oversight

Purchase of Tires for Heavy Snow Removal Vehicles by the Department of the Air Force

Published by the Government Accountability Office on 1971-02-23.

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

                                             i?3&3tAL ACCOUNTING     OFFICE
                                      WASHPNGTOM,D.C. 20548

DEFENSE   DIVIS1ON




              Commanding General, Air Force Logistics     Command
              Wright-Patterson Air Force Base, Ohio      45433
                     Attention:   MCIML

              Dear Sir:

                  Since July 1966, the Air Force has negotiated at least four
            contracts for remanufacture of snow removal equipment.           The four
            contracts negotiated with thtishkosh        Truck Corporation,    Cshkosh,
            Wisconsin, were FOg603-67-D-0003, FOg603-67-D-0099, F0%03-69-D-
              002, and F09603-70-D-1210,     These contracts were issued by the
          P Warner Robins Air Materiel Area and were administered by the
          LP efense Contract Administration     Service.    All contracts were nego-
            tiated fixed price.     The contract prices included costs to replace
            nonserviceable   tires,  and the contractor    usually installed    a
            complete set of new tires on each remanufactured vehicle.

                   We believe substantial   savings are possible if rebuilt    tires
              are used for this purpose rather than new ones. To the extent tires
              cannot be rebuilt,  some savings can still  be realized if new tires
              are obtained through the General Services Administration      Federal
              Supply Schedule rather than through the contractor.
                      In order to demonstrate the savings which can be realized, we
              compared the prices paid for new tires under contract F09603-69-b
              0002 with the prices shown in the Federal Supply Schedule for both
              rebuilt    and new tires,  The contract authorized the purchase of 608
              new tires for $173,930.

              SAVINGS FQSSIBLE BY USING REBUILT TIRES

                    Our review showed that had rebuilt  tires been used instead of
              new tires,   $137,000 would have been saved. Prices for rebuilding
              tires as shown in the Federal Supply Schedule are substantially
              lower than the prices for the 608 new tires.    Differences     range
              from about $1.26 to $244 a tire depending on size.     Rebuilding
              services are offered by four companies less than 85 mile:; from
              the contractor.




                                    50 TH ANNIVERSARY    1921-     1971 jo93
      To determine potential     savings, if all of the 608 replaced tires
could have been rebuilt,     we used prices shown in GSA Region 5 Federal
Supply Schedule for May 1969 through April 1970.       The following com-
parison shows differences     between the prices shown on work requests
for new tires and costs for rebuilding.

                            Unit   price
Number                                Rebuilding
    of                  On work          price     Unit price               Total
tires    Tire    size   requests        (note a>   difference          difference

 12       12.00-20        $1-63        $37.10'         $125.90     $     1,510.80

 46       12.00-20         164           37.10          u6.90            5,837.4-O
                                                   *
 36       14.00-20         280           58.68          221.32           7,967.52

124      14.00-20          278           58.68          219.32          qlg5.68

 74       14.00-24         309           6'+d'9         244.21          18,071.54

J&        14.00-24         307           64.79          242 .,2x        76,538.36

608
-"F=                                                               $137,121.30


"Contractors listed in the Federal Supply Schedule offer discounts
 ranging from 50 to 62 percent.   An average of 55 percent was used
 to arrive at these prices.

PISEWTIRES LESS COSTLYWHEN F'URCHASED
FROM GENERALSERKCCESADMINISTRATION

      We recognize that not every tire removed from the vehicles can
be rebuilt.    However, even if none of them met rebuilding     require-
ments, about $49,000 could have been saved by purchasing new tires
through the General Services Administration      Federal Supply Schedule.
We compared prices shown in the work requests under contract
FO9603-69-D-0002 with prices shown in the Federal Supply Schedule,
Federal Supply Classification      Group 26, Part II, for new tires based
on size and ply rating.      The following  table shows constructed
savings,




                                                                                     - 2 -
Number                     Unit price
   of                  On work                                    Total
tires     Tire size    requests       FSS        Difference    difference
 12       12,00-20       $163       $107.23        $55.77      $      669.24

 46       12.00-20        164        107.23         56.77          2,611.42

 36       14.,00-20       280        195.12         84.88           3,o55.68
124       14.00-20        273        1grj.12        82.88          10,277.12

 74       14.00-24        309        223.41         85.59          6,333.66

316       14.00-24        307        223.41         83.59          26,414.44
608                                                            $49,36+,

     We did not attempt to construct potential    savings under the
other contracts.
ADMINISTRATIVE
             VIEWSANDOUREVALUATION
Purchase of tires through Federal
Supply Schedule sources
      In view of these potential savings, we directed an inquiry to the
contracting officer, Warner Robins Air Materiel Area, Robins Air Force
Base, Georgia. We asked what consideration was given to procurement
of new tires through Federal Supply Schedule sources and rebuilding of
old tires as opposed to procurement of new tires.
      In a letter dated May 11, 1970, (attached), the Director, Procure-
ment and Production, stated that consideration is given to the procure-
ment of tires through the Federal Supply Schedule. However, the
delivery offered in the supply schedules has not been compatible with
required dates for delivery of tires.
      Contract FO9603-69-D-0002provided for the contractor to deliver
remanufactured vehicles in about 90 days after arrival at the contrac-
tors' plant. The Federal Supply Schedule for new tires in effect at
the time provided for delivery from 10 to 60 days after the date of
order, and the current schedule requires delivery within 30 days. The
supply schedule for rebuilt tires provides for pickup and delivery
within 7 to 25 days.   There would appear to be ample time to obtain
both new and rebuilt tires through Federal Supply Schedule sources and




                                                                          -3-
furnish them to the contractor     without   conflicting   with   the delivery
of the remanufactured vehicles.

Rebuilt   tires

      The Director  stated that the use of rebuilt    tires on heavy snow
removal vehicles is not feasible because the service life is question-
able, and operational    failures cannot be tolerated    due to the limited
number of snow removal vehicles in the Air Force.

      The Federal Supply Schedule, we note, includes rebuilding   ser-
vices for tires as large as 33.5-33 on heavy earthmoving and special
purpose equipment and guarantees rebuilding   tires against defects in
materiel  and workmanship.  This seems to establish  the companies'
confidence in using recapped tires on heavy ecpxipment.

      In recent years our office has issued four reports to the
Congress on rebuilding  tires.    In June 1966, we reported that substan-
tial  savings could be attained by rebuilding   motor vehicle tires
within the Air Force,   The Air Force was in'general    agreement with
our findings, and as a result of the report, Technical Order 36~32-1-11
was issued.   The Air Force policy,   as stated in this order, is to
rebuild tires     whenever possible rather than buy new tires.           '
      Our most recent report to the Congress, "Opportunity   for Improving
Results of Tire-Rebuilding   Programs in J&rope," issued January 1971,
pointed out that substantial   savings could be attained by more exten-
sive programs for rebuilding   used tires.  The Department of Defense
concurred in our recommendations and stated that additional     DOD policy
on vehicle-tire   standards and on the use of rebuilt  tires was in order.

     We believe that had there been any serious question regarding
the service life of rebuilt  tires that the Department of the Air Force
and the Department of Defense would not have been in agreement with
the conclusions and recommendations stated in the above report.

     We cannot envision an Air Force installation   which does not have
the capability   to change and repair tires on any of its equipment.
This capability,   it seems, would even be required to overcome downtime
caused by defects which sometimes occur in new tires.

       The Director also advised that rebuilding    service is not readily
available   in the vicinity of the contractor    due to the size of the
molds required to accommodate the tires.      This does not seem to be
the case since four companies within 85 miles oflthe contractor       offer




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         to rebuild tires of the sizes in question. Buckley Air National Guard
         Base, Colorado, obtains rebuilding services from a companylocated
         1,200 miles from the base with pickup and delivery being made every
         21 days.
        ' Tread design
                The Director stated that certain tread patterns are prescribed
         for use on vehicles which are operated on and around airfield runways
         and taxi areas. Buckley Air National Guard Base, Colorado, has eight
         snow removal vehicles.    The tread design of the tires mounted on this
         equipment varies between some of these vehicles; however, each of the
         vehicles has tires with similar tread design. Apparently, no one
         particular tire is required, provided the tread design meets foreign
         object damagerequirements. Tires on these eight vehicles were
         manufactured by six different companies. These were at least four
         different tread designs on these vehicles.    Two of the vehicles had
         one.tire each that had been rebuilt.

         CONCLUSIONS
                  ANDRECOMME8DATIONS
               We do not believe that the views of the Director of Procurement
         an's Production, Warner Robins Air Materiel Area, are valid regarding
         contract F09603-69-D-0002. Substantial savings can be realized by
         purchasing new tires from Federal Supply Schedule sources and by
         rebuilding tires whenever they meet rebuilding requirements.
              We recommendthat procedures being followed in replacement of
         tires on heavy snow removal equipment be reviewed in view of the
         potential economies involved.
              Wewould appreciate your commentson this matter and advice as
         to any actions you plan to take as the result of this letter.
              A copy of this letter   is being sent to the Secretary of the
         Air Force.




                                                 ssociate Director

         Attachment




                                                                                 -   5-
                                           DEPARTMENT             OF THE AIR FORCE
                                    HEADQUARTERS    WARNER    ROBINS AIR MATERIEL     AREA (AFLC)
                                           ROBINS   AIR   FORCE    BASE,   GEORGIA   31093




SUBJECT’-
              Informal Inquiry Dated 6 March 1970, Contract                             F09603-69-D-0002,
              Oshkosh Truck Corp, Oshkosh Wisconsin

        TO:   Air Force Audit Staff
              U S General Accounting Office
              Field Operations Division

              1. Your informal inquiry dated 6 March 1970 regarding subject
              contract was acknowledged by interim reply dated 25 March 1970.
              The referenced contract contemplates the remanufacture of snow
              removal vehicles to a "like new" condition and the vehicles carry
              the same manufacturer's      warranty as a new vehicle.              During remanu-
              facture the vehicles are disassembled to the bare frame. All worn
              parts and assemblies are replaced during reassembly as required to
              assure a "like new" vehicle.        Firm Fixed Prices for the remanufacture
              of the vehicles are based on the contractor              furnishing      all required
              supplies and services regardless of the condition of the vehicle
              when input to the contractor's       facilities.         The Government cannot
              forecast the type, size or quantities            of reparable vehicles to be
              remanufactured.      Special handling is necessary for certain unique
              requirements such as the vehicle tires.              During remanufadture, the
              tires are installed     pursuant to Section 3 para 3-2 of Technical
              Order 36Y32-l-11.      Directional   and non-directional           tires with varying
              tread depth cannot be intermingled.             The Administrative        Contracting
              Officer at DCASD-Milwaukee issues work orders authorizing                    new tires
              only when the contractor       cannot assemble a matching set of serviceable
              tires from those received on input vehicles.                When negotiating       prices
              on work requests the Administrative            Contracting Officer is authorized
              to recognize reasonable, allowable,           material handling and general and
              administrative     charges.    The quantity of snow removal vehicles in the
              Air Force inventory is the minimum necessary to support existing
              aircraft.      This requires maximum remanufacturing            effort     during the
               summer months each year.       The short period of time in which the
              vehicles can be brought from and returned to the Arctic locations
               creates a delivery problem of tires as well as a problem for delivery
               of other parts and components from subcontractors.                  The contract
               carries a production delivery time of 90 days from receipt of the
              vehicles in the contractor's       facilities.

              2.  In answer to question one, consideration  is given to utilization
              of the Federal Supply Schedule for procurement of tires.   In many
              cases, however, the delivery offered in the supply schedules has
not been compatible with required dates for delivery of tires.   All
factors are considered when approving the work request.   Cost and
delivery schedules for the tires are paramount in the decision as to
source of supply which will be in the best interest  of the Government.

3. In answer to question two, replacing tires at the installation         on
an as,needed basis is not compatible with "like new" remanufacture of
the vehicle.   The remanufactured vehicle would not carry a new vehicle
warranty on‘&ansmission,     axles and drive line components if the
vehicle was not equipped with serviceable      tires.   In many cases
remanufactured vehicles are not returned to the base or even the same
major command from which they originated.        Often the vehicles are
received at contractor's    facility with tires that have no additional
service life.   The vehicles must be completely serviceable        at the
time they are returned to the Northern and Arctic bases. The need for
vehicles during the fall and winter seasons will not permit the down
time necessary for the bases to purchase tires after receipt of
remanufactured vehicles.

4. In answer to question three, the use of recapped tires on heavy snow
removal vehicles is not considered feasible.        As stated above, operational
failures   cannot be tolerated  due to the limited      number of snow removal
vehicles in the Air Force fleet.        The service life of recapped tires
used on these vehicles would be questionable.         Due to thd size of the
molds required to acconrmodate the tires involved,        recapping service is
not readily available    in the vicinity    of the base or of the contractor.

5. In answer to question four, all new tires are standardized
according to the vehicle type and size.       In order to prevent foreign
object damage to aircraft,    certain tread patterns are prescribed by
T.O. 0.3GY32-l-11, para 2, 9.e., for use on vehicles which are to be
operated on and around airfield      runways and taxi areas. Dual-wheel
axles are prohibited.     All 54,000 pound Gross Vehicle Weight (GVW)
plows (Rotary and Displacement) are equipped with four 14.00 x 24,
20 ply, Goodyear Hi-Miller    All Weather (Diamond) tread tires,      complete
with tube and flaps.    All 34,000 pound GVWRotary type plows are
equipped with four 14.00 x 20, 18 ply, Goodyear tires of the same
tread pattern as 54,000 pound GVWvehicles,        with tubes and flaps.
Since the 34,000 pound GVWDisplacement type plows are used primarily
for clearing access roads , parking areas and residential      (family
housing) areas, use of dual wheel' axles may be authorized.        Either
four or six tires may be installed,      depending on the requirement of
the using command. These are Firestone "On-Highway" tread, size
12.00 x 20, 14 ply, complete with tubes and flaps.
6.     In answer to question     five , DCASD-Milwaulcee    has verified      that  old
tires     are disposed  of according     to normal  plant   clearance    procedures
specified     in the Contracts     for disposition    of excess GFP, condemned
property,     salvage  or scrap,

7.    Please   advise if additional      information    is   required   or   if   further
assistance     can be rendered.                                                             *.,.,.?. ,%nUl

FOR TEE COMH4NDER




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