated that the  comparability adjustment should have been about half of the evaluation  team’s adjustment.
section_title: Material Surcharge
paragraphs: The evaluation team disallowed Ogden’s proposed cost comparability  adjustment for a material surcharge.  While this action was appropriate for  this competition, one technical issue may be important for future  competitions.  The team said that it disallowed the adjustment because  Ogden did not include material in its cost proposal.  The more appropriate  rationale for disallowing this adjustment was that the cost of government  furnished material was added as an adjustment to both proposals.   Therefore, there was no need for a comparability adjustment.  While this  was not a factor for this competition, it may be relevant for future  competitions if a private competitor chooses to use contractor furnished  material.
section_title: Conclusions
paragraphs: The Air Force met the requirements of applicable laws and regulations in  the competition for depot maintenance work at the Sacramento ALC.   However, the process used for estimating overhead, commodity rate risk,  warehousing, base operating support, and material surcharge costs  provides issues for the Air Force to consider in its future competitions.   Specifically, the evaluation team could have better documented support for  certain key cost estimates, followed more appropriate or consistent  approaches for estimating costs, and used more accurate or appropriate  data.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft copy of this report to the Air Force for comment and  review for procurement sensitive information.  Responsible officials stated  that they did not have sufficient time to review and comment on the report.   As agreed with the responsible committees, to respond to the  congressionally mandated reporting date, we issued prepublication and  printed copies of this report with appropriate markings to indicate that the  report contained procurement sensitive information that must be  safeguarded.  Subsequently, Air Force officials identified specific data that  they said should be removed from the published report.  We have removed  the sensitive data identified by the Air Force from this version of the report.
section_title: Scope and Methodology
paragraphs: In conducting our work, we obtained information from and interviewed  officials at the Air Force Headquarters, Washington, D.C.; the Air Force  Materiel Command Headquarters, Wright Patterson Air Force Base, Ohio;  the Sacramento ALC, McClellan Air Force Base, California; and the Ogden  ALC, Hill Air Force Base, Utah.  We also discussed contracting issues with  DCAA officials.  We offered to discuss the Sacramento competition and  award with both the public and private sector competitors; however,  because of the pending litigation the Air Force has not provided either  competitor with a debriefing.  Since the competitors were not familiar with  the specifics of the evaluation, they could not provide us with detailed  concerns regarding the evaluation process.  Particularly, when we  contacted the private-sector competitor, its representative stated that  discussions of the selection with our Office, without the benefit of a  debriefing, would not be productive.
To analyze the Air Force’s decision to award the Sacramento depot  maintenance workload to the Ogden ALC, we interviewed officials and  collected relevant documents from Headquarters, Department of the Air  Force;  Headquarters, Air Force Materiel Command; Air Force source  selection team members; representatives from the two competitor; and  DCAA.  To verify compliance with the Sacramento competition and  selection with applicable laws and regulations, our Office of the General  Counsel performed a legal compliance review.  To determine whether cost  elements considered in the source selection evaluation were complete and  reasonable, we discussed the selection structure with cognizant Air Force  and DOD officials, as well as the qualified competitors.  We also reviewed  the Air Force evaluation team's calculating methods for the various cost  estimates for reasonableness and compared the cost elements between  competitors to identify material drivers and to further test for  reasonableness.  We discussed with the evaluation team members their  rationale for treating cost elements in the evaluation and in some cases  recalculated cost estimates.  A list of our related reports is provided at the  end of this report.
We performed our review between September and November 1998 in  accordance with generally accepted government auditing standards.
We are sending copies of this report to the Honorable William S. Cohen,  Secretary of Defense; the Honorable F.W. Peters, Acting Secretary of the  Air Force; the Honorable Jacob J. Lew, Director, Office of Management and  Budget; and interested congressional committees and members.  We will  also make copies available to others upon request.
Please contact me at (202) 512-8412 if you or your staff have questions  concerning this report. The major contributors to this report are listed in  appendix IV.
section_title: Summary of Depot Reporting Requirements in the National Defense Authorization Act for Fiscal Year 1998
paragraphs: The National Defense Authorization Act for Fiscal Year 1998 contained the  following depot-related reporting requirements for our Office.
I. Report on DOD's Compliance with 50-Percent Limitation (Section 358)
The act amended 10 U.S.C. 2466(a) by increasing from 40 to 50 percent the  amount of depot-level maintenance and repair workload funds that the  Department of Defense (DOD) can use for contractor performance and  revised 10 U.S.C. 2466(e) by requiring the Secretary of Defense to submit to  Congress by February 1, 1998, a report identifying the percentage of funds  expended for contractor performance.
Within 90 days of DOD’s annual report to Congress, we were required to  review DOD’s report and inform Congress whether DOD had complied with  the 50-percent limitation.
II. Reports Concerning Public-Private Competitions for the Depot  Maintenance Workloads at the Closing San Antonio and Sacramento Air  Logistics Centers (Section 359)
The act added section 2469a to title 10 the United States Code to provide  for special procedures for public-private competitions concerning the  workloads of these two closing depots.  It also required us to issue four  reports.
First, within 60 days of its enactment, the 1998 Defense Authorization Act  required us to review the C-5 aircraft workload competition and  subsequent award and report to Congress on whether (1) the procedures  used provided an equal opportunity for offerors to compete without regard  to performance location, (2) the procedures complied with applicable law  and the Federal Acquisition Regulation (FAR), and (3) the award resulted  in the lowest total cost to DOD.
Second, the act required the Secretary of Defense to submit a  determination to Congress if any of the workloads were bundled in a single  solicitation.  We were required to report our views on the DOD  determination within 30 days.
Third, the act required us to review all DOD solicitations for the workloads  at the San Antonio and Sacramento ALCs and report to Congress within 45  days of the solicitations’ issuance whether the solicitations provided  “substantially equal” opportunity to compete without regard to  performance location and otherwise complied with applicable laws and  regulations.
Fourth, the act required us to review all DOD awards for the workloads at  the two closing ALCs and report to Congress within 45 days of the contract  award whether (1) the procedures used complied with applicable laws and  regulations and provided a “substantially equal” opportunity to compete  without regard to performance location, (2) “appropriate consideration  was given to factors other than cost” in the selection, and (3) the selection  resulted in the lowest total cost to DOD for performance of the workloads.
This report addresses the fourth requirement for the award of the  Sacramento aircraft and commodity workloads.
section_title: San Antonio and Sacramento Air Logistic Centers’ Closure History
paragraphs: The 1995 Base Realignment and Closure (BRAC) Commission  recommended closing the Sacramento and San Antonio Air Logistics  Centers (ALC) and transferring their workloads to the remaining depots or  to private sector commercial activities.  In making these recommendations,  the Commission considered the effects of the closures on the local  communities, on workload transfer costs, and the potential effects on  readiness and concluded that the savings and benefits outweighed the  drawbacks.  The Commission’s report noted that given the significant  amount of excess depot capacity and limited DOD resources, closure was a  necessity and would increase the use of the remaining centers and  substantially reduce DOD operating costs. The specific Commission  recommendations were as follows:
Realign Kelly Air Force Base, including the ALC; disestablish the  defense distribution depot; consolidate the workloads to other DOD  depots or to private sector commercial activities as determined by the  Defense Depot Maintenance Council; and move the required equipment  and personnel to the receiving locations.
Close McClellan Air Force Base, including the ALC; disestablish the  defense distribution depot; move the common-use ground  communication electronics to Tobyhanna Army Depot, Pennsylvania;  retain the radiation center and make it available for dual use and/or  research, or close as appropriate; consolidate the remaining workloads  with other DOD depots or private sector commercial activities as  determined by the Council; and move the required equipment and any  required personnel to receiving locations.  All other activities and  facilities at the base were to close.
In considering the BRAC recommendations to close the two centers, the  President and the Secretary of Defense expressed concerns about the near-term costs and potential effects on local communities and Air Force  readiness.  In response to these concerns, the President, in forwarding the  Commission’s recommendations to Congress, indicated that the ALCs’  work should be privatized in place or in the local communities.  He also  directed the Secretary of Defense to retain 8,700 jobs at McClellan Air  Force Base, which had been recommended for closure, and 16,000 jobs at  Kelly Air Force Base, which had been recommended for realignment, until  2001 to further mitigate the closures’ impact on the local communities.
Additionally, the size of the workforce remaining in the Sacramento and  San Antonio areas through 2004 was expected to remain above 4,350 and  11,000, respectively.
The Air Force initially focused on privatizing five prototype workloads— three at Sacramento (for hydraulics, electric accessories, and software)  and two at San Antonio (for C-5 aircraft paint/depaint and fuel  accessories).  The Council approved the Air Force’s plans for the five  prototype workloads on February 1, 1996.  The prototype workloads  involved about 11 percent of the San Antonio depot’s maintenance  personnel and about 27 percent of the Sacramento depot’s personnel.
Shortly after the Council approved the prototype program, the concept’s  appropriateness was questioned.  Community and industry groups  expressed an interest in having larger packages, and DOD officials were  concerned about the cost of administering a large number of smaller  contracts.  Implementation of the prototype concept was put on hold in  May 1996 as the Air Force considered various options.  In April 1996, we  testified that, if not effectively managed, privatizing depot maintenance  activities, including the downsizing of remaining DOD depot infrastructure,  could exacerbate existing excess capacity problems and the inefficiencies  inherent in underused depot maintenance capacity.  Privatizing workloads  in place at two closing Air Force depots would not reduce the excess  capacity in the remaining depots or the private sector and consequently  would not be a cost-effective approach to reducing depot infrastructure.    Later that year, we reported that privatizing in place, rather than closing  and transferring the depot maintenance workloads at the Sacramento and  San Antonio centers, would leave the Air Force with costly excess capacity  at its remaining depots that a workload consolidation would mitigate.    Our analysis showed that transferring the depot maintenance workloads to  other depots could yield additional economy and efficiency savings of over  $200 million annually.
We recommended that the Secretary of Defense require the Secretary of the  Air Force to take the following actions:
Before privatizing any Sacramento or San Antonio center workload,  complete a cost analysis that considers the savings potential of  consolidating the two centers’ depot maintenance workloads at other  DOD depots, including savings that can be achieved for existing  workloads by reducing overhead rates through more efficient capacity  utilization of fixed overhead at underused military depots that could  receive this workload.
Use competitive procedures, where applicable, for determining the most  cost-effective source of repair for workloads at the closing Air Force  depots.
In August 1996, the Air Force announced a revised strategy for allocating  the depot workloads at the Sacramento and San Antonio centers.  The  strategy involved several large consolidated work packages, essentially one  at Sacramento and two at San Antonio (one for the C-5 aircraft and one for  engines).  In December 1996, the Air Force issued procedures to conduct  public-private competitions for the workloads and to allow one of the  remaining public depots to compete with the private sector for each of the  three workload packages.  The Air Force's procedures allowed evaluation  credit for public and private sector proposals that offered overhead savings  to other government workloads.
In February 1997, the Air Force issued a request for proposals for the C-5  aircraft depot maintenance workload.  In September 1997, the Air Force  awarded the C-5 workload to the Warner Robins Air Logistics Center based  on the Air Force conclusion that it had the lowest total evaluated cost.  As  required by the 1998 Defense Authorization Act, we reviewed the C-5  award, issuing our report on January 20, 1998.  We concluded that (1) the C-5 competition procedures provided an equal opportunity for public and  private offerors to compete without regard to where the work could be  performed; (2) the procedures did not appear to deviate in any material  respect from the applicable laws or the FAR; and (3) based on Air Force  assumptions and conditions at the time of award, the award resulted in the  lowest total cost to the government.
On December 19, 1997, DOD submitted to Congress a determination and  report to support bundling the engine workloads at the San Antonio depot  and a determination and report to support bundling the commodity and  aircraft workloads at the Sacramento depot.  DOD was required to submit  these documents before issuing single solicitations at each location for the  combined work.  In response to 1998 Authorization Act requirements and  subsequent requests from the Senate Committee on Armed Services and  the House Committee on National Security, we issued two reports and two  testimonies providing our assessment of DOD’s determinations that it was  more logical and economical to combine the workloads being competed at  the closing depots.  We reported that: the determination and reports contained significant weaknesses in logic,  assumptions, and data;
DOD had not considered alternatives that appeared to be logical and
DOD’s assumption that efficiencies from shared personnel and facilities  would be best achieved with a single solicitation for combined  workloads at each location was questionable; and the Air Force’s conclusion from its cost analysis that the workload  combination would save $22 million to $130 million at Sacramento and  $92 million to $259 million at San Antonio was questionable because the  Air Force did not consider all cost factors, such as the cost benefits of  increased competition resulting from solicitations for individual  workloads.
On March 20, 1998, the Air Force issued a solicitation for the combined  aircraft and commodity workloads at the Sacramento depot and on March 30, 1998, issued a solicitation for the combined engine workloads at  the San Antonio depot.  We issued our required report on the Sacramento  solicitation on May 4, 1998.  We concluded that the Air Force had not  provided a sufficient basis to show that soliciting the workloads on a  combined basis was necessary to satisfy its needs.  Otherwise, we found  that the solicitation complied with applicable laws, including 10 U.S.C.  2469a.  On May 14, 1998, we issued our report on the San Antonio  solicitation, similarly concluding that the Air Force had not provided a  sufficient basis to show that soliciting the workloads on a combined basis  was necessary to satisfy its needs but that otherwise the solicitation  complied with applicable laws, including 10 U.S.C. 2469a.
section_title: Legal Review of Competition for Sacramento Air Logistics Center Workloads
paragraphs: On March 20, 1998, the Department of the Air Force, Sacramento ALC at  McClellan Air Force Base, California issued requests for proposal (RFP)  No. F04606-98-R-0007 for the purpose of conducting a public-private  competition for the depot-level workloads being performed at the closing  Sacramento ALC.  The Air Force received proposals from one private  sector offeror—Lockheed Martin Corporation (Lockheed)—and from one  public offeror—the Air Force’s Ogden ALC.  Following technical and cost  evaluations, the Air Force selected Ogden ALC to perform the Sacramento  workloads on the basis that its proposal represented the best value to the  government.  The Ogden ALC proposal also represented the lowest “most  probable total evaluated” cost at $1,794,488,861 over the 9-year  requirement.
Section 359 of the National Defense Authorization Act for Fiscal Year 1998,  Public Law 105-85 (1998 Authorization Act), added section 2469a to title 10  of the United States Code, which provided for special procedures for  public-private competitions for the workloads at the closing Sacramento  and San Antonio ALCs.  Section 2469a also requires us to review the  selection process for the awards made for the workloads at the two closing  ALCs and report to Congress within 45 days of each award on whether (1)  the procedures used to conduct the competition provided a substantially  equal opportunity for offerors to compete without regard to performance  location and complied with 10 U.S.C. 2469a and all applicable laws and  regulations, (2) appropriate consideration was given to factors other than  cost in the selection, and (3) the award resulted in the lowest total cost to  the DOD for the performance of the workloads.
Our review is based on the record of the proposal evaluation and the  selection.  In addition, we spoke to Air Force officials and considered  concerns raised informally by one of the competitors.  We recognize that an  offeror may file a protest with our Office pursuant to 31 U.S.C. 3551-3556,  or with the courts, or may file an objection to the award with DOD under 10 U.S.C. 2469a(h).  If a protest is filed, factual information, issues, and  arguments raised by the interested parties will be reviewed in the context  of an adversarial process.  For that reason, the result of a protest may differ  from that of our current review.  Similarly, the result of an objection filed  with DOD may differ from our review.
Based on our review of the procedures the Air Force used to conduct the  Sacramento competition in context of the concerns that were raised by the  competitor, we found no basis to conclude that (1) the procedures did not  provide a substantially equal opportunity for the offerors to compete  without regard to performance location, (2) appropriate consideration was  not given to factors other than cost in the selection, and (3) the procedures  used in selecting the successful offeror deviated in any material respect  from the applicable laws and regulations.  While not affecting the legal  sufficiency of the selection, we nevertheless identified several issues  related to the estimates supporting the cost evaluation.  These issues are  discussed in the body of the report.
In an earlier review of the Sacramento solicitation, we concluded that the  Air Force had not provided a sufficient basis to show that soliciting the  workloads on a combined basis was necessary to satisfy its needs.  We also  concluded that the solicitation was otherwise in compliance with  applicable laws, including the provisions of 10 U.S.C. 2469a, and that it  provided a substantially equal opportunity for offerors to compete without  regard to performance location.
On June 17, 1998, Pemco Aeroplex, Inc. (Pemco) filed a protest of the  solicitation’s provisions with our Office pursuant to 31 U.S.C. 3551-3556.   Pemco objected to the solicitation of the workloads on a combined basis.   In a decision dated September 25, 1998, our Office sustained the protest,  concluding that the Air Force was unable to show that combining the  requirements was reasonably required to satisfy its needs and  recommending that the agency cancel the solicitation and resolicit its  requirements without combining the workloads.  On October 9, the Air  Force decided to proceed with the award to Ogden ALC notwithstanding  the protest recommendation.  On October 13, Pemco filed civil action no. Cv. 98-B-2584-S in the United States District Court for the Northern  District of Alabama, Southern Division, seeking a declaration that the  award is void and an injunction preventing the Air Force from going forward with  performance.
The following describes the legal standards applicable to the Sacramento  competition, relevant aspects of the solicitation and evaluation procedures  the Air Force used, and our analysis of those procedures under the  applicable legal standards.
subsections: section_title: Applicable Legal Standards
paragraphs: The basic authority for the Sacramento workload competition is 10 U.S.C.  2469a, which provides procedures for public-private competitions for the  workloads of the closing Sacramento and San Antonio ALCs that are  proposed to be outsourced after the November 18, 1997, enactment of the  1998 Authorization Act.  Section 2469a sets forth a number of requirements  that the Air Force must satisfy in the solicitations it issues and the source  selection process it uses, to make awards for the specified workloads.   Particularly, the solicitation and the source selection process must (1)  permit both public and private offerors to submit offers; (2) take into  account the fair market value of any land, plant, or equipment at a closed or  realigned military installation that is proposed to be used by a private  offeror in the performance of the workload; (3) take into account the total  estimated direct and indirect costs that will be incurred by DOD and the  total estimated direct and indirect savings (including overhead) that will be  derived by DOD; (4) use cost standards to determine the depreciation of  facilities and equipment that provide, to the maximum extent practicable,  identical treatment to public and private offerors; (5) permit any offeror,  whether public or private, to team with any other public or private entity to  perform the workload at any location or locations of their choosing; and (6) ensure that no offeror may be given any preferential consideration for,  or in any way be limited to, performing the workload in place or at any  other single location.
In addition to 10 U.S.C. 2469a, there are a number of other laws that are  generally applicable to the outsourcing of government-performed depot  workloads.  One of the principal laws is 10 U.S.C. 2469, which provides for  the use of “competitive procedures for competitions among private and  public sector entities” when DOD contemplates changing the performance  of a depot workload, valued at $3 million or more, to contractor  performance.  In addition, section 8039 of the Department of Defense  Appropriations Act for Fiscal Year 1998, Public Law 105-56, authorizes  public-private competitions for depot workloads as long as the “successful  bids" are certified to "include comparable estimates of all direct and  indirect costs for both public and private bids.”  Both provisions state that  Office of Management and Budget Circular A-76 is not to apply to the  competitions.  Other than the reference in section 8039 to the use of  comparable estimates of all costs, neither provision prescribes the  elements that constitute a competition.  Further, 10 U.S.C. 2470 provides  that depot-level activities are eligible to compete for depot workloads.
There are other provisions that apply, generally, to converting DOD  functions to private-sector performance.  Section 8014 of the 1998 DOD  Appropriations Act requires that DOD certify its in-house estimate to  congressional committees before converting any activity performed by  more than 10 civilian employees to contractor performance; the provisions  of 10 U.S.C. 2461 require that whenever a DOD-performed function, such as  the workloads involved in this competition, is converted to performance by  a contractor, DOD must provide to Congress a cost comparison that shows  that a savings will result.  Under 10 U.S.C. 2462, DOD is generally required  to contract with the private sector if a source can provide the supply or  service at a lower cost than DOD can and to ensure that all costs  considered are realistic and fair.
The Air Force implements these outsourcing authorities through the Air  Force Materiel Command’s Procedures for Depot Level Public-Private  Competition, December 20, 1996 (Depot Competition Procedures).  The  procedures are supplemented by the “Defense Depot Maintenance Council  Cost Comparability Handbook” (CCH), including the January 28, 1998,  revision, the Air Force Materiel Command “Guide to the Cost  Comparability Handbook” and the SAF/AQ Public-Private Competition  Cost Procedures of February 21, 1998.  The procedures provide for issuing  a solicitation calling for offers from public and private sector sources and  establish the criteria, including those listed in 10 U.S.C. 2469a, for deciding  how the Air Force will select a source from either sector to perform depot  workloads.  According to these procedures, a competitive solicitation is to  be issued in accordance with the applicable provisions of the FAR, which  set forth uniform policies and procedures for the competitive acquisition  system that all executive agencies use and implements the provisions of  chapter 137 of title 10 of the United States Code, which govern DOD  acquisitions.
This use of the competitive acquisition system subjects a depot workload  competition to the applicable provisions of chapter 137 and the FAR to the  extent that they do not conflict with the public-private competition statutes  cited previously.  (Newport News Shipbuilding and Dry Dock Company, B-221888, July 2, 1986, 86-2 CPD 23.)  Further, aspects of a competition that  fall outside the competitive acquisition system's parameters as defined by  chapter 137 and the FAR, such as the comparison of public and private  offers for the workloads from the two closing ALCs, are governed by 10 U.S.C. 2469a and the other statutes applicable to public-private depot  competitions as implemented by the Air Force.
In general, the standards in chapter 137 and the FAR (1) require that a  solicitation clearly and unambiguously state what is required so that all  offerors can compete on an equal basis and (2) allow restrictive provisions  to be included only to the extent necessary to satisfy an agency’s needs.   Under these standards, an agency must follow the criteria announced in the  solicitation, which in this case include those required by 10 U.S.C. 2469a,  and exercise its judgment in a reasonable manner in determining which of  the competing offers is to be selected.  (Dimensions International/QSOFT,  Inc. , B-270966.2, May 28, 1996, 96-1 CPD 257.)
section_title: Solicitation
paragraphs: The RFP for the Sacramento workloads provides for the award of several  line items representing various performance phases for each of the  different workloads to be competed.  For example, line item no. 0001,  among other things, calls for offers on a cost-plus-award fee basis for the  transition period for the KC-135 aircraft, the A-10 aircraft, and  commodities, including hydraulics, instruments/electronics, electrical  accessories, and nonrouted backshop/manufacturing.  Other line items  provide for firm-fixed priced offers for the performance of these various  workloads, including “over and above” work, once the transition is  completed, and for other miscellaneous work requirements.  The RFP also  provides for a transition period, which is to begin at the award and to end  by September 30, 1999, a 5-year basic performance period, and up to 3 additional years based upon the performance of the awardee.  The line  items representing the work for the KC-135 aircraft and the A-10 aircraft  during the basic performance period are to be awarded on a multi-year  basis, with guaranteed minimum quantities, while the other workloads are  to be awarded on a requirements-type basis, with no minimum quantity  guaranteed.
According to the solicitation, the competition is to be conducted in  accordance with FAR 15.101, which sets forth the source selection  processes and techniques to be used in competitive negotiated  acquisitions, as well as the applicable Air Force and Air Force Materiel  Command supplements.  Further, the solicitation provides that the Depot  Competition Procedures, the CCH, and their updates are to govern the  selection.
The solicitation states that the award will be made to the offeror—either  public or private—who is deemed responsible in accordance with the  FAR, whose proposal conforms with the solicitation and is judged to  represent the best value to the government.  According to the RFP, the  Source Selection Authority (SSA) will integrate the source selection team's  assessments of the proposals under the evaluation criteria listed in the  solicitation to arrive at a best value selection.
The evaluation criteria consist of criteria for transition, operations, cost,  and assessment.  Transition is made up of the integrated master plan,  personnel plan, and integrated master schedule.  The operations criteria  consist of five factors representing the major workloads: (1) KC-135  aircraft, (2) hydraulics, (3) instruments/electronics, (4) electrical  accessories, and (5) A-10 aircraft.  The assessment criteria, which will be  used for measuring the extent to which a proposal meets the transition,  operations, and cost criteria, are made up of two parts: (1) understanding  of/compliance with the solicitation requirements and (2) soundness of  approach.
Under the cost criteria, proposals will first be assessed for completeness,  realism, and reasonableness.  Then each offeror’s total proposed cost is  to be determined by calculating the various cost estimates, unit prices, and  hourly rates proposed for the different line items.  Next, the offerors’ total  alternative cost is to be developed by factoring in the numerous  adjustments to public and private offerors’ total proposed cost in  accordance with the CCH and the RFP.  Finally, the offerors’ total evaluated  cost is to be determined by adjusting the total alternative cost to reflect the  “dollarized impact of significant discriminators, to the extent that a dollar  value can be assigned to such discriminators, based on identified proposal  strengths, weaknesses and risks.”
Further, the RFP provides for the evaluation of general considerations such  as the results of preaward surveys, site visits, and “fair market value.”  In  addition, the proposals are to be the subject of two risk assessments:  proposal and performance.  A  proposal risk assessment is to measure the  risk that is associated with an offeror’s proposed approach to  accomplishing the solicitation requirements relating to each of the three  transition area factors and each of the five operations area factors.  A   performance risk assessment is to assess, based on an offeror’s present and  past performance, the probability of the offeror successfully accomplishing  the proposed effort.
Finally, the solicitation provides that in the SSA’s best value assessment, the  criteria for transition and operations areas, and cost criteria are to be  equally important, while the general considerations are to be “considered  substantially less important than Cost, Transition, or Operations.”    According to the RFP, this assessment is also to include “as appropriate”  items listed in the solicitation as “Other Considerations.”  This category  essentially reiterates five of the six requirements for the competition listed  in the 1998 Authorization Act.
The proposals were first evaluated by specialized teams, which reported to  a source selection evaluation board (SSEB), which in turn, reported its  conclusions to a source selection advisory council (SSAC).  The SSAC then  advised the SSA, who made the final selection decision on the merits of the  proposals.
section_title: Evaluation of Proposals
paragraphs: Two offerors submitted proposals in response to the solicitation.  Ogden  ALC, the public depot chosen by the Air Force to submit the public sector  offer, proposed (1) to perform  the commodities work and the A-10 aircraft  work at its facilities in Utah and (2) to have the KC-135 aircraft work  performed by the Boeing Aerospace Corporation (Boeing) at the Boeing  Aerospace Support Center located at the closing San Antonio ALC at Kelly  Air Force Base.  Boeing, a partner to Ogden in the public sector offer,  proposes to use the San Antonio facilities that have been transferred by the  Air Force to the Greater Kelly Development Corp. (GKDC) and leased by  GKDC to Boeing.   The private sector offeror, Lockheed, proposed to  perform all of the work at the closing Sacramento ALC at McClellan Air  Force Base, where the workloads are currently being performed by  government employees.  The Sacramento ALC facilities are to be  transferred by the Air Force to Sacramento County.  Under the Lockheed  proposal, the facilities would be leased by the county to Lockheed.   Lockheed’s major subcontractors are AAI Aerospace Corporation (AAI) for  the hydraulics workload and GEC-Marconi Avionics Incorporated (GEC-Marconi) for the instruments/electronics and the electrical  accessories.
The proposals were initially evaluated to determine whether they were to  be included in the competitive range in accordance with FAR 15.306(c) and  considered for award.  On June 23, 1998, the Air Force determined both  proposals to be within the competitive range.
Accordingly, discussions were held with the offerors consisting of written  evaluation notices raising concerns about each of the proposals and face-to-face and telephone exchanges about the concerns.  As a result, each  offeror submitted proposal revisions.  The Air Force requested final  proposal revisions on August 26, which were the subject of the Air Force's  final cost adjustments and evaluation.  Based on the results of the  evaluations and cost adjustments, the advice of the SSAC, and the SSA's  own analysis in the context of the RFP evaluation criteria, the SSA decided  that the Ogden ALC proposal met all of the RFP requirements and  represented the best value to the government over the life of the  requirement.  The SSA’s conclusion was based upon Ogden ALC’s “slight  advantage” in the operations area and its lower “most probable total  evaluated cost” of performance.  Consequently, the SSA selected Ogden  ALC to perform the Sacramento workloads.
section_title: Technical Evaluation
paragraphs: As noted previously, the solicitation evaluation criteria provided that the  offerors’ management approaches were to be evaluated in the transition  and operations areas.  Under transition, three factors were to be evaluated:  (1) integrated master plan, (2) personnel plan, and (3) integrated master  schedule.  Operations included five factors: (1) KC-135 aircraft, (2) hydraulics, (3) instruments/electronics, (4) electrical accessories, and  (5) A-10 aircraft.  Under each of the factors, the proposal risk was assessed.
subsections: section_title: Transition
paragraphs: The first factor under transition, integrated management plan, was to  assess the management, transition activities, and logistics plans and  activities of the offerors.  Under this factor, the SSA noted that both  offerors had been assigned a green, or acceptable, rating, with low risk by  the SSAC.  The SSA stated that Lockheed’s approach, which was to perform  all of the work at the Sacramento ALC facilities, had less potential for  disruption to the ongoing operations than the Ogden ALC plan, which  involved the transition of the KC-135 aircraft work to the Boeing facility at  the San Antonio ALC.  The A-10 aircraft and the commodities work was to  be done at the Ogden ALC facilities in Utah.  While recognizing that the  Ogden ALC approach was sound and would minimize disruption to  workload production, the SSA nevertheless concluded that the Lockheed  plan, which would maintain the existing, experienced government  workforce in place at Sacramento “was a benefit.”  Since the SSA  concluded that neither offeror had significant strengths or weaknesses  under this factor, she did not propose to make a “dollarization” adjustment.
Under the personnel plan factor, an offeror was to provide a plan that  detailed the staffing necessary to perform the workloads and a plan to  acquire, train, and maintain the staff.  The SSA concurred with the SSAC's  green rating for both proposals and the assignment of a low risk rating to  the Lockheed proposal and a moderate risk rating to the Ogden ALC  proposal.  The SSA noted that Lockheed would use the trained and  experienced workforce at the Sacramento ALC.  The SSA believed that  there was risk that some of the current workforce would not wish to leave  government service but concluded that a significant portion would want to  continue working at the Sacramento location.  On the other hand, the SSA  had concerns about the Ogden ALC’s ability to hire 328 people from the  Sacramento workforce to work on the commodities at Ogden.  In this  regard, the SSA noted that Boeing intended to hire its workforce for the  KC-135 aircraft from San Antonio, Texas, and Wichita, Kansas, where it  currently maintains a facility.  The SSA found “real differences” between  the proposals under this factor, concluding that the weakness in the Ogden  ALC proposal regarding the availability of the experienced workforce  resulted in a moderate risk rating.  Consequently, the SSA concluded that  the risk should be offset by an upward “dollarization” cost adjustment in  the determination of Ogden ALC’s most probable total evaluated cost.
Under the integrated master schedule factor, an offeror was to submit a  comprehensive transition time line based on the integrated master plan  that identified all tasks and major event milestones required to transition  all of the workloads.  Both offerors were given green, or acceptable, ratings  with a low risk by the SSAC.  The SSA had a concern with the Ogden ALC  approach, which would transfer the workload to two locations: Ogden,  Utah, for the commodities and the A-10 aircraft and San Antonio, Texas, for  the KC-135 aircraft, which would involve completely a new workforce for  the KC-135.  This concern did not raise to the level of a weakness because  the SSA had confidence in Ogden ALC's risk mitigation strategy of using  intense integrated product team oversight.  Overall, the SSA considered  both offerors to be equal under this factor and saw no need for a  “dollarization” adjustment.
section_title: Operations
paragraphs: Under the KC-135 factor, an offeror must submit a contractor work  specification that will become the contract statement of work, define all of  the work requirements, and identify work flow and processes to reflect the  offeror’s specific approach to accomplishing the work.  Other information  to be provided includes (1) a work activity flow plan for one complete  aircraft to show the sequence of movement through the required processes  and (2) “waterfall” plans, which are to describe the work flow activity using  the number of aircraft represented by the best estimated quantity and, in  the alternative, the maximum order quantity.  In addition, any process  improvements to current practices of performing the work are to be  explained under this factor.
For the KC-135 aircraft, the SSAC rated both proposals as blue  (exceptional) and assigned Ogden ALC a low risk rating and Lockheed a  low/moderate rating.  In adopting the ratings, the SSA noted that both  proposals contained strengths concerning the reduction of the flowdays  needed for the programmed aircraft depot maintenance.  She nevertheless  concluded that the Ogden ALC proposal was the strongest under this  factor.  According to the SSA, this advantage was grounded in Ogden  ALC’s proposal to exceed the RFP flowday requirement of 175 days by  contractually committing to a reduction to 150 days by fiscal year 2002 and  to 140 days by fiscal year 2003.  In addition, the SSA was impressed by  Ogden ALC’s proposal to use in-line jacking to accomplish “over and above”  structural work concurrently with the planned programmed work and its  plan to use a continuous fluid sampling analysis to ensure early recognition  of defects.  The SSA, however, did note a weakness in Ogden ALC’s  approach concerning its plan to use fewer labor hours than considered  readily achievable by the evaluation team.  The SSA concluded that this  risk could be mitigated by normal monitoring and was not significant  enough for a moderate risk rating.
The SSA recognized that Lockheed also had proposed to reduce the  required flowdays (to 165 in fiscal year 2002 and to 155 by fiscal year 2004),  but Lockheed’s approach, which involved using two shifts, had some risk  because Lockheed had not documented the availability of the workforce  for the extra shift or the way the proposed productivity increases would be  achieved.  Another element contributing to Lockheed’s low/moderate risk  rating was the SSA’s concern about the plan to use field team employees to  meet the proposed productivity increases and flowday reductions.  The  SSA decided that Ogden ALC’s superior flowday reduction could not be  “dollarized” because the KC-135 was not an aircraft that generated revenue  for the Air Force.  However, the SSA recognized that this was a significant  benefit and concluded that Ogden ALC offered an approach to the KC-135  aircraft work that had greater strengths and was more advantageous than  Lockheed’s approach.
Under the hydraulics factor, the SSA concurred with the SSAC’s rating of  each proposal as green and low risk.  The SSA concluded both proposals  were essentially equal and proposed no “dollarization.”
Under the factor for instruments/electronics, the SSA agreed with the  SSAC’s ratings of both proposals as green and low risk.  Again, the SSA  concluded that both offerors were essentially equal and proposed no  “dollarization.”
Under the electrical accessories factor, the SSAC rated both proposals as  green; Lockheed was given a low risk rating, while Odgen ALC was rated as  a moderate risk.  This rating was caused by a process improvement  concerning the pretesting of oil-cooled generators and a change in the  painting sequence of the repair process.  According to the SSA, the new test  process could create production bottlenecks due to test equipment  constraints with the potential of increased flowdays and the new paint  process could increase flowtime.  Thus, the SSA concluded that to offset  this moderate risk, an upward “dollarization” adjustment to the evaluated  cost of the Ogden ALC proposal would be added.  This adjustment would  reduce, in the SSA's view, the risk rating to low.
Under the A-10 aircraft factor, the SSA concurred with the SSAC's ratings  of both proposals as blue and low risk.  The SSA concluded that both had  equal strengths and proposed no “dollarization.”
section_title: Risk and General Considerations
paragraphs: Under the performance risk analysis for the transition, operations, and cost  areas, the SSA determined that each represented a low risk and that there  was not a discriminator among them.  Further, under the general  consideration category, the SSA concluded that both offerors meet all  solicitation and responsibility requirements and had acceptable small  business plans.
The SSA agreed with the SSAC’s analysis of fair market value of the assets  of the closing McClellan Air Force Base that were to be transferred to  Sacramento County and then leased to Lockheed to perform the  workloads.  According to the SSA, Lockheed would lease the facilities at a  composite rate of $0.33 per square foot a month, the local market rate for  similar industrial facilities.  Further, the SSA concluded that the Air Force  would transfer the facilities to the County at fair market value.  Finally, the  SSA agreed that the SSAC’s $25,038,804 adjustment to Lockheed’s cost  proposal for depreciation of the government furnished equipment (GFE)  reflected the fair market value of the equipment.
The SSA also evaluated Boeing’s lease of the closing San Antonio ALC  facility in connection with its performance of the KC-135 aircraft work  under the Ogden ALC proposal and concluded there was no basis to make  any further adjustment (other than that already made for GFE) to either  proposal for fair market value.  In this regard, the SSA concluded that the  lease between GKDC and Boeing was an “arms length” transaction, not  contingent on the competition, made at a fair market price.
section_title: Cost Evaluation
paragraphs: As noted previously, the cost evaluation consisted of (1) an assessment of  the realism and reasonableness of the cost proposals; (2) a determination  of the “total alternative cost” of each proposal, calculated through  adjustments required by the CCH and RFP; and (3) a determination of the  total evaluated cost of each proposal, calculated by taking the total  alternative cost and adjusting it to reflect the “dollarization” of significant  discriminators among the proposals.  In determining the total evaluated  cost, the evaluators used ranges based on different estimates for overhead  savings and risk “dollarization.”  The  results for each of these analyses  conducted by the cost evaluators are summarized below.
subsections: section_title: Realism and Reasonableness Evaluation
paragraphs: The cost team evaluators initially reviewed each offeror’s cost proposal to  determine its completeness, realism, and reasonableness.  The evaluators  ultimately were satisfied that each cost proposal met these standards.  In  accordance with the Depot Competition Procedures, the Defense Contract  Audit Agency (DCAA) audited the Ogden ALC cost proposal and reviewed  the public offeror’s disclosure statement and accounting and estimating  systems.  The disclosure statement was found to be adequate and the  proposal was determined to be realistic.
DCAA also reviewed Ogden ALC’s accounting and estimating systems and  found in a report dated December 22, 1997, that the accounting system was  inadequate, in part, for assuring that all workload costs are properly  recorded and that the estimating system was also inadequate, in part,  because it relied on accounting system data.  Nevertheless, we were  informed by the DCAA auditors who performed the review that these  inadequacies did not affect the validity of the Ogden ALC cost proposal.
section_title: Determination of Total Alternative Cost
paragraphs: The cost evaluators determined each offeror’s total alternative cost by first  calculating the offeror’s “customer cost”--in essence, its proposed price for  performing the requirement, and then making upward and downward  adjustments to this figure in accordance with the RFP and the CCH.  Ogden  ALC’s customer cost was calculated to be $1,097,615,652.  Lockheed’s  customer cost was $1,256,721,586.
Using the customer cost for each offeror as a base, the evaluators made the  comparability adjustments called for in the CCH and the RFP.  Two sets of  adjustments were made.  The first set, required by form number 1 of the  CCH, encompassed adjustments to the public sector offer and the second  set, required by form number 2 of the CCH, governed adjustments  applicable to the public and private sector proposals.
The CCH form number 1 adjustments made to the Ogden ALC proposal  included upward and downward changes in a number of categories.  The  most significant were upward adjustments for base operating support,  unfunded civilian retirement, and retiree health benefits.  The upward and  downward adjustments resulted in an adjusted cost of $1,153,415,260 to the  proposal.  The adjusted cost was lower than Lockheed's customer cost of  $1,256,721,586.
Some CCH form number 2 adjustments were made to both proposals.   Upward adjustments were made to both types for GFM for both the  commodities and the KC-135 aircraft, contract administration, reduction-in- force (RIF) costs; costs associated with the transition of government  personnel (i.e., costs of retaining current work force at McClellan that will  be subject to a RIF and not be rehired by the new source after the workload  is transitioned pending their separation); and costs of performing the work  in process during the transition that each offeror elected not to perform.   Most of these adjustments were similar in size for both proposals.  The  largest difference was in the RIF cost adjustment, resulting in increases to  Ogden ALC’s and Lockheed’s costs.  Examples of downward adjustments  were those made for the payment of federal income tax on profits to the  Lockheed and Ogden ALC proposals.
Form number 2 also provided for a downward adjustment for a public or  private offeror that proposed and supported overhead savings to other  government work resulting from the increased work from the competition  sharing the costs of fixed assets.  While no such savings were proposed  by Lockheed, the evaluators determined that a downward adjustment of  between $70,357,189 and $24,665,837 could be applied to the Ogden ALC  proposal to represent the savings applicable to other workloads at the  Ogden ALC facility during the performance period.
The net result of the form number 2 comparability analysis for the  Lockheed proposal was an upward adjustment of $630,058,494.  The form  number 2 upward adjustments to the Ogden ALC proposal included the  high and low ranges for overhead savings.
This final cost adjustment resulted in a total alternative cost for Lockheed  of $1,886,780,080 and a range of between $1,694,862,974 and $1,740,554,326  for Ogden ALC.  No single adjustment accounts for the cost difference at  this point, and at the highest range for Ogden ALC, its alternative cost was  more than $140,000,000 lower than Lockheed's.
section_title: Determination of Total Evaluated Cost
paragraphs: To arrive at the total evaluated cost of each proposal, the evaluators took  the total alternative cost and applied “dollarization” adjustments.
The initial aspect of the Ogden ALC proposal that was considered to be  suitable for quantification was the transition risk as it related to both the  KC-135 aircraft and the commodities.  The first concern was Ogden ALC's  proposal to have the workforce at the closing Sacramento depot perform  most of the work in process on the KC-135 aircraft before the workload  was transitioned to the Boeing facility at San Antonio.  While the  adjustment for this work in form number 2 assumed normal workforce  efficiency (80 percent), the evaluators, based on the experience of previous  transitions from closing depots, concluded that it was likely that the  closing depot would experience declining efficiency.  Consequently, the  evaluators calculated the impact of a lower efficiency rate (45 percent) on  the work to be completed at Sacramento.  This rate resulted in a  quantification of the risk of performing the remaining KC-135 work at  Sacramento.  Next, the evaluators added another adjustment that  represented the risk that Boeing would not  achieve its proposed 90-percent efficiency rate as it began the KC-135 aircraft work at its new  facility.
The evaluators were similarly concerned about the transition risks in the  Ogden ALC proposal for commodities workload.  The evaluators calculated  the Sacramento efficiency rate for the completion of commodities work in  process to be 65 percent.   Further, the evaluators reduced the efficiency  rate proposed for the new commodity work to be performed by the  combined workforces at Sacramento and Ogden.  The total  recommendation for “dollarized” transition risk for all the affected  workloads (KC-135 aircraft and commodities) under the Ogden ALC  proposal was $20,732,000.
The evaluators were also concerned about transition risk in connection  with the Lockheed proposal.  Their concerns centered around the  efficiency of the Sacramento workforce in accomplishing the work in  process for both the KC-135 aircraft and commodity workloads.  In both  cases the evaluators assumed a Sacramento efficiency rate of 65 percent  (higher than the rates of Ogden ALC and its partner Boeing, as Lockheed  proposed to perform the work at the closing Sacramento facility using  much of the current workforce).  Further, for both workloads, the  evaluators did not think that Lockheed could achieve its proposed  efficiency rates at the start of full performance.  The calculations resulted  in a proposed total “dollarization” of $16,068,000 for the Lockheed  proposal.
The evaluators concluded that the risks inherent in two aspects of Ogden  ALC’s proposed performance of the commodities workload after transition  should be “dollarized.”  The first risk involved Ogden ALC’s process  improvements and whether those improvements (particularly those in the  electrical accessories area) would result in a reduction of workhours.  The  evaluators were skeptical that the reduction  could be achieved, and they  consequently calculated a proposed upward “dollarization” adjustment of  $17,380,738 to represent the risk that the predicted reduction would not  occur.
The second risk related to the nature of the public depots’ funding under  the working capital fund and the possibility that the government will have  to shoulder the additional cost if Ogden ALC cannot perform at its  proposed labor rates.  The evaluators requested DCAA to conduct a rate- risk analysis on the Ogden ALC cost proposal, comparing the proposed  rates to Ogden ALC’s current and past labor rates.  DCAA calculated what it  believed to be more realistic rates and concluded that its rates would result  in a $37,373,690 increase in Ogden ALC's cost.  The evaluators concluded  that a “dollarized” risk range representing the high and low historical rates  analyzed by DCAA should be established for this factor.
As the result of these evaluations, the SSAC presented the SSA with a  recommended total evaluated cost range for each offeror.  The  recommendation consisted of a high range, including the lowest overhead  savings, if any, combined with the highest upward “dollarization”  adjustments, and a low range consisting of the highest overhead savings, if  any, and the lowest upward “dollarization” adjustments.  The high range  was $1,819,717,982, and the low range was $1,707,243,712 for Ogden ALC.   The high range for Lockheed was $1,902,848,080, while the low range was  $1,886,780,080.  Ogden ALC's high range is below Lockheed's low range by  over $65,000,000.
The SSA reviewed the recommended total evaluated ranges and concluded  that the high range estimate for Lockheed of $1,902,848,080, including the  recommended $16,068,000 “dollarization” for transition risk  represented  Lockheed's most probable cost.  The SSA concluded that the most probable  cost for Ogden ALC was $1,794,488,861, about $25,000,000 below the  SSAC's high range.  The SSA’s estimate for Ogden ALC included $46,217,730  for overhead savings (about midway between the SSAC high and low  ranges), the total amounts recommended by the SSAC for transition risk  ($20,732,000) and for performance risk related to commodity workload  process improvements ($17,380,738) and the DCAA recommendation of  $37,373,690, for overall cost risk for the workloads to be performed at the  public depot.  A summary of the cost adjustments adopted by the SSA is  shown in table III.1.
Table III.1:  Cost Adjustments Adopted by the SSA   (46,217,730)
section_title: Award
paragraphs: Based on the evaluation results, the SSA concluded that the offerors were  “essentially equal” in performance risk and general considerations.  The  SSA noted that Lockheed had a slight advantage in transition, while Ogden  ALC had a slight advantage in operations.  The SSA selected Ogden ALC   for award, as the competitor representing the best value to the government  based upon the public offeror’s operations advantage combined with its  lower most probable total evaluated cost.
section_title: GAO Analysis
paragraphs: As discussed previously, several statutes govern the solicitation and award  process for public-private competitions for the depot workloads of the  closing Sacramento and San Antonio ALCs.  In particular, 10 U.S.C. 2469a  sets forth the elements that must be considered in  selecting the public or  private source to perform the workloads.  Further, because the Air Force  used the competitive acquisition system, the standards in chapter 137 of  title 10 of the United States Code and the FAR apply to the extent they are  consistent with 10 U.S.C. 2469a and the other applicable provisions relating  to the outsourcing of depot workloads and to conversions of DOD  functions to private-sector performance.  See (Newport News Shipbuilding  and Dry Dock Co.,) cited above.
In addition to reviewing the evaluation and selection records, we spoke to  relevant Air Force officials and to the public-sector offeror.  While the  public offeror won the competition, it still had some concerns that  primarily centered around its preliminary understanding of the treatment  of its proposed overhead savings and some of its proposed cost  adjustments.
Reviewing the Sacramento competition in this context, we found no basis  to conclude that the procedures used in selecting the successful offeror  deviated in any material respect from the section 2469a requirements or  other applicable laws or relevant provisions of the FAR.  The Air Force  issued a competitive solicitation in accordance with FAR part 15, which  provided for the participation of a public sector depot.  We found no basis  to conclude that the selection did not provide for a substantially equal  opportunity for public and private offerors to compete without regard to  performance location or that appropriate consideration was not given to  noncost factors in the selection.  Overall, the evaluation process appeared  to be reasonable, fair, and consistent with the evaluation scheme in the  solicitation, the Depot Competition Procedures, and the CCH.  While not  affecting the legal sufficiency of the selection, we nevertheless identified  several issues related to the estimates supporting the cost evaluation.   These issues are discussed in the body of the report.
subsections: section_title: Performance Location
paragraphs: Subsection (g) of 10 U.S.C. 2469a provides that our report on the  competitive procedures is to include our view as to whether the procedures  “provided substantially equal opportunity for public and private offerors to  compete for the contract without regard to the location at which the  workload is to be performed.”  In addition, 10 U.S.C. 2469a(d), which lists  the requirements for the selection process, provides that a public or private  competitor must be permitted to perform at the location of its choosing and  a competitor is not to be given preferential treatment for, or be limited to,  performing the workload in place or at any other single location.
As stated in our prior review of the solicitation for the Sacramento  workloads, we found no provisions in the solicitation that designated a  particular location at which performance was required or preferred or that  evidenced a bias toward any particular performance location.  Similarly,  in our review of the selection process, we found nothing to indicate that a  particular performance location was required or that there was a bias  toward a particular location in the evaluation of the proposals or the  selection of Ogden ALC.
In the selection, the SSA expressed concern about the risks inherent in the  Ogden ALC plan for transitioning the workloads from the Sacramento  facility to the San Antonio and Ogden performance locations.  The SSA  concluded that Lockheed’s proposal to perform at the closing Sacramento  facility gave that firm a slight advantage in the transition area.  As we  understand the 10 U.S.C 2469a provisions concerning performance  location, they are to prevent the Air Force from creating an advantage for a  particular location for reasons that are not reasonably related to  performance or cost.  We believe that the SSA’s concerns in the  evaluation, which centered on Ogden ALC's ability to convince more than  300 experienced Sacramento workers to relocate to Ogden, Utah, were  based upon legitimate performance considerations related to Ogden ALC’s  transition plan and did not reflect bias towards performance at  Sacramento.
section_title: Consideration of Noncost Factors
paragraphs: In accordance with 10 U.S.C. 2469a(g), our review of the selection process  is to include our view as to whether “appropriate consideration was given  to factors other than cost in the selection of the source for performance of  the workload.”  We found no basis to conclude that the Air Force did not  give “appropriate consideration to noncost factors in the selection  process.”
As discussed in our review of the Sacramento solicitation, the selection  was to be based upon “the best value to the Government.”  This selection  scheme integrated a relative assessment of such noncost factors as  transition, operations, and risk along with a extensive evaluation of the  proposed costs.  Under this evaluation method, the entity selected might,  or might not, be the competitor whose proposal was determined to  represent the lowest total evaluated cost.
The selection of Ogden ALC was based on the SSA’s assessment that the  public offeror’s slight advantage in the operations area (a noncost  consideration) combined with its lower evaluated cost resulted in the best  value to the government.  The evaluation and selection record shows an  intensive assessment of the noncost elements of each of the proposals.  For  example, the SSA considered Lockheed’s plan to recruit and maintain the  existing workforce in-place at the Sacramento facility to be a benefit; on  the other hand, she concluded that Odgen ALC’s plans for relocating the  workloads to San Antonio and Ogden were risky.  The record also shows  that the SSA considered and favorably noted Boeing’s (Ogden ALC’s  partner) technical approach for performing the KC-135 aircraft work but  expressed concern about the feasibility of Ogden ALC’s plans to implement  process improvements in performing the electrical accessories work.
While the offeror selected did represent the lowest evaluated cost to the  government, as the examples show, the SSA and the other evaluators  considered the relative merits of the technical and management  approaches of the offerors.  Thus, the record provides no basis for us to  conclude that factors other than cost were not given appropriate  consideration as required by 10 U.S.C. 2469a.
section_title: Compliance With Other Applicable Provisions of 10 U.S.C. 2469a
paragraphs: In addition to addressing the section 2469a provisions, including  performance location and consideration given to factors other than cost,  we reviewed the Sacramento competition to determine whether it  otherwise complied with the requirements of section 2469a.  As noted  previously, 10 U.S.C. 2469a sets forth six requirements that must be  satisfied in the Sacramento solicitation and selection process.
Reviewing the evaluation and selection records in the context of the 10 U.S.C. 2469a requirements, we found that the six requirements were  addressed during the evaluation and selection process in a manner that was  consistent with the solicitation evaluation provisions.  Thus, we found no  basis to conclude that the Sacramento selection process deviated in any  material respect from the requirements of 10 U.S.C. 2469a.
section_title: Compliance With Other Applicable Provisions of Law
paragraphs: As stated earlier, the provisions of 10 U.S.C. 2461 requiring a notice to  Congress of the savings to be achieved from a conversion of a DOD  function to private-sector performance, and the requirement in 10 U.S.C.  2462 that DOD is to contract with the private sector if a private firm can  provide the supply or service needed at a lower cost, apply generally to  conversions of DOD functions such as these workloads.  Whether the Air  Force must comply with either statute in a particular competition depends  upon whether a public or private offeror is selected.  In this case, the Air  Force selected the proposal of the public-sector offeror, Ogden ALC, which  represented the lowest total evaluated cost for the performance of the  workloads.  As we understand it, while the public offeror will use a private  firm to perform the KC-135 aircraft portion of the requirement, Ogden ALC  retains the overall responsibility for the performance of all of the  workloads.
Section 2469a, which provides specific authority for the Sacramento  competition, authorizes a public entity to use a private-sector firm as a  participant in its proposal.  In view of this special authority, and  considering that the Ogden ALC proposal represented the overall lowest  evaluated cost, we do not believe that either 10 U.S.C. 2461 or 2462 requires  that portions of the proposal representing work to be performed by the  public offeror or by its private partner be the subject of separate analyses.   We, thus, conclude that, in this case, the selection of the low-cost public  offeror was consistent with 10 U.S.C. 2462 and did not trigger the notice  requirements of 10 U.S.C. 2461.
section_title: Other Matters
paragraphs: While we found no basis to conclude that the evaluation and selection  process deviated in any material respect from the provisions of 10 U.S.C.  2469a and other applicable provisions of law, we identified several issues  related to the estimates used in the cost evaluation.  These issues are  discussed in the body of the report.
section_title: Major Contributors to This Report
subsections: section_title: National Security and International Affairs Division, Washington, D.C.
section_title: Office of the General Counsel, Washington, D.C.
section_title: Dallas Field Office
section_title: Related GAO Products
paragraphs: Army Industrial Facilities: Workforce Requirements and Related Issues  Affecting Depots and Arsenals (GAO/NSIAD-99-31, Nov. 30, 1998).
Navy Depot Maintenance: Weaknesses in the T406 Engine Logistics  Support Decision (GAO/NSIAD-98-221, Sept. 14, 1998).
Defense Depot Maintenance: Public and Private Sector Workload  Distribution Reporting Can Be Further Improved (GAO/NSIAD-98-175, July 23, 1998).
Defense Depot Maintenance: Contracting Approaches Should Address  Workload Characteristics (GAO/NSIAD-98-130, June 15, 1998).
Public-Private Competitions: Review of San Antonio Depot Solicitation  (GAO/OGC-98-49, May 14, 1998).
Defense Depot Maintenance: Use of Public-Private Partnering  Arrangements (GAO/NSIAD-98-91, May 7, 1998).
Public-Private Competitions: Review of Sacramento Air Force Depot  Solicitation (GAO/OGC-98-48, May 4, 1998).
Navy Ship Maintenance: Temporary Duty Assignments of Temporarily  Excess Shipyard Personnel Are Reasonable (GAO/NSIAD-98-93, Apr. 21,  1998).
Public-Private Competitions: DOD’s Additional Support for Combining  Depot Workloads Contains Weaknesses (GAO/NSIAD-98-143, Apr. 17,  1998).
Defense Depot Maintenance: DOD Shifting More Workload for New  Weapon Systems to the Private Sector (GAO/NSIAD-98-8, Mar. 31, 1998).
Depot Maintenance: Lessons Learned From Transferring Alameda Naval  Aviation Depot Engine Workloads (GAO/NSIAD-98-10BR, Mar. 25, 1998).
Public-Private Competitions: Access to Records Is Inhibiting Work on  Congressional Mandates (GAO/T-NSIAD-98-111, Mar. 4, 1998).
Force Structure: Army’s Efforts to Improve Efficiency of Institutional  Forces Have Produced Few Results (GAO/NSIAD-98-65, Feb. 26, 1998).
Public-Private Competitions: Access to Records Is Inhibiting Work on  Congressional Mandates (GAO/T-NSIAD-98-101, Feb. 24, 1998).
Public-Private Competitions: DOD’s Determination to Combine Depot  Workloads Is Not Adequately Supported (GAO/NSIAD-98-76, Jan. 20, 1998).
Public-Private Competitions: Processes Used for C-5 Aircraft Award  Appear Reasonable (GAO/NSIAD-98-72, Jan. 20, 1998).
Defense Depot Maintenance: Information on Public and Private Sector  Workload Allocations (GAO/NSIAD-98-41, Jan. 20, 1998).
Air Force Privatization-in-Place: Analysis of Aircraft and Missile System  Depot Repair Costs (GAO/NSIAD-98-35, Dec. 22, 1997).
Outsourcing DOD Logistics: Savings Achievable But Defense Science  Board’s Projections Are Overstated (GAO/NSIAD-98-48,  Dec. 8, 1997).
Navy Regional Maintenance: Substantial Opportunities Exist to Build on  Infrastructure Streamlining Progress (GAO/NSIAD-98-4, Nov. 13, 1997).
Air Force Depot Maintenance: Information on the Cost-Effectiveness of B-1  and B-52 Support Options (GAO/NSIAD-97-210BR, Sept. 12, 1997).
Navy Depot Maintenance: Privatizing Louisville Operations in Place Is Not  Cost-Effective (GAO/NSIAD-97-52, July 31, 1997).
Defense Depot Maintenance: Challenges Facing DOD in Managing Working  Capital Funds (GAO/T-NSIAD/AIMD-97-152, May 7, 1997).
Defense Depot Maintenance: Uncertainties and Challenges DOD Faces in  Restructuring Its Depot Maintenance Program (GAO/T-NSIAD-97-112, May 1, 1997) and (GAO/T-NSIAD-97-111, Mar. 18, 1997).
Navy Ordnance: Analysis of Business Area Price Increases and Financial  Losses (GAO/AIMD/NSIAD-97-74, Mar. 14,1997).
Defense Outsourcing: Challenges Facing DOD as It Attempts to Save  Billions in Infrastructure Costs (GAO/T-NSIAD-97-110, Mar. 12, 1997).
High-Risk Series: Defense Infrastructure (GAO/HR-97-7, Feb. 1997).
Air Force Depot Maintenance: Privatization-in-Place Plans Are Costly  While Excess Capacity Exists (GAO/NSIAD-97-13, Dec. 31, 1996).
Army Depot Maintenance: Privatization Without Further Downsizing  Increases Costly Excess Capacity (GAO/NSIAD-96-201, Sept. 18, 1996).
Navy Depot Maintenance: Cost and Savings Issues Related to Privatizing-in-Place at the  Louisville, Kentucky Depot (GAO/NSIAD-96-202,  Sept. 18, 1996).
Defense Depot Maintenance:  Commission on Roles and Mission’s  Privatization Assumptions Are Questionable (GAO/NSIAD-96-161, July 15,  1996).
Defense Depot Maintenance:  DOD's Policy Report Leaves Future Role of  Depot System Uncertain (GAO/NSIAD-96-165, May 21, 1996).
Defense Depot Maintenance:  More Comprehensive and Consistent  Workload Data Needed for Decisionmakers (GAO/NSIAD-96-166, May 21,  1996).
Defense Depot Maintenance:  Privatization and the Debate Over the Public-Private Mix  and (GAO/T-NSIAD-96-148, Apr. 17, 1996) and (GAO/T-NSIAD-96-146, Apr. 16, 1996 ).
Military Bases:  Closure and Realignment Savings Are Significant, but Not  Easily Quantified (GAO/NSIAD-96-67, Apr. 8, 1996).
Depot Maintenance:  Opportunities to Privatize Repair of Military Engines  (GAO/NSIAD-96-33, Mar. 5, 1996).
Closing Maintenance Depots: Savings, Workload, and Redistribution Issues  (GAO/NSIAD-96-29, Mar. 4, 1996).
Navy Maintenance:  Assessment of the Public-Private Competition Program  for Aviation Maintenance (GAO/NSIAD-96-30, Jan. 22, 1996).
Depot Maintenance:  The Navy’s Decision to Stop F/A-18 Repairs at Ogden  Air Logistics Center (GAO/NSIAD-96-31, Dec. 15, 1995).
Military Bases: Case Studies on Selected Bases Closed in 1988 and 1991  (GAO/NSIAD-95-139, Aug. 15, 1995).
Military Base Closures:  Analysis of DOD’s Process and Recommendations  for 1995 (GAO/T-NSIAD-95-132, Apr. 17, 1995).
Military Bases:  Analysis of DOD’s 1995 Process and Recommendations for  Closure and Realignment (GAO/NSIAD-95-133, Apr. 14, 1995).
Aerospace Guidance and Metrology Center:  Cost Growth and Other  Factors Affect Closure and Privatization (GAO/NSIAD-95-60, Dec. 9, 1994).
Navy Maintenance:  Assessment of the Public and Private Shipyard  Competition Program (GAO/NSIAD-94-184, May 25, 1994).
Depot Maintenance:  Issues in Allocating Workload Between the Public and  Private Sectors (GAO/T-NSIAD-94-161, Apr. 12, 1994).
Depot Maintenance  (GAO/NSIAD-93-292R, Sept. 30, 1993).
Depot Maintenance:  Issues in Management and Restructuring to Support a  Downsized Military (GAO/T-NSIAD-93-13, May 6, 1993).
Air Logistics Center Indicators (GAO/NSIAD-93-146R, Feb. 25, 1993).
Defense Force Management: Challenges Facing DOD as It Continues to  Downsize Its Civilian Work Force (GAO/NSIAD-93-123, Feb. 12, 1993).
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