Defense Logistics:

The Army Needs to Implement an Effective Management and Oversight Plan for the Equipment Maintenance Contract in Kuwait

GAO-08-316R: Published: Jan 22, 2008. Publicly Released: Jan 22, 2008.

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William M. Solis
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The Department of Defense (DOD) relies on contractors to perform many of the functions needed to support troops in deployed locations. For example, at Camp Arifjan, Kuwait the Army uses contractors to provide logistics support for operations in Iraq and Afghanistan. Contractors at Camp Arifjan refurbish and repair a variety of military vehicles such as the Bradley Fighting Vehicle, armored personnel carriers, and the High-Mobility, Multi-Purpose Wheeled Vehicle (HMMWV). However, while contractors provide valuable support to deployed forces, we have frequently reported that long-standing DOD contract management and oversight problems increase the opportunity for waste and make it more difficult for DOD to ensure that contractors are meeting contract requirements efficiently, effectively, and at a reasonable price. This report discusses information about Task Order 1 that we developed during our review. Our objectives were to (1) evaluate the contractor's performance of maintenance and supply services under Task Order 1, (2) determine the extent to which the Army's quality assurance and contract management activities implement key principles of quality assurance and contract management regulations and guidance, and (3) determine the extent to which the Army is adequately staffed to perform oversight activities.

Our analysis indicates that the Army is inadequately staffed to conduct oversight of Task Order 1. Authorized oversight personnel positions vacant at the time of our visit in April 2007 included those of a quality assurance specialist, a property administrator, and two quality assurance inspectors. The contracting officer told us that the two civilian positions (the quality assurance specialist and the property administrator) had been advertised but the command had not been able to fill the positions with qualified candidates. The battalion was unsure why the two military positions (the quality assurance inspectors) had not been filled. The lack of an adequate contract oversight staff is not unique to this location. We have previously reported on the inadequate number of contract oversight personnel throughout DOD, including at deployed locations. Army officials also told us that in addition to the two quality assurance inspectors needed to fill the vacant positions, additional quality assurance inspectors were needed to fully meet the oversight mission. According to battalion officials, vacant and reduced inspector and analyst positions mean that surveillance is not being performed sufficiently in some areas and the Army is less able to perform data analyses, identify trends in contractor performance, and improve quality processes. Also, the Army is considering moving major elements of option year 3 (including maintenance and supply services) to a cost plus award-fee structure beginning January 1, 2008. Administration for cost plus award-fee contracts involves substantially more effort over the life of a contract than for fixed-fee contracts. Without adequate staff to monitor and accurately document contractor performance, analyze data gathered, and provide input to the award-fee board, it will be difficult for the Army to effectively administer a cost plus award-fee contract beginning in January 2008.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: As a result of our recommendation, the Army increased the number of personnel overseeing and managing the contract and improved oversight and management policies and procedures. During follow up visits to Kuwait we observed improved contract management and oversight including a lean six sigma team engaged to improve management and oversight.

    Recommendation: The Secretary of Defense should direct the Secretary of the Army to review and evaluate the Army's procedures for managing and overseeing the Global Maintenance and Supply Services task order in Kuwait and take the necessary actions to improve contract management.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: As a result of our report, the Army assigned more oversight and management personnel to the battalion in Kuwait responsible for managing the contract. In addition, the battalion completed and issued new quality assurance procedures and policies and engaged a lean six sigma team to improve quality assurance. Through follow-up visits GAO confirmed that oversight and management of the contract had improved.

    Recommendation: The Army should develop a strategy to implement its current quality assurance and maintenance management oversight plans to ensure that (1) all deficiencies are documented in the Army's quality assurance database without affecting the mission, (2) contractor data are analyzed to improve contractor performance, and (3) all information on contractor performance is provided to the contracting officer.

    Agency Affected: Department of Defense: Department of the Army

  3. Status: Closed - Implemented

    Comments: Army has assigned more oversight and management personnel to the battalion as recommended in our report. Visits to the battalion confirmed that additional personnel were assigned to the battalion.

    Recommendation: The Army should take steps to fill vacant oversight positions with personnel who have the appropriate knowledge and skills.

    Agency Affected: Department of Defense: Department of the Army

  4. Status: Closed - Not Implemented

    Comments: Contract has expired.

    Recommendation: The Army should develop a plan to allow the proper administration of the cost plus award-fee structure for maintenance and supply services.

    Agency Affected: Department of Defense: Department of the Army

  5. Status: Closed - Implemented

    Comments: The Army considered delegating oversight responsibility to DCMA however decided to retain oversight responsibility and add additional oversight personnel to the unit responsible for providing oversight and management of the contract. This action meets the intent of our recommendation.

    Recommendation: The Army should consider delegating some additional oversight responsibilities to Defense Contract Management Agency to meet some of the current contract management and oversight personnel shortfalls.

    Agency Affected: Department of Defense: Department of the Army


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