Johnston Atoll Contractor Performance

NSIAD-96-22R: Published: Oct 6, 1995. Publicly Released: Oct 6, 1995.

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GAO reviewed the performance of the Johnston Atoll operation and maintenance contractor. GAO noted that: (1) the operation and maintenance contractor's performance rating dropped by about 25 percent between 1987 and 1991; (2) in 1991, the Army encouraged the contractor to improve its performance by offering financial incentives; (3) although the contractor's performance did not significantly improve between 1992 and 1994, it received an additional $5 million in award fees; (4) the contract award fee structure, delays in determining award fees, and ineffective communications resulted in lower than expected performance levels; and (5) although the Army and the contractor are working together to improve facility operations, management improvements could be enhanced if the Army adopted a management team approach called partnering at the facility.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The new JACADS contract, awarded in 1998, establishes a 3-percent base award fee as compensation for acceptable performance and a 6-percent incentive award fee. The award fee criteria are structured so that the award fee is only paid on performance above acceptable performance levels.

    Recommendation: The Assistant to the Secretary of Defense for Atomic Energy should ensure that the Commander of the Army Chemical Demilitarization and Remediation Activity develops a new contract award fee structure that recognizes the base fee as compensation for acceptable performance and requires the contractor to perform above the acceptable level to earn an additional award fee.

    Agency Affected: Department of Defense: Office of the Assistant Secretary (Atomic Energy)

  2. Status: Closed - Implemented

    Comments: The Army agreed that efforts were needed to shorten the timeframe from the availability of cost data to the date of the award fee. However, the Army concluded that 60 days was too short and that a 90-day window was more appropriate. As a result, the Army established a 90-day goal for awarding the fee for JACADS.

    Recommendation: The Assistant to the Secretary of Defense for Atomic Energy should ensure that the Commander of the Army Chemical Demilitarization and Remediation Activity determines and provides the award fees within the 60-day contractual period.

    Agency Affected: Department of Defense: Office of the Assistant Secretary (Atomic Energy)

  3. Status: Closed - Implemented

    Comments: The Army held formal discussions with the JACADS systems contractor that resulted in a partnering agreement becoming part of the new contract. Since then, the Army has conducted several smaller contract administrative meetings refining the partnering approach with the JACADS systems contractor. Further, this approach has been used during recent planning efforts for closing the disposal facility.

    Recommendation: The Assistant to the Secretary of Defense for Atomic Energy should ensure that the Commander of the Army Chemical Demilitarization and Remediation Activity formalizes the government's intention to continue its team approach to managing the Johnston Atoll facility by proposing the partnering approach during the 1996 contract negotiations.

    Agency Affected: Department of Defense: Office of the Assistant Secretary (Atomic Energy)

 

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