Military Sealift Command Contracts: Contract Abuses Resulted in Poorly Maintained Ships, Unqualified Crews, and Increased Cost to Government

GAO discussed the operation of nine tankers leased by the Navy's Military Sealift Command (MSC) to transport jet fuel and other petroleum products to ports worldwide in support of U.S. military efforts. GAO noted that: (1) the contractor's inadequate maintenance has caused the ships to deteriorate and has eroded mission capability; (2) MSC has not enforced the contract's preventative maintenance requirements; (3) the contractor's failure to comply with the crewing requirements has caused unsafe conditions; (4) the MSC contracting officer failed to follow generally accepted contracting practices during the preaward and award phases of the contract; (5) due to poor contract management and oversight by MSC, the government has incurred at least $25 million in costs, and could incur an additional $31 million to $40 million in contract costs; and (6) several issues concerning the Sealift tanker contract are the subject of ongoing federal investigations.