Air Force ADP:

Lax Contract Oversight Led to Waste and Reduced Competition

IMTEC-93-3: Published: Nov 19, 1992. Publicly Released: Dec 21, 1992.

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Pursuant to a congressional request, GAO reviewed contracting practices at the Air Force Standard Systems Center (SSC).

GAO found that: (1) SSC had a pattern of mismanagement and inappropriate actions; (2) SSC did not establish effective mechanisms and procedures to track orders, deliveries, and payments on the Phase IV contract; (3) SSC inappropriately used the Phase IV contract to purchase equipment and services that were not within the scope of the contract, did not satisfy documented or validated user requirements, and did not properly justify expenditures; and (4) the Air Force continued its commitment to a single vendor for all its base-level computing needs, which discouraged competition and resulted in a sole-source award for the Standard Base Level Computing (SBLC) follow-on contract.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Given the summary nature of this recommendation, it should be dropped for future followup. See comments under each of the following recommendations for additional information on specific recommendations and responses.

    Recommendation: The Secretary of Defense should direct the Secretary of the Air Force to take actions to institute greater controls over the SBLC contract and promote a more competitive environment for meeting base-level data processing needs.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: The Air Force has taken action to require the use of IPMS for all orders on the SBLC follow-on contract. Instructions have been sent to Air Force bases detailing these requirements. Unless an IPMS number is available, the contractor is precluded from shipping equipment. According to the Air Force, system changes have been made that should improve accuracy and timeliness. An accomplishment report is being prepared to reflect this action.

    Recommendation: The Secretary of Defense should direct the Secretary of the Air Force to improve accounting and control procedures over the SBLC follow-on contract to ensure effective management of expenditures, equipment deliveries, and services. In addition, the Information Processing Management System should be improved to assure proper tracking and accounting for contract costs and equipment inventories, and monitoring of contract and Delegation of Procurement Authority limits.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: SSC believes the Phase IV contract modifications were within scope. The Judge Advocate General reviews modifications for legal sufficiency; but the contracting officer makes final scope decisions. SSC uses the requirements process to initiate contract modifications. The Air Force believes this ensures validated user needs are implemented and the cost/benefit analyses were well documented and convincing. It does not plan to change its procedures for changes. GAO disagrees that these actions were adequate, and Phase IV contract modifications were within scope, although senior officials approved them. GAO believes that the cost/benefit analyses were inaccurate and did not provide convincing evidence that replacements were necessary. The Air Force cannot verify maintenance savings because of accounting and control weaknesses in the Information Processing Management System. The recommendation should be closed because it is 2 years old, and GAO has been unable to convince DOD to take action.

    Recommendation: The Secretary of Defense should direct the Secretary of the Air Force to improve SBLC contract management practices to ensure that only modifications are executed that are: (1) within the scope of the contract; and (2) supported by validated user requirements and convincing cost/benefit analyses.

    Agency Affected: Department of Defense

  4. Status: Closed - Implemented

    Comments: SSC plans to limit purchases to base-level requirements. The I-CASE contract is intended to supplant CASE tools on the SBLC follow-on contract. The Base-Level Systems Modernization Program is aimed at reducing the Air Force's dependence on proprietary hardware by modernizing base-level software. SSC officials believe that using ADA and I-CASE will expedite the modernization program and the Air Force will be ready to compete for open systems hardware in 1997. Air Force actions to increase competition are underway but have slipped. Competition will increase by 1997 but not to the full extent practicable.

    Recommendation: The Secretary of Defense should direct the Secretary of the Air Force to develop a strategy, consistent with the provisions of Competition in Contracting Act and implementing regulations, to promote a more competitive environment for meeting base-level data processing requirements. Such a strategy should, as a minimum: (1) limit orders under the SBLC follow-on contract to maintaining existing base-level systems and equipment; and (2) ensure that SSC establishes and gives top priority to initiatives which will allow greater competition for base-level computing needs by the time the SBLC follow-on contract ends in 1997.

    Agency Affected: Department of Defense

 

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