Objective
We determined whether the Contracting
Officer, Defense Logistics Agency (DLA)
Land and Maritime, implemented
Recommendations B.2.a and b in
Report No. DODIG-2014-054 as agreed.
Report No. DODIG-2014-054, “Defense
Logistics Agency Land and Maritime Paid
Too Much for High Mobility Multipurpose
Wheeled Vehicle Repair Parts,” (HMMWV)
was issued on April 4, 2014. The audit
identified 49 repair parts for the HMMWV
available for purchase through the
Integrated Logistics Partnership contract
that required a unit‑of-issue conversion.
This conversion was required when the
contractor’s unit of issue differed from
the Government’s. Recommendation B.2.a
pertained to the identification of
any authorized overpayments for
any other HMMWV repair parts.
Recommendation B.2.b pertained to the
alignment of AM General’s repair part
prices with the Government standard
units of issue on future delivery orders
and invoices.
Finding
We determined that DLA Land and Maritime
officials implemented Recommendation B.2.a
as a greed. DLA Land and Maritime
officials reconciled billing records for
HMMWV repair parts that required a
unit‑of‑issue conversion from February 2009
through September 2013 as agreed to in
Recommendation B .2.a. Further, DLA Land
and Maritime officials conducted monthly
reconciliations through October 2015 to close out billing
transactions for both the Integrated Logistics Partnership
and follow-on contracts. DLA Land and Maritime found, and
we confirmed, that no further overpayments occurred. In
addition, we confirmed that DLA Land and Maritime officials
issued $1.62 million in credit memos against AM General, and
that $1.62 million was credited to the Government.
We determined that DLA Land and Maritime officials did not
fully implement Recommendation B.2.b as agreed. Our review
of DLA Land and Maritime’s billing reconciliations indicated
that the unit‑of-issue conversion problem still existed.
However, DLA Land and Maritime officials took appropriate
actions to address the unit‑of-issue conversion problem.
Specifically, DLA Land and Maritime continued to perform
monthly reconciliations and updated their standard operating
procedures with steps to ensure the unit of issue matched the
unit price. Although the problem still existed, we determined
it did not result in further overpayments.
Recommendations
We are not making recommendations in this report. Although
DLA Land and Maritime officials did not fully implement
Recommendation B.2.b, they took appropriate actions to
address the unit-of-issue conversion problem and we did not
find any evidence of further overpayments.
Management Comments and Our Response
We provided a discussion draft of this report to management
for review and comment. Management concurred with our
conclusion and did not have any comments on the discussion
draft. Therefore, no written response to this report
is required.
This report is a result of Project No. D2015-D000XD-0260.000.