The Los Alamos National Laboratory, located in New Mexico, is charged with enhancing the security of nuclear weapons and nuclear materials worldwide. On Thursday, May 4, 2000, Bandelier National Monument workers in the Cerro Grande Mountain area set fire to a portion of the monument’s land to thin uncontrolled forest growth. The fire rapidly grew out of control, and during the 2-week period that followed, over 47,000 acres of national forest, county, pueblo, and laboratory land burned. The laboratory later reported that 8,000 acres of its land had been damaged, 39 structures had been destroyed, and almost $130 million in fire-related costs had been incurred. The laboratory was officially closed from May 8 until May 22 but, according to Los Alamos officials, remained in a state of emergency because of damage caused by the fire and the threat of flooding until August 2000. After the fire, the laboratory’s Cerro Grande Rehabilitation Project office contacted divisions that had lost equipment in the fire and required that they submit detailed lists of their losses to obtain the release of fire recovery funds from DOE. Seven divisions indicated that they needed a total of $13.2 million in fiscal year 2000 and $15 million in subsequent years to recover from the fire. Each division provided information on the equipment that had been damaged or destroyed by the fire, the estimated cost of replacement equipment, and the actual cost of replacement equipment that had already been purchased. The equipment needing replacement included desktop and laptop computers, printers, cameras, office furniture, scientific equipment, and related supplies. The laboratory, in general, purchases equipment using several procurement methods. Each method is intended to obtain goods and services at the lowest cost, taking into account the cost of procurement administration. One such method is the laboratory’s just-in-time subcontracting program. This program, according to laboratory officials, allows personnel to obtain products from prequalified suppliers at discounted prices, usually within 24 hours of order placement. Orders and payments are processed electronically, thereby eliminating the need for involvement from the procurement staff. Other procurement methods used by the laboratory include the purchase card program, wherein a credit card is used, and purchase orders. Through the purchase card program, laboratory personnel may order supplies and equipment through the Internet or other available sources of supply. Laboratory officials told us that the laboratory does not track the total cost of purchases of $25,000 or less made collectively through its just-in-time subcontracting program, purchase card program, and purchase orders. However, during fiscal year 2000, Los Alamos’ procurement staff processed over $46 million in individual purchase orders of $25,000 or less for goods and services, including personal computers, printers, digital cameras, and related equipment and supplies. The DOE Office of Inspector General has issued at least one report on computer acquisitions. Specifically, in 1997, the DOE Office of Inspector General performed an audit of desktop computer acquisitions at the Idaho National Engineering and Environmental Laboratory. The Inspector General’s report indicated that, in order to reduce costs, DOE’s Idaho contractor had formally studied its desktop computer acquisition practices and estimated that establishing a mandatory performance standard for computers would result in millions of dollars in savings per year. On the basis of this study, DOE’s Idaho contractor established a mandatory computer performance standard at the site. The Inspector General reported that DOE’s Idaho contractor could further improve its computer acquisition practices by using alternative supply sources, such as GSA, Small Business Administration contracts, or other desktop computer vendors. We found no similar DOE reviews regarding the acquisition of laptop computers, computer printers, or digital cameras for other DOE sites. The Los Alamos contractor probably could have saved money by expanding its possible supply sources. Our review showed that Los Alamos paid nearly the full retail price or more for many of the items. If Los Alamos had used more supply sources, it could have saved about 25 percent on certain items. Supply sources that could have been used include GSA and more suppliers that advertise over the Internet. Recent literature suggests that using the Internet to expand supply sources and compare prices can produce savings. Los Alamos officials indicated that the laboratory has been using the Internet but acknowledged that more enhancements in Internet procurement were possible. Because of the difficulty in getting detailed price and product information for the time period the purchases were made, we reviewed only 17 items purchased by the laboratory from May through July 2000 (see app. I). We determined the manufacturer’s suggested retail price (retail price) for 12 of the items: 5 desktop computers, 1 laptop computer, 4 printers, and 2 digital cameras. Of the 12 items, Los Alamos received discounts from the suppliers it used on only 5. In five cases, Los Alamos paid nearly the retail price for the items. In two cases, Los Alamos paid more than the retail price. In addition to comparing Los Alamos’ purchase prices with retail prices, we also identified individual suppliers that could have provided certain of the items at a cost below that paid by Los Alamos. For example, Los Alamos could have saved about 25 percent in some cases if it had used other sources. Los Alamos purchased the 17 items from three local New Mexico vendors (one of which was a just-in-time contractor), one Internet vendor, and one computer manufacturer. The laboratory did not attempt to purchase the equipment items through GSA’s Internet shopping site or from other vendors that advertise their equipment over the Internet. Laboratory officials told us that, for the items reviewed, they felt most comfortable dealing with companies they had done business with in the past. Because historical prices for computer and electronic equipment are not readily available, it was difficult to determine what Los Alamos could have paid for all of the 17 items we reviewed if it had used other vendors. We were able, however, to develop price comparisons for 4 of the 17 items: 3 printers and 1 digital camera. The total Los Alamos purchase price for the four items was $2,677, but these items would have cost $2,000 if purchased at that same time from GSA or from suppliers that advertise over the Internet, a savings of 25 percent. Although this sample is small, it shows that expanding supply sources could save money. In commenting on this information, Los Alamos officials said that the most expensive of the four items, a digital camera costing about $1,300 and purchased 8 days after the laboratory reopened, was needed immediately to document the fire damage and was purchased from a local vendor at a discounted price. However, we found that this camera could have been purchased directly from the manufacturer at any time after the fire for about $974 and received within 2 days with no shipping cost. Recent literature suggests that using the Internet to expand supply sources and compare prices can produce savings. For example, according to an article in the November 2000 issue of Public Management, Internet procurement offers a significant opportunity to cut costs, increase organizational effectiveness, and improve customer service. Internet procurement, as described in the article, allows agencies to search for products and services from available suppliers and determine best prices, product availability, and shipping costs. Although Los Alamos used the Internet to make many of its purchases, it did not use it to compare prices from available suppliers. Officials of the laboratory said it has been using the Internet but acknowledged that more enhancements in Internet procurement were possible. Los Alamos contracting officials further said that their contract with DOE encourages but does not require using GSA to purchase equipment and that they did not consider using GSA for their replacement purchases. One Los Alamos procurement assistant who was responsible for procuring many of the equipment items included in our review indicated that she was not aware that GSA had an online shopping site. In response to our review, Los Alamos officials said the laboratory would give greater consideration to using GSA for its future equipment purchases. Specifically, these officials indicated that people who use purchase cards now receive training on how to use GSA Advantage! and will be encouraged to use GSA as an alternative to the laboratory’s just-in- time program when appropriate. The Los Alamos contractor could save money by establishing mandatory performance standards for computer and computer-related equipment. DOE’s contractor at the Department’s Idaho laboratory reported that mandatory standards for computers resulted in cost savings at that laboratory. Neither Idaho nor Los Alamos has developed performance standards for computer printers, digital cameras, or other related equipment. However, consideration of such standards could provide additional opportunities for cost savings. According to the Office of Inspector General’s report on computer acquisitions at DOE’s Idaho laboratory, the contractor there determined that millions of dollars in cost savings were possible if mandatory performance standards for purchasing such equipment were implemented. The computer performance standards in question refer to such things as the speed of the microprocessor, the size of the random access memory, and the size of the hard drive. Before October 1994, DOE’s Idaho laboratory had no sitewide standard to govern the acquisition of desktop computer systems. To address this issue, the laboratory contractor formed a working group consisting of representatives from all laboratory departments to study the situation. The working group developed a specific computer standard and recommended that it be established laboratorywide. Anticipated benefits included, for example, lower computer support costs and fewer training expenses. The laboratory contractor required all departments to comply with the standard. The contractor also adopted and implemented a policy that stipulates, in part, that only the contractor’s information resources management director can approve deviations from the standard. Because DOE’s Idaho contractor reported cost savings at that laboratory, using mandatory performance standards may represent a best practice that could be used by Los Alamos. At Los Alamos, the contractor has developed minimum voluntary performance standards for its desktop and laptop computer acquisitions, but no maximum standards. Also, unlike Idaho, Los Alamos has no requirement that purchases above the standard receive formal management review and approval.