Inventory Management: Purchasing Parts From Contractor-Operated Stores
and Commercial Sources (Letter Report, 09/11/95, GAO/NSIAD-95-176).

Pursuant to a legislative requirement, GAO compared the cost of vehicle
repair parts purchased from Air Force Contractor Operated Parts Stores
(COPARS) with those purchased directly from commercial suppliers and
provided information on whether the provisions of Office of Management
and Budget (OMB) Circular A-76 are to be applied when terminating a
COPARS contract.

GAO found that: (1) the most cost-effective method for purchasing
vehicle repair parts varies from base to base, depending on the types of
vehicles in the fleet and the local economy, vendor availability, and
vendor delivery preferences; (2) installation commanders are in the best
position to decide which procurement approach will best meet their
needs; (3) controlling personnel costs is essential in determining
whether savings can be achieved in a commercial-source procurement
system; (4) to achieve savings, maintenance units need to perform the
purchasing function with about the same number of personnel as the
COPARS contractor and to assign personnel in mid-level enlisted pay
grades, but it is unclear whether bases can operate within such
parameters; (5) OMB Circular A-76 does not apply to the Air Force's
vehicle repair parts support decision, since the Air Force is not
replacing COPARS with in-house service; and (6) the establishment of a
commercial parts procurement system is simply an alternative way of
doing business.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-95-176
     TITLE:  Inventory Management: Purchasing Parts From 
             Contractor-Operated Stores and Commercial Sources
      DATE:  09/11/95
   SUBJECT:  Military land vehicles
             Motor vehicle repairs
             Spare parts
             Military inventories
             Contract termination
             Cost effectiveness analysis
             Procurement procedures
             Air Force procurement
             Comparative analysis
             Air Force bases

             
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Cover
================================================================ COVER


Report to Congressional Committees

September 1995

INVENTORY MANAGEMENT - PURCHASING
PARTS FROM CONTRACTOR-OPERATED
PARTS STORES AND COMMERCIAL
SOURCES

GAO/NSIAD-95-176

Inventory Management

(709115)


Abbreviations
=============================================================== ABBREV

  COPARS - Contractor Operated Parts Stores
  OMB - Office of Management and Budget

Letter
=============================================================== LETTER


B-260360

September 11, 1995

Congressional Committees

This report responds to the conference report accompanying the Fiscal
Year 1995 Department of Defense Appropriations Act, which required us
to conduct a cost comparison study of vehicle repair parts purchased
from Air Force Contractor Operated Parts Stores (COPARS) with those
purchased directly from commercial suppliers.  Also, we are reporting
on whether the provisions of Office of Management and Budget (OMB)
Circular A-76 are to be applied before terminating a COPARS contract. 


   BACKGROUND
------------------------------------------------------------ Letter :1

Air Force bases have a variety of vehicles to support base operations
and meet mission needs.  The mix of vehicles differs at each base but
typically includes common commercial vehicles such as Plymouth and
Dodge sedans and Ford and Chevrolet pickup trucks.  Other vehicles
can include commercial lawn mowers, forklifts, ambulances, fire
trucks, buses, and fuel trucks. 

The policies and procedures for acquiring vehicle repair parts are
prescribed in the Federal Acquisition Regulation for small purchases. 
The regulation directs the bases to use the small purchase procedure
that is most suitable, efficient, and economical for each
acquisition.  Small purchase procedures include blanket purchase
agreements, purchase orders, and the International Merchant Purchase
Authorization Card.\1

Bases may also meet their vehicle repair parts needs by establishing
COPARS.  These stores were authorized in the early 1960s because the
Air Force believed they would usually be more responsive and less
costly than the traditional Air Force base supply system.  The stores
are operated under a requirements-type supply contract that is
competitively awarded for 1 year with annual renewable options.  The
contract calls for pricing parts on the basis of discounts from
suggested list prices.  Each bidder offers a separate discount for
each market category, and the contract is awarded to the bidder with
the greatest overall discount.  Space and utilities for the stores
are furnished by the bases. 

Currently, the Air Force contracts with COPARS at 46 of its bases,
and the value of these contracts totals $79.6 million.  Numerous
purchases are made daily from each store, and each purchase is
expected to be priced according to the contract.  Most items cost
less than $25, and only a few cost more than $500.  The stores also
carry, at the contractor's expense, an inventory of frequently
required parts. 


--------------------
\1 A blanket purchase agreement is a simplified method of filling
anticipated recurring needs for supplies or services by establishing
charge accounts with qualified supply sources.  Purchase orders are
used for on-the-spot, over-the-counter purchases of supplies or
services.  The International Merchant Purchase Authorization Card is
a commercial credit card that permits customers to buy directly from
a supplier without going through the contracting office, unlike the
previous two methods.  It reduces the administrative burden
associated with other procurement methods. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :2

Our review showed that the most cost-effective method for purchasing
vehicle repair parts can vary from base to base.  Every base is
unique in terms of the mission that it must support and the nature of
its local economy.  Factors such as the types of vehicles in the
fleet, volume of business conducted, vendor availability in the
community, vendor delivery preferences, and vendor payment
preferences differ among bases and affect the price of parts.  Also,
various mission-related factors, such as deployments, may affect the
availability of personnel needed to manage a commercial-source parts
procurement operation.  Given these differences, installation
commanders are in the best position to determine which approach for
acquiring parts will best meet their needs.  In making this decision,
the commanders would need to thoroughly analyze all relevant factors
to arrive at a reasonable judgment of the preferred purchase option. 

Our cost analyses at two bases showed that controlling personnel
costs is key to determining whether savings could be achieved in a
commercial-source procurement system.  To achieve savings,
maintenance units would need to (1) perform the purchasing function
with approximately the same number of personnel as the COPARS
contractor and (2) assign personnel in mid-level enlisted pay grades. 
Because neither base has initiated a commercial-source procurement
system, it is unknown whether bases can operate within these
parameters. 

OMB Circular A-76 does not apply to the Air Force's vehicle repair
parts support decision.  The establishment of a commercial-source
procurement system is simply an alternative way of doing business. 
The Air Force is not replacing a COPARS with an identical in-house
service.  As a result, no study is required. 


   THE BEST APPROACH FOR
   PURCHASING PARTS VARIES BY
   INSTALLATION
------------------------------------------------------------ Letter :3

Our study showed that the most cost-effective method for purchasing
vehicle parts can vary from base to base.  Each one is unique in
terms of the mission that it must support and the nature of its local
economy.  Factors such as the types of vehicles in the fleet, volume
of business conducted, vendor availability in the community, vendor
delivery preferences, and vendor payment preferences differ among
bases.  At the two bases we visited--Dyess Air Force Base in Abilene,
Texas, and Little Rock Air Force Base in Jacksonville, Arkansas--we
identified numerous local factors affecting the price of parts that
would need to be analyzed to determine the most cost-effective
approach.  For example, at Dyess two large parts distributors do not
make deliveries.  If parts were bought from these distributors, it
would raise the base's vehicle usage costs.  Also, two parts
distributors at Little Rock do not accept credit cards.  To buy parts
from these distributors, the base would have to use other procurement
methods, such as purchase orders, that would raise transaction costs. 

Similarly, mission factors differ by base, and installation
commanders need to determine whether the additional personnel
resources needed to start up a commercial-source procurement
operation are available.  For example, at Dyess approximately 10
percent of the vehicle maintenance unit's personnel are deployed at
any given time, and the vehicle maintenance supervisor values the
assistance provided by the COPARS employee.  However, bases
supporting units that deploy infrequently may not derive as great a
benefit from their COPARS.  An analysis at each base would determine
which procurement method or combination of methods constitutes the
best approach for a particular installation.  In our opinion,
installation commanders are in the best position to make this
analysis. 


   RESULTS OF COST ANALYSES AT TWO
   BASES
------------------------------------------------------------ Letter :4

For Dyess and Little Rock Air Force Bases, we obtained price quotes
from local commercial suppliers and compared them with parts prices
charged by COPARS.  At Little Rock, we did not obtain statistically
projectable parts cost data.  However, the data we did obtain allowed
us to analyze cost trends.  At the two bases, we found that
commercial suppliers could generally provide parts at lower cost. 
However, other costs incurred in making the purchases, particularly
personnel costs, could offset or perhaps exceed any parts savings. 
To be cost-effective, bases must (1) perform the purchasing function
with approximately the same number of personnel as the COPARS
contractor and (2) assign personnel in mid-level enlisted pay grades. 
Maintenance supervisors believe that more people would be needed for
the first 6 to 12 months of operation until personnel gain experience
in operating a commercial-source procurement system.  Table 1 shows
the results of our cost comparisons and estimates of the costs of
operating a commercial-source procurement system for the first
6 to 12 months while units gain experience.  Table 2 shows estimated
costs after the units gain experience. 



                                         Table 1
                         
                           Projected Annual Costs of Purchasing
                         Parts From Commercial Sources During the
                            First 6 to 12 Months of Operation

                                (Fiscal year 1995 dollars)


                                         Commerci                      Commerci
                                               al  Differen                  al  Differen
Cost                             COPARS   sources        ce    COPARS   sources        ce
-----------------------------  --------  --------  --------  --------  --------  --------
Parts                          $217,000  $199,000  $18,000\  $405,000   Unknown  Unknown\
                                                          a                             b
Service charge                  4,000\c         0     4,000   8,000\c         0    $8,000
Personnel
COPARS contract monitor        19,000\d         0    19,000  12,000\d         0    12,000
Pay grade E-4                         0    63,000   -63,000         0   $94,000   -94,000
Pay grade E-6                         0    88,000   -88,000         0   132,000         -
                                                                                  132,000
Vehicle usage                         0     2,000    -2,000         0     5,000    -5,000
Assets, supplies, and                 0         0         0         0         0         0
 equipment
=========================================================================================
Total
=========================================================================================
Pay grade E-4 $                 240,000  $264,000         -  $425,000    nknown   Unknown
                                               \e   $24,000         U
=========================================================================================
Pay grade E-6                  $240,000  $289,000         -  $425,000   Unknown   Unknown
                                               \f   $49,000
-----------------------------------------------------------------------------------------
Note:  See table 2 for an explanation of table notes. 



                                         Table 2
                         
                           Projected Annual Costs of Purchasing
                         Parts From COPARS and Commercial Sources
                            Using the Same Number of Personnel

                                (Fiscal year 1995 dollars)


                                         Commerci                      Commerci
                                               al  Differen                  al  Differen
Cost                             COPARS   sources        ce    COPARS   sources        ce
-----------------------------  --------  --------  --------  --------  --------  --------
Parts                          $217,000  $199,000  $18,000\  $405,000   Unknown  Unknown\
                                                          a                             b
Service charge                  4,000\c         0     4,000   8,000\c         0    $8,000
Personnel
COPARS contract monitor        19,000\d         0    19,000  12,000\d         0    12,000
Pay grade E-4                         0    23,000   -23,000         0   $47,000   -47,000
Pay grade E-6                         0    33,000   -33,000         0    66,000   -66,000
Vehicle usage                         0     2,000    -2,000         0     5,000    -5,000
Assets, supplies, and                 0         0         0         0         0         0
 equipment
=========================================================================================
Total
=========================================================================================
Pay grade E-4                  $240,000  $224,000   $16,000  $425,000   Unknown   Unknown
                                               \e
=========================================================================================
Pay grade E-6                  $240,000  $234,000    $6,000  $425,000   Unknown   Unknown
                                               \f
-----------------------------------------------------------------------------------------
\a We estimated, at the 95-percent confidence level, that the COPARS
price for parts would be $216,656 ï¿½ $2,012 and the local vendor price
would be $198,680 ï¿½ $3,526.  The difference between the midpoint of
these two ranges, rounded to the nearest $1,000, is $18,000. 

\b Our sample was not large enough to statistically project an annual
savings. 

\c Contractors may impose a service charge when they are required to
obtain parts that are not already priced in the contract. 

\d This number is the cost of Air Force personnel (at pay grade E-5)
that monitor the COPARS contract. 

\e This number is the sum of parts; service charge; personnel (pay
grade E-4); vehicle usage; and assets, supplies, and equipment. 

\f This number is the sum of parts; service charge; personnel (pay
grade E-6); vehicle usage; and assets, supplies and equipment. 


      PARTS COST
---------------------------------------------------------- Letter :4.1

Our analysis of vehicle parts prices was based on a sample of repair
activity over 20 random days.  We obtained price quotes for items in
our sample from vendors or specialized parts suppliers and obtained
the current COPARS price for these same items and determined the
difference. 

At Dyess Air Force Base, our sample included 466 parts purchased by
the vehicle maintenance unit.  Over the 20 days, parts quotes from
commercial sources were $3,115 less than equivalent parts purchased
from COPARS.  We estimated that Dyess could save about $22,000
annually by buying parts from commercial sources.  The savings
includes $4,000 in service charges now paid to COPARS that would not
be incurred in a commercial-source procurement operation. 

At Little Rock Air Force Base, our sample included 772 items
purchased from COPARS by the vehicle maintenance unit.  However, at
the conclusion of our fieldwork, we had collected price quotes on
only 133 parts purchased by the vehicle maintenance unit over 4
random days.  For these parts, commercial suppliers were $1,142 less
than the same parts purchased from COPARS.  This sample is not large
enough to statistically project a total annual savings, and the
sample would have to be completed to determine the amount of savings. 
However, this information provides sufficient data to do a cost-trend
analysis.  If this savings trend were to continue, the base would
achieve an annual savings of $64,000.  This includes $8,000 in
service charges paid to COPARS that would not be incurred in a
commercial-source procurement operation. 

Generally, COPARS parts prices are higher than parts purchased
directly from commercial sources because COPARS prices include
service costs (e.g., employee and home and field office operating
expenses) and profit that are applied against the parts it sells to
the Air Force.  Contractors must add sufficient surcharge to the
parts sold to the base to cover these expenses.  Therefore, we
believe our savings estimates are reasonable. 


      PERSONNEL COST
---------------------------------------------------------- Letter :4.2

To operate a commercial-source procurement system, vehicle
maintenance units would have to assign personnel to do work now
performed by COPARS employees.  This work includes assisting
mechanics in identifying parts, identifying sources of supply,
placing orders, arranging the pickup or delivery of parts, returning
wrong parts, and performing administrative functions related to parts
distribution and tracking.  At Dyess these services are provided by
one full-time COPARS employee.  At Little Rock these services are
provided by two full-time COPARS employees.\2 Personnel costs for
COPARS employees were not included in our analysis as a COPARS
program cost because the employees' salaries are paid by their
employers and are included in the price of parts sold to the unit. 
COPARS personnel costs are for Air Force personnel that monitor the
COPARS contract.  This job would not be required in a
commercial-source procurement system. 

Two factors determine the Air Force's personnel costs in a
commercial- source procurement system:  the number of people assigned
to provide the services now provided by COPARS employees and their
pay grade.  Because neither Dyess nor Little Rock has instituted a
commercial-source procurement system, the number of personnel that
would be required and their grades are not known. 

To achieve savings at both bases, our analysis showed that the
maintenance units would need to (1) control the number of personnel
assigned to perform the purchasing function and (2) assign personnel
in mid-level enlisted pay grades.  For example, if the one COPARS
employee at Dyess and the two COPARS employees at Little Rock were
replaced with Air Force personnel at pay grade E-4, the bases would
incur personnel costs of $23,000 and $47,000, respectively, and would
generate savings of $16,000 and $24,000, respectively.  At pay grade
E-6, personnel costs at Dyess and Little Rock would be $33,000 and
$66,000, respectively, and savings would decrease to $6,000 and
$5,000, respectively.\3

Maintenance supervisors at both bases believe that it would take 6 to
12 months to identify suppliers and gain experience in parts research
and procurement.  Until Air Force personnel gained that experience,
more people would be required.  The Dyess maintenance supervisor told
us he would initially need to assign two people to operate a
commercial-source procurement system.  Currently, one person spends 4
hours a day monitoring the COPARS contract.  This person would be
reassigned for a net addition of 1.5 personnel.  At Little Rock, the
vehicle maintenance unit commander told us that she would need three
people to operate a commercial-source procurement system.  Currently,
one person spends approximately 2-1/2 hours a day monitoring the
COPARS contract.  This person would similarly be reassigned for a net
addition of 2.7 personnel. 

With the use of Air Force personnel cost data for pay grade E-4, we
estimated the cost of the additional personnel during the start-up
period would be $44,000 annually at Dyess and $82,000 annually at
Little Rock.\4 At pay grade E-6, the cost of the additional personnel
would be $69,000 annually at Dyess and $120,000 at Little Rock. 
Additionally, the supervisors noted that deployments and
reassignments of personnel could occasionally disrupt operations. 

Both Air Force and contractor officials commented on our personnel
cost analysis.  Air Force officials agreed that personnel would need
to be assigned to perform those functions now performed by the COPARS
contractor.  However, they stated that the functions would be
performed by personnel already in the units and that no additional
personnel would be assigned.  Thus, even though parts procurement
transaction costs, including personnel costs, would increase, the
units would incur no additional personnel costs overall. 

Contractor officials questioned whether the units could train
personnel to the same degree of proficiency at parts identification
and research as COPARS employees within 6 months.  One contractor
believed it would take 3 years or more for Air Force personnel to
become adequately trained in this field. 


--------------------
\2 Each employee spends about 6 hours per day on tasks that would be
directly transferable to Air Force personnel in a commercial-source
procurement system. 

\3 The savings for Little Rock are the net differences between the
savings identified in our parts cost-trend analysis (including
service charge) and costs for personnel (pay grades E-4 and E-6);
vehicle usage; and assets, supplies, and equipment. 

\4 The estimates for Dyess and Little Rock are derived by subtracting
the cost of the individual who monitors the COPARS contract from the
cost of personnel assigned to operate the commercial-source
procurement system. 


      VEHICLE USAGE COST
---------------------------------------------------------- Letter :4.3

In a commercial-source procurement system, Air Force personnel would
have to use government vehicles to pick up parts from commercial
suppliers that do not make deliveries.  Because the bases would
essentially be dealing with the same commercial suppliers as their
existing COPARS, we based our vehicle usage estimates on the average
number of miles, at
30 cents per mile, the COPARS contractor drives in 1 week picking up
parts.  At Dyess and Little Rock Air Force Bases, we estimated that
annual vehicle usage costs would be $2,000 and $5,000, respectively. 


      ASSETS, SUPPLIES, AND
      EQUIPMENT COST
---------------------------------------------------------- Letter :4.4

Our analysis did not identify any significant cost differences in
assets, supplies, or equipment needed to operate either a COPARS or
commercial-source procurement system. 


   OMB CIRCULAR A-76 STUDY IS NOT
   REQUIRED
------------------------------------------------------------ Letter :5

OMB Circular A-76 establishes the federal policy that governs whether
commercial services should be performed under contract with
commercial sources or with in-house government facilities and
personnel.  According to the policy, the government generally relies
on commercial sources to supply the products and services it needs. 
However, government performance of a commercial activity is
authorized if a cost comparison shows that the government can operate
the activity at an estimated lower cost. 

According to an OMB official, an A-76 study is required when
identical functions are transferred from the contractor to the
government or vice versa.  For example, if the Air Force planned to
replace a COPARS with an identical in-house system, such as a
Government Operated Parts Store, an A-76 study would be required. 

Purchasing parts from commercial sources rather than from COPARS is
not a transfer of identical functions; it is an established
alternative method for meeting repair parts needs.  Authority for
purchases would be delegated to base personnel, and the base would no
longer use COPARS' services.  As a result, we believe the Air Force
is not required to perform an OMB A-76 cost study before terminating
a COPARS contract and purchasing automotive repair parts in the local
market. 


   AGENCY AND CONTRACTOR COMMENTS
   AND OUR EVALUATION
------------------------------------------------------------ Letter :6

The Department of Defense fully concurred with our findings,
conclusions, and methodology (see app.  II).  We also discussed our
findings with officials from the Office of the Secretary of the Air
Force and incorporated their comments where appropriate. 

We received comments from three COPARS contractors.  The contractors'
overall concern was that our report would be interpreted as saying
that the local purchase option is less costly than COPARS.  That is
not our overall conclusion, and we revised our report to more
prominently state that the cost-effectiveness decision depends on
local circumstances and therefore should be decided on a case-by-case
basis after careful analysis. 

The contractors specifically raised concerns in two areas.  First,
they commented that our comparison presents an optimistic picture of
prices that government personnel can obtain.  According to one
contractor, vendors are under no obligation to actually sell at the
prices we obtained, whereas COPARS prices are firm and valid for the
duration of the contract, regardless of outside market factors and
fleet changes. 

Although we agree with this contractor's position, we believe that
bases that initiate commercial-source procurement systems will likely
obtain parts from the same suppliers used by COPARS.  Since no
additional charges will be added to cover service costs and profit,
we also believe that bases should be able to obtain most parts at
less cost. 

Second, the contractors disagreed with our personnel cost analysis,
stating that our conclusion assumed that savings could be achieved if
the Air Force performed the purchasing functions with the same number
of personnel as the COPARS contractors.  The contractors questioned
whether the Air Force could achieve the same degree of proficiency as
COPARS personnel in identifying parts and conducting research in 6 to
12 months.  Also, they questioned whether our analysis adequately
assessed the pay grades of personnel who would perform the parts
purchasing function. 

We recognized the contractors' concerns about our personnel cost
analysis by presenting these costs as a range to reflect the
uncertainty of these costs and by incorporating their comments where
appropriate.  The contractors also provided other detailed comments,
and we considered these in finalizing our report. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :7

We conducted our study at two Air Force Air Combat Command bases: 
Dyess Air Force Base, Abilene, Texas, and Little Rock Air Force Base,
Jacksonville, Arkansas.  These bases were selected based on
recommendations from the COPARS contractors and Air Force officials. 
Additional information on our scope and methodology appears in
appendix I.  We performed our review from January to May 1995 in
accordance with generally accepted government auditing standards. 


---------------------------------------------------------- Letter :7.1

We will send copies of this report to the Director, OMB; the
Secretaries of Defense and the Air Force; and other interested
parties.  We will also provide copies to others upon request. 

Please contact me at (202) 512-8412 if you or your staff have any
questions concerning this report.  Major contributors to this report
are listed in appendix III. 

David R.  Warren
Director, Defense Management
 and NASA Issues

List of Committees

The Honorable Strom Thurmond
Chairman
The Honorable Sam Nunn
Ranking Minority Member
Committee on Armed Services
United States Senate

The Honorable Mark O.  Hatfield
Chairman
The Honorable Robert C.  Byrd
Ranking Minority Member
Committee on Appropriations
United States Senate

The Honorable Floyd D.  Spence
Chairman
The Honorable Ronald V.  Dellums
Ranking Minority Member
Committee on National Security
House of Representatives

The Honorable Bob Livingston
Chairman
The Honorable David R.  Obey
Ranking Minority Member
Committee on Appropriations
House of Representatives


SCOPE AND METHODOLOGY
=========================================================== Appendix I

Our sampling methodology considered the cost of parts, frequency that
the parts are needed, and maintenance workload associated with the
parts requirement.  We discussed the methodology with Contractor
Operated Parts Store (COPARS) contractors and Air Force personnel. 

To compare parts prices, we obtained a listing of actual repair parts
purchases between February 1994 and February 1995 from the Air
Force's On-Line Vehicle Information Management System.  Other data
for nonvehicle parts necessary for repair activity but not recorded
in the system were contained on individual requisitions.  These parts
represent shop supplies and parts that a repair facility would need
but are not attributed to a specific vehicle or engine.  We automated
the requisition data used by the maintenance personnel to order
nonvehicle parts and combined this information with the system's
data. 

We used these data to sample repair activities over 20 randomly
selected days at the two locations (more costly days had a higher
chance of selection) and obtained prices from vendors or specialized
parts suppliers.  We obtained the current COPARS price for these same
items and determined the difference between the commercial suppliers'
and the COPARS' prices for each day's activity and estimated our
results to reflect 1 year of daily maintenance activities.  We were
able to obtain prices for all 20 days of activity at Dyess.  At
Little Rock, we did not complete the parts cost comparison because
our analysis was showing that decisions would still have to be made
on a case-by-case basis and the 4 days of activity we did obtain was
sufficient to show cost trends. 

Because some of the data lacked detail, we could not obtain local
supplier prices for all items.  For these items, we assumed that the
difference between the suppliers' and the COPARS' prices would be
zero. 

We did not verify the accuracy of the Air Force's data or the
completeness of the nonvehicle parts requisitions.  If the Air
Force's data contained maintenance activity errors, our results would
be directly affected by these errors. 

Our personnel estimates were based on interviews with managers within
each bases' contracting squadron, finance office, and vehicle
maintenance unit.  These individuals identified the time required to
administer the COPARS contract and estimated the amount of time that
would be required to administer a commercial-source procurement
system for vehicle repair parts.  We used estimates of the number of
personnel needed to procure parts from commercial sources because we
could not find any bases with a comparable size and mix of vehicles
that currently manage a commercial-source procurement operation.  We
discussed our conclusions regarding personnel with maintenance
supervisors at both bases, and they agreed with our numbers. 

Our analysis of vehicle usage costs was based on an analysis of
vehicle usage reimbursement records maintained by the COPARS
contractor.  Assets, supplies, and equipment costs were based on
interviews with Air Force vehicle maintenance supervisors and COPARS
employees. 




(See figure in printed edition.)APPENDIX II
COMMENTS FROM THE DEPARTMENT OF
DEFENSE
=========================================================== Appendix I


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================= Appendix III


   NATIONAL SECURITY AND
   INTERNATIONAL AFFAIRS DIVISION,
   WASHINGTON, D.C. 
------------------------------------------------------- Appendix III:1

Kenneth R.  Knouse, Jr.
Glenn D.  Furbish
Arthur L.  James, Jr. 


   DALLAS FIELD OFFICE
------------------------------------------------------- Appendix III:2

Mary Kay Muse
Cary Russell
Robert Malpass


   KANSAS CITY FIELD OFFICE
------------------------------------------------------- Appendix III:3

Richard E.  Burrell

