THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, August 9, 1995 TAG: 9508090420
SECTION: MILITARY NEWS PAGE: A12 EDITION: FINAL
SOURCE: BY DALE EISMAN, STAFF WRITER
LENGTH: Medium: 84 lines
When Edmundo Negado, a master chief aboard the destroyer Hewitt, became suspicious last year about a vendor's charge for a circuit card assembly for one of the ship's electronic components, he decided to pick up the phone.
When John Williams, a petty officer first class at the Trident Refitting Facility in Kings Bay, Ga., thought the Navy possibly was being overcharged for a diode semiconductor device, he also reached for a phone.
Their calls, and thousands of others last year, were directed to a small Norfolk office that in 12 years has helped save the Navy more than $1 billion and earned participating sailors and airmen cash bonuses of more than $250,000.
The ``Price Challenge Hotline'' invites sailors and Marines around the world to help the Navy root out excess charges for the millions of items in its inventory. In return, tipsters may receive up to $25,000.
Callers are paid based on how much the Navy saves as a result of their reports. Those whose calls result in savings of $10,000 or less receive 10 percent of the total. In cases where the savings are larger, the payment increases on a sliding scale up to the $25,000 maximum.
Negado got $3,100 after an investigation stemming from his call to the hotline verified a substantial overcharge for the circuit cards. The vendor in question refunded $80,415 to the government.
Williams received $736, and the Navy essentially replaced the device that prompted his call with another he suggested.
Negado was paid even though he'd left the service before the case was resolved. The Navy's ``Price Fighters'' unit, which runs the hotline, tracked him down in the San Diego area and mailed an award check, said Mack Gum, a program manager for the hotline.
``He called us back and thanked us profusely,'' Gum said.
Calls to the hotline account for about half of the more than $1 billion the Price Fighters have saved the Navy since 1983. In comparison, $1 billion is roughly the current cost of one Arleigh Burke class destroyer, or enough to buy 1,000 Tomahawk cruise missiles.
The Price Fighters are part of the Fitting Out and Supply Support Assistance Center, and their work helps the Air Force and Army as well as the Navy. The unit maintains a database of pricing research that supply officers in all the services can access via computer.
Ed Mikulski, a spokesman for the unit, said it typically fields requests for help from procurement officers who may have only ``a gut feeling'' that they're being overcharged for a particular item. It handles similar queries from those who are getting ready to make a purchase but are unsure of what they should expect to pay.
If the item is commonly used and available commercially, the Price Fighters will check to verify that the price being quoted to the Navy is in line with what private sector customers are paying.
The group also conducts ``should cost'' studies of suspicious items, looking at the technical specifications of what's being bought and the cost the manufacturer incurs in producing it.
Much of what the military buys is produced especially for its use according to demanding specifications written by the services. Those ``mil-specs'' can add dramatically to products' costs, and Defense Secretary William J. Perry is pushing for the use of commercially available products whenever possible.
Whalon Herbert, an official in the Price Fighters unit, said the unit can't order shifts from mil-specs to commercial products but sometimes makes recommendations for such changes. ILLUSTRATION: MAKING CONTACT
To contact the Price Challenge Hotline
Local phone 445-1786
Toll-free 1-800-NAV-CHAL
Fax (804) 444-4626
Internet PRICE-FIGHTER$ FOSSAC.NAVY.MIL
By mail P.O. Box 15129
Norfolk, Va. 23511-0129
GARY C. KNAPP
Debra A. Swearingen, left, and Joyce K. Gilbert work for the "Price
Fighters" unit. They research prices to see just how much the
services should be charged for products.
by CNB