The Navy in San Diego spent $164,000 on cold-storage boxes that were never used for pier-side refrigeration because the Navy lacked a large enough facility in which to chill them.
The 178 boxes were placed in an outdoor boat lot, where they rusted for two years. A few were used to store paint.
"It was a waste of government funds--that has been the conclusion from day one," said Mary Giffin, director of management control and review at the Naval Supply Center in San Diego. "It was a poor decision made at the time. But I want to explain that we didn't just take 178 boxes and throw them in the garbage, because we are utilizing them in other areas."
The supply center's acquisition of the refrigerator boxes illustrates the complexity of the Navy purchasing system and how it can sometimes go awry even when everyone involved had "the best intentions," according to one Navy official.
A Senate Budget Committee report released last week says the armed services, including the Navy, have stockpiled $30 billion in unneeded military supplies in warehouses and storage lots. The committee's chairman, Jim Sasser (D--Tenn.), said the stockpiling shows that "there are no incentives among purchasing people to save money."
Naval Supply Center officials in San Diego purchased the insulated boxes in December, 1985. They hoped the purchase would save money by reducing the number of workers paid to wait by docks for ships and by cutting back the amount of fuel used by refrigerator trucks waiting with their engines running. The Navy calculated it would save $300,000 a year, according to an internal report.
The supply center provides food and supplies to 140 ships in San Diego and Long Beach and also services 344 shore facilities, such as the Navy Hospital in Balboa Park. The boxes, 4 feet by 4 feet by 7 feet, are designed to be chilled in a cold warehouse, loaded with food and taken to piers to await loading aboard ship.
But there were several glitches. The supply center didn't have a facility large enough to chill the boxes. And the boxes, designed to keep food frozen for two days, didn't work for longer than six hours, according to tests conducted by the supply center in the spring of 1985 before the purchase.
"Why would they buy them before they had a building to use them? And if they didn't pass the specifications, why would they buy them?" asked Rep. Jim Bates (D-San Diego). "They wasted all that money--bungled the whole operation and then make lame excuses. We don't need $1,000 paint lockers."
In a December letter, Bates asked the naval inspector general, Rear Adm. Ming Chang, to investigate "the wasteful procurement of a product that NSC San Diego did not have the capability to use."
An investigator from Washington left San Diego on Wednesday after spending several days looking into Bates' allegations.
Although the center lacked a facility large enough to chill the boxes, construction of one had been planned since 1979, said Mary Markovinovic, a spokeswoman for the supply center. However, that plan never got off the drawing board. Money to build the warehouse was cut in 1986 or '87, after the purchase of the boxes, Markovinovic said.
The Naval Supply System Command in Washington earmarked funds for San Diego's supply center to purchase the boxes, Markovinovic said. During the year they were bought, the supply center's contracting department made $204 million in purchases. For it, the box contract--bid on by three companies--was relatively small.
Navy officials specified that they wanted the 178 insulated boxes to be able to hold a temperature of zero degrees Fahrenheit for a minimum of 48 hours. Before purchasing the boxes, the supply center's staff tested them for four consecutive days, beginning May 14, 1985.
The boxes failed three tests, including one in which workers plugged the drain opening at the manufacturer's suggestion. The tests showed that six hours was the maximum time the boxes could sustain a temperature of less than 15 degrees Fahrenheit, according to a letter from the supply center's contracting officer, E. Davenport.
Davenport told manufacturer Bill Rivers about the failures in a letter dated May 20, 1985. Davenport wrote that he was returning the box and requesting more testing. The insulated boxes had "failed first article testing specifications miserably," according to an internal report.
Rivers, whose company is based in Jacksonville, Fla., did not return repeated calls from The Times. It could not be determined whether Rivers changed the way the boxes were built after they failed Navy tests.
In a memo dated Dec. 3, 1985, Cmdr. Joseph Palanuk, director of the supply center's materiel department, gave approval for the boxes to be delivered, documents show. The boxes were shipped to the center in batches, the last lot of nine delivered April 29, 1986.
Supply center officials say they cannot explain why the purchase was made after the boxes failed tests, because a crucial file is missing.