oversight

Opportunities for Savings by Increasing Competition in Procurement of Commercial Equipment

Published by the Government Accountability Office on 1971-02-26.

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

                           uipment   B-764018




    National Aeronautics and
       Space Admmstratlon

,




    BY THE COMPTROLLER    GENERAL
    OF THE UNITED  STATES
                                                         .


                COMPTROLLER      GENERAL     OF    THE       UNiTED     STATES
                               WASHINGTON     DC         20548




B- 164018




To the     President       of the Senate     and the
Speaker      of the     House    of Representatives

         This 1s our report         on opportunltles      for savings                   by in-
creasing     competition        In procurement       of commercial                     equipment
by the Natlonal        Aeronautics       and Space Admlmstratlon.

          Our   review was made      pursuant to the Budget    and Account-
ing    Act,   1921 (31 U.&C.    53), and the Accounting     and Auditing
Act     of 1950 (31 U.S.C.   67).

          Copies   of this report    are being  sent to the                       Dlrector,         Of-
fice    of Management        and Budget,  and to the Actmg                         Admmlstra-
tor,    Natlonal   Aeronautics     and Space Admxustratlon.




                                            Comptroller                 General
                                            of the United               States




                                       BESTDOCUMENTAVAlLABLE



                -      SOTH   ANNIVERSARY                1921-        1971                      -
    COMPTROLLERGENERAL'S                                  OPPORTUNITIES         FOR SAVINGS BY INCREASING
    REPORT TO THE CONGAESS                                COMPETITION        IN PROCUREMENT OF COMMERCIAL
                                                          EQUIPMENT
                                                          National       Aeronautics       and Space
                                                          Admlnlstratlon            B-164018


    DIGEST
    ------


    WHY THE REVIEW WASMADE

             The General       Accounting        Office     (GAO) has reviewed            the procurement        of
             equipment       by the NatIonal          Aeronautics        and Space Administration             (NASA)
             to determine       whether      its pollcles,          procedures,        and practices      have
             resulted      in maximum competltlon              as directed        by law        The equipment
             covered     In this      revlew     consjsted       of catalog,        or off-the-shelf,        Items
             and did not include            special      equipment       designed      to meet the specific
             needs of the users              The equipment          generally       consisted      of such items
             as electronic        instrumentation           devices      and photographic          and laboratory
             equipment         The revlew was made at five                  centers     which purchased         about
             $41 4 million        worth of equipment             during     1968


    FINDIIVGS AND CONCLUSIONS

             A significant           number of purchases            had been made without            effective
             competltlon          because,     1t-1 many instances      , restrictive         specifications
             governed       the procurement              Generally,     specifications          were prepared
             by the equipment            users or under their           direction        and included         spe-
             cial     features      which the users desired                  These special         features        usu-
             ally    were available          only on a particular            piece      of equipment        from a
             single      supplier          In some cases the special               features     were unneces-
             sary        If equipment         users had not specified              such features,         specifi-
             cations       could have been less restrictive,                   which probably          would have
             resulted       in Increased         cornpetitIon       and in savings         to the Government
             (See P 5 )

             Analysis   of 1,239 contracts       awarded during         1968 for equipment      cost-
             ing about $24 4 millIon       showed that       795 of the contracts          (64 percent)
I
             had been awarded without       effective      competltlon         Of the 795 contracts,
I            389 had been negotiated       on a sole-source          basis     For the other      406
             contracts,   bids had been solicited          from more than one supplier            but
             in every case only one bidder's          equipment        met the speclflcatlons
             (See p. 5 )

             GAO mailed     questionnaires          to a number of NASA suppliers          and inter-
             viewed their      representatives           Several   suppliers     informed    GAO that,
             when they received          an invitation      for bid that     specified     a brand name
             or equal,    they did not respond           because experience         had shown that     the
             brand-name     supplier      would receive       the award      (See p. 7 )

    Tear   Sheet



                                                               1
                                                                                                                  I
                                                                                                                  I
                                                                                                                  I
                                                                                                                  I
                                                             1                                                    I
                                                                                                                  I
    GAO believes     that  there    is little     lncentlve        on the part     of suppliers
                                                                                                                  I
    of the preferred      brands    to offer    their     products      at competitive       prices               I
    when they recognize       their   products'       charactenstlcs        in the specIfica-                     I
                                                                                                                  I
    tions                                                                                                         I
                                                                                                                  I
    Examples    of     procurements       of equipment           in which competition         was llmlted         I
                                                                                                                  I
    as a result        of restrictive       specifications           are discussed         on pages 9             I
    through   14                                                                                                  I
                                                                                                                  I

    GAO believes          that,    although       NASA's procurement         policy       (see p 4) 1s            1
                                                                                                                  I
    basically       sound,      restrictive         specifications       have limited         competltlon         I
    The basic       cause for excessive               use of restrictive         speclflcatlons           was a   I
    lack      of effective        management        control        Review and approval           of equ-rp-       I
    ment purchase           requests       and of speclflcatlons          were insufficient             to en-    I
    sure that        the equipment          requested       was necessary,       that    1-L satlsfled            I
                                                                                                                  I
    only mlnlmum          needs,      and that      the speclflcatlons        were not unnecessarily              I
    restrictive             (Seep         17)                                                                     I
                                                                                                                  I
                                                                                                                  I
    The inadequate         review    and approval       process      places     equipment     users In            I
    a posltlon         to decide   which suppliers'          equipment       they wants to prepare                I
    speclflcatlons         based on the unique          characteristics           of the Items     wanted,        I
                                                                                                                  I
    and to be virtually           assured   of getting         them       It usually      is not eco-             I
    nomical      for a suppller       to modify     existing       equipment       to compete     with an-
                                                                                                                  i
    other     supplier     that   can meet the speclflcations               wlthout      changes   in 1'~s        I
    product          (See p 17 )                                                                                  I
                                                                                                                  I
                                                                                                                  I
     Equipment       speclflcatlons  based on a particular    suppller's equipment                           or
     specifying        a brand name or equal should    be used only when no alterna-                              i
                                                                                                                  I
     tives     are   possible                                                                                     I

                                                                                                                  I
    Justlflcatlon      for such equipment        should     (1) Identify           the research          proJ-    I
    ect or work for which the equipment               1s needed and should              explain        the        I
                                                                                                                  I
    need for the equipment,         (2) identify        all special         requirements         dlctat-
    lng a sole-source       procurement      or the use of restrictive                 speclficatlons,            i
    (3) describe     the benefits       of the special        requirements,           and (4) list                I
                                                                                                                  I
    the estimated      cost of the minimum         acceptable        alternative        equipment                  I
    that     could be used if the special          requirements         were not necessary                         I
                                                                                                                   I
                                                                                                                   I
    Such Justification        would provide    reviewing      officials        with adequate   in-                 I
                                                                                                                  I
    formation       to ensure  that  the equipment      requested       satisfies    the mln7mum                  I
    needs of the Government         and that   the specifications            are not unneces-                     I
    sanly     restrictive                                                                                         I
                                                                                                                  I
                                                                                                                  I
                                                                                                                  I
                                                                                                                  I
RECOiYiWNDATIONSOR SUGGESTIONS                                                                                    I

                                                                                                                  I
    To Increase competltlon              and to provide            for the procurement    of equlp-               I
    ment that meets actual              minimum needs,           the Admlnlstrator     of NASA should
                                                                                                                  1
                                                                                                                  I
        --require       the use of specifications           that    have acceptable      ranges of                I
            dlmenslons,       performance,        and other   characterlstlcs       of the mInimum                I
                                                                                                                  I
            equipment      necessary      to fulfill     the Government's      requirements     and               I
                                                                                                                  I
                                                                                                                  I
                                                                                                                  I
                                                                                                                  I
                                                  2                                                               I
                                                                                                                  I
                                                                                                                  I
             --require     that   requests    fo; &e&purchase        of equipment       clearly        state
                whether    the speclflcatlons        are brand name or equal           or have been
                 prepared    on the basis     of equipment     descnptlons       in a suppller's
                 catalog   and, of so, that       the requests     give full     wrItten       Justlfi-
                 catlon   of the need for any restrlctlve            features    speclfled              (See
                 P. 18 )


AGENCY ACTIONS AND UNRESOLVEDISSUES

        NASA stated       that     it was in full     agreement       with the ObJective    of the
        recommendations          and that   it intended     to implement       requirements   empha-
        slzlng      to contracting      and management       officials     the need to increase
        competition          (See p 18 )


MATTERS FOR CONSIDERATION BY THE CONGRESS

        This report  IS sent to the Congress                  to     Inform  It of   the   actions     to be
        taken  by NASA to Increase  competition                    in procurement




Tear Sheet



                                                     3
                           Contents
                                                                   Page

DIGEST                                                               1

CHAPTER

       1   INTRODUCTION                                              4

       2   COMPETITION LIMITED BY UNNECESSARILY RESTRIC-
           TIVE SPECIFICATIONS                                       5
               Noncompetitive     procurements                       5
               Restrictive    specifications                         6
               Examples of use of restrictive         specifica-
                 tions                                               9
               Weaknesses rn evaluating        equipment re-
                 quests                                             15

       3   CONCLUSIONS, RECOMMENDATIONS, AND AGENCY
           COMMENTS                                                 17
              Conclusions                                           17
              Recommendations                                       18
              Agency comments                                       18

       4   SCOPE OF REVIEW                                          20

APPENDIX

       I   Letter    dated July 30, 1970, from the Acting
              Associate    Administrator   for Organization
              and Management, National      Aeronautics     and
              Space Administration,      to the General Ac-
              counting    Office                                    23

  II       Principal  offlcnals  of the National     Aeronau-
              tics and Space Administration     responsible
              for the activities  discussed   in this re-
              port                                                  26
COMPTROLLERGENERAL'S                                  OPPORTUNITIES         FOR SAVINGS BY INCREASING
REPORTTO THE CONGRESS                                 COMPETITION        IN PROCUREMENT OF COMMERCIAL
                                                      EQUIPMENT
                                                      National       Aeronautics      and Space
                                                      AdmInIstratIon           B-164018


DIGEST
we----


WHYTHE REVIEW WASMADE
         The General       Accounting        Office     (GAO) has reviewed            the procurement         of
         equipment       by the National          Aeronautics        and Space AdminIstratIon             (NASA)
         to determine       whether       its pol~cles,         procedures,        and practices      have
         resulted      in maximum competltlon              as directed        by law        The equipment
         covered     In this      review     consisted       of catalog,        or off-the-shelf,         items
         and did not include            special      equipment       designed      to meet the specific
         needs of the users              The equipment          generally       consisted      of such Items
         as electronic        Instrumentation           devices      and photographlc          and laboratory
         equipment         The review        was made at five           centers      which purchased        about
         $41 4 million        worth of equipment             during     1968.


FINDINGS AND CONCLUSIOIVS
         A slgn~f=~cant         number of purchases           had been made without            effective
         competlt~on         because,    in many Instances,           restnctlve        speclflcatlons
         governed       the procurement            Generally,     specifications          were prepared
         by the equipment           users or under their          dlrectlon        and included         spe-
         cial    features      which the users desired                  These special       features         usu-
         ally    were available         only on a particular            piece     of equipment        from a
         single     supplier          In some cases the special              features     were unneces-
         sary.      If equipment        users had not specified              such features,         speclfl-
         cations      could have been less restrictive,                  which probably         would have
         resulted      In Increased        competition        and In savings         to the Government.
         (See P* 5.)

         Analysis       of 1,239     contracts       awarded during         1968 for equipment      cost-
         lng about        $24 4 millIon        showed that       795 of the contracts          (64 percent)
         had been       awarded without         effective      competltlon         Of the 795 contracts,
         389 had      been negotiated          on a sole-source          basis     For the other      406
         contracts,        bids had been sbl~clted             from more than one supplier            but
         In every       case only one bidder's            equipment        met the speclflcatlons
         (See p.      5.)

     GAO mailed     questionnaires          to a number of NASA suppliers          and inter-
     viewed their      representatives           Several   suppliers     Informed     GAO that,
     when they received          an lnvltation      for bid that     specified     a brand name
     or equal,    they did not respond           because experience         had shown that      the
     brand-name     supplier      would receive       the award.     (See p. 7 )
    GAO believes     that   there    IS little     ~ncentlve        on the          part of suppliers
    of the preferred      brands     to offer    the-rr products         at         competltlve    prices
    when they recognize        their   products'      characterlstlcs                in the specifica-
    t-rons

    Examples    of procurements            of equipment        ?n which competltlon           was 17mted
    as a result    of restrictive            specifications        are discussed           on pages 9
    through   14

    GAO belleves     that,    although      NASA's procurement         policy       (see p, 4) IS
    basically    sound,    restnctlve         specifications       have llm~ted         competition
    The basic    cause for excessive            use of restrictive         specifications           was a
    lack of effective       management        control        Review and approval           of equip-
    ment purchase      requests      and of specifications          were lnsufficlent             to en-
    sure that    the equipment        requested       was necessary,       that    it satisfied
    only minimum     needs,     and that      the specifications        were not unnecessarily
    restrictive        (See p 17 )

    The inadequate          review    and approval      process       places     equipment     users In
    a position          to decide   which suppliers'          equipment       they want, to prepare
    specifications          based on the unique         characteristics            of the items wanted9
    and to be virtually            assured   of getting         them.      It usually      IS not eco-
    nomical       for a supplier       to modify     ex-rstlng      equipment       to compete with an-
    other      supplier     that   can meet the speclflcatlons               without      changes   in its
    product           (See p 17 )

    Equipment       speclflcatlons  based on a part?cular   supplier's equipment                              or
    specifying        a brand name or equal should   be used only when no alterna-
    tives     are   possible

    Justlflcation         for such equipment        should     (1) ldentlfy          the research          proJ-
    ect    or work for which the equipment              IS needed and should              explain        the
    need     for the equipment,        (2) ldentlfy        all special        requirements          dicta-t-
    lng    a sole-source       procurement      or the use of restnctlve                 specifications,
    (3)    describe     the benefits       of the special       requlrementsg           and (4) list
    the    estimated      cost of the minimum        acceptable        alternative        equipment
    that     could   be used if the special          requirements         were not necessary

    Such Justification        would provide    reviewing      officials        with adequate    in-
    formation       to ensure  that  the equ-rpment     requested       satlsfles     the minimum
    needs of the Government         and that   the specifications             are not unneces-
    sarily    restrictive


RECOMM.ENDAT~ONS
              OR SUGGESTIONS
    To increase competltlon              and to provide          for the procurement    of equlp-
    ment that meets actual              mlnJmum needs,         the Admlnlstrator     of NASA should

       --require       the use of speclficatlons            that have acceptable        ranges  of
           dimensions,       performance,        and other    characteristics      of the minimum
           equipment      necessary      to fulfill     the Government's      requirements     and


                                                  2
       --require      that requests     for the purchase       of equipment       clearly        state
          whether    the speclflcatlons        are brand name or equal          or have been
           prepared     on the basis    of equipment     descnptlons       In a supplier's
           catalog   and, of so, that       the requests     give full    written        ~ustifi-
           cation   of the need for any restrlctlve            features    speclfled              (See
           P 18.1


AGENCYACTIONS AND UNRESOLVEDISSUES
    NASA stated       that     It was in full    agreement       with the obJective    of the
    recommendations          and that   it Intended    to Implement       requirements   empha-
    slzTng      to contracting      and management     offlclals      the need to Increase
    competition           (See p 18.)


MATTERSFOR CONSIDERATIONBY THE CONGRESS
    This    report  IS sent to the Congress             to     inform  it of   the   actions     to   be
    taken     by NASA to Increase  cornpetitIon              in procurement
                                         CHAPTER 1

                                   INTRODUCTION

       The National    Aeronautics    and Space Act of 1958
 (42 U.S.C. 2451) authorized       the peaceful     exploratron        of space
and established      NASA to research    into and solve problems of
flrght     In and out of the earth's     atmosphere     and to develop,
construct,     test,  and operate aircraft,      mlsslles,      satellites,
other space vehicles,       and related    equipment    for research
purposes.

     Chapter 137, Title     10, United States Code, formerly       the
Armed Services  Procurement      Act, provides  that the procurement
of goods and services    by the Government be made, to the ex-
tent possible,  under condltlons      of full  and free competition,
The NASA Procurement    Regulation    states that

           "Plans,drawings,        speclflcations        or purchase de-
           scriptions       for procurements      shall state only the
           actual minimum needs of the Government and de-
           scribe     the supplies     and services        in a manner which
           will    encourage maximum competition              and eliminate
           insofar      as is possible,       any restrictive       features
           which might limit        acceptable      offers     to one sup-
           plier's      product,   or the products         of a relatively
           few suppliers."

        The operations   of NASA are under the direction     of four
offices      the Office   of Manned Space Flight,   the Office    of
Space Science and Appllcatlons,       the Offrce of Tracking    and
Data Acquisltlon,      and the Office   of Advanced Research and
Technology.

        The equipment     covered In this review consisted     of cat-
alog, or off-the-shelf,          items and did not include   special
equipment designed        to meet the specific    needs of the users.
The equipment generally         consisted  of such items as elec-
tronic    instrumentation      devices and photographic    and lab-
oratory     equipment.      The scope of our review 1s described     m
chapter 4.

           The principal     officials        of NASA responsible     for the ac-
tivitles       discussed     in thrs       report  are listed     ln appendix II.

                                             4
                                 CHAPTER 2

              COMPETITION LIMITED         BY UNNECESSARILY

                     RESTRICTIVE     SPECIFICATIONS

      Our review at five centers   revealed     that,    in many in-
stances,  the use of restrictive   specifications        for the pro-
curement of equipment had resulted      in a significant        number
of purchases ' being made without    effective     competition.

        Generally,  specifications       were prepared     by equipment
users or under their        direction    and included    those special
features    which the users considered         necessary    or desirable.
We found, however,      that the special       features    were generally
available     only on a particular       piece of equipment     from a
single    supplier  and that,       in some cases, the special       fea-
tures were unnecessary.

      If    equipment users had not specified             such special    fea-
tures,    the invitations      for bids for the equipment           could have
contained     less restrictive       specifications,       which probably
would have resulted         in increased      competition     and in savings
to the Government.

NONCOMPETITIVE PROCURE~NTS

       To determine      the extent   of competition        for equipment
purchases     at the five centers,       we compiled     statistics      on
equipment purchases         during calendar     year 1968.        The statis-
tics showed that four of the centers had awarded 1,029 con-
tracts    In the total      amount of about $18.2 million           and that
the frfth     center,    Goddard Space Flight       Center,    had awarded
828 contracts       in the amount of about $23.2 million.              We
selected    for analysis       210 of the Goddard contracts--in            the
amount of about $6.2 million--on            a random basis and all the
1,029 contracts       awarded by the other centers.            Thus our
analysis    included     1,239 contracts     covering    equipment pur-
chases in the amount of about $24.4 million

      Our analysis    revealed   that 795 contracts,          or about
64 percent,   had been awarded without     effective          competltlon.
Of the 795 contracts,       389 had been negotiated          on a


                                      5
sole-source    basis,    For the other 406 contracts,      bids had
been solicited     from more than one supplier       but in each case
only one bidderIs      equipment met the specifications.         The
details    for each center are shown in the      following    table,

                         Noncompetitive
                            Awarded on                                   Total
                    Sole      basxs of                   Compet-        awards
  Center           source      one bid        Total       itive       revrewed

Ames                  121           28          149          54            203
Electronics            85          117          202          91            293
Goddard                74           72          146          64            210
Langley                57          129          186         140            326
Lewis                  52           60          112                        207

       Total          389          *                                     1.239

Percent                31              33        64           36          100

RESTRICTIVE     SPECIFICATIONS

        We found that the lack of effective            competition       was
primarily     attributable        to the widespread    practace     of tarlor-
ing procurement         speclfacataons    to a particular       suppllerfs
product     and that this practice        limited   the number of sup-
pliers    that were able to respond to the invitations                 for bids.

         The tailoring     of specifications        generally      was accom-
plished     in one of two ways,          One  practice    was    to  cite a
particular       brand and model and to stipulate             that an equal
would be acceptable          if the equal could meet certain             charac-
terlstics.         The other technique       was to copy verbatim         or to
paraphrase       the description      of the preferred        brand and model
in the supplier's         catalog.

        We found that,  when either   of these          two ways of writing
specifications     was used, the procurement            usually was made
under one of the following      circumstances.

       1. The preferred       brand was bought on a sole-source
          basis without       solicitation  of other bids,
       2. The preferred  brand         was bought      because    no other
          brds were receaved.

       3, The preferred   brand was bought             because lower bids
          for other brands were rejected               for not meeting
          specifications,

       We were told by technical           personnel     at the centers,
and our review conflrmed,           that it was common practice            for
the users of equipment         to select       in advance the brand and
model desired       and then to write the specrflcations               around
the features       of that brand,       We found that these features
often had lrttle        or no relation       to actual     performance     re-
qulrements      but were apparently        Included     only to ensure pro-
curement of the preferred           brand,       Consequently,     if a sup-
plrer   offered     another   brand that could meet the center's
actual   requirements,      the supplIer's         bid could be ruled non-
responsive      for failure    to comply wl-th the specaflcations.

        Although     the users probably          were sincerely    motivated
to select what they consrdered                to be the product      best sulted
for their      purposes,     we belleve       that they often attempted        to
obtain     the highest     performance        and most desirable      features
available      without    adequate consrderatlon           of whether the
added cost of such features             was Justified       by the benefits
that would be realized,             Moreover,      since users cannot al-
ways be completely         familiar     with all products        on the mar-
ket, the practnce         of basing specifications           upon the physl-
cal features        of a preferred      brand may result,        m some
cases, 1.n excludmg          from consideration         another   brand which
has higher       performance      characteristics       than those of the
preferred      brand.

        To obtain      the views of NASA suppllers              on the centers'
practice      of using restrictive         speclficatlons,          we mailed
questlonnalres         to a number of suppliers            and interviewed
therr     representatives.         Several   suppliers        rnformed us that,
when they received         an rnvltation       for bid that specrfred           a
brand name or equal or when they recognized                      that the speci-
fications       were based upon the features             of a particular
brand, they did not respond because experience                       had shown
that the brand-name          supplier    would receive         the award.
      Generally,      the suppllers    that we contacted        expressed
the ophnron that NASA could increase            competition      for its
equrpment purchases         if rt would base the specxflcatlons           on
the performance       characterxstlcs     needed to fulfill        NASA re-
quirements     rather    than on the physical     characteristics        of
one suppllerOs       product.

          In view of the suppliers'           comments, we belreve       that
 lnvitatlons      for bids that cite specifications               based on par-
tlcular      brands restrict        competition     because suppliers        of
other brands believe            that NASA prefers       the products     rndi-
cated by the speclficatlons               and therefore    do not bid,        As
a result,       we belleve      that there 1s little        incentive    on the
part of supplrers           of the preferred      brands to offer      their
products       at competrtlve       prices when they recognize         therr
products"       characterrstlcs         In the speclf ications.
EXAMPLES OF USE OF RESTRICTIVE             SPECIFICATIONS

      To gain greater   rnsaght    Into the equipment      procurement
systems at the centers,      we selected    40 noncompetrtlve      pro-
curements and examnned into each one In detafl.              Our review
of these procurements     revealed    the following   lnformatlon

                                                                Number
                                                               of cases
         Competltlon      llmlted   because of:
              Use of restrrctLve        tailored
                 specrfications                                    29
             Use of restrictive         brand-name
                 or equal specifications
         No restractlon        of competition    noted            - ii
                    Total

         Following       are examples of procurements   of equipment  In
which competltlon            was llmlted as a result  of the use of re-
strictive        specifications.

Video   tape   recorder

        A center had a need for a video tape recorder                to be
used in recording       test subjects'       physical     and facial    reac-
tions under various        controlled     condrtlons        Because some of
the tests were to be conducted            In a mobile medical monltor-
ing trailer       where space was at a premium, the researcher
specified      that the recorder      be sufflclently       compact to be
mounted in a 19-inch        equipment     rack.      He specified    also that
the recorder       have the maximum continuous          recordrng    time capa-
bility    available,    to mlnlmize     the need for Interrupting           test
projects    to change the tape.

      The technician      who was asked to develop the speclflca-
tlons told us that he had reviewed            vendors'     catalogs    and had
determlned    that the longest       continuous     recording     time avall-
able on the market was 90 minutes and that the recorder                    with
this capabllaty      apparently     would fit    anto a 19-inch       equlp-
ment rack.     He then wrote the speclficatlons             around the fea-
tures listed     In the catalog      for this model recorder          and In-
cluded the requirement         that it be capable of flttlng           into the


                                       9
equipment     rack.    Subsequently,       the supplier    of this recorder
notified    the center that it could not be mounted in a 19-
Inch rack.       The technicIan      then rewrote     the specifications
to eliminate      the requirement       for rack mounting,      stating
that,    when the recorder      was used in the trailer,          it would be
placed on a table rather         than rn the equipment rack.             Neves-
theless,    the size and weight limitations,            which were based
on the dimensions       and weight of the preferred          model, re-
mained unchanged in the specifications.

      Invitations for bid for the procurement     of the recorder
were sent to 23 suppliers,     but only two bids were received,
in the amounts of $4,350 and $5,550.      The supplier  submlt-
tlng the low bid stated    that it was offering:
      rr*** [a] video tape recorder       which provides    the
      basic functional    and operational      characterls-
      tics as interpreted    by Specifications        No. L50-
      9012A.

      "The specifications          as written   are restrictive
      to one particular        manufacturer     and source of
      supply therefore       llmlting      the competitive      pro-
      curement position        the Federal     Government de-
      sires .I'

         The low bid was reJected     because the recorder         had the
capability      for only 60 minutes of uninterrupted           playing   time
instead     of the required    90 minutes,     because it exceeded
slightly     the size and weight limitations,            and because of
certain     other minor differences.       The contract       was awarded
to the higher       bidder, the supplier     of the recorder        that had
been the basis for the center's          specifications.

      The recorder    was received      by the center in August 1968
but was inoperable     and had to be returned       to the manufac-
turer for repair.      It was not returned       to the center until
December 1968.     At the time of our review in September 1969,
none of the tests had exceeded about 45 minutes and many of
the tests had included      interruptions     which would have pro-
vided the opportunity     to change tapes nf it had been neces-
sary to do so.




                                     10
        We discussed     this procurement    with the researcher    using
the recorder,      who   stated that he was not aware of the $1,200
difference     between     the prrce of the recorder    that was pur-
chased and the low         bid,    He told us that, had he been aware
of this drfference,          he would have reconsidered    hrs request
for the go-minute        recorder.

Tow tractor

        A center's      lnvltatclon      for bids for the procurement            of
a tow tractor        contained       speclflcatlons        based on those in the
catalog     description        of a brand and model which center offi-
cials had determined            would meet the center's           needs.     The
speclflcatlons        cited the brand name and model or equal and
listed     a number of required            features     which were ldentlcal
with those of the preferred                brand, lncludlng        a 4,000-pound
drawbar      pull,    a six-cylinder          gasoline-powered       engine with
approximately        227-cubic-inch          displacement      and 84 brake horse-
power, a fully        synchronized         transmission      wzth three forward
speeds and one reverse              speed, and hydraulic         brakes with an
Orscheln-type        parking      brake.

         The contract     file    did not contain        documentation     justl-
fying the need for these specific                 features     or evidence    that
these speclflcatrons           had been questioned          during the purchase
request     approval     process.       Moreover,     none of the center of-
flclals     whom we rntervlewed,          including      some of the approvrng
officials,      could explain        the function       of, or the need for,
the specified        Orscheln-type       parking     brake.

        SIX frrms were rnvlted    to bid on the tow tractor,     but
only one bid was received.        The other five firms replied
that they were unable to meet the specrflcations.            A con-
tract    for the tow tractor    was awarded to the vendor whose
catalog     had been used as the basis for preparing     the pur-
chase speciflcataons.        The contract  price was $5,380.

      We contacted    a number of suppliers  and determined       that
there were several     other brands of tow tractors     available      at
comparable    or lower prices,   whrch had a 4,000-pound      or more
drawbar pull but which could not meet one or more of the
other specifications.       For example, two of these tractors
had engrnes with fewer than six cylinders.         Center officials
told us that a SIX-cylinder      engine was not absolutely
necessary     and that a tractor      with fewer cylinders    might have
been acceptable       rf It could do the job required.        They said
that,     In addltlon    to the 4,000-pound     drawbar pull,    the
essential     requirements     were weight and safety.
        Since the lower priced tractors                that we Identafied       had
not been evaluated         by the center's         technical    personnel,      we
could not determlne          whether they would have met the weight
and safety      requirements.          We belleve      that it IS apparent,
however,thatthe         restrictive        specaflcations      effectively
eliminated      from competltlon         for this advertised          procurement
all but the preselected             brand and model of tow tractor.
Audio    tape   recorders

       A center needed seven audio tape recorders       for use In
sonic-boom     tests to be conducted    in Californlals   MoJave
Desert,    Because of the remoteness of the test locations,
the center desired     a recorder   with a low power consumption,
to permit operation     from a storage battery.

        The speclflcatlons      were based on the catalog             descrip-
tion of a model with a power consumption                  of 125 watts,
which we understood         was the lowest power consumption             of any
recorder     then available.        The speclflcatlons         cl-ted maxlmum
dlmenslons      that approximated       those of the preferred          brand
and cited many other features             that were copied almost ver-
batim from the supplier's           catalog,     including     the capablllty
to operate      at an altitude      of 70,000 feet.         Since the sonic
booms were to be recorded           at ground level,        the only reason
for including       this requirement        appeared to be that It was a
feature    of the preferred       recorder.

       The center sollclted     bids for the procurement       of the
recorders    from 53 suppliers     but recenved only three bids,
in the amounts of $112,798,        $106,750,   and $75,740.      The low
bid was reJected    because, among other things,        the recorder!s
power consumption    was 500 watts,      which exceeded the specs-
fled maximum of 125 watts.         The second lowest bid was re-
celved from the supplier       around whose catalog     descrlptlon
the speclflcatlons     had been written.      This bid was accepted
and the recorders    were purchased for $106,750.
        The suppller was late         In dellverlng  the recorders,            and,
after    they were delivered,         the center found them to be


                                        12
defective.     At the time of our fleldwork,     the center had re-
turned the recorders     to the manufacturer    numerous times and
was still  trying    to have them repaired   under the warranty

        When less than a month remained before commencement of
the scheduled       tests and the center had not yet received                   the
tape recorders        in an operable       condition,      it sollclted       new
proposals      for the procurement         of seven tape recorders            to ac-
complish     the tests.       Because of the urgency of the require-
ment,    the   proposals     were  solicited       by telephone,      requiring
delivery     withln     10 days, although        the center recognized          that
this requirement         might exclude from biddIng           a number of ma-
Jar tape recorder         manufacturers      who conceivably         could meet
the speciflcatlons.           The specifications         for this procurement
were based upon two selected              commercial models or equal.

        Two proposals          were received          One, in the amount of
$68,565,        was for the recorder          for which a bid of $75,740 had
been received           under the original         solicitation               The other
proposal,         in   the   amount   of  $64,750,      was     for    a   brand   of re-
corder for which a bid had not been received                             in the original
solicitation.             The  center    accepted     the     low    proposal      and ne-
gotiated        a contract      for the purchase of the seven recorders
for $64,750,             Since these recorders          had a power consumption
of 500 watts and could not be operated                        from storage         bat-
teries,       the center also purchased             seven electric             generators
at a total          cost of about $1,750.           We were informed             by the
researcher          that these tape recorders             satlsfactorlly          met the
center's        requirements       for the sonic-boom             tests.

        It is apparent    that the center did not consider      all the
alternatlves    when it purchased    the original  recorders     at a
cost of $106,750.       Had It done so, it could have purchased
seven recorders     and seven generators    to accomplish    the tests
at a considerably      lower cost.

Leak detector

         A center had a need          for a leak detector       to detect    and
measure leaks In vacuum             systems.      The user of this equipment
identified       the need for       the equipment,     selected    the pre-
ferred     brand and model,         drafted    the purchase request,        pre-
pared the specifications,               recommended the source,       evaluated



                                            13
the bids, selected   the supplier  to receive                  the award,     and
accepted  the equrpment upon delivery.

       The bid solicitation           cited a brand name or equal in ac-
cordance with specifications              which included      such special
features     as sensitivity,        response time, cleanup time, cold
trap,    remote control,       dimensions,       and operating    instructions
permanently     printed      on the instrument,       all of which were
taken from a catalog          description      of the preferred      model

        Invitations        for bid were sent to         12 suppliers        and five
bids were received,            ranging     from a low     of $2,986 to a high
of $4,540.          The second haghest bid, In            the amount of $4,090,
was for the leak detector              on which the       center's      specifica-
tions had been based.              The   three lowest       bids were declared
nonresponsive          for failure     to meet the      specifications,          and
the award was made to the supplier                 of   the preferred        brand.
The highest         bid was not evaluated        for    compliance       with the
specifications.

        The lowest bid was rejected        because, among other rea-
sons, the instrument        did not have a cold trap.       The user of
the equipment      informed us that the purpose of the cold trap
was to condense out harmful         vapors and to protect      the sys-
tem from contamination.          Our examination    of the catalog
describing     the detector    for which the low bid was submitted
showed that it had a titanium          pump which removed impurities
from the system by a different          process than the cold trap.
The user told us that he had not been familiar             with the
titanium    pump and that,     had he been aware of its capability,
he would have given more consideration            to the low bid in
view of the price difference         of more than $1,000.

       Although      we do not know for certain        that the lowest
priced    leak detector      would have fulfIlled        the center's    re-
quirements      since the low bid was reJected          without    a techni-
cal evaluation         of the titanium     pump, we believe     that this
procurement      illustrates      the effect    of basing specifications
on the features         of a preselected     brand and model instead         of
on actual     performance     requirements




                                         14
WEAKNESSES IN EVALUATING EQUIPMENT REQUESTS

       We belleve       that the use of restrlctlve           speclflcatlons
stems from a lack of effective                management control       over the
review and approval            of equipment purchase requests            and of
the accompanying          speclflcatlons.         The users of equipment        are
responsible       for preparing         the purchase requests       and the
equipment      speclflcatlons.            NASA procedures   require      that these
requests     be revlewed        and approved by users'        branch and dl-
vlslon    chiefs.

        Our review showed that purchase requests                      generally       did
not contain       wrltten     Justlflcatlons          of equipment       needs or
other lnformatlon           necessary      for the reviewing          offxlals        to
determine      that the required           equipment was necessary,              that
It satlsfled       only mlnlmum needs, or that the accompanying
speciflcatlons         were not unnecessarily            restrictive.          We dls-
cussed with branch and dlvlslon                   chiefs   at the various          cen-
ters the basis for approving                 requests.,     At one center they
told us that they relied               heavily     on the Judgment of the
users to make the proper determlnatlons                     of what to buy.
Some offlclals          told us that In revlewlng             purchase requests
they were concerned prlmarrly                  with the avallablllty            of funds.

        After        a purchase request         has been approved by thebranch
and dxvlslon           chief and, In some Instances,                  by an asslstant
drrector,        It 1s reviewed           in the center's          procurement      office.
According        to procurement           personnel,      they seldom question             the
need for special              features      of equipment because they are not
qualified        to make a determlnatlon               of the need for technlcal
features.           We believe        that the procurement            personnel     should
be able to rely upon the branch and dlvlslon                             chiefs   to ade-
quately      fulfill        their    reviewing      responslbllltles.           It fol-
lows, however,            that such reliance           requires       that equipment
needs be thoroughly                evaluated    at those management levels.

       NASA's cost reduction    reports   show that slgnlflcant
savings can be obtained      when equipment     requests    are closely
evaluated,    as illustrated   by the following      cases.
        1. After determining     that a certain    contractor     was the
           only source avaIlable       for the procurement      of shlp-
           board counters,   a center requested       the contractor
           to submit a proposal      for the counters.        The
           contractor  submltted        a proposal   of $120,000,    which
           the center consldered         excessive.    After  obtalnrng
           competltlve  bids from        other contractors,    the center
           awarded a contract    to      the low bidder for $30,000.

      2. A center needed four cameras to Include                    In Its pho-
         tographlc      system for a launch simulator.                 In 1967 a
         request     for a proposal       was sent to the sole-source
         contractor,      who offered      the Items for $30,000.             Be-
         cause of budget constraints,             however,      the center
         could not purchase the cameras.               After      reexamlnlng
         Its requirements,          the  center   determlned        that ex-
         isting    cameras could be modlfled           to satisfy         Its
         needs.      The   modlflcatlons      were  made    for     $2,200.

       3. A user requested        that a certain     item be bought from
          a speclflc     contractor     because that contractor       was
          the only one that could furnish            the Item.   Contract-
          ing personnel      questloned     this declslon    and sollclted
          bids from other sources.           Eight bids were received,
          ranging    from a low bid of $62,975 to the high of
          $203,500 that was submltted           by the recommended sole
          source.      The award was made to the low bidder.

       As part of our review,            we examined reports         Issued by
NASA's internal       auditors       and found that from March 1965
three reports      had been issued that included              findings     slmllar
to ours.     They reported         that the Lewis Research Center not
only had a very high number of sole-source                   procurements         but
also hadlnsufflclentdocumentatlon                 to Justify     buying items
on this basis.        In August 1967 the auditors             reported      that,
at the George C. Marshall              Space Flight   Center,      the Justlfl-
cations   often lacked enough lnformatlon               to establish        the
necessity     for purchasing         items on a noncompetltlve           basis and
that procurement        speclflcatlons       had been prepared          on a basis
that precluded      competltlon.          In September 1968 they reported
that the Electronics          Research Center needed to obtain                in-
creased competltlon         for Its purchases.




                                         16
                                    C-MPTER 3

       CONCLUSIONS, RECOMMENDATIONS. AND AGENCY COMMENTS

CONCLUSIONS

         We belleve    that,    although    NASA's procurement      policy     is
basically       sound, its practice        of using restrictive       specifi-
cations      has resulted     in llmlted     competltlon.       Our review
indicated       that the basic cause for excessive            use of restrlc-
tlve speclflcatlons          was a lack of effective         management con-
trol     over the review and approval          of equipment purchase re-
quests and of specifications              to ensure that the equipment
requested      was necessary,        that it satisfied     only minimum
needs, and that the specifications               were not unnecessarily
restrictive.

        This Inadequate       review and approval          process places
equipment      users In a position         to decide which suppliers'
equipment      they want, to prepare         speclficatlons        based on the
unique characterlstlcs           of the items wanted, and to be vir-
tually     assured of getting       them,     We believe       that invlta-
tlons for bids that contain            speclflcatlons         based on de-
scrlptlve      features    of a particular        product,     rather     than on
performance       requirements,     result     in limited      competltlon       be-
cause It usually         is not economical        for a supplier        to modify
existing      equipment    to compete with another            supplier      that
can meet the speclflcatlons            without      changes in its product.

        In our opinion,        the centers'      procurement      systems need
to be strengthened         to realize      the economies normally
achieved     through competition          and to obtain      adequate assur-
ance that equipment purchases              are consistent       with mlnlmum
needs.     In addition,        we believe     that NASA should reempha-
size to its centers          Its basic procurement         policy     and should
establish      the controls       necessary     to ensure that the policy
1s properly       implemented.

      We believe   that equipment     specifications    which are
based on a particular    supplier's     equipment    or which specify
a brand name or equal should be used only when no alterna-
tives are possible.     We believe     also that Justification      for
such equipment    should (1) identify       the research proJect    or


                                        17
work for which the equrpment 1s needed and should explain
the need for the equipment,                (2) identify       all special      requlre-
ments which necessitate             a sole-source         procurement      or the use
of restrictive        specifications,          (3) describe       the benefits       of
the special       requirements,        and (4) list        the estimated       cost of
the minimum acceptable            alternative         equipment which could be
used if the special           requirements        in item (2) above were not
necessary.        Such Justifications           would provide        reviewing     of-
facials      with adequate information              to ensure that the equip-
ment requested        satisfies       only the minimum needs of the Gov-
ernment and that the specifications                    are not unnecessarily
restrictive.

RECOMMENDATIONS

     To Increase  competition and to provide for the procure-
ment of equipment  that meets actual minimum needs, we rec-
ommend that the Administrator  of NASA:

       --Require      the use of specifications       that have accept-
          able ranges of dimensions,         performance,   and other
          characteristics      of the minimum equipment necessary       to
          fulfill     the Government's    requirements.

       --Require       that requests   for the purchase of equipment
          clearly      state whether the specifications        are brand
          name or equal or have been prepared            on the basis of
          equipment       descriptions   in a supplier's    catalog     and,
          lf    so,  that the requests     give a detailed     written     JUS-
          tlfication       of the need for any restrictive        features
          specified.

AGENCY COMMENTS

     NASA's comments on our draft  report     were furnished  to
us in a letter  dated July 30, 1970 (see app. I), by the Act-
ing Associate  Administrator for Organization     and Management.

        NASA advised us that it was in full          agreement with the
obJective    of the recommendations        and intended     to implement
operating    requirements    which would emphasize to contracting
and management officials       the need to increase         competition
in the procurement       of commercial-type      equipment.



                                          18
        NASA stated    that It Intended       to require     a certlflca-
tlon,    with concurrence       at no lower than the dlvlslon             level
of the requesting        organlzatlon,     that the speclflcatlon            em-
ployed the widest ranges of characterlstlcs                 consonant with
the use envlsloned        for the equipment        and that,    In the req-
ulsrtloner's      Judgment,     no quality    or characteristic         was
stated as a requirement          which was not necessary          for the ad-
equate performance        of the equipment.         NASA stated      also that,
If such a certlflcatlon           cannot be made, the documentation
accompanying      the request       should provide    full   particulars
and a Justlflcatlon         for the use of the restrlctlve             speclfl-
cation.

       NASA stated further            that the certlflcatlon       would be
expanded to provide          notlflcatlon       when a manufacturer's           cat-
alog had been used In preparing               the speclflcatlons          or when
speclflcatrons       were brand name or equal.               NASA stated that,
in such cases, the requlsltloner                would be required         to make
a written      determination        that In his judgment        the use of
brand-name or equal purchase descrlptlons                    or speclflcatrons
would permit adequate competltlon                and that all the known
acceptable      brand-name products          meeting the user's         requlre-
ments had been listed           In the determlnatlon.

        In addition,    NASA stated that It was confident          that the
certsflcatlons       and Justlflcatlons     described   above would
serve as an effective         means to realize     the desired   lmprove-
ment In procurements        of the type questioned      by GAO and that
center directors       would be requested      to implement    approprl-
ate   procedures     rmmedlately.




                                        19
                                CHAPTER 4

                            SCOPE OF REVIEW

        Our review Included      an examlnatlon    of pertinent     records
and documents at the Ames Research Center,            Moffett    Field,
Callfornla,      the Electronics    Research Center,      Cambridge,
Massachusetts,       the Goddard Space Flight      Center, Greenbelt,
Maryland,     the Langley Research Center,        Hampton, Vlrglnla,
and the Lewis Research Center,         Cleveland,    Ohlo.

       We complied statlstlcs        showing the amount of competl-
tlon that these centers        obtalned     In the award of 1,239 con-
tracts   for equipment    during     calendar    year 1968.     We also
selected    for detalled    examlnatlon       40 noncompetltlve    procure-
ments at the five centers.




                                      20
APPENDIXES




   21
                                                                                                          APPENDIX I
                                                                                                              Page 1


                              NATIONAL      AERONAUTICS            ANB SPACE ABMINISTRATION
                                                      WASHINGTON        DC   20546



                                                                                             JUL 30 1970
REPLY TO
ATTN OF    KDp-1


           HP, James K, Spencer
           Ass%stant   Director,      Civil         Division
           IY. 9. General    Accounting            Office
           Washington,    D. C. 20548

           Dear Hr, Spencer:
           We appreciate        the opportunity        to camment on the recommendations                 in the
           draft    audit    report,    “Qpportunities        for Savings     by Reducing        Noncompetitive
           Procurement       of Commercial-Type         Equipment.”       As can be seen from the
           attached      comments,    the NASA is in full           agreement   with the objective             of
           the recommendations          and we intend       to implement      operating       requirements
           which will       emphasize     to contracting        and management      officials        the need to
           increase      competition      in the procurement         of commercial-type          equipment.

           As is indicated            by the report         also,     we bellieve        that the NASA’s procure-
           mant policy         is bas%cally        ssannd and we are &I full                  agreement    that purchase
           requests        and equipment        specifications            should not be unnecessarily                restric-
           tLve.       Acsordingly,        our e          nts are limited            to consideration         of the
           recommendations            and the steps necessary                 to implement        them.   We feel we
           should point          out however,       that certain            of the procurement          examples
           mentroned        fn the report        do not necessarily               indicate       a lack of effective
           management         comtrol     over the review and approval                     of purchase     requests,          For
           instance,        when equipment         meeting        specifications           is not offered       following
           a solicitation,            the schedule        for experimentation                may force the acquisition
           of equipment          whLch would have been regarded                     as only marginally          acceptable
           at the time the request               was originally             approved.         The successful        performance
           of the marginal            equipment     is frequently             associated       with a margin        of risk
           which may be tolerable               only within          the context         of time and circumstances.

           We apprecfate      your efforts    in helping     MASA to make its procurement
           practices    more effective     and believe     that the additional       requirements
           described     in the attachment      w111 strengthen     our procedures,,

           Sincerely       yours,




           Bernard  Horitz
           Acting  Associate                      trator
           for Organization                       agemen t


                                                                   23
APPENDIX I
    Page 2

          NASA COl4!@3TSOFITpbE GAO DW.P RXPORT TO CONGRESSOR
          OPPOR%THITIESFOR SAVDES BY R.EEWXNGRONCOI'4PETI~
                PR0C~JRWT OF C~CIAEWE         EQUIPMEXT


The General Accounting Office (GAO) In the draf‘t report titled
"Opportu.tx.Lt~es for Savings by Reducing Woncompetitive Procurement of
Commerciti-m        Equipment," presents two primary recommendations with
a tiew to xnproving competitive      opportunities by decreasing the use
of restrictive    specz~fications.

It 1s -iIGw!4policy, as set forth in NASA Procurement Regulation,        Part 1,
Subpart 12, to "state only the a&&. minimum needs of the Government
and describe the supplies and sertices in a manner which wxll encourage
maximum competition   snd etiminate,znsofar     as is possible,   any restric-
tive features which might limit acceptable offers to one supplier's
product, or the products of a relatively     few suppliers."     The regulation
also covers policy considerations     on the availability    of specifications,
standards, plans and draw%ngs, and the use of purchase descriptions
811d the use of brand names.
The following   comments are submxtted regarding         the recommendations
contained III the report:
GAO Recommendation I. Place increased emphasis on the use of specificctr
tions wkch call. for acceptable ranges of dimensions, performance,   and
%her characterlstxs     of the minims equipment necessary to fulfill  the
&vernment"s  requirements,
We agree that the Government requisitioner         should thoroughly         justify the
use of specxfxcations      which set forth restrictively       nsrrow ranges of
performance,    illmensions and other characteristics;        or, which establish
a reqluerement of a tind or level found In the product of only one or two
producers.     The use of such specifxcations      can be le@timate under
certdn     compelling circumstances.      When specifications      prove more restrfc-
txve than necessary it is probably more due to striving              for engineering
or tectical     perfection   on the part of the reqwsitioner           rather than any
intent to limit competition.
One of the recognizable    difficulties     that arises, contributing       to
instances of using a restrictive        specification,   is the inability      of a
contracting  officer,   not clearly in possession of superior technic&I.
knowledge, to superimpose his opinion or judgment on equipment require-
ments stated to be necessary by a technics3ly          qualified  initiator     of a
purchase request.     And we believe,     as does GAO, that "procurement




                                      I

                                           24
                                                                           APPENDIX I
                                                                               Page 3

personnel should be able to rely upon the branch and tivislon                chzefs to
adequately fulfill       their reviewing responslblllties."         Nevertheless,       we
now l&end to require more than the review and approval by the user's
branch and tivislon        chiefs by adding the need for a certiflcatlon            with
concwrence at no lower than dinsion             level in the Initiator's       organlza-
tion that the specaflcataoa         as stated employs the widest ranges of
characteristics     consonant dLth the use envisioned for the equipment, and
further,    that ;~n the reqasitioner's        Judgment no quality or characterlstlc
1s stated 8s a requirement which is not necessary for the adequate
performance of the equipment.          If such certification     cannot be made,
then the documentation accompanying the request shall provade full
particulars     and a Justification      for the use of the restrlctlve        specifl-
cation.     Such Justification      shall be concurred In at division        level.
GAO Becommendat~on 2, Whenever specaficatlons    are brand name or equal,
or have been prepared mth the use of a supplier's     catalog, require
that the intivldual  who prepares the purchase request clearly state
that fact and that he furnish a detailed written    Justification  for
using tnis type of spciflcatlon.
The certlflcatlon       mentloned above ~~11 be expanded to provide notlfica-
tlon when a given manufacturer's        catalog has been used in preparmg the
specification.        When this occurs or when specifications      are brand name
or equal, the documentation accompanying the request knll provide full
justlficatlon      for the concurrence of the &vision       chief.    Thus the
requisrtioner     will be requzred to make a written deterrmnatlon         that in
his JU        nt the use of brand name or equal purchase descriptions          or
speciflcatlons       ~~11 permit adequate competition,    that all of the known
acceptable brand name products meeting the user's requirements have
been listed in the determination
In order to maintain the engineering            competence demonstrated XI the
accomplishment of the USA Msslon to date, we feel that engmeermng
personnel must be free to exercise their Judgment in determining needs
At the same time, the contractq            officer   needs to know that such
Judgment, considering        all aspects, including      the need for competition
and economy, has in fact been made. We are confident              that the
certifications      and Justrficatrons     described above will serve as an
effective      means to realialm      the desired improvement In procurements
of the type questioned by GAO, and we ~111 request Center Directors
to mplement appropriate          procedures umnetiately



D. J.@arnett
Assistant Adsnnistrator
  for Industry Af'fa.irs




                                              25
APPENDIX II
     Page 1
                 PRINCIPAL      OFFICIALS   OF THE

       NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

         RESPONSIBLE FOR THE ACTIVITIES                DISCUSSED

                         IN THIS REPORT


                                                  Tenure        of offlce
                                                  From                      -To

                         HEADQUARTERS

ADMINISTRATOR:
    George M. Low (actlng)                  Sept.        1970       Present
    Thomas 0. Paine                         Oct.         1968       Sept. 1970
    James E. Webb                           Feb.         1961       Oct.    1968

DEPUTY ADMINISTRATOR:
    George M. Low                           Dec.         1969      Present
    Thomas 0. Pal-ne                        Mar.         1968      Oct.    1968
    Robert C. Seamans,    Jr.               Dec.         1965      Jan.    1968

ASSOCIATE ADMINISTRATOR
    Homer E. Newell                         Oct.         1967       Present
    Robert C. Seamans, Jr                   Sept.        1960       Sept    1967

ASSOCIATE ADMINISTRATOR FOR
  ORGANIZATION AND MANAGEMENT*
    Richard C. McCurdy                      Qct a 1970             Present
    Bernard Morltz   (acting)               May   1969             Oct.    1970
    Harold B. Finger                        Mar.  1967             May     1969

ASSISTANT ADMINISTRATOR,
  OFFICE OF INDUSTRY AFFAIRS AND
  TECHNOLOGY UTILIZATION
     Daniel J. Harnett                      act    l     1969      Present
     George J. Vecchlettl   (acting)        May          1969      Sept. 1969
     Phlllp    N. Whittaker                 Aug.         1968      May     1969
     Bernhardt    L Dorman                  Jan.         1967      July    1968




                                   26
                                                                       APPENDIX II
                                                                            Page 2
                                                           Tenure    of offlce
                                                           From                  To
                                                                                 -
                               AMES RESEARCH CENTER

 DIRECTOR:
     Hans M. Mark                                   Feb.      1969       Present
     H. Jullen Allen                                Oct.      1965       Feb.    1969


                           ELECTRONICS RESEARCH CENTER (note              a)

 DIRECTOR:
     James C. Elms                                  Oct.      1966      June          1970


                           GODDARDSPACE FLIGHT CENTER

 DIRECTOR:
     John F. Clark                                  July      1965      Present


                              LANGLEY RESEARCH CENTER
DIRECTOR*
    Edgar M. Cortrlght                              May       1968      Present
    F. L. Thompson                                  May       1960      May     1968


                               LEWIS RESEARCH CENTER

DIRECTOR:
    Bruce T. Lundm                                  Nov.      1969      Present
    Abe Sllversteln                                 Nov.      1961      Oct.    1969
%lectronlcs             Research   Center   was closed      as of June     1970.




U S GAO   Wash,   D C


                                            27