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May 31, 2016

The Naval Air Systems Command Did Not Obtain Fair and Reasonable Prices on ScanEagle Spare Parts (Redacted)


We determined whether the Naval Air Systems Command purchased sole‑source spare parts at fair and reasonable prices from Insitu, Inc. for the ScanEagle Unmanned Aircraft System.


Naval Air Systems Command contracting officials did not obtain fair and reasonable prices on sole-source spare parts. Although contracting officials received lower prices than the contractor proposed, contracting officials did not substantiate the analysis used to determine price reasonableness. In addition, contracting officials did not take advantage of quantity discounts when determining fair and reasonable prices for sole-source spare parts because program office personnel did not define spare-part requirements.

After analyzing our statistical sample, we determined that Naval Air Systems Command overpaid on 207 sole-source spare parts by $2.1 million of the $67.5 million spent. Additionally, Naval Air Systems Command will overpay on the remaining value of $42.6 million for ScanEagle spare parts if contracting officials continue using the current negotiated spare part prices. Naval Air Systems Command may also overpay on future ScanEagle contracts if officials do not substantiate their analysis to determine price reasonableness or quantify the spare‑part requirements.


  1. We recommend that the Naval Air Systems Command, Assistant Commander for Contracts:
    1. validate that contracting officials substantiate fair and reasonable price analysis performed in accordance with acquisition regulations on future contracts and
    2. determine whether overpayments on spare parts were or will be made and pursue available options to recover the funds.
  2. We also recommend that the Program Manager, Navy and Marine Corps Small Tactical Unmanned Aircraft System Program Office define spare-part requirements for contracting officials’ use in negotiating more advantageous prices on future contracts

Management Comments and Our Response

As a result of management comments, we revised our finding and Recommendation 1.a; redirected Recommendations 1.a and 1.b to the Naval Air Systems Command, Assistant Commander for Contracts; and renumbered Recommendation 1.c as 2. Comments from the Deputy Assistant Secretary of the Navy (Acquisition and Procurement), responding for the Program Manager, Navy and Marine Corps Small Tactical Unmanned Aircraft System Program Office, did not address the specifics of Recommendation 1.a, partially addressed the specifics of Recommendation 1.b, and addressed all specifics of Recommendation 2. We request that the Naval Air Systems Command, Assistant Commander for Contracts, provide comments in response to this report.

May 19, 2016

Independent Auditor's Report on Agreed-Upon Procedures for DoD Compliance With ServiceContract Inventory Compilation and Certification Requirements for FY 2014

We assessed whether DoD complied with Federal and DoD requirements when Components compiled and certified the FY 2014 inventory of contracts for services (ICS). We observed the methods that DoD Components used to compile the ICS and the completeness of information in Component certification letters. In addition, we followed up on recommendations from our reports on DoD’s FY 2012 and FY 2013 ICS.

May 13, 2016

Evaluation of the Accuracy of Data in the DoD Contract Audit Follow-Up System

We evaluated the accuracy of data in the Contract Audit Follow-Up (CAFU) System, which DoD Components use to track and manage the status of actions that contracting officers take in response to Defense Contract Audit Agency (DCAA) audit reports.

May 12, 2016

U.S. Army Special Operations Command Properly Awarded Service Contracts

We determined whether U.S. Army Special Operations Command awarded service contracts and task orders in accordance with Federal and DoD regulations. The contracted services included functions such as maintenance, medical, housekeeping, education and training, and transportation to support U.S. Army Special Operations Command.

May 9, 2016

Evaluation of the Separation of Service Members Who Made a Report of Sexual Assault

In accordance with House Report 114-102 to accompany Public Law 114-92, "National Defense Authorization Act for Fiscal Year 2016," we evaluated the separations of service members who made unrestricted reports of sexual assault.

May 4, 2016

Air Force Civil Engineer Center Management of EnergySavings Performance Contracts Needs Improvement

Our objective was to determine whether the Air Force is effectively managing energy savings performance contracts (ESPCs). This report is the second in a series of audits on ESPCs.

May 3, 2016

DoD Met Most Requirements of the Improper Payments Elimination and Recovery Act in FY 2015, butImproper Payment Estimates Were Unreliable

We determined whether DoD complied with Public Law No. 107-300, “Improper Payments Information Act of 2002,” November 26, 2002, as amended by Public Law 111-204, “Improper Payments Elimination and Recovery Act of 2010” (IPERA), July 22, 2010. The audit was required by the 2010 Act.

April 29, 2016

DoD Needs to Require Performance of Software Assurance Countermeasures During Major Weapon System Acquisitions (For Official Use Only)

The report is For Official Use Only. To file a Freedom of Information Act request, please submit a request to FOIA Online.

April 29, 2016

The Air Force Processes for Approving Air Force Life Cycle Management Center Single-Award Indefinite-Delivery Indefinite-Quantity Contracts Need Improvement

We determined whether the Air Force Life Cycle Management Center’s (AFLCMC) single-award indefinite-delivery indefinite-quantity (IDIQ) contracts were properly justified in accordance with Federal and DoD procedures. In addition, we determined whether the delivery and task orders were within the scope of the contracts, in accordance with the Statement of Work and Performance Work Statement. We reviewed the eight single-award IDIQ contracts awarded by the AFLCMC from October 1, 2013, through January 27, 2015, with a total value of $2.5 billion. We also reviewed 76 task orders associated with the eight contracts, with a total value of $1 billion.