Need To Improve Consolidation Feasibility Studies and Maintenance Practices--GSA

Published by the Government Accountability Office on 1977-08-31.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                             3 -
                                   UNITED STATESGENERALACCOUNTINGOFFICE
                                             WASHINGTON,   D C   20548

               DIVIStON                                          AUG 3 I ‘I977

             Mr. Robert Graham, Commlssloner
             Federal Supply Service
             General Services AdmLnlstratlon
             Washmgton, D,C     20405

              Dear Mr         Graham

                     We recently    completed a study (GAO asszgnment code 943441) of
              problems experienced      by GSA m its efforts    to consolidate   and
              establish    Interagency    motor pools and purchase vehicles    needed to
              meet increased      agency requirements    Our draft report on this
              matter was forwarded      to Mr Solomon for comment on July 18, 1977.

                     In addltlon     to the matters discussed xn our draft report,      we
              have two other observations        that we want to bring to your attention
              SpecLflcally,      we belleve  that GSA needs to Improve the accuracy of its
              consolidation      studies and should give more conslderatlon     to multi-
              shift maintenance operation        as a means of reducing vehicle   requirements
              Details of our observations        follow.

              Consolidation        Studies
                    Studies prepared by GSA supportlng  proposed consolrdatlon     of
              motor pool systems include costs which have no real bearing on
              comparative   cost operations and tend to overstate potential    savings

                      In arrlvlng      at estimated savings, GSA studies include the
              differences       in depreclatlon     charges on Its motor pool vehicles          with
              vehicles    operating      m agency fleets          We found that the comparisons
              were meanIngless because depreclatlon               rates used by GSA and other
              agencies were not uniform and the age of vehicles                 mncluded In the
              comparisons varied considerably.             In any event, since depreclatlon
              expenses have no real bearing on savings that the Government will
              realize by consolldatlng          motor pools, we do not believe         that they
              should be included In GSA cost analysis studies                   On th1.s issue the
              Office of Management and Budget policy states                     . "that even if
              there existed unlformlty          between agencies In accounting         for depre-
              clatlon,     there would still       be no Justlflcatlon      for using different
              rates for cost comparison purposes                In dealing with the same vehicles,
              depreclatzon        should be based on the same factors            One agency should
              not logically        have a cost advantage over another agency "

        The followmg     example shows how GSA studies have overstated
savings by lncludlng       vehicle    depreclatlon   1~1 Its cost comparisons.
        At the request of the AzLr Force, GSA made a study of four
Air Force bases m 5an Antonlo,            Texas (Brooks, Kelly, Lackland,         and
Randolph)        The purpose of the study was to detemne            the feaslbillty
of expanding the exlstlng          San Antonlo Lnteragency motor pool to
serve these Arr Force bases            The GSA study recommended consolldatlon
and estimated savings of $745,000 annually              Differences    In deprecla-
tlon represented      $331,000 of the $745,000 savings stated In the GSA

       In addltlon     to depreclatlon,         other costs have received    questionable
treatment     1n GSA's studies         For example, one study conducted by GSA
Involved    some 698 agency vehicles,            some dispersed In rural areas and
scattered     over a 200-rmle radius             The savings proJected by the study
were based on comparlng the maintenance costs assocrated with motor
pool vehicles      operating    In a metropolitan        area with the maintenance
costs of agency vehicles          operatmg       1n rural areas on unmmproved roads
Furthermore,      GSA personnel     arbltrarlly       adJusted the cost figures
subrmtted by the agencies to colnclde with GSA experienced                 costs      For
example, if the agency showed accumulated mlleage of 60,000 rmles for
a vehacle and lndrcated         that it had requlrea         only two sets of new tires,
GSA arbltrarlly      added the cost of a third set of tires before making
Its cost comparisons.
       We belleve    that the eredlbllrty     of GSA studies IS reduced when
potential    savings are overstated       and that this may foster agency
opposltlon     to proposed consolldatlon.

Multi-shift    Maintenance

      In a May 1976 letter to the Admnlstrator    of GSA, we reported
that during 1975 a dally average of about 62 dispatch vehicles,       or
15 percent, were deadlined   for repair, service,  or lnspectlons   In
Region 5

       Durmg our current review, we noted that all of the GSA
interagency  motor pools we vlszted performed vehzcle maintenance
only during daylight    hours from 8 a.m. to 5 p.m     We believe   GSA
should consider performing    preventive maintenance and repairs     on
a second or third shift so that fewer vehicles      would be deadlined
for service or repair during the regular workday.

      Maintenance of vehicles  during other than normal duty hours
wauld also provide better service to GSA customers since the pools
would be open longer hours thus allowing       customers more flexlblllty
in picking up and retumlng    vehicles      Also, by havmg fewer vehicles
down for maintenance during "prime time", the number of vehicles          to
meet total motor paols requirement     would be reduced.

        Although we do not plan to formally   report on these areas, we
would    appreciate   I$ if you would gave us your thoughts on these
matters     and advlse us of any corrective  measures taken or contemplated

      We wxll be happy to discuss these matters         with you or members of
your staff    If you have any questxons, please         contact Paul Spitz of
my staff on 275-5877

                                    Sincerely     yours,

                                4               /L-&J
                                    Hen7 W. Connor
                                    Assocxate Dxector