Summary: Pursuant to a congressional request, GAO reviewed draft legislation proposing the sale of Naval Petroleum Reserve Number 1 (NPR-1), focusing on: (1) the proposed sales method; and (2) improvements to ensure that the government receives the best value from the sale. GAO noted that: (1) the proposed sales method appears to provide equal opportunity to all prospective buyers and yield fair market value for NPR-1; (2) the sales method stipulates that the government will accept the highest responsible offer that meets or exceeds the minimum acceptable price, which will be based on the net present value of NPR-1, and requires that NPR-1 ownership shares be finalized before the sale; and (3) under the proposed legislation, the Secretary of Energy may use independent experts to value NPR-1 and finalize ownership shares and an investment banker to administer the sale. GAO also noted that the draft legislation needs to: (1) provide for adequate notification and information dissemination to improve potential buyers' participation; (2) resolve conflicting time requirements; and (3) provide for congressional notification of potential obstacles to the sale.
