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DOD Procurement: Changes to Military Specifications for Testing Industrial Fasteners

Published by the Government Accountability Office on 1990-12-21.

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

GAO

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                                                                  DOD PROCUREMENT
                                                                  Changes to Military
                                                                  Specifications for
                                                                  Testing Industrial
                                                                  Fasteners




                                                                                            RELEASED
                                                                RESTRICTED ---Not     to be released outside the
                                                                General Accomtlng Offlee unless speclflcally
                                                                approved by the Office of Congressional
                                                                Relations.

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                   United States
GAO                General Accounting Office
                   Washington, D.C. 20648

                   National Security and
                   International Affairs Division

                   B-242113

                   December21,lQQO
                   The Honorable Nicholas Mavroules
                   Chairman, Subcommitteeon Investigations
                   Committee on Armed Services
                   House of Representatives
                   Dear Mr. Chairman:

                   This report respondsto your June 21,1990, request that we review cer-
                   tain aspectsof proposed changesto the military specifications for
                   testing the quality of class 3 threaded fasteners.’Specifically, we
                   reviewed (1) whether the Air Force followed proper procedures for
                   implementing changesto the military specifications and (2) whether the
                   military services followed appropriate competitive procedures for
                   purchasing the gages2required to implement the proposed changes.


Results in Brief   cations, followed applicable Department of Defense(DOD) regulations
                   when it initiated changesto the fasteners’testing specifications. The
                   purpose of the changeswas to make fastener testing more stringent. The
                   Air Force justified the changesbecausethey believed somemilitary air-
                   craft accidents were causedby poor quality fasteners. To implement
                   these more stringent testing specifications, the Air Force and the Navy
                   have procured a specific gage-called an indicating type gage-which
                   analyzes deviations in fastener threads. When procuring these gages,
                   the Air Force and Navy have followed competitive procurement prac-
                   tices as specified in WD regulations and the Competition in Contracting
                   Act.

                   Standards for procuring class 3 fasteners include requirements for
Background         testing to determine the degreeof fit between the threaded shaft and the
                   mated bolt, or other parameters of the fastener, and the precision with
                   which the specific requirement is met. Such tests usually involve the use
                   of gagesto make the specific measurementsinvolved.



                   ‘Class 3 fasteners are mainly nuts and bolts used in submarine and aircraft construction, but may
                   also refer to any item that is threaded to mate with another, such as a turbine engine shaft.

                   ‘Gage can also be spelled “gauge”; however, the common spelling in the fastener industry is gage.



                   Page 1                                                       GAO/NSIAD-91-M      DOD Procurement
                       B-242113




                       In 1987,the Air Force proposed to changethe specifications for class 3
                       fasteners to changethe method of testing the quality of these fasteners.
                       The Air Forcejustified these changesbasedon reported accidentsto mil-
                       itary aircraft, which were attributed to poor quality threads on class 3
                       fasteners.
                       The processfor making changesto military specifications is prescribed
                       by applicable DOD regulations. These specifications-MIL-S-7742 and
                       MIL-S-8879-cover fasteners currently in the inventory and fasteners
                       developedand procured as a part of new defensesystems,respectively.
                       Both standards describethe physical characteristics of the threaded
                       portions of the fasteners, and the inspection and verification require-
                       ments for delivery and acceptanceof the fasteners by the ordering
                       services.
                       Testing is usually done by one of three methods-A, B, or C. Testing
                       under method A provides the least amount of thread quality informa-
                       tion, method B provides more thread information, while method C, the
                       most rigorous testing method, provides the most information on thread
                       quality. Prior to the proposed changes,methods A and B were used. The
                       proposed changeswill call for use of methods B and C. The proposed
                       changeswill also result in the need to use a type of gage-called an
                       indicating type gage(which analyzesthe deviations that exist in various
                       fastener thread elements)-to make the measurementsnecessaryto
                       meet the proposedtesting requirements.
                       The fastener industry (manufacturers, retailers, and contractors) has
                       expressedconcernthat the proposed specifications will be more rigorous
                       than is necessaryto achieve an appropriate level of quality in class 3
                       fasteners, and that the adoption of the new specifications will result in
                       excessivecosts to buy the necessarygagesand re-inspect existing fast-
                       ener inventories.

                       The Air Force followed applicable DOD regulations for changing the
Air Force Followed     testing specifications of class 3 fasteners. The regulation, DefenseStand-
Specification Change   ardization and Specification Program Policies, Proceduresand Instruc-
Procedures             tions; DOD 4120,3-M,involves certain considerations,including (1) an
                       initial justification for the change,(2) an evaluation of the cost impact
          Y            of the proposedchange,(3) solicitation of industry comment,and (4) the
                       assignmentof a project number prior to initiating the change.




                       Page 2                                      GAO/NSIAD91-S4   DOD Procurement



                                             ,’
                             B-242113




                             The Air Force prepared a justification for the proposed changes,solic-
                             ited industry comments,and obtained project numbers to initiate specifi-
                             cation changeprocedures.An Air Force official informed us that, based
                             on their past experiencewith previous specification changes,they did
                             not perceive a need to evaluate the cost impact of these proposed
                             changes.
                             Representativesfrom the fastener industry stated that cost increases
                             will result from the proposed changesbecauseof the need to acquire
                             gaging equipment, increasedinspection time, calibration and mainte-
                             nance costs, and costs for training inspection, planning, and design per-
                             sonnel. Becauseof these concerns,the HouseSubcommitteeon
                             Investigations has requestedthat the Air Force conduct a cost impact
                             analysis, That study is currently ongoing and is expectedto be com-
                             pleted in mid-December1990.

                             One major retailer has also argued that the processfollowed for
                             changing the standards was not proper, becauseindustry comments
                             were not adopted in the final standard. Throughout the process,DOD
                             solicited and received many industry comments.A DOD regulation pro-
                             vides that industry commentsbe considered,but they are not required
                             to be adopted in the final standard. DOD consideredand adopted several
                             industry comments.However, they also rejected some.


ixxv   lCt3   r UllU w txl
                             procedureswhen purchasing indicating type gagesand the contracting
Competitive                  records were complete.Theseproceduresgenerally included announce-
Procurement                  ment of the procurement in the CommerceBusinessDaily, issuanceof a
                             competitive request for proposal (RFP), and technical and cost evaluation
Procedures                   of contractor proposals.
                             We examined six contracts, which totaled more than $818,000of the
                             $1.2 million the Air Force and the Navy spent for these gagesfrom
                             October 1,1987, to May 16,199O.(The Army did not purchase any
                             gages).For each of these procurement actions, many vendors requested
                             copies of the RFP, but only one to three bids were received for each
                             action. One company was awarded all six contracts.

                             Somemanufacturers of indicating type gagesbelieve that the procure-
                             ment processfor government purchase of indicating type gageshas been
                             biased by including unnecessaryspecifications that favor a single
                             manufacturer.


                             Page3                                        GAO/NSIAD-91-S4DODProcurement
              B242113




              In examining the RFP specifications, we found that the RFPS specified
              that the gagesbe capableof the middle category of fastener testing
              (method B), but included additional specifications which, in effect,
              establisheda requirement for the most rigorous fastener testing stan-
              dard (method C). We also found that certain requirements in the RFP
              specifications we reviewed were not contained in the documentscited in
              the original CommerceBusinessDaily announcement,and that they
              were very similar to literature provided to the contracting office by the
              winning gagemanufacturer.
              Under the Federal Acquisition Regulation, an agency is required to pre-
              pare specifications and purchase descriptions that promote full and
              open competition and reflect the agency’sminimum needsand the
              market available to satisfy such needs.In addition, purchase descrip-
              tions may not be written to specify a particular feature of a product of
              one manufacturer unless the agency determinesthat the particular fea-
              ture is essentialto the government’srequirements. Specifications and
              purchase descriptions that do not comply with the provisions of the
              Federal Acquisition Regulation may be challengedby filing a bid protest.

              Concerningthe RFPS we reviewed, service engineerstold us that the
              listed requirements for the gages,including the more rigorous testing
              proceduresspecified, were necessaryto ensure the quality of the fas-
              teners. Becausewe were asked not to review the technical basis for the
              proposed changesto the fastener standards, we did not obtain informa-
              tion on whether the more rigorous test proceduresare in fact necessary,
              or whether the specifications identified in the RFPS for the gageswere
              appropriate.

              We discussedDOD proceduresand regulations, and reviewed documenta-
Scopeand      tion, for changingthe military specifications with the DefenseQuality
Methodology   and Standardization Office in Falls Church, Virginia, the Air Force
              Logistics Command,and the Aeronautical SystemsDivision at Wright-
              Patterson Air Force Base,Ohio. Documentsreviewed included DOD
              Manual 4120.3-M,DefenseStandardization and Specification Program
              Policies, Proceduresand Instructions, and DOD Directive 6000.43,Acqui-
              sition Streamlining. As you requested,we did not review the basis for
              the proposed changein the testing requirements, but we did review cer-
              tain concernsraised by fastener industry representatives.




              Page4                                       GAO/NSIAD-91-94DODProcurement
B-242113




We reviewed the Competition in Contracting Act of 1984
 (10 U.S.C.2304 et seq.) and DOD proceduresfor competitive procure-
ments, Our examination of the Air Force and the Navy’s procurement of
indicating type gagesfor class 3 fasteners involved reviewing (1) the
acquisition proceduresused by the procurement activity’s contracting
branch, and (2) the equipment specifications contained in the RFPS pro-
vided to interested vendors. We examined the last 2 to 3 years procure-
ment of these gagesat the Air Logistics Center at Kelly Air Force Base,
Texas; the Portsmouth Naval Shipyard, Maine; and the Norfolk Naval
Shipyard, Virginia.
We also met with two commercial gagevendors to discusstheir concerns
about the changein military specifications and the military services pro-
curement of indicating type testing gages.In addition, we conducted
telephonediscussionswith other gagemanufacturers, fastener industry
and other military service procurement representatives.

We conductedour review from July through October 1990 in accordance
with generally acceptedgovernment auditing standards.

As agreedwith your office, we did not obtain written agencycomments
on this report,. However, we discussedthe report with appropriate DOD
officials and have incorporated their commentsas appropriate.

Unless you publicly announceit contents earlier, we plan no further dis-
tribution of the report until 30 days from the date of this letter. At that
time, we will send copiesto the Chairmen, Houseand SenateCommittees
on Armed Services,the Secretariesof Defense,Army, Navy, and the Air
Force; the Director, Office of Managementand Budget; and other inter-
ested parties. We will also make copies available to others upon request.




Page 5                                       GAO/NSIAD-91-W   DOD Procurement



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lb242118




Pleasecontact me at (202) 275-4268if you have any further questions.
Major contributors to this report are listed in appendix I.
Sincerely yours,




!!f!iz:fy
Director
Air Force Issues




Page 6                                    GAO/NSIAD-91-94   DOD Procurement
Page 7   GAO/NSIAD-91-&I   DOD Procurement
Appendix I

Major Contributorsto This Report


                        Norman J. Rabkin, AssociateDirector
National Security and   ThomasJ. Denomme,Assistant Director
International Affairs   ClementA. Gaynor, Jr., Evaluator-in-Charge
Division, Washington
DC.




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