U.S. Navy/Military Sealift Command:

Weak Contract Administration Led to Unsafe and Poorly Maintained Ships

OSI-94-27: Published: Aug 31, 1994. Publicly Released: Oct 12, 1994.

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Pursuant to a congressional request, GAO investigated the operation of nine tankers leased by the Military Sealift Command (MSC), focusing on whether the: (1) ships' equipment has deteriorated because of inadequate maintenance oversight; and (2) ships are staffed with adequate numbers of crew for safe operation.

GAO found that: (1) all of the nine tankers reviewed had numerous problems that could adversely affect the ships' crews, the environment, and the tanker-leasing program; (2) contractors do not have incentives to spend their funds on preventive maintenance and provide competent crew members because unspent maintenance and personnel funds in fixed-price contracts remain with the contractor; (3) the lack of ship maintenance oversight has compromised tanker safety and mission readiness, and resulted in a $20-million cost increase to MSC; (4) the lack of qualified and fully staffed tanker crews has contributed to oil spills and mission security and efficiency problems; (5) MSC has not enforced contract crewing requirements because it does not have a system to determine contractor compliance with crewing requirements; and (6) weaknesses in MSC contract administration practices include the absence of a single program manager, written program instructions, and a contracting officer's technical representative to monitor contractor performance.

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