UNITED ‘STATES GE~~~L~ACCOUNTMG OFFICE WASHINGTON, D.C. 20548 INTERNATIONAl. DIVISION B-165629 MAI? 1 5 1971 The Honorable 11111111111111 LM095692 The Secretary of Defense A Attention: Assistant Secretary of Defense I (JInstallations"and Logistics) Dear Mr. Secretary: c#%sihj In the course of our review, we learned that, for certain locations, the Army obtains laundry services by contracting with foreign firms, whereas the Air Force has its own '!in-housell laundry facilities operating at a fraction of their capacity at the same locales. &&99D26 /bL!J-emD~---- Cost calculations we made in conjunction with Army and Air Force specialists revealed that meaningful savings could be achieved through the use of a military inter-service agreement which would enable the Army to reduce its volume of contracttig by using Air Force laundry facilities at Cam Fknh Bay, Vietnam, and U Tapao, Thaiknd. Up until the time of our examination, the two services had not cooperated to reduce expenditures by consolidating their laundry service operations. After we discussed the matter with Army and Air Force laundry specialists, steps were taken to consider an inter-service laundry support arrangement for the Cam Ranh Bay area. Our computations (see appendix A) show that annual savings of about $227,238 can be realized by the Goverrment if the Army would reduce its contracts and obtain its laundry setices from the Air Force facilities at CamRanhBay. As shown in appendix A, about $113,056 of these savings consist of the difference between the Army*s contractual costs and the cost of obtaining the Air Force services at current operating unit costs. Also, the savings would include an estimated additional $114,182 because even lower unit costs would be experienced through the more efficient operation of the Air Force facilities at full capacity. SOTH ANNIVERSARY 1921” 1971 /i5giil From our observations and those of military officials, similar operationsl affiliations should result in savings at U Tapao, Thailand. As a result of our inquiry, an inter-services support agreement has been negotiated for the U Tapao area which reduced the handling of the Army's laundry requirements by local contractors, end increased the work load at the Air Force's facility. That facility formerly operated at only l/3 of capacity. In view of the substantial potential cost and balance-of-payments benefits that might be realized, we propose that the Departmant of Defense undertake studies to determine whether similar inter-service support agreements would be beneficial at other overseas locations. As a first step, we suggest that data be compiled and compared on contracting and in-house operati.ons of the Army, Navy, Air Force and M&ines. This would enable the identification of specific situations which indicate potential benefits through the use of inter-service support agreements so that they can be studied in greater detail. We have discussed this matter with appropriate military specialists and they have agreed that economic benefits are possible by using l,in-housefl facilities rather than contracting for laundry services. We would appreciate receiving the Department~s views and advice as to any steps taken or contemplated with cegard to the matters discussed in this letter. Copies of this letter are being sent to the Director, Office of Management and Budget; and the Foreign Operations and Government Infomtion Subcormnittee, House Committee on Government Operations. Sincerely yours, Enclosure -2- - APPENDIXA ESTIMATED$AVINGS To BEREALIZED BY CONSOLIDATIONOF LAUNDRYOPERATIONS ATM4 RANBBAY. VIETNAM Estimated Savinm Attributable to Difference in Cost Per Unit of Laundered Clothing Estimated Air Force Under Army Contract rrIn-Houself Operations .07 .044 *Estimated ApproxLmate Estimated Annual Potential KLHouse" Savings Number of Amy Clothing l/ ts l Savings Attributable to Per Unit Air Force can Proces 3A Difference in Existing Unit Costs ;ozs J&037,700 $113,036 iI Military specialists have informed us that the Air Force facility can handle this additional work load and that Amy is currently contracting for a work load in excess of this volume. Estimated Additional Savings Attributable to Full CaDacity Lau2xlry Operations Estimated Unit Cost of Air Force KLn-House" Operations Approximate At Full Work Load Units Estimated Savings current Camcity Savings at FuJl CamcitY at FuX. Capacity .044 .025 ,019 6,009,600 $114,182 Summary of Estimated Annuel SavinEts Attributable to: Difference in existing unit costs $ll3,056 Nl capacity operations 11,!+.182 Tot&I. estimated savings $227.238
Possibility of Using Contractors Instead of U.S. Government-Owned Facilities for Providing Laundry Services in Southeast Asia
Published by the Government Accountability Office on 1971-03-15.
Below is a raw (and likely hideous) rendition of the original report. (PDF)