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United States Government Accountability Office: 
GAO: 

Report to the Committee on Armed Services, House of Representatives: 

November 2014: 

Defense Logistics: 

Greater Awareness of Recommendations and Improvements in Data Quality 
Needed to Resolve Container-Management Challenges: 

GAO-15-114: 

GAO Highlights: 

Highlights of GAO-15-114, a report to the Committee on Armed Services, 
House of Representatives. 

Why GAO Did This Study: 

DOD uses DOD or commercial carrier shipping containers to transport 
supplies worldwide. Container management has been a long-standing 
challenge. DOD has paid detention fees of about $823 million from 2003 
through 2012 for retaining containers longer than allowed, primarily 
due to operations within CENTCOM, including Afghanistan, where fees 
continue to accrue. GAO was asked to review DOD's efforts to address 
container-management challenges and the accumulation of detention 
fees. This report assesses the extent to which (1) DOD policy and 
guidance incorporate recommendations addressing container-management 
challenges in CENTCOM's area of responsibility, and (2) DOD has 
managed and reduced detention fees for containers in Afghanistan since 
2012. GAO reviewed prior audit reports to identify container-
management recommendations; analyzed data such as container type and 
ownership from 2010 through 2013; and interviewed DOD officials. 

What GAO Found: 

Since the early years of operations in Afghanistan and Iraq, 
Department of Defense (DOD) efforts to improve container management in 
the U.S. Central Command (CENTCOM) area of responsibility have 
included either updating existing or developing new container-
management policy and guidance. However, the department cannot provide 
reasonable assurance that all recommendations addressing container 
management in the CENTCOM area of responsibility have been 
incorporated in DOD's policy or guidance, as appropriate. DOD 
officials incorporated some recommendations made by DOD audit agencies 
and other organizations aimed at improving container management into 
policy and guidance. For example, in August 2012 the commanders of 
CENTCOM and U.S. Transportation Command issued a joint memorandum 
outlining leadership's responsibility for container management in the 
CENTCOM area of responsibility that was a direct result of a 2012 
Joint Logistics Board report that recommended corrective actions to 
enhance senior leaders' understanding of container management. 
However, DOD does not have a comprehensive list of the corrective 
actions that have been recommended over time. Without such a list, DOD 
cannot reasonably ensure that all of the recommendations have been 
incorporated into policy and guidance as appropriate. For example, of 
the 95 corrective actions that GAO identified from reports by DOD 
audit agencies and other organizations issued from 2003 through 2013, 
DOD officials could not provide information on steps taken to address 
40 of the corrective actions. 

Since 2012, DOD has taken steps to manage and reduce shipping 
container detention fees incurred due to the untimely return of 
commercial carrier-owned shipping containers in Afghanistan, but its 
ability to manage and reduce these fees is limited by inaccurate and 
incomplete data. In August 2012, DOD established the requirement that 
within 15 days of a shipping container's arrival: (1) receipt of the 
container was to be recorded by the unit in-theater, (2) the container 
was to be unloaded, and (3) the responsible carrier was to be notified 
that its container was available for pickup. DOD also developed a set 
of tracking metrics to monitor progress in meeting this requirement. 
However, incomplete and inaccurate data about the location and number 
of containers accruing detention fees hindered DOD's ability to manage 
and reduce detention fees for containers in Afghanistan. For example, 
GAO analysis of DOD's container-management system data and carrier 
delivery data for each month in 2013 showed that DOD had not recorded 
in the container-management system about 16 percent of the carrier-
owned containers delivered and received in Afghanistan. DOD has 
identified factors, or procedural weaknesses, that may contribute to 
incomplete and inaccurate data; however, it has not assessed the 
extent to which these weaknesses have contributed to data 
inaccuracies, determined the root causes of these weaknesses, or 
developed a corrective-action plan for correcting them. Without an 
assessment of the root causes and a corrective-action plan, it will be 
difficult for DOD to have complete and accurate data, which could 
limit its ability to manage and reduce detention fees for containers 
in Afghanistan and in future contingency operations. 

What GAO Recommends: 

GAO recommends that DOD (1) develop a list of recommendations and 
incorporate them into policy and guidance and (2) identify root causes 
for procedural weaknesses that contribute to inaccurate, incomplete 
container data and develop and implement a corrective plan. DOD 
concurred with the first recommendation and partially concurred with 
the second because it partially disagreed to whom GAO directed the 
recommendation. GAO concurred and modified the recommendation. 

View [hyperlink, http://www.gao.gov/products/GAO-15-114]. For more 
information, contact Cary B Russell at 202-512-5431 or 
russellc@gao.gov. 

Contents: 

Letter: 

Background: 

DOD Cannot Determine the Extent to Which Its Policy and Guidance 
Incorporate Recommendations to Improve Container Management in the 
CENTCOM Area of Responsibility: 

DOD Has Taken Steps to Manage and Reduce Shipping-Container Detention 
Fees in Afghanistan, but Its Ability to Manage and Reduce These Fees 
Is Limited: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: Comments from the Department of Defense: 

Appendix III: GAO Contact and Staff Acknowledgments: 

Table: 

Table 1: Number of Reports Issued from 2003 through 2013 That Included 
Recommendations to Improve Shipping-Container Management: 

Figures: 

Figure 1: Detention-Fee Payments for Containers Shipped to Afghanistan 
and Iraq in Fiscal Years 2003 through 2012: 

Figure 2: Comparison of DOD Containers in Afghanistan with Known and 
Unknown Locations on October 31, 2013: 

Abbreviations: 

DOD: Department of Defense: 

CENTCOM: U.S. Central Command: 

ISO: International Organization for Standardization: 

[End of section] 

United States Government Accountability Office: 
GAO:
441 G St. N.W. 
Washington, DC 20548: 

November 21, 2014: 

The Honorable Howard P. "Buck" McKeon: 
Chairman: 
The Honorable Adam Smith: 
Ranking Member: 
Committee on Armed Services: 
House of Representatives: 

Afghanistan's logistics environment is challenging for U.S. forces 
because Afghanistan is a mountainous, arid, land-locked country with 
poorly developed infrastructure, including few roads, no railway, and 
few airports with limited amounts of paved runways. Further, the 
Department of Defense's (DOD) distribution of supplies and equipment 
into and within Afghanistan--a major operational area in the U.S. 
Central Command (CENTCOM) area of responsibility--is a complex process 
that involves many organizations and utilizes both surface and air 
modes of transportation over various routes. A major component of this 
distribution process involves the use of shipping containers to 
transport goods to, within, and from Afghanistan. For example, 
according to DOD container-management data, DOD managed, at its peak 
(January 2013), approximately 107,000 containers in Afghanistan, which 
included a combination of containers owned or leased by the U.S. 
government or provided by commercial shipping companies as part of 
DOD's shipping contract with these carriers. 

Container management for shipping containers, whether DOD-owned, 
leased, or carrier-owned, involves the tracking, storage, shipment, 
use, delivery, discharge, and return of the container to the common-
user container fleet or to the owning carrier.[Footnote 1] The 
management of these containers has been a long-standing challenge for 
DOD. According to DOD data, as of September 2014 the department has 
paid detention fees of $823 million from fiscal years 2003 through 
2012 for retaining carrier-owned containers used in Iraq and that are 
continuing to be used in Afghanistan for longer periods of time than 
allotted contractually.[Footnote 2] DOD currently estimates that 
detention payments for fiscal years 2013 and 2014 will be 
approximately $41 million and $40 million, respectively. 

We first reported on the issue of container management in 1977 and, 
along with other audit agencies, have issued reports since then 
identifying challenges related to container management. For example, 
in October 2011, we found that reporting and tracking of containers in 
container-management systems was inconsistent for reasons including 
that the two container-management systems in use were not integrated, 
thus potentially creating gaps in information.[Footnote 3] We 
recommended that, to better manage its shipping-container processes, 
DOD should select a single container-management system for all DOD 
entities and contract carriers to track the containers' status. DOD 
concurred with this recommendation and, in 2012, approved requirements 
for a single container-management system. DOD expects completion of an 
initial version of the system after the end of fiscal year 2014. 
Furthermore, since 1990, GAO has maintained a program to focus 
attention on government operations that it identifies as high risk due 
to their greater vulnerabilities to fraud, waste, abuse, and 
mismanagement or the need for transformation to address economy, 
efficiency, or effectiveness challenges. DOD's supply-chain 
management, which includes container management, has been on GAO's 
high-risk list since 1990.[Footnote 4] In our most recent update to 
the high-risk list, we reported that DOD had taken steps to mitigate 
some of the challenges concerning supplying the warfighter in 
Afghanistan, but problems remained, including in effectively tracking 
and managing cargo containers.[Footnote 5] 

Aspects of DOD container-management responsibilities reside with a 
number of offices within the department. For example, the Office of 
the Deputy Assistant Secretary of Defense for Transportation Policy is 
responsible for establishing container-management policy. The Surface 
Deployment and Distribution Command, the logistics directorates for 
each of the military services, the Defense Logistics Agency, U.S. 
Transportation Command, and CENTCOM all have responsibilities for 
different facets of managing containers, including the purchasing, 
shipping, managing, and returning of containers while they are being 
used in theater.[Footnote 6] 

Given the continued challenges DOD faces as it works to improve 
container management and reduce detention fees, you asked us to review 
DOD's efforts to improve container management in the CENTCOM area of 
responsibility in light of container detention fees. This report 
examines the extent to which (1) DOD policy and guidance incorporate 
recommendations by DOD audit agencies and other organizations that 
address container-management challenges in the CENTCOM area of 
responsibility, and (2) DOD has managed and reduced detention fees for 
containers in Afghanistan. 

To address the first objective, we reviewed DOD policy and guidance 
pertaining to container management to develop our understanding of 
container-management operations and roles and responsibilities. We 
then reviewed reports issued from calendar years 2003 through 2013 by 
all audit agencies we identified as having done work on the subject of 
container management at DOD: the Army Audit Agency, the Naval Audit 
Service, the Air Force Audit Agency, the DOD Office of Inspector 
General, the Defense Contract Audit Agency, the Defense Contract 
Management Agency, the Special Inspector General for Iraq 
Reconstruction, the Special Inspector General for Afghanistan 
Reconstruction, and GAO.[Footnote 7] We contacted and interviewed DOD 
logistics and container-management officials from the Office of the 
Deputy Assistant Secretary of Defense for Transportation Policy, U.S. 
Transportation Command, CENTCOM, the U.S. Army, the U.S. Marine Corps, 
the Surface Deployment and Distribution Command, and the Defense 
Logistics Agency to discuss efforts to improve container management 
and identify any additional reports and studies with findings and 
recommendations involving container-management issues potentially 
affecting DOD operations in CENTCOM's area of responsibility.[Footnote 
8] We also interviewed DOD officials to determine whether the 
department had undertaken efforts to identify recommendations 
addressing container management. We then analyzed the relevant 
recommendations contained in these reports and studies that we 
identified, noting the DOD components responsible for implementing 
them, and then categorized the recommendations based on common themes 
that emerged from our review of the reports. As a result, we were able 
to identify whether certain recommendations were repeated over the 
reporting period. We then reviewed DOD policy and guidance pertaining 
to container management to determine the extent that the 
recommendations we identified were reflected in them. We compared 
DOD's inclusion of recommendations addressing container-management 
challenges into its policy and guidance documents according to 
criteria outlined in Standards for Internal Control in the Federal 
Government.[Footnote 9] 

To address the second objective, we met with officials from the Office 
of the Deputy Assistant Secretary of Defense for Transportation 
Policy, U.S. Transportation Command, CENTCOM, the U.S. Army, the U.S. 
Marine Corps, the Surface Deployment and Distribution Command, and the 
Defense Logistics Agency to develop an understanding of how DOD 
accrues and pays detention fees and manages shipping containers to 
reduce the accumulation of detention fees. We also discussed and 
observed the processes and procedures by which invoices for detention 
fees are received, reviewed, and paid, and observed demonstrations of 
the U.S. Transportation Command's system used to track and manage 
government-owned and carrier-owned shipping containers used in the 
CENTCOM area of responsibility including in Afghanistan. In addition, 
we collected comprehensive listings from 2013 of the containers and 
any associated data, including, for example, the date a container 
arrived in theater, the container type, and the ownership of the 
container; and analyzed the data to understand the amounts and uses of 
shipping containers in Afghanistan. We also collected all available 
end-of-month DOD listings--from September 2010 through December 2013--
of carrier-owned shipping containers subject to detention fees to 
conduct our own analysis. We selected September 2010 because it was 
the first month for which DOD had available end-of-month data. We 
concluded with December 2013 because it was the cutoff date for the 
analyses that we had planned to conduct. We compared our observations, 
data we collected, and our analyses with Standards for Internal 
Controls in the Federal Government and DOD guidance such as the 
Defense Transportation Regulation and CENTCOM's Container Management 
Policy Letter of Instruction that specify the need to accurately and 
timely record data that has an effect on detention fee 
accrual.[Footnote 10] We also assessed DOD's efforts to improve its 
management of container data against best practices for improving 
federal agency performance and accountability and against Standards 
for Internal Control in the Federal Government, which address risks 
and accountability for achieving effective results.[Footnote 11] In 
addition, we assessed the reliability of the container data by 
reviewing related documentation, interviewing knowledgeable officials, 
and testing the data for obvious errors and completeness. We concluded 
that the container data were sufficiently reliable to present select 
findings, but identified limitations that are discussed later in this 
report. Appendix I provides additional details on the scope and 
methodology. 

We conducted this performance audit from February 2013 to November 
2014 in accordance with generally accepted government auditing 
standards. These standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

Background: 

Shipping containers are reusable intermodal enclosures or flat, open 
platforms that meet International Organization for Standardization 
(ISO) container standards and are intended to be loaded with cargo and 
shipped on or in a transportation conveyance.[Footnote 12] The 
containers DOD uses are typically 20 to 40 feet long and 8 feet wide, 
some of which are refrigerated for perishable goods.[Footnote 13] DOD 
uses containers to transport equipment and supplies to destinations in 
support of troops conducting military operations worldwide, including 
Afghanistan. In austere environments, DOD also uses containers for 
many other purposes such as providing secure storage for goods and 
using container walls for force protection. 

The containers DOD has managed in the CENTCOM area of responsibility, 
including in Afghanistan, are owned or leased by DOD; owned by 
coalition partners; owned by contractors supporting DOD; or owned by 
commercial carriers operating under DOD's Universal Services Contract. 
The Universal Services Contract provides international cargo 
transportation and distribution services using ocean common or 
contract carriers, and offers regularly scheduled commercial liner 
service for requirements that may arise in any part of the world. The 
contract is primarily for DOD requirements and applies to services 
performed in peacetime and exigency areas. Contract provisions include 
detention-fee rates, container purchase options and prices, and 
maximum detention-fee accrual periods, among other provisions. When 
carriers deliver goods using their own containers, DOD has a 
contractually specified number of days to return a container before 
incurring added fees--defined as "free-time" in the contract. After 
the free-time period ends, DOD accrues daily detention fees until the 
carrier is notified that an empty container is available for pickup. 
[Footnote 14] Under various circumstances, the contract also allows 
DOD to acquire a carrier's container, either through the payment of a 
maximum amount of detention fees, or through payment of a 
contractually set purchase price after a minimum amount of detention 
fees has been paid.[Footnote 15] 

As of August 2014, DOD's container-management system comprises two key 
information management systems--the U.S. Transportation Command's 
Integrated Booking System/Container Management Module and the Army 
Container Asset Management System--along with the persons and 
organizations using, updating, and managing the two systems. The 
Surface Deployment and Distribution Command and CENTCOM use the 
Integrated Booking System/Container Management Module as their 
container-management system. The system provides data on all container 
ownership types used in theater including government-owned or leased, 
coalition partner-owned, and carrier-owned containers in theater and 
estimates detention costs for containers that are not returned to 
carrier owners prior to the end of the free-time period. The Army 
Container Asset Management System records all containers in DOD's 
inventory and serves as the official property record for Army-owned 
containers. From the Army Container Asset Management System, personnel 
can conduct studies on Army container status, location, and 
disposition from data entered into the system by its users and data 
feeds from other sources. 

Detention fees, purchase prices, and maximum detention-fee accrual 
periods in Iraq and Afghanistan varied, according to the Universal 
Services Contract, depending on the size of a container and whether 
the container is refrigerated. For example, in 2013, detention fees 
for carrier-owned containers ranged from $22 to $127 per day and could 
accrue over periods ranging from 350 days to 700 days, at which point 
DOD would become the de facto owner. Containers could also be 
purchased prior to these maximum periods, but only after a minimum 
period of detention is paid: 60 days for containers shipped under the 
2013 Universal Services Contract or 90 days for containers shipped 
under previous contracts. Purchase prices in 2013 ranged from $2,880 
to $31,500 depending on the size of a container and whether the 
container was refrigerated. Figure 1 shows detention fees DOD accrued 
from fiscal years 2003 through 2012. Fiscal year 2013 and 2014 data 
are excluded from this figure because detention fees can accrue over a 
period of 350 to 700 days; therefore, payment of these fees for 
containers leased in a given fiscal year may extend into subsequent 
fiscal years. Moreover, until a contract is closed out, the contractor 
may continue to make detention-fee claims. 

Figure 1: Detention-Fee Payments for Containers Shipped to Afghanistan 
and Iraq in Fiscal Years 2003 through 2012: 

[Refer to PDF for image: vertical bar graph] 

Nominal dollars: 

Fiscal year 2003: $112 million; 
Fiscal year 2004: $146 million; 
Fiscal year 2005: $144 million; 
Fiscal year 2006: $68 million; 
Fiscal year 2007: $42 million; 
Fiscal year 2008: $25 million; 
Fiscal year 2009: $51 million; 
Fiscal year 2010: $85 million; 
Fiscal year 2011: $94 million; 
Fiscal year 2012: $57 million. 

Source: GAO analysis of Department of Defense (DOD) data. GAO-15-114. 

Note: Detention fees for fiscal years 2013 and 2014 were not fully 
known prior to issuance of this report because detention fees can 
accrue over a period of 350 to 700 days. Data were not available to 
separate container-fee payments between Afghanistan and Iraq. 

[End of figure] 

DOD Cannot Determine the Extent to Which Its Policy and Guidance 
Incorporate Recommendations to Improve Container Management in the 
CENTCOM Area of Responsibility: 

Since the early years of operations in Afghanistan and Iraq, DOD 
officials have made efforts to improve container management in the 
CENTCOM area of responsibility. One way they continue to improve 
container management is by either updating existing or developing new 
container-management policy and guidance. To do so, they incorporated 
recommendations by DOD audit agencies and other organizations aimed at 
improving container management. However, it is uncertain whether all 
of the recommendations have been incorporated into DOD policy as 
appropriate because the department does not have a comprehensive list 
of the recommendations that have been made over the years. 

DOD's Container-Management Policy and Guidance Incorporate Some 
Recommendations to Improve Container Management: 

Since the early years of operations in Afghanistan and Iraq, DOD 
officials have made efforts to improve container management in the 
CENTCOM area of responsibility. One way they continue to improve 
container management is by either updating existing or developing new 
container management policy and guidance based on recommendations made 
by DOD audit agencies as well as other organizations. Specifically, 
these policy and guidance changes have addressed various aspects of 
container management including: (1) doctrine and planning for the use 
of containers in a contingency environment, (2) leadership's 
responsibility for container management, and (3) efforts to improve 
the tracking and inventorying of containers. 

Doctrinal and planning guidance for Army units with distribution 
responsibilities in the CENTCOM area of responsibility, which includes 
responsibility for container management, is contained in three 
documents: Army Regulation 56-4: Distribution of Materiel and 
Distribution Platform Management, published in March 2007 and revised 
in September 2014; Army Theater Distribution, published in May 2011; 
and Army Container Operations, published in May 2013.[Footnote 16] 
However, according to Army officials, both Army Theater Distribution 
and Army Container Operations were informed by a recommendation made 
in a 2008 Army Audit Agency report that container management in a 
contingency environment be integrated into doctrine and 
planning.[Footnote 17] In addition, Army officials noted that these 
documents also address a 2011 Army Audit Agency recommendation that 
lessons learned about container management for ongoing and future 
contingencies be institutionalized in the contingency planning 
process.[Footnote 18] 

Leadership's responsibility for container management in the CENTCOM 
area of responsibility is addressed in the Container Detention 
memorandum signed by both the commander of U.S. Transportation Command 
and CENTCOM in August 2012.[Footnote 19] According to U.S. 
Transportation Command officials, this memorandum was published as a 
direct result of a recommendation made in a Joint Logistics Board 
report, also published in 2012, that included additional 
recommendations aimed at enhancing senior leaders' understanding of 
container-management challenges and detention-fee payments and 
enforcing compliance with previously published container-management 
policy as outlined in CENTCOM's Container Management Letter of 
Instruction. Specifically, the Container Detention memorandum states 
that compliance with CENTCOM's Container Management Letter of 
Instruction is mandatory and that all subordinate commanders in 
theater are to ensure that their respective units embrace container-
management and detention-fee reduction goals. Moreover, the Container 
Detention memorandum states that subordinate commanders in the CENTCOM 
theater should report container transactions in order to track the 
receipt, location, and discharge of containers in accordance with 
procedures also specified in the CENTCOM Container Management Letter 
of Instruction. 

The tracking and inventorying of containers in the CENTCOM area of 
responsibility is addressed in the aforementioned CENTCOM Container 
Management Letter of Instruction, initially issued in 2006 according 
to U.S. Transportation Command officials and periodically updated 
thereafter, most recently in January 2014. In this letter, CENTCOM 
emphasizes the necessity for the timely entry of data for all 
containers moving into, within, or out of the CENTCOM area of 
responsibility; stresses the importance of maintaining accurate 
theater-wide container inventories through a robust inventory 
management program; and details the roles and responsibilities of the 
various DOD organizations that constitute the theater container-
management structure. According to CENTCOM officials, the CENTCOM 
Container Management Letter of Instruction and its periodic updates 
address concerns raised by Army Audit Agency reports from 2005 and 
2009 and the Joint Logistics Board's report of 2012 that recommended 
enhancing and clarifying the authority of the theater container-
management structure; conducting physical inventories of containers in 
order to better track them; and completing property-management 
functions for containers purchased in the CENTCOM area of 
responsibility.[Footnote 20] 

DOD Cannot Ensure That All Recommendations Addressing Container 
Management in the CENTCOM Area of Responsibility Have Been 
Incorporated in Policy and Guidance as Appropriate: 

Notwithstanding DOD's efforts to improve container management in the 
CENTCOM area of responsibility by either updating existing or 
developing new policy and guidance in response to recommendations made 
by DOD and other organizations, DOD cannot ensure recommendations have 
been addressed in policy and guidance as appropriate. This is because, 
according to DOD officials, no single office or entity within the 
department has comprehensively identified all of the reports and 
recommendations the various DOD and other organizations have made to 
improve container management in the CENTCOM area of responsibility. 
Standards for Internal Control in the Federal Government call for an 
organization's internal control processes to ensure that the findings 
of audits and other reviews are promptly resolved.[Footnote 21] 

When we asked key officials from DOD organizations that play some role 
in or have some responsibility for container management to identify 
what, if any, steps had been taken to address recommendations that 
have been made by DOD and other organizations, the officials responded 
that this information was not easily available without extensive work 
to compile. Because DOD could not provide us with a comprehensive list 
of reports and their associated recommendations addressing container-
management challenges in the CENTCOM area of responsibility, we 
conducted our own literature search and subsequently compiled a list 
of 25 reports and reviews issued by DOD and other organizations from 
2003 through 2013. Included in these reviews and reports are 95 
recommendations aimed at improving container management in the CENTCOM 
area of responsibility (see table 1). Although this list may not be 
comprehensive because our search was limited to the period 2003 
through 2013, and DOD had no source or means to corroborate or verify 
what we identified, when we requested that DOD provide us information 
on the steps taken to address the recommendations we did identify, DOD 
provided information on steps taken to address 55 of the 95 
recommendations that we identified. However, DOD did not provide 
answers for the remaining 40 recommendations.[Footnote 22] 

Table 1: Number of Reports Issued from 2003 through 2013 That Included 
Recommendations to Improve Shipping-Container Management: 

Organization: Department of Defense (DOD) audit agencies; 
Reports issued/reviews: 20; 
Recommendations identified: 79; 
Period of issuance: 2003-2013. 

Organization: DOD components/other organizations; 
Reports issued/reviews: 3; 
Recommendations identified: 13; 
Period of issuance: 2004-2012. 

Organization: GAO; 
Reports issued/reviews: 2; 
Recommendations identified: 3; 
Period of issuance: 2007-2011. 

Organization: Total; 
Reports issued/reviews: 25; 
Recommendations identified: 95; 
Period of issuance: 2003-2013. 

Source: GAO analysis of DOD data. GAO-15-114. 

Note: Recommendations we identified may not be comprehensive because 
DOD did not have an alternative source or means to corroborate or 
verify what we identified. Additionally, the same or similar 
recommendations may appear in different reports and therefore may be 
duplicated. 

[End of table] 

According to Standards for Internal Control in the Federal Government, 
internal control is an integral part of an organization's management 
that provides reasonable assurance that operations are conducted 
effectively and efficiently, that financial reporting is reliable, and 
that applicable laws and regulations are complied with. One of the 
standards of internal control is Monitoring, which calls for agencies 
to assess the quality of performance over time and ensure that the 
findings of audits and other reviews are promptly resolved. In this 
vein, managers are to: (1) promptly evaluate findings from audits and 
other reviews, including those showing deficiencies and 
recommendations reported by auditors and others who evaluate agencies' 
operations; (2) determine proper actions in response to findings and 
recommendations from audits and reviews; and (3) complete, within 
established time frames, all actions that correct or otherwise resolve 
the matters brought to management's attention.[Footnote 23] A second 
standard, Information and Communications, states that information 
should be recorded and communicated to management and others within 
the entity who need it and in a form and within a time frame that 
enables them to carry out their internal control and other 
responsibilities. However, based on DOD's container-management 
officials' lack of comprehensive awareness of recommendations 
described previously, DOD cannot reasonably assure that all 
recommendations for the CENTCOM area of responsibility have been 
addressed in policy or guidance, as appropriate. Without a 
comprehensive list, DOD cannot reasonably assure whether it has 
addressed all of the recommendations related to container management 
operations as appropriate in policy or guidance, nor can it reasonably 
assure that policymakers have the information available and 
incorporate it as needed into new and existing container-management 
policies. DOD could use our work as a starting point for identifying 
additional recommendations to improve container-management policy and 
guidance for the next contingency. 

DOD Has Taken Steps to Manage and Reduce Shipping-Container Detention 
Fees in Afghanistan, but Its Ability to Manage and Reduce These Fees 
Is Limited: 

Since mid-2012, DOD has taken a number of steps to manage and reduce 
shipping-container detention fees incurred for the untimely return of 
commercial shipping containers used in Afghanistan. However, DOD's 
ability to manage and reduce container detention fees is limited by 
inaccurate and incomplete data about the number and location of 
containers accruing detention fees. 

DOD Has Taken Steps to Manage and Reduce Shipping-Container Detention 
Fees: 

According to DOD, the department tracks the amount of detention fees 
it accrues each fiscal year and has worked to manage and reduce these 
fees through a variety of efforts. For example, in June 2012, a Joint 
Logistics Board-directed container-management team issued a report 
that included recommendations for improving global container 
management that would reduce detention costs in CENTCOM. Subsequently, 
in August 2012, DOD implemented one of the team's recommendations when 
the commanders of the U.S. Transportation Command and CENTCOM issued 
their joint memorandum--addressed to the military services, the 
Defense Logistics Agency, U.S. Forces Afghanistan, and CENTCOM's 
component commands--directing them to focus specifically on improving 
container-management operations to reduce detention fees. The joint 
memorandum also established a requirement within the CENTCOM area of 
responsibility that within 15 days of a shipping container's arrival, 
receiving organizations are to acknowledge receipt of the container, 
unload the container, and notify the responsible carrier that its 
container is available for pickup. In addition, according to the joint 
memorandum, U.S. Transportation Command and CENTCOM developed a set of 
tracking metrics to monitor progress in meeting this requirement. 
[Footnote 24] Furthermore, in March 2013, U.S. Transportation 
Command's subordinate organization, the Surface Deployment and 
Distribution Command, developed and began tracking data against 
container-management goals to support the drawdown from Afghanistan, 
according to officials from the organization. The data included the 
number of containers not released for carrier pickup and the number of 
containers accruing detention fees for longer than 3 months. Lastly, 
in September 2013, according to CENTCOM officials, CENTCOM formed an 
assistance team in Afghanistan to help operating bases focus on 
container management in order to improve container inventory database 
accuracy and reduce the number of containers, which could reduce 
detention fees. 

Following the collective actions it has taken to manage and reduce 
detention fees, DOD estimated that there would be a significant 
decrease in fees for 2013 and 2014.[Footnote 25] Specifically, DOD 
estimated that the $57 million in detention fees paid in 2012 will be 
reduced to $41 million in fiscal year 2013 and to $40 million in 
fiscal year 2014. DOD officials said that they expected the decrease 
in detention fees because of a combination of two factors: (1) a 
projected reduction in the number of containers being shipped into 
Afghanistan as operations draw down there, and (2) a reduction in the 
average detention fees that will be accrued per container resulting 
from actions DOD has taken to reduce and manage those fees. Because of 
insufficient data, however, according to Surface Deployment and 
Distribution Command officials, DOD could not determine the extent to 
which the expected decrease would be due to actions the department has 
taken in theater to reduce and manage detention fees or the expected 
decrease would be the result of other factors such as there being 
fewer containers in Afghanistan as a result of the drawdown.[Footnote 
26] Further, according to Surface Deployment and Distribution Command 
officials, because there is a lag in the time carriers submit 
detention-fee invoices, it is difficult for DOD to determine a 
reliable estimate for detention fees for containers in theater at a 
given time. The officials said that they hope to have more reliable 
data after (1) operations cease in Afghanistan, when remaining 
detention invoices and requests-for-equitable-adjustment detention-fee 
claims are received and processed, and (2) the Universal Services 
Contract is closed out, which will not occur until fiscal year 2016 or 
later. 

DOD's Incomplete and Inaccurate Container-Management Data Limits Its 
Ability to Manage and Reduce Detention Fees in Afghanistan: 

Although DOD has estimated that there will be a decrease in the amount 
of detention fees it will pay, its ability to manage and reduce 
detention fees for containers subject to them in Afghanistan is 
limited by incomplete and inaccurate data on the number and location 
of containers in country. Moreover, DOD has not assessed contributing 
factors to determine the root causes for its incomplete and inaccurate 
data. 

According to Standards for Internal Control in the Federal Government, 
for an agency to run and control its operations, it must have 
relevant, reliable information relating to internal events.[Footnote 
27] In this regard, the DOD Transportation Regulation specifies that 
combatant commanders are to collect and maintain data on every 
container in theater.[Footnote 28] However, DOD's data on the number 
of carrier-owned containers subject to detention fees is incomplete 
and inaccurate. Without relevant and reliable data, DOD's ability to 
monitor and reduce detention fees is limited. For example, DOD 
concluded that the total number of containers in DOD's container-
management system subject to detention fees were understated because 
the invoices DOD received for the same period indicated that there was 
a greater number of carrier-owned containers in theater.[Footnote 29] 
Specifically, using data from DOD's container-management system on the 
number of carrier-owned containers used in the CENTCOM area of 
operations (including in Afghanistan), container managers estimated 
that detention fees for fiscal year 2011 would be about $23 million. 
However, DOD received detention-fee invoices totaling about $84 
million for fiscal year 2011, about 3.7 times higher than estimated, 
which represents approximately 5,200 containers that DOD could not 
account for. According to Surface Deployment and Distribution Command 
officials, improvements in data feeds and user data entry have been 
made over the past 4 years as they have worked to resolve this 
discrepancy but have not yet fully done so. Nonetheless they believe 
that the discrepancy arose primarily from inaccuracies in inventory 
data. Without accurate inventory data to validate invoices, DOD is at 
risk for being overbilled, which happened during fiscal years 2010 and 
2011 according to Surface Deployment and Distribution Command 
officials. Specifically, investigations by the Surface Deployment and 
Distribution Command and others beginning in 2010 led to recouping 
costs for incorrect carrier-shipment billings, resulting in $3.9 
million and $9.0 million in detention-fee refunds to DOD for fiscal 
years 2010 and 2011, respectively. 

In addition to incomplete data on the number of containers subject to 
detention, the DOD container-management system also does not contain 
accurate data on the location of all shipping containers in 
Afghanistan. CENTCOM's container-management policy sets as a goal the 
establishment of accountability for containers in theater, which 
includes accurate recording of the location of each container into the 
container-management system.[Footnote 30] However, data for DOD 
shipping containers in Afghanistan on 4 separate days, from April 2013 
through the end of December 2013, showed that containers with unknown 
locations ranged from 14 percent to 25 percent of all containers in 
Afghanistan. Figure 2 illustrates the portion of containers in 
Afghanistan with known and unknown locations on October 31, 2013. 
[Footnote 31] 

Figure 2: Comparison of DOD Containers in Afghanistan with Known and 
Unknown Locations on October 31, 2013: 

[Refer to PDF for image: pie-chart] 

Containers with known locations: 79%; 
Containers with unknown locations: 21%. 

Source: GAO analysis of Department of Defense (DOD) data. GAO-15-114. 

[End of figure] 

Moreover, our additional analysis indicated that, over the period 
September 2010 through December 2013, 7,707 individual carrier-owned 
containers had unknown locations recorded in the container-management 
system with 572 of those individual shipping containers accruing 
detention fees for 1 year or more. Without accurate location data, 
DOD's ability to locate, empty, and return those carrier-owned 
shipping containers is limited, and detention fees, therefore, can 
continue to accrue unabated until reaching the maximum allowed by 
contract--approximately twice the purchase price of the container. 

DOD has identified several procedural weaknesses in the management of 
containers in theater that may affect the accuracy and completeness of 
container-management data. According to Surface Deployment and 
Distribution Command officials, one procedural weakness is that 
containers are not always being recorded in theater when received. 
Specifically, the officials stated that the procedures for verifying 
the receipt of a container at a base in Afghanistan do not require a 
receiving unit representative to sign directly for shipping containers 
upon arrival because operations at bases can be quite extensive, and 
waiting for a receiving unit representative to arrive at the delivery 
point[Footnote 32] would create or exacerbate backlogs. Therefore, 
according to Surface Deployment and Distribution Command officials, 
the person manning the delivery point when the container arrives signs 
for it, although that person has no responsibility for entering any 
data into the DOD container-management system. As a result, container 
managers may be unaware of containers delivered to their areas of 
responsibility and not learn that such containers are accruing 
detention fees until after DOD receives a bill from the carrier for 
the detention fees. CENTCOM's container management policy specifies 
that within 48 hours of receiving a container the receiving unit 
should record the event in DOD's container-management system.[Footnote 
33] In addition, Standards for Internal Control in the Federal 
Government state that events such as the receipt of goods (e.g., 
shipping containers and their contents) should be promptly recorded to 
maintain their relevance and value to management in controlling 
operations and making decisions.[Footnote 34] However, our analysis of 
DOD's container-management system data and carrier delivery data for 
the end of each month in 2013 showed that DOD had not recorded in the 
container-management system about 16 percent of the carrier-owned 
containers delivered and received in Afghanistan. Moreover, according 
to U.S. Transportation Command officials, without records of receipts, 
DOD does not always have complete documentation to confirm whether or 
not delivery dates and resulting detention fees claimed by the carrier 
are correct, and, as a result, has accepted unsupported delivery 
claims and billings for detention fees. Until the location of a 
container is determined, DOD may purchase containers that are known to 
be lost to avoid further detention payments or it may continue to pay 
the detention fees up to the maximum amount allowed by contract--
ranging from approximately $3,200 to $47,500 depending on the type of 
container--at which time, DOD becomes the owner of that container. 

In addition, Surface Deployment and Distribution Command officials 
have identified a variety of other procedural weaknesses that they 
stated led to carrier-owned containers not being recorded in the 
container-management system, which may also affect the accuracy and 
completeness of data. Specifically, they identified instances where 
the following occurred: 

* Containers were shipped into the theater outside of the DOD 
container-management system. For example, a carrier delivers a 
container to the theater before it is recorded in DOD's container-
management system. This situation may occur when a unit orders items 
that are shipped directly from a supplier or manufacturer instead of 
through an intermediary military supply activity. 

* Container records were closed before the container was returned to 
the specified pickup location without prior approval from the carrier 
for this change. For example, a unit in theater unloads a container at 
a location other than the original delivery point and records the 
container as ready for carrier pickup without the carrier's agreement 
to the alternative location. Recording the container as ready for 
carrier pickup causes DOD's container-management system to disregard 
the container as subject to detention fee accrual. However, without 
carrier agreement to the alternative pick up location, detention fees 
continue to accrue under the terms of the Universal Services Contract. 
[Footnote 35] 

* Container records were closed while the container was in use. For 
example, an in theater container manager may mistakenly conclude that 
because a container is no longer in a unit's possession, it has been 
returned to a carrier. The container manager, therefore, designates 
the container record as inactive in DOD's container-management system. 
However, the container may still be in DOD's possession and subject to 
detention fees. 

* Containers were recorded incorrectly as government-owned containers. 
For example, a container manager in theater with a large volume of 
containers may mistakenly code a carrier-owned container as a DOD 
container. The DOD container-management system does not consider these 
incorrectly coded containers as subject to detention fees, however 
detention fees continue to accrue. 

While DOD has identified the procedural weaknesses above that may 
affect the completeness and accuracy of container-management data and 
has, according to Surface Deployment and Distribution Command 
officials, researched container data and taken other steps to resolve 
most of these instances, the department has not assessed the extent to 
which these weaknesses have affected the data. For example, the Joint 
Logistics Board-directed container-management team recommended more 
automated reporting to significantly reduce manually inventorying 
containers, thereby improving the accuracy of inventory data.[Footnote 
36] In response, DOD contracted for the development of automated 
technology for the recording of shipping containers as they enter and 
exit military installations and, according to DOD officials, expects 
to complete an initial evaluation of the selected technology after the 
end of fiscal year 2014. According to DOD officials, the technology is 
intended to provide irrefutable proof of a container's movement, work 
without reliance on satellite tags, and supplement or even replace the 
need for human manual entry. However, DOD has not identified the root 
cause or causes for the inaccurate inventory data that this 
recommendation and the selected technology are intended to address, 
which is critical if the department is to correct the procedural 
weaknesses that contribute to inaccurate and incomplete data. Further, 
according to Surface Deployment and Distribution Command officials, no 
DOD office has identified the root causes of the other procedural 
weaknesses discussed above or developed a corrective action plan with 
corrective measures to address the root causes. In our process for 
determining agencies' programs at high risk due to their greater 
vulnerabilities to fraud, waste, abuse, and mismanagement or the need 
for transformation to address economy, efficiency, or effectiveness 
challenges, we developed criteria stated in our November 2000 report, 
Determining Performance and Accountability Challenges and High Risks, 
which found that one step that agencies can take to help resolve their 
programs' performance and accountability challenges is to develop a 
corrective action plan that includes identifying root causes and 
effective solutions.[Footnote 37] For container management, such a 
corrective plan would contain corrective measures intended to help 
develop effective solutions for better locating and confirming receipt 
of containers and verifying detention invoices as a means to manage 
and reduce detention fees in current and future contingencies. 
According to these criteria, for improving federal agency performance 
and accountability, agencies can help resolve a program's performance 
and accountability challenges by developing a corrective action plan 
that identifies root causes and effective solutions and provides for 
completion of corrective measures in the near term.[Footnote 38] 
Further, Standards for Internal Control in the Federal Government 
state that an agency's procedures are among the control activities 
that help ensure actions are taken to address risks and are an 
integral part of an entity's implementing and accountability for 
stewardship of government resources and achieving effective results. 
[Footnote 39] One reason DOD has not identified the root cause or 
causes for the procedural weaknesses that contribute to inaccurate or 
incomplete container-management data nor developed a corrective-action 
plan with effective solutions that provide for completion of 
corrective measures, according to Surface Deployment and Distribution 
Command officials, is that the responsibility for handling containers 
in Afghanistan is dispersed among CENTCOM, U.S. Transportation 
Command, and U.S. Forces-Afghanistan and its subordinate units. 
According to the officials, their command, which is a subordinate 
element of U.S. Transportation Command, has attempted to improve the 
completeness and accuracy of container-management data and to identify 
root causes for its inaccuracy and incompleteness by focusing on areas 
that fall within their responsibility, such as providing training on 
managing containers and on assessing and improving the data systems. 
However, they also noted that other factors affecting the completeness 
and accuracy of container-management data fall outside of the Surface 
Deployment and Distribution Command. According to Surface Deployment 
and Distribution Command officials, other than the command's attempts, 
no other DOD office has assessed root causes for the procedural 
weaknesses identified in this report or developed a corrective-action 
plan to assess the procedural weaknesses and determine their root 
causes. 

According to Surface Deployment and Distribution Command officials 
with global container management responsibilities, complete data on 
the number of carrier-owned containers, including which containers are 
accruing detention fees, would help DOD container managers achieve a 
reduction in these fees. Until DOD assesses its procedural weaknesses, 
identifies the root causes for those weaknesses, and develops and 
implements a corrective-action plan to address them, the department is 
limited in its ability to manage and reduce detention fees. Further, 
because it will not have the information it needs to correct the 
deficiencies in the data to better locate and confirm receipt of 
containers and verify detention invoices until it does so, DOD will 
not have reliable data to assess how well its efforts to manage and 
reduce detention fees are working currently and in future 
contingencies. 

Conclusions: 

The management of shipping containers has been a long-standing 
challenge for DOD, a challenge that is particularly acute during 
contingency operations and one that has been exacerbated in 
Afghanistan given the harsh conditions that exist there. Recently, the 
Deputy Secretary of Defense's Global Container Policy and the August 
2012 memo signed by the commanders of the U.S. Transportation Command 
and CENTCOM demonstrate that DOD's top leadership recognizes the 
challenges container managers face in managing containers and the need 
for reducing detention fees during this most recent conflict. However, 
in order to proactively and successfully improve future container-
management operations and prevent the accumulation of detention fees, 
DOD would benefit by being fully apprised of all recommendations made 
by DOD audit agencies and other organizations thus far and determining 
which actions would potentially resolve container-management 
challenges. DOD could use our work as a starting point for identifying 
additional recommendations to improve container-management policy and 
guidance for the next contingency. In addition, until DOD assesses its 
procedural weaknesses, identifies the root causes for those 
weaknesses, and develops and implements a corrective-action plan to 
address them to help improve the quality of its container-management 
data, it will be difficult for the department to determine how best to 
improve its container-management operations, including the reduction 
of detention fees. 

Recommendations for Executive Action: 

To help DOD to improve the overall management of shipping containers 
for current and future contingencies, we recommend that the Secretary 
of Defense take the following three actions. 

To more fully incorporate recommendations into its policy and guidance 
and to ensure that improvements to container management will be 
sustained for future contingencies, we recommend that the Secretary of 
Defense develop a comprehensive list of recommendations made by DOD 
agencies and other organizations, and make the information available 
for policymakers to incorporate, as appropriate, into new or existing 
container-management policy and guidance. DOD could use our work as a 
starting point for this assessment. 

To help ensure DOD's container-management system has more complete and 
accurate data, and DOD is better positioned to assess progress in 
managing containers to reduce detention fees, we recommend that the 
Secretary of Defense direct the Commander CENTCOM to: 

* identify the root cause or causes for the procedural weaknesses in 
the handling of containers and the extent to which they contribute to 
the incomplete and inaccurate recording of container-management data 
in theater, and: 

* develop and implement a corrective action plan with effective 
solutions for the root causes identified that provide for completion 
of corrective measures. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to DOD for review and comment. In 
written comments, DOD concurred with one of the three recommendations 
and partially concurred with the two other recommendations. DOD's 
comments are summarized below and reprinted in appendix II. DOD also 
provided technical comments on the draft report, which we incorporated 
as appropriate. 

DOD concurred with the first recommendation that the Secretary of 
Defense develop a comprehensive list of recommendations made by DOD 
agencies and other organizations, and make the information available 
for policymakers to incorporate, as appropriate, into new or existing 
container-management policy and guidance. DOD has requested that we 
provide a listing of the 95 recommendations identified during this 
review to use as a starting point for its assessment, to which we 
agreed. 

DOD partially concurred with the second recommendation that the 
Secretary of Defense direct the Commander CENTCOM, to identify the 
root cause or causes for the procedural weaknesses in the handling of 
containers and the extent to which they contribute to the incomplete 
and inaccurate recording of container-management data in theater. DOD 
stated that it concurred with the recommendation, but added that 
CENTCOM is responsible for theater container management and control in 
its area of responsibility. DOD also stated that CENTCOM will 
coordinate with U.S. Transportation Command to the extent that 
specific theater actions affect overall global container management. 
We initially drafted the recommendation to both CENTCOM and the U.S. 
Transportation Command in order to ensure that action would be taken 
from both commands; however, we agree with DOD that CENTCOM is 
responsible and that coordination with U.S. Transportation Command to 
the extent that specific theater actions affect overall global 
container management is appropriate. Therefore, we modified the 
recommendation accordingly. 

DOD partially concurred with the third recommendation that the 
Secretary of Defense direct the Commander CENTCOM, to develop and 
implement a corrective action plan with effective solutions for the 
root causes identified that provide for completion of corrective 
measures. DOD stated that it concurs with the recommendation, but also 
stated that implementing the recommendation is a CENTCOM 
responsibility. Further, DOD stated that only CENTCOM may direct 
military Service component commands to take specific actions in the 
CENTCOM area of responsibility. DOD added that if resolution of the 
issues requires actions beyond CENTCOM's purview, then CENTCOM will 
refer specific actions to the Joint Staff for assistance in obtaining 
resolution with other commands and organizations. We initially drafted 
the recommendation to both CENTCOM and the U.S. Transportation Command 
in order to ensure that action would be taken from both commands; 
however, we agree with DOD that CENTCOM is responsible and that 
coordination with the Joint Staff for assistance in obtaining 
resolution with other commands and organizations is appropriate. 
Therefore, we modified the recommendation accordingly. 

We are sending copies of this report to the appropriate congressional 
committees, the Secretary of Defense, the Commanders for CENTCOM and 
the U.S. Transportation Command, and other interested parties. In 
addition, this report is available at no charge on GAO's Web site at 
[hyperlink, http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-5431 or russellc@gao.gov. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. GAO staff who made key contributions 
to this report are listed in appendix III. 

Signed by: 

Cary B. Russell, Director: 
Defense Capabilities and Management: 

[End of section] 

Appendix I: Scope and Methodology: 

To assess the extent to which Department of Defense (DOD) policy and 
guidance incorporate recommendations that address container-management 
challenges in the U.S. Central Command's (CENTCOM) area of 
responsibility, we reviewed DOD-wide, combatant command, and service-
specific policy and guidance pertaining to container management to 
develop our understanding of container-management operations and roles 
and responsibilities. To identify recommendations made by DOD audit 
agencies and other organizations that addressed container-management 
challenges, we researched websites and databases and contacted 
officials as necessary from the following audit agencies: Army Audit 
Agency, Naval Audit Service, Air Force Audit Agency, DOD Office of 
Inspector General, Defense Contract Audit Agency, Defense Contract 
Management Agency, Special Inspector General for Iraq Reconstruction, 
Special Inspector General for Afghanistan Reconstruction, and GAO. We 
interviewed DOD logistics and container-management officials from the 
Office of the Deputy Assistant Secretary of Defense for Transportation 
Policy, U.S. Transportation Command, CENTCOM, the U.S. Army, the U.S. 
Marine Corps, Surface Deployment and Distribution Command, and the 
Defense Logistics Agency to discuss challenges with and efforts to 
improve container management, and identify additional reports or 
studies with findings and recommendations involving container-
management issues. During this process, we observed that these 
recommended corrective actions were generated over time and concluded 
that development of such actions may be an ongoing effort. 

To identify findings and recommendations relating to container-
management issues potentially affecting DOD operations in CENTCOM's 
area of responsibility, we reviewed the reports and studies for the 10-
year period 2003 through 2013--the period DOD began tracking detention 
fees for operations in Iraq and Afghanistan through the completion of 
field work on this objective of our review. The recommendations we 
identified may not be comprehensive because DOD did not have an 
alternative source or means to corroborate or verify what we 
identified. Additionally, the same or similar recommendations may 
appear in different reports and therefore may be duplicated. We 
analyzed the relevant recommendations to identify the organizations 
responsible for implementation and categorized the recommendations to 
determine patterns and repetition over time. We discussed the listing 
of recommendations with DOD container-management officials to 
determine how the department addressed the findings and 
recommendations. We then requested the department provide us with the 
status of the recommendations we had identified to determine whether 
actions were completed or implemented. We reviewed DOD policy and 
guidance pertaining to container management to determine the extent 
that the categories of recommendations we identified were reflected in 
them. We also reviewed the recommendations status updates DOD provided 
to identify instances where DOD stated that recommendations had been 
incorporated into container-management policy and guidance. We 
compared DOD's inclusion of recommendations addressing container-
management challenges into its policy and guidance documents against 
criteria for recording and communicating important information to 
management as contained in the Information and Communication, and 
Monitoring, standards in Standards for Internal Control in the Federal 
Government.[Footnote 40] 

To determine the extent to which DOD managed and reduced container 
detention fees, we met with officials from the Office of the Deputy 
Assistant Secretary of Defense for Transportation Policy, U.S. 
Transportation Command, CENTCOM, U.S. Army, U.S. Marine Corps, Surface 
Deployment and Distribution Command, and the Defense Logistics Agency 
to develop an understanding of how DOD accrues and pays detention 
fees, and manages shipping containers to reduce the accumulation of 
detention fees. We observed the processes and procedures by which 
invoices for detention fees are received, reviewed, and paid. Also, we 
observed demonstrations of the DOD system used to track and manage 
shipping containers used in the CENTCOM area of responsibility and 
collected comprehensive listings of containers and associated data for 
each container captured in these listings. We observed demonstrations 
of DOD's two key systems used in container management for Afghanistan 
(the U.S. Transportation Command's Container Management Module and the 
Army Container Asset Management System), collected information on the 
systems' structure and data content, and requested and collected 
various reports produced in queries on 4 separate days, from April 
2013 through December 2013, for complete data on the number of 
containers in theater that officials conducted at our request. From 
the U.S. Transportation Command's Container Management Module we then 
collected and analyzed complete data sets for all shipping containers 
recorded for Afghanistan to understand the densities and usages of 
shipping containers in Afghanistan. This included determining 
locations where containers were recorded and the ratios of carrier-
owned containers to government-owned containers; and identifying 
containers without recorded geographic locations, the length of time 
carrier-owned containers had been in Afghanistan, and the ratios of 
containers recorded as empty to those with contents or occupants. 

In Afghanistan, we met with U.S. Forces-Afghanistan officials and 
various container control officers identified by officials from the 
Surface Deployment and Distribution Command to discuss shipping-
container management and the accuracy of data recorded in the 
Container Management Module. We also collected all available end-of-
month DOD listings--from September 2010 through December 2013--of 
carrier-owned shipping containers subject to detention-fee accruals 
for analysis. We selected September 2010 because it was the first 
month for which DOD had available end-of-month data. We concluded with 
December 2013 because it was the cutoff date for the analyses that we 
had planned to conduct. We summarized and discussed our initial 
analysis with officials from the Surface Deployment and Distribution 
Command to ensure accurate interpretation of the data collected. We 
compared our observations, data we collected, and our analyses with 
Standards for Internal Controls in the Federal Government and DOD 
regulations such as the Defense Transportation Regulation and 
CENTCOM's Container Management Policy Letter of Instruction that 
specify the need to accurately and timely record data that has an 
effect on detention fee accrual.[Footnote 41] We also assessed DOD's 
efforts to improve its management of container data against best 
practices for improving federal agency performance and accountability 
found in Determining Performance and Accountability Challenges and 
High Risks, and Standards for Internal Control in the Federal 
Government, which address risks and accountability for achieving 
effective results. GAO developed the criteria for assessing 
performance and accountability for an agency's major program and 
mission areas and management functions by considering the requirements 
of program-specific legislation as well as the requirements of 
management-reform legislation, such as the Chief Financial Officers 
Act of 1990, the Government Performance and Results Act of 1993, the 
Government Management Reform Act of 1994, the Federal Financial 
Management Improvement Act of 1996, and the Clinger-Cohen Act of 1996. 

We assessed the reliability of the data by reviewing related 
documentation, interviewing knowledgeable officials, and testing the 
data for obvious errors and completeness. We concluded the data were 
sufficiently reliable to present selected findings on the completeness 
and accuracy of the numbers and locations of shipping containers 
subject to detention fees, but identified limitations that are 
discussed in this report. 

We conducted this performance audit from February 2013 to November 
2014 in accordance with generally accepted government auditing 
standards. These standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: Comments from the Department of Defense: 

Assistant Secretary of Defense: 
Logistics and Materiel Readiness: 
3500 Defense Pentagon: 
Washington, DC 20301-3500: 

October 21, 2014: 

Mr. Cary Russell: 
Director, Defense Capabilities and Management: 
U.S. Government Accountability Office: 
441 G Street, N.W. 
Washington, DC 20548: 

Dear Mr. Russell: 
This is the Department of Defense (000) response to the GAO Draft 
Report, GAO-15-114, "Defense Logistics: Greater Awareness of 
Recommendations and Improvements in Data Quality Needed to Resolve 
Container Management Challenges," dated September 22, 2014 (GAO Code 
351805). Detailed comments on the report recommendations are enclosed. 

Sincerely, 

Signed by: 

Paul D. Peters: 
Principal Deputy: 

Enclosure: As stated. 

GAO Draft Report Dated September 22, 2014: 
GAO-15-114 (GAO Code 351805): 

"Defense Logistics: Greater Awareness Of Recommendations And 
Improvements In Data Quality Needed To Resolve Container Management
Challenges" 

Department Of Defense Comments To The GAO Recommendations: 

Recommendation 1: To more fully incorporate recommendations into its 
policy and guidance and to ensure that improvements to container 
management will be sustained for future contingencies, GAO recommends 
that the Secretary of Defense develop a comprehensive list of 
recommendations made by DoD agencies and other organizations, and make 
the information available for policymakers to incorporate, as 
appropriate, into new or existing container management policy and 
guidance. DoD could use GAO's work as a starting point for this
assessment. 

DoD Response: Concur. 

Recommendation 2: To help ensure DoD's container management system has 
more complete and accurate data, and DoD is better positioned to 
assess progress in managing containers to reduce detention fees, GAO 
recommends that the Secretary of Defense direct the Commanders, U.S. 
Transportation Command and CENTCOM to identify the root cause or 
causes for the procedural weaknesses in the handling of containers and 
the extent to which they contribute to the incomplete and inaccurate 
recording of container management data in theater. 

DoD Response: Partially concur with comments. 

The Department concurs with the recommendation; however, the supported 
combatant commander (in this case, USCENTCOM) is responsible for 
theater container management and control in its area of responsibility 
(AOR). USCENTCOM will coordinate with USTRANSCOM to the extent that 
specific theater actions impact overall global container management. 

Recommendation 3: To help ensure DoD's container management system has 
more complete and accurate data, and DoD is better positioned to 
assess progress in managing containers to reduce detention fees, GAO 
recommends that the Secretary of Defense direct the Commanders, U.S. 
Transportation Command and CENTCOM to develop and implement a 
corrective action plan with effective solutions for the root causes 
identified that provide for completion of corrective measures. 

DoD Response: Partially concur with comments. 

The Department concurs with the recommendation; however, this is a 
USCENTCOM responsibility. Only USCENTCOM may direct military Service 
component commands to take specific actions in the USCENTCOM AOR. If 
resolution requires actions beyond USCENTCOM's purview, then USCENTCOM 
will refer specific actions to the Joint Staff for assistance in 
obtaining resolution with other commands and organizations. 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Cary B. Russell, (202) 512-5431 or russellc@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, key contributors to this 
report include Guy LoFaro, Assistant Director; Jim Ashley; Tracy 
Barnes; Richard Burkard; Virginia Chanley; Grace Coleman; Larry Junek; 
Anne McDonough-Hughes; Mary Catherine Hult; Carol Petersen; Pauline 
Reaves; and John Strong. 

[End of section] 

Footnotes: 

[1] Common-use containers are leased, procured, or made available from 
government-owned inventories to support the intermodal transportation 
requirements of all military services. These containers are managed 
and controlled by the U.S. Transportation Command through the Surface 
Deployment and Distribution Command while they support DOD 
transportation needs in peace and war. 

[2] Detention-fee data for fiscal years 2013 and 2014 were not fully 
known prior to issuance of this report because detention fees can 
accrue over a period of 350 to 700 days. Furthermore, payment of these 
fees for containers used in a given fiscal year may extend into 
subsequent fiscal years because billing for detention fees may not be 
done immediately following return of containers or notification to the 
carrier about the status of its containers. Moreover, until a contract 
is closed out, the contractor may continue to make detention-fee 
claims. Unless otherwise stated in this report, all dollar figures are 
in nominal terms, unadjusted for inflation. 

[3] GAO, Warfighter Support: DOD Has Made Progress, but Supply and 
Distribution Challenges Remain in Afghanistan, [hyperlink, 
http://www.gao.gov/products/GAO-12-138] (Washington, D.C.: Oct. 7, 
2011). The two container-management systems in use that were not 
integrated were the U.S. Transportation Command's system used to track 
and manage government-owned and carrier-owned shipping containers in 
use, including those in Afghanistan, and the U.S. Army's system used 
to track container location and status of government-owned containers. 

[4] GAO, High-Risk Series: An Update, [hyperlink, 
http://www.gao.gov/products/GAO-13-283] (Washington, D.C.: February 
2013). 

[5] [hyperlink, http://www.gao.gov/products/GAO-13-283]. 

[6] See Deputy Secretary of Defense Memorandum, Global Container 
Management Policy (Dec. 18, 2009). 

[7] We selected this period to correspond with the period DOD began 
tracking detention fees for operations in Iraq and Afghanistan through 
the completion of work on this objective of our review. We identified 
the noted agencies as those agencies providing recommendations based 
on our research. However, DOD did not have the means to verify or 
corroborate that our list was all-inclusive. 

[8] For purposes of this report, the term "recommendation" includes 
written corrective actions and formal recommendations made by DOD 
components and other organizations. 

[9] GAO, Standards for Internal Control in the Federal Government, 
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1] 
(Washington, D.C.: November 1999). 

[10] [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]. DOD 
Transportation Regulation 4500.9-R, Part VI, Management and Control of 
Intermodal Containers and System 463L Equipment (September 2009) 
(includes changes through Nov. 29, 2012). U.S. Central Command, 
CENTCOM Container Management Letter of Instruction (CM LOI) (Jan. 15, 
2014) (hereinafter cited as CENTCOM Container Management Letter of 
Instruction (Jan. 15, 2014). 

[11] GAO, Determining Performance and Accountability Challenges and 
High Risks, [hyperlink, http://www.gao.gov/products/GAO-01-159SP] 
(Washington, D.C.: November 2000). [hyperlink, 
http://www.gao.gov/products/GAO/AIMD-00-21.3.1]. GAO developed 
criteria for assessing performance and accountability for an agency's 
major program and mission areas and management functions in 
[hyperlink, http://www.gao.gov/products/GAO-01-159SP]. The criteria 
were developed by considering the requirements of program-specific 
legislation as well as the requirements of management-reform 
legislation, such as the Chief Financial Officers Act of 1990, the 
Government Performance and Results Act of 1993, the Government 
Management Reform Act of 1994, the Federal Financial Management 
Improvement Act of 1996, and the Clinger-Cohen Act of 1996. 

[12] The International Organization for Standardization develops 
voluntary international standard product specifications to improve the 
efficiency of industry and international trade. Regarding shipping 
containers, ISO standards for shipping containers include, for 
example, external, internal, and door dimensions, strength of walls, 
floors, and ceilings, and marking and identification requirements. 

[13] DOD also uses other types of containers, including some that are 
less than 20 feet long, bulk fuel storage containers, and flat 
shipping racks. 

[14] DOD's Global Container Management Policy defines detention fees 
as a charge made on a carrier conveyance held by or for a consignor or 
consignee beyond the allowable free time for loading or unloading, for 
forwarding directions, or for any other purpose authorized and 
documented by the consignor or consignee. Fees for detention are in 
addition to all other transportation charges. 

[15] The Universal Services Contract contains an automatic purchase 
clause under which the U.S. government acquires ownership of any 
carrier-owned container for which the government has paid 700 days of 
accrued detention for any refrigerated container or 350 days of 
accrued detention for any other container. 

[16] Army Regulation 56-4, Distribution of Materiel and Distribution 
Platform Management (Sept.17, 2014); U.S. Army, Army Theater 
Distribution, ATTP 4-0.1 (FM 100-10-1) (May 20, 2011.); and U.S. Army, 
Army Container Operations, ATP 4-12 (May 10, 2013). 

[17] U.S. Army Audit Agency, Audit of Management of Shipping 
Containers in Southwest Asia - Iraq (Project A-2007-ALL-0081.004), A-
2008-0098-ALL (Alexandria, Va.: Apr. 3, 2008). 

[18] U.S. Army Audit Agency, Container Management in Iraq--Condition 
and Contents, A-2011-0047-ALL (Alexandria, Va.: Dec. 22, 2010). 

[19] U.S. Transportation Command Memorandum, Container Detention 
(Scott Air Force Base, Ill. (Aug. 28, 2012) 

[20] U.S. Army Audit Agency, Asset Visibility and Container 
Management: Operation Iraqi Freedom, A-2005-0197-ALE (Europe Field 
Office: July 2005); Audit of the Management of Shipping Containers 
Southwest Asia - Afghanistan (Project A-2007-ALL-0081.005), A-2009-
0033-ALL (Alexandria, Va.: January 2009); U.S. Transportation Command, 
Container Management Tiger Team Findings and Recommendations (June 
2012). 

[21] [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]. 

[22] For the 55 instances where DOD provided information on steps 
taken to address the recommendations that we identified, DOD officials 
indicated that actions were taken to implement the recommendations, 
including incorporating changes into DOD's policy or guidance, for 32 
of the 55 recommendations. 

[23] [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]. 

[24] U.S. Transportation Command, Container Detention. 

[25] As stated previously, detention fees can accrue over a period of 
350 to 700 days. Therefore, detention-fee payments for containers 
leased in one fiscal year may extend over multiple fiscal years. 
Moreover, until a contract is closed out, the contractor may continue 
to make detention-fee claims. 

[26] In June 2011, the United States announced plans to reduce the 
number of U.S. forces in Afghanistan and, by September 2012, had 
reduced its number by 33,000 troops. Concurrently there has been a 
decrease in the number of containers being shipped to Afghanistan and 
a reduction in the number of operations locations and bases in 
Afghanistan where containers are located. As a result, the number of 
containers in Afghanistan has decreased. 

[27] An event is a process or part of a process occurring in a 
particular moment and place. For example, the delivery of a container 
to DOD would constitute an event for which an agency would need 
relevant and reliable information. 

[28] DOD Transportation Regulation 4500.9-R, Management and Control of 
Intermodal Containers and System 463L Equipment. 

[29] DOD's determination was based on data queries from its container-
management system for September 2010 through October 2013 for the 
number of carrier-owned containers in Afghanistan subject to detention 
fees compared to detention-fee invoices received for the same period. 

[30] CENTCOM Container Management Letter of Instruction (Jan. 15, 
2014). 

[31] We selected October for this figure because it followed the end 
of the fiscal year, and was neither the highest nor lowest value for 
the dates for which we had data. 

[32] According to Surface Deployment and Distribution Command 
officials, container delivery varies depending on the base location, 
and may occur, for example, at a central receiving and shipping point 
within a base, or at a base gate. 

[33] CENTCOM Container Management Letter of Instruction. 

[34] [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]. 

[35] In its technical comments, DOD noted that if a carrier's driver 
picks up a container from a location that is different from that 
delivered, then detention fees would stop at that point, but DOD did 
not provide data on how often this has happened in the past or state 
the likelihood of it happening in the future. 

[36] U.S. Transportation Command, Container Management Tiger Team 
Findings and Recommendations. 

[37] [hyperlink, http://www.gao.gov/products/GAO-01-159SP]. 

[38] [hyperlink, http://www.gao.gov/products/GAO-01-159SP]. 

[39] [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]. 

[40] GAO, Standards for Internal Control in the Federal Government, 
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1] 
(Washington, D.C.: November 1999). 

[41] [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]. 

[End of section] 

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