oversight

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)

                                      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