Department of Energy: Opportunities Exist to Improve Los Alamos' 
Equipment Purchasing Practices (04-JUN-01, GAO-01-426). 	 
								 
The Department of Energy (DOE) received $13.2 million in	 
supplemental funding in fiscal year 2000 to replace equipment	 
lost in the May 2000 Cerro Grande fire that damaged the Los	 
Alamos National Laboratory. GAO reviewed the practices used by	 
the contractor that operates the laboratory--the University of	 
California (UC)--to determine whether it can benefit from	 
modified purchasing practices. GAO found that UC can save money  
by (1) expanding its supply sources to include suppliers such as 
the General Services Administration  and the Internet, (2)	 
establishing mandatory maximum performance standards for computer
purchases to avoid unjustified, costly, and unnecessary 	 
capabilities, and (3) increasing its use of a standard brand of  
computer and computer-related equipment to maximize volume	 
discounts with selected suppliers.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-01-426 					        
    ACCNO:   A01027						        
  TITLE:     Department of Energy: Opportunities Exist to Improve Los 
             Alamos' Equipment Purchasing Practices                           
     DATE:   06/04/2001 
  SUBJECT:   Computers						 
	     Contractors					 
	     Cost control					 
	     Electronic equipment				 
	     Equipment inventories				 
	     Internet						 
	     Laboratories					 
	     Procurement practices				 
	     Cerro Grande (NM)					 
	     Idaho						 
	     Los Alamos (NM)					 

******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO Testimony.                                               **
**                                                              **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced.  Tables are included, but    **
** may not resemble those in the printed version.               **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
******************************************************************
GAO-01-426
     
Report to the Secretary of Energy

United States General Accounting Office

GAO

June 2001 DEPARTMENT OF ENERGY

Opportunities Exist to Improve Los Alamos' Equipment Purchasing Practices

GAO- 01- 426

Page i GAO- 01- 426 Los Alamos Fire Replacement Purchases Letter 1

Appendix I Los Alamos National Laboratory Equipment Price Comparison 13

Appendix II Scope and Methodology 14

Appendix III Comments From the Department of Energy 15

Abbreviations

DOE Department of Energy GSA General Services Administration Contents

Page 1 GAO- 01- 426 Los Alamos Fire Replacement Purchases

June 4, 2001 The Honorable Spencer Abraham The Secretary of Energy

Dear Mr. Secretary: In fiscal year 2000, the Department of Energy (DOE)
received $13.2 million in supplemental funding to replace equipment lost in
the May 2000 Cerro Grande fire that damaged the Los Alamos National
Laboratory. Because of congressional concerns about whether these funds
would be spent in the most economical fashion, we reviewed the practices
used by the contractor that operates the laboratory- the University of
California- to make the replacement purchases. In late 2000, we briefed
congressional staff on the need for, and scope of, supplemental funding at
the laboratory. In the course of our work since then, however, we noted
several opportunities for Los Alamos to improve its purchasing of computers,
printers, and digital cameras that we wanted to bring to your attention.
While the laboratory spent about $350, 000 on such items as a result of the
fire, it spends millions of dollars annually on similar purchases.

This report discusses how the contractor can improve its purchasing
practices by (1) expanding possible supply sources for equipment purchases,
(2) establishing mandatory performance standards for equipment purchases,
and (3) standardizing the brands and models of computer and computer-
related equipment the laboratory uses. To identify these opportunities, we
reviewed the purchases of 17 replacement items: computers, printers, and
digital cameras. For each item, we requested information from Los Alamos
contracting officials on performance specifications, procurement source, and
price paid. We independently attempted to determine if each item could have
been procured at a lower price, met existing laboratory performance
standards, and adhered to any laboratory- imposed limit on purchasing
various brands and models of the same equipment. In addition, we reviewed in
detail one DOE report on computer acquisitions at the Department?s Idaho
National Engineering and

United States General Accounting Office Washington, DC 20548

Page 2 GAO- 01- 426 Los Alamos Fire Replacement Purchases

Environmental Laboratory. 1 (See app. II for details of our scope and
methodology.)

Opportunities exist for the Los Alamos contractor to save money by modifying
its purchasing practices in three areas. First, the contractor could expand
its use of supply sources. About 25 percent could have been saved on certain
items if the laboratory had used the General Services Administration (GSA)
or additional suppliers that advertise over the Internet. In response to our
review, Los Alamos officials said they would give greater consideration to
using GSA for future equipment purchases.

Second, the contractor could establish mandatory maximum performance
standards, such as defining the size of the hard drive, for computer
purchases. Los Alamos has established voluntary minimum performance
standards for its computer purchases, but no maximum standards. All
computers we reviewed had performance capabilities that exceeded Los Alamos?
minimum standards. Because Los Alamos does not require that such purchases
be formally reviewed, we could not determine if the higher cost Los Alamos
paid for computers with enhanced capabilities was justified. In contrast,
the contractor at DOE?s Idaho National Engineering and Environmental
Laboratory requires that all purchases of computers that exceed its
mandatory performance standards be formally reviewed by management.

Third, the contractor could benefit by increasing its use of a standard
brand of computer and computer- related equipment. In general, Los Alamos
does not limit the variety of brands and models of equipment that are
purchased. As a result, the contractor may not be taking full advantage of
discounts associated with making multiple purchases of the same item. In
addition, purchasing different brands and models of equipment means that
prices can vary. For example, one desktop computer brand we reviewed cost
about $2, 900, while another brand with enhanced capabilities cost about
$2,600. According to officials at Los Alamos, its employees were using
different brands and models of equipment before the fire, and the items
purchased were intended to be nearly identical replacements for the ones
that had been destroyed. Los Alamos officials

1 DOE, Office of Inspector General, Audit of Desktop Computer Acquisitions
at the Idaho National Engineering and Environmental Laboratory, WR- B- 97-
07 (Albuquerque, New Mexico: DOE, Aug. 25, 1997). Results in Brief

Page 3 GAO- 01- 426 Los Alamos Fire Replacement Purchases

also told us that uniformity of computer type and brand across the more than
40 organizations at the laboratory would not meet the needs of the diverse
applications and functions involved in experimental work. However, two Los
Alamos divisions- Business Operations and Facility and Waste Operations-
have begun using a standard brand of computer, and it has dramatically
reduced support costs. Los Alamos has not formally evaluated the feasibility
of adopting this approach for more of its organizations.

We are making several recommendations to improve the way Los Alamos
purchases equipment. DOE reviewed a draft of this report and generally
agreed with its recommendations.

The Los Alamos National Laboratory, located in New Mexico, is charged with
enhancing the security of nuclear weapons and nuclear materials worldwide.
On Thursday, May 4, 2000, Bandelier National Monument workers in the Cerro
Grande Mountain area set fire to a portion of the monument?s land to thin
uncontrolled forest growth. The fire rapidly grew out of control, and during
the 2- week period that followed, over 47,000 acres of national forest,
county, pueblo, and laboratory land burned. The laboratory later reported
that 8,000 acres of its land had been damaged, 39 structures had been
destroyed, and almost $130 million in fire- related costs had been incurred.
The laboratory was officially closed from May 8 until May 22 but, according
to Los Alamos officials, remained in a state of emergency because of damage
caused by the fire and the threat of flooding until August 2000.

After the fire, the laboratory?s Cerro Grande Rehabilitation Project office
contacted divisions that had lost equipment in the fire and required that
they submit detailed lists of their losses to obtain the release of fire
recovery funds from DOE. Seven divisions indicated that they needed a total
of $13.2 million in fiscal year 2000 and $15 million in subsequent years to
recover from the fire. 2 Each division provided information on the equipment
that had been damaged or destroyed by the fire, the estimated cost of
replacement equipment, and the actual cost of replacement equipment that had
already been purchased. The equipment needing

2 In addition to the $13.2 million, DOE received about $125 million in
fiscal year 2000 supplemental funding for other laboratory activities, such
as controlling erosion, restoring utility services, providing emergency
response, and carrying out replacement construction projects. Background

Page 4 GAO- 01- 426 Los Alamos Fire Replacement Purchases

replacement included desktop and laptop computers, printers, cameras, office
furniture, scientific equipment, and related supplies.

The laboratory, in general, purchases equipment using several procurement
methods. Each method is intended to obtain goods and services at the lowest
cost, taking into account the cost of procurement administration. 3 One such
method is the laboratory?s just- in- time subcontracting program. This
program, according to laboratory officials, allows personnel to obtain
products from prequalified suppliers at discounted prices, usually within 24
hours of order placement. Orders and payments are processed electronically,
thereby eliminating the need for involvement from the procurement staff.
Other procurement methods used by the laboratory include the purchase card
program, wherein a credit card is used, and purchase orders. Through the
purchase card program, laboratory personnel may order supplies and equipment
through the Internet or other available sources of supply. Laboratory
officials told us that the laboratory does not track the total cost of
purchases of $25,000 or less made collectively through its just- in- time
subcontracting program, purchase card program, and purchase orders. However,
during fiscal year 2000, Los Alamos? procurement staff processed over $46
million in individual purchase orders of $25,000 or less for goods and
services, including personal computers, printers, digital cameras, and
related equipment and supplies.

The DOE Office of Inspector General has issued at least one report on
computer acquisitions. Specifically, in 1997, the DOE Office of Inspector
General performed an audit of desktop computer acquisitions at the Idaho
National Engineering and Environmental Laboratory. 4 The Inspector General?s
report indicated that, in order to reduce costs, DOE?s Idaho contractor had
formally studied its desktop computer acquisition practices and estimated
that establishing a mandatory performance standard for computers would
result in millions of dollars in savings per year. 5 On the basis of this
study, DOE?s Idaho contractor established a mandatory

3 Los Alamos officials indicated that DOE acquisitions regulations require
that DOE and its contractor obtain products at fair and reasonable pricing.
4 Audit of Desktop Computer Acquisitions at the Idaho National Engineering
and Environmental Laboratory.

5 Desktop Computing Hardware Standardization Recommendation Report for the
Idaho National Engineering Laboratory (Generated by Shain Byington,
Configuration Management, Apr. 28, 1995).

Page 5 GAO- 01- 426 Los Alamos Fire Replacement Purchases

computer performance standard at the site. The Inspector General reported
that DOE?s Idaho contractor could further improve its computer acquisition
practices by using alternative supply sources, such as GSA, Small Business
Administration contracts, or other desktop computer vendors. We found no
similar DOE reviews regarding the acquisition of laptop computers, computer
printers, or digital cameras for other DOE sites.

The Los Alamos contractor probably could have saved money by expanding its
possible supply sources. Our review showed that Los Alamos paid nearly the
full retail price or more for many of the items. If Los Alamos had used more
supply sources, it could have saved about 25 percent on certain items.
Supply sources that could have been used include GSA and more suppliers that
advertise over the Internet. Recent literature suggests that using the
Internet to expand supply sources and compare prices can produce savings.
Los Alamos officials indicated that the laboratory has been using the
Internet but acknowledged that more enhancements in Internet procurement
were possible.

Because of the difficulty in getting detailed price and product information
for the time period the purchases were made, we reviewed only 17 items
purchased by the laboratory from May through July 2000 (see app. I). We
determined the manufacturer?s suggested retail price (retail price) for 12
of the items: 5 desktop computers, 1 laptop computer, 4 printers, and 2
digital cameras. 6 Of the 12 items, Los Alamos received discounts from the
suppliers it used on only 5. In five cases, Los Alamos paid nearly the
retail price for the items. In two cases, Los Alamos paid more than the
retail price.

In addition to comparing Los Alamos? purchase prices with retail prices, we
also identified individual suppliers that could have provided certain of the
items at a cost below that paid by Los Alamos. For example, Los Alamos could
have saved about 25 percent in some cases if it had used other sources. Los
Alamos purchased the 17 items from three local New

6 For two of the items, the manufacturer provided Los Alamos and us
conflicting information regarding the suggested retail price. On the
remaining three items, suggested retail price information was not readily
available. Expanding Possible

Supply Sources for Equipment Purchases

Los Alamos Paid Nearly the Full Retail Price or More for Many of the Items

Using More Supply Sources Could Have Saved Money on Certain Items

Page 6 GAO- 01- 426 Los Alamos Fire Replacement Purchases

Mexico vendors (one of which was a just- in- time contractor), one Internet
vendor, and one computer manufacturer. The laboratory did not attempt to
purchase the equipment items through GSA?s Internet shopping site 7 or from
other vendors that advertise their equipment over the Internet. Laboratory
officials told us that, for the items reviewed, they felt most comfortable
dealing with companies they had done business with in the past.

Because historical prices for computer and electronic equipment are not
readily available, it was difficult to determine what Los Alamos could have
paid for all of the 17 items we reviewed if it had used other vendors. We
were able, however, to develop price comparisons for 4 of the 17 items: 3
printers and 1 digital camera. The total Los Alamos purchase price for the
four items was $2, 677, but these items would have cost $2, 000 if purchased
at that same time from GSA or from suppliers that advertise over the
Internet, a savings of 25 percent. Although this sample is small, it shows
that expanding supply sources could save money. In commenting on this
information, Los Alamos officials said that the most expensive of the four
items, a digital camera costing about $1,300 and purchased 8 days after the
laboratory reopened, was needed immediately to document the fire damage and
was purchased from a local vendor at a discounted price. However, we found
that this camera could have been purchased directly from the manufacturer at
any time after the fire for about $974 and received within 2 days with no
shipping cost.

Recent literature suggests that using the Internet to expand supply sources
and compare prices can produce savings. For example, according to an article
in the November 2000 issue of Public Management, 8 Internet procurement
offers a significant opportunity to cut costs, increase organizational
effectiveness, and improve customer service. Internet procurement, as
described in the article, allows agencies to search for products and
services from available suppliers and determine best prices,

7 GSA?s Internet shopping site is called ?GSA Advantage!? According to a GSA
handbook on the site, GSA Advantage! gives the user access to over a million
commercial products and services available from GSA at the lowest possible
prices. DOE and its contractors are authorized to use this site.

8 Kenneth Mitchell, ?Instituting E- procurement in the Public Sector,?
Public Management (Nov. 2000). Internet Usage Can

Expand Supply Sources and Produce Savings

Page 7 GAO- 01- 426 Los Alamos Fire Replacement Purchases

product availability, and shipping costs. 9 Although Los Alamos used the
Internet to make many of its purchases, it did not use it to compare prices
from available suppliers.

Officials of the laboratory said it has been using the Internet but
acknowledged that more enhancements in Internet procurement were possible.
Los Alamos contracting officials further said that their contract with DOE
encourages but does not require using GSA to purchase equipment and that
they did not consider using GSA for their replacement purchases. One Los
Alamos procurement assistant who was responsible for procuring many of the
equipment items included in our review indicated that she was not aware that
GSA had an online shopping site. In response to our review, Los Alamos
officials said the laboratory would give greater consideration to using GSA
for its future equipment purchases. Specifically, these officials indicated
that people who use purchase cards now receive training on how to use GSA
Advantage! and will be encouraged to use GSA as an alternative to the
laboratory?s just- intime program when appropriate.

The Los Alamos contractor could save money by establishing mandatory
performance standards for computer and computer- related equipment. DOE?s
contractor at the Department?s Idaho laboratory reported that mandatory
standards for computers resulted in cost savings at that laboratory. Neither
Idaho nor Los Alamos has developed performance standards for computer
printers, digital cameras, or other related equipment. However,
consideration of such standards could provide additional opportunities for
cost savings.

According to the Office of Inspector General?s report on computer
acquisitions at DOE?s Idaho laboratory, the contractor there determined that
millions of dollars in cost savings were possible if mandatory performance
standards for purchasing such equipment were implemented. The computer
performance standards in question refer to such things as the speed of the
microprocessor, the size of the random access memory, and the size of the
hard drive. Before October 1994, DOE?s Idaho

9 The article?s author told us that Internet procurement allows agencies to
expand supply sources, compare prices, and thereby obtain better prices and
better deals. He also said that simply changing procurement practices from a
paper- based operation to one whereby goods and services are ordered
electronically will produce only marginal savings. Establishing

Mandatory Performance Standards for Equipment Purchases

Page 8 GAO- 01- 426 Los Alamos Fire Replacement Purchases

laboratory had no sitewide standard to govern the acquisition of desktop
computer systems.

To address this issue, the laboratory contractor formed a working group
consisting of representatives from all laboratory departments to study the
situation. The working group developed a specific computer standard and
recommended that it be established laboratorywide. Anticipated benefits
included, for example, lower computer support costs and fewer training
expenses. The laboratory contractor required all departments to comply with
the standard. The contractor also adopted and implemented a policy that
stipulates, in part, that only the contractor?s information resources
management director can approve deviations from the standard. Because DOE?s
Idaho contractor reported cost savings at that laboratory, using mandatory
performance standards may represent a best practice that could be used by
Los Alamos.

At Los Alamos, the contractor has developed minimum voluntary performance
standards for its desktop and laptop computer acquisitions, but no maximum
standards. Also, unlike Idaho, Los Alamos has no requirement that purchases
above the standard receive formal management review and approval. According
to Los Alamos contracting officials, whenever an employee requests a new
computer system, that request is reviewed by a supervisory official, but the
review is not formally documented.

Of the 17 equipment items we reviewed, 9 were desktop or laptop computers.
All nine computers had performance capabilities that exceeded Los Alamos?
minimum voluntary standards. For example, one voluntary standard for laptop
computers is having a hard drive of 6.4 gigabytes. 10 All three laptop
computers in our sample had hard drives of 12 gigabytes or more. Because
there is no requirement to document instances in which capabilities exceed
Los Alamos? voluntary minimum standards, we could not determine if the
enhanced performance capabilities and extra cost associated with these
laptop computers were justified.

Neither Idaho nor Los Alamos has developed performance standards for
computer printers, digital cameras, or other related equipment. However,

10 This standard was in effect at Los Alamos from September 1999 until
September 2000 and covered the period during which the replacement equipment
we reviewed was purchased. In September 2000, Los Alamos revised its
standard to allow the acquisition of laptop computers with 10 gigabytes of
hard drive.

Page 9 GAO- 01- 426 Los Alamos Fire Replacement Purchases

on the basis of our review, such standards may be beneficial. For example,
one equipment item we reviewed was a printer for which Los Alamos paid more
than $1,400. Because of its unique capabilities, such a printer is normally
used to meet the printing needs of a group of individuals connected to the
same network server. In this case, however, the printer was being used
primarily by one technical staff member and one part- time contractor who
was in the office about one- third of the time. Neither individual needed a
printer with unique capabilities. Other technical staff members we
interviewed had printers for their personal use with lesser speed
capabilities that cost between $280 and $700. In addition, we noted that the
clarity and resolution of the $700 printer were similar to those of the
$1,400 printer, but that the $700 printer had less memory. Printer memory,
however, is an issue only when a large number of employees are queuing up
for printing simultaneously.

The Los Alamos contractor could save money if it increased its use of a
standard brand of computer and computer- related equipment. DOE?s contractor
at its Idaho laboratory determined that it could achieve considerable cost
savings by limiting the various brands and models of desktop computers it
purchased. Because of these reported cost savings, such limitations may be a
best practice that could be used by Los Alamos. In contrast to Idaho, Los
Alamos generally allows various brands and models of the same equipment to
be purchased.

Before 1995, according to a report by DOE?s contractor at its Idaho
laboratory, that laboratory allowed many different computer systems to be
purchased. The contractor?s report indicated that this had created a range
of problems: higher costs for maintenance, support, and training;
difficulties in communicating through electronic messaging and using shared
files; and problems in operating among work platforms and programs.
Therefore, when Idaho established its standard for desktop computers, the
contractor took the standard one step further and charged its procurement
division with selecting a computer model that, on the basis of cost,
reliability, serviceability, and other factors, would be in compliance with
the standard. A cost- benefit analysis showed that cost savings ranging from
$5 million to $10 million could be achieved over 10 years if the proposed
standard was implemented. Subsequently, the procurement division awarded a
contract to a single vendor to provide one specific brand of network and
laptop computers and one specific brand of desktop computers. Standardizing
the

Brands and Models of Computer and Computer- Related Equipment

Page 10 GAO- 01- 426 Los Alamos Fire Replacement Purchases

At Los Alamos, in general, no similar limitations on desktop and laptop
computer acquisitions exist. As a result, the contractor can purchase
different brands and models of computers. For instance, the six desktop
computers we reviewed were all different brands or models, and the three
laptop computers were all different brands. These computers can also vary in
price. For example, one replacement desktop computer cost about $2,900,
while a different brand computer with enhanced capabilities cost about
$2,600. According to Los Alamos contracting officials, the laboratory?s
employees had different brands and models of equipment before the fire. The
items purchased were intended to be nearly identical replacements for the
ones that had been destroyed by the fire. Los Alamos officials also told us
that uniformity in computers across the entire laboratory would not meet the
needs of the diverse applications and functions involved in experimental
work. These officials indicated, however, that a certain number of the
laboratory?s more than 40 organizations have begun using a standard brand of
computer to meet their specific requirements.

We determined that two Los Alamos divisions- Business Operations and
Facility and Waste Operations-- have begun using a standard brand of
computers and it has dramatically reduced support costs. 11 However, Los
Alamos has not formally evaluated the feasibility of adopting this approach
for more of its organizations.

While the scope of our review was limited, it raised the possibility that
significant savings could be realized at Los Alamos by adopting revised
procurement practices. If Los Alamos expanded its use of the Internet and,
thereby, considered a broader spectrum of supply sources, including GSA,
significant savings could be possible. Additional savings might also be
possible if Los Alamos adopted the best practices being reported at Idaho.
For example, if Los Alamos established mandatory performance standards for
computer and computer- related equipment purchases, savings could probably
be realized by avoiding purchasing higher- priced equipment that exceeds the
needed capabilities. Furthermore, if Los Alamos limited the number of brands
and models of the same equipment it purchased as at Idaho, savings could be
realized from volume discounts associated with

11 According to the Los Alamos group leader for desktop computer support,
about one- third of computer support is presently done in- house. Los Alamos
also uses outside contractors to provide computer support on an as- needed
basis. Conclusions

Page 11 GAO- 01- 426 Los Alamos Fire Replacement Purchases

making multiple purchases of the same equipment item and from lower support
costs. DOE?s Idaho contractor reported that these practices have or likely
will result in cost savings.

To improve the economy of equipment purchases at the Los Alamos National
Laboratory, we recommend that you direct the contractor at Los Alamos to

 develop policies and procedures that encourage greater consideration of
additional supply sources, including GSA and suppliers that advertise over
the Internet;

 establish, to the extent practicable, mandatory performance standards for
computer and computer- related equipment; and

 evaluate, in light of the reported savings at two Los Alamos divisions,
the feasibility of having more of its organizations use a standard brand of
computer and computer- related equipment.

We provided a draft copy of this report to DOE for its review and comment.
DOE stated that the overall finding of potential cost saving opportunities
and the three associated recommendations contained in the report merit
additional management attention. DOE indicated that it was directing Los
Alamos to undertake specific actions in response to each of the
recommendations. While generally agreeing with our recommendations, DOE
pointed out that most of the procurements in question were made during a
regional disaster, and that DOE places a high value on supporting regional
socioeconomic development. In addition, DOE stressed in its comments that
best value includes aspects other than lowest possible advertised cost.
Further, DOE indicated that mandatory performance standards for computer and
computer- related equipment could potentially affect programmatic or mission
requirements.

We believe that adopting our recommendations will not adversely affect DOE?s
ability to purchase equipment during an emergency, promote regional
development, or achieve the best value. We also believe that mandatory
performance standards for computer and computer- related equipment should be
flexible enough to allow exceptions, but that those exceptions should be
formally reviewed. DOE?s complete comments are presented in appendix III.
Recommendations for

Executive Action Agency Comments

Page 12 GAO- 01- 426 Los Alamos Fire Replacement Purchases

We performed our work at DOE?s headquarters and Los Alamos from August 2000
through March 2001 in accordance with generally accepted government auditing
standards. Additional information on the scope and methodology of our review
is presented in appendix II.

We are sending copies of this report to interested congressional committees
and subcommittees and to the Director, Office of Management and Budget. We
will also make copies available to others on request.

Please call me at (202) 512- 3841 if you or your staff have questions about
this report. W. Farrell Fenzel and Robert J. Baney also made key
contributions to this report.

Sincerely yours, (Ms.) Gary L. Jones Director, Natural Resources

and Environment

Appendix I: Los Alamos National Laboratory Equipment Price Comparison

Page 13 GAO- 01- 426 Los Alamos Fire Replacement Purchases

Item Los Alamos price Retail price GSA or Internet lowest price

Computers/ desktops

Apple (G3/ 400Mhz/ 64MB/ 10GB) $1,294 $1,299 a Apple (G4/ 450Mhz/ 128MB/
20GB) 2,899 2,999 a Apple (G4/ 500Mhz/ 256MB/ 27GB) 3,494 3,499 a Dell
(Pentium III/ 866Mhz/ 128MB/ 20.4GB) 2,635 2,785 a Dell (Pentium III/
733Mhz/ 256MB/ 20GB) 2,843 a a Hewlett- Packard (Pentium III/ 733Mhz/ 128MB/
9.1GB) 2,579 2,746 a

Computers/ laptops

Apple (G3/ 500Mhz/ 128MB/ 12GB) 3,584 3,599 a Dell (Pentium III/ 600Mhz/
256MB/ 18GB) 4,092 a a Micron (Pentium III/ 500Mhz/ 128MB/ 12GB) 3,263 a a

Printers

Epson 900G Personal Color Inkjet (10ppm color, 12ppm black) 400 429 a
Hewlett- Packard Personal Color Inkjet (8. 5ppm color, 11ppm black) 279 a
$236 Hewlett- Packard Personal Color Inkjet (10ppm color, 12ppm black) 399 a
280 Hewlett- Packard Workgroup Color Inkjet (10ppm color, 12ppm black) 700
589 510 Hewlett- Packard Workgroup Black & White Laserjet (10ppm) 700 859 a
Hewlett- Packard Workgroup Black & White Laserjet (17ppm) 1, 430 1,927 a

Cameras

Olympus Digital (1280 x 1024 maximum resolution, 1.40 megapixels) 1,081 999
a Olympus Digital (1712 x 1368 maximum resolution, 2.50 megapixels) 1,299
1,299 974

Notes: G3, G4, and Pentium are types of microprocessors installed in
computers. Mhz is the abbreviation for megahertz, a unit used to measure the
speed of a computer processor. MB, or megabyte, is a unit used to measure
the information storage capacity of the computer?s random access memory. GB,
or gigabyte, is a unit used to measure the information storage capacity of a
computer?s hard drive. PPM stands for pages per minute. Megapixels refers to
the number of dots per square inch. a Price was not available.

Source: Los Alamos prices were obtained from officials at the laboratory.

Appendix I: Los Alamos National Laboratory Equipment Price Comparison

Appendix II: Scope and Methodology Page 14 GAO- 01- 426 Los Alamos Fire
Replacement Purchases

To determine whether supplemental funding was being spent in the most
economical fashion, we randomly selected 17 items of replacement equipment
that had already been purchased for further review. Of the 17 selected
items, 6 were different brands or models of desktop computers, 3 were
different brands of laptop computers, 6 were different brands or models of
printers, and 2 were different models of digital cameras. For each item, we
requested a report from Los Alamos? property management system regarding the
item and the item?s purchase invoice. We used this information to determine
the performance specifications, procurement source, and price paid for each
item. We also, to the extent possible, examined each item and interviewed
the employee to whom each item had been assigned. Through this process, we
were able to determine the exact configuration of each item, including its
peripherals and options. Further, we independently attempted to determine if
each item could have been procured at a lower price using a supply source
other than that used by the laboratory, such as GSA?s Federal Supply
Schedule and private companies that offer their equipment for sale over the
Internet.

We also obtained from Los Alamos contracting officials information on the
laboratory?s requirements regarding equipment purchases. This information
included a copy of the current DOE contract with the University of
California, applicable DOE acquisition regulations, and laboratory policies
and procedures pertaining to purchasing computer and computer- related
equipment and using GSA for equipment purchases.

In addition, we searched for DOE reports on the procurement of computer
equipment by DOE contractors and found a 1997 Office of Inspector General
audit on desktop acquisitions at the Idaho National Engineering and
Environmental Laboratory. We found no other DOE reports on the acquisition
of computers or computer- related equipment.

Finally, we researched available literature for information on the
advantages and disadvantages of Internet procurement. We performed our work
from August 2000 to March 2001 in accordance with generally accepted
government auditing standards. Appendix II: Scope and Methodology

Appendix III: Comments From the Department of Energy

Page 15 GAO- 01- 426 Los Alamos Fire Replacement Purchases

Appendix III: Comments From the Department of Energy

Appendix III: Comments From the Department of Energy

Page 16 GAO- 01- 426 Los Alamos Fire Replacement Purchases

Appendix III: Comments From the Department of Energy

Page 17 GAO- 01- 426 Los Alamos Fire Replacement Purchases (141485)

The first copy of each GAO report is free. Additional copies of reports are
$2 each. A check or money order should be made out to the Superintendent of
Documents. VISA and MasterCard credit cards are also accepted.

Orders for 100 or more copies to be mailed to a single address are
discounted 25 percent.

Orders by mail:

U. S. General Accounting Office P. O. Box 37050 Washington, DC 20013

Orders by visiting:

Room 1100 700 4 th St., NW (corner of 4 th and G Sts. NW) Washington, DC
20013

Orders by phone:

(202) 512- 6000 fax: (202) 512- 6061 TDD (202) 512- 2537

Each day, GAO issues a list of newly available reports and testimony. To
receive facsimile copies of the daily list or any list from the past 30
days, please call (202) 512- 6000 using a touchtone phone. A recorded menu
will provide information on how to obtain these lists.

Orders by Internet

For information on how to access GAO reports on the Internet, send an e-
mail message with ?info? in the body to:

Info@ www. gao. gov or visit GAO?s World Wide Web home page at: http:// www.
gao. gov

Contact one:

 Web site: http:// www. gao. gov/ fraudnet/ fraudnet. htm

 E- mail: fraudnet@ gao. gov

 1- 800- 424- 5454 (automated answering system) Ordering Information

To Report Fraud, Waste, and Abuse in Federal Programs
*** End of document. ***