GAO _. I h’(‘t”llllwl’ 1000 . (I 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. _-,-l_i”.“. .*...II.“.ll_l,.I__ ,I”-_ -,,.._- .__,.... I,.___.-._-,,, ,,, (;AO,:NSIAIb!~l-84 . .“__,I..I_.._._.__^_ --__--- __-.___.._. -.- __..__ --.-~.-- 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 ‘,. ‘., , 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. @@2680) Page 8 GAO/NSIAD-91-94 DOD Procurement Orclc~rittg Ittf’ortttalion I I.S. (;c*ttvral Ac*mtttttittg OfficC~ I’. 0. Box fiO15 t;;til.ttc~rshttrg, MI) NH77 I
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)