[Survey Report on Utility Services Acquisitions, National Park Service]
[From the U.S. Government Printing Office, www.gpo.gov]
Report No. 98-I-690
Title: Survey Report on Utility Services Acquisitions, National
Park Service
Date: September 30, 1998
**********DISCLAIMER**********
This file contains an ASCII representation of an OIG report.
No attempt has been made to display graphic images or illustrations.
Some tables may be included, but may not resemble those in the printed version.
A printed copy of this report may be obtained by referring to the PDF
file or by calling the Office of Inspector General, Division of
Acquisition and Management Operations at (202) 208-4599.
******************************
U.S. Department of the Interior
Office of Inspector General
AUDIT REPORT
UTILITY ACQUISITIONS,
NATIONAL PARK SERVICE
REPORT NO. 98-I-690
OCTOBER 1998
MEMORANDUM
TO: The Secretary
FROM: Richard N. Reback
Acting Inspector General
SUBJECT SUMMARY: Final Survey Report for
Your Information - "Utility Services
Acquisitions, National Park Service" (No. 98-I-690)
Attached for your information is a copy of the subject final
survey report. The objective of the survey was to determine
whether the National Park Service complied with the
regulations pertaining to the acquisition of utility
services and performed adequate analyses to support its
decision to build or rehabilitate utility systems rather
than to purchase utility services from existing utility
providers.
Overall, we concluded that the Park Service complied with
pertinent regulations in that it performed adequate
analyses to support its decisions to build or rehabilitate
water and wastewater treatment systems in lieu of acquiring
utility services from utility providers. We also concluded
that the Service appropriately used value engineering in
selecting the preferred alternative. These conclusions were
based upon our review of 23 of the 41 projects that were
within the scope of our survey.
The report did not contain any recommendations. Therefore,
a response to the report was not required.
If you have any questions concerning this matter, please
contact me at (202) 208-5745 or Mr. Robert J. Williams,
Assistant Inspector General for Audits, at (202) 208-4252.
Attachment
SURVEY REPORT C-IN-NPS-001-98-D
Memorandum
To: Assistant Secretary for Fish and Wildlife and Parks
From: Robert J. Williams
Assistant Inspector General for Audits
Subject: Survey Report on Utility Services
Acquisitions, National Park Service (No. 98-I-690)
INTRODUCTION
This report presents the results of our survey of
utility services acquired by the National Park Service.
The objective of the survey was to determine whether
the Park Service complied with the regulations
pertaining to the acquisition of utility services and
performed adequate analyses to support its decision to
build or rehabilitate utility systems rather than to
purchase utility services from existing utility
providers.
BACKGROUND
At some parks, the Park Service constructs and operates
utility systems that provide water and wastewater
treatment. At other parks, the Park Service purchases
these services from utility providers. In general, the
Park Service's Denver Service Center, located in
Denver, Colorado, is responsible for the design and
construction of Government-owned utilities, and the
Field Operations Technical Support Center, also located
in Denver, is responsible for negotiating with utility
providers for utility services.
The Park Service's Management Policies, Chapter 9:5,
issued in December 1988, state that the Park Service is
to use municipal or other utility systems outside the
parks whenever economically and environmentally
practicable and authorizes the Park Service to
participate in "cost-sharing with municipalities and
others in meeting new, expanded, or replacement park
utility needs." However, even though there may be
municipal utility service providers in the general
vicinity of a particular park, factors such as the
isolation of the park and the size of existing local
utility plants can affect the Park Service's decision
to build or to buy utility services.
The Park Service has incorporated value engineering
into its construction program. Office of Management
and Budget Circular No. A-131, "Value Engineering,"
requires that Federal agencies use value engineering,
also known as value analysis, value management, and
value control, to reduce program and acquisition costs.
Value engineering is defined by the Circular as "an
organized effort directed at analyzing the functions of
systems, equipment, facilities, services, and supplies
for the purpose of achieving the essential functions at
the lowest life-cycle cost consistent with required
performance, reliability, quality, and safety." As
related to the scope of our survey, the Park Service
uses value engineering to develop and compare
alternatives, such as to build or to buy, and to
validate the preferred alternative. In addition to
value engineering, the Park Service has recently
implemented a decision-making system, Choosing By
Advantages, in which monetary and nonmonetary factors
are evaluated to determine the best alternative for
achieving desired objectives.
SCOPE OF SURVEY
We identified 41 water and wastewater treatment system
projects that were within the scope of our survey.
These projects included those that were in various
construction stages in fiscal years 1997 and 1998, as
well as those planned or anticipated to be funded in
fiscal years 1999 and 2000. The Denver Service Center
was responsible for all of the projects because regions
and parks generally do not design and construct large
utility projects.
Our survey was conducted in accordance with the
"Government Auditing Standards," issued by the
Comptroller General of the United States. Accordingly,
we included such tests of records and other auditing
procedures that were considered necessary under the
circumstances. The survey included a review of 23 of
the 41 water and wastewater treatment system projects
in the planning or construction stages during fiscal
years 1997 through 2000. Electrical generation
systems were excluded from our survey because the Park
Service generates its own electrical power only in
remote locations, thereby precluding a build or buy
decision. We completed our survey work in August 1998.
We also reviewed the Department of the Interior's
Accountability Report for fiscal year 1997, which
includes information required by the Federal Managers'
Financial Integrity Act, and the Park Service's annual
assurance statement for fiscal year 1997 and determined
that there were no reported internal control weaknesses
related to the objective and scope of our survey.
PRIOR AUDIT COVERAGE
Neither the Office of Inspector General nor the General
Accounting Office has issued any audit reports during
the past 5 years on utility services acquisitions by
the Park Service.
RESULTS OF SURVEY
We concluded that the National Park Service did comply
with its Management Policies regarding the acquisition
of utility services and that it performed adequate
analyses to support its decisions to build or
rehabilitate water and wastewater treatment systems in
lieu of acquiring utility services from utility
providers. We also concluded that value engineering
was used, as required by Office of Management and
Budget Circular No. A-131, in selecting the preferred
available alternative. These conclusions were based
upon our review of 23 of the 41 projects that were
within the scope of our survey.
Of the 23 projects reviewed, decisions to build were
made for 19 of the projects, and decisions to buy were
made for 2 of the projects. The remaining two utility
service requirements were to be met by a combination of
building and buying. In all cases, documentation
existed in the project files that adequately
substantiated the decisions made.
Specifically, for the 19 decisions to build, we found
that 2 were based on value engineering analyses which
showed that it was more beneficial to build facilities
rather than to buy the services; 10 were based on the
remote locations where the utilities were needed, which
precluded the possibility of connecting, in a cost-
effective manner, to a municipal system; 2 were repair
projects to existing utilities; 3 involved the
relocation of housing units within Yosemite National
Park and the subsequent reconnection to the existing
treatment facilities; and 2 were based on a variety of
reasons, all of which supported the decision to build.
We found that the two decisions to buy were based on
the urban locations of the parks and on the absence of
existing facilities that were capable of being
economically rehabilitated to provide the utility
services. The decisions on meeting the parks' utility
requirements by a combination of building and buying
were based on the proximity of the utility-related
facilities within the parks to the commercial utility
systems. For example, at Lake Mead National Recreation
Area, upgraded water treatment facilities were needed
at various locations throughout the Area to meet State
of Nevada water quality standards. For the remote
locations, the necessary water treatment facilities
were either built or rehabilitated by the Park Service.
However, one location was in proximity to municipal
utility services, and the Park Service negotiated a
contract to connect to the municipal system, which was
more economical than building a water treatment
facility at that location.
In addition, for three projects, we performed a limited
evaluation of the life-cycle cost analyses performed by
the Park Service to determine whether the particular
cost items in the analyses were appropriate. To make
this determination, we evaluated the various cost items
included in the analyses and discussed the Park
Service's procedures and use of certain cost items with
engineers from the Bureau of Reclamation and the U.S.
Army Corps of Engineers. Based on our limited review
of the three cost analyses and the information provided
by the Bureau and the Corps, we concluded that the cost
items were appropriate.
Since this report does not contain any recommendations,
a response is not required.
The legislation, as amended, creating the Office of
Inspector General requires semiannual reporting to the
Congress on all audit reports issued, actions taken to
implement audit recommendations, and identification of
each significant recommendation on which corrective
action has not been taken.
We appreciate the assistance of Park Service personnel
in the conduct of our audit.
ILLEGAL OR WASTEFUL ACTIVITIES SHOULD BE REPORTED
TO THE OFFICE OF INSPECTOR GENERAL BY:
Sending written documents to:
Within the Continental United States
U.S. Department of the Interior
Office of Inspector General
1849 C Street,N.W.
Mail Stop 5341
Washington, D.C. 20240
Calling:
Our 24 hour
Telephone HOTLINE
1-800-424-5081 or
(202) 208-5300
TDD for hearing impaired
(202) 208-2420 or
1-800-354-0996
Outside the Continental United States
Caribbean Region
U.S. Department of the Interior
Office of Inspector General
Eastern Division- Investigations
1550 Wilson Boulevard
Suite 410
Arlington, Virginia 22209
Calling:
(703) 235-9221
North Pacific Region
U.S. Department of the Interior
Office of Inspector General
North Pacific Region
238 Archbishop F.C. F'lores Street
Suite 807, PDN Building
Agana, Guam 96910
Calling:
(700) 550-7428 or
COMM 9-011-671-472-7279