March 7, 2017 —
We determined whether the U.S. Army Contracting Command developed adequate controls to effectively monitor contractor performance for the Kuwait Base Operations and Security Support Services (KBOSSS) contract.
The KBOSSS contract is a cost-plus-award-fee contract awarded to provide services necessary to perform base operations and security support services in the Area Support Group– Kuwait (ASG-KU) area of responsibility.1 As of December 2016, the Army has paid the contractor more than $2.7 billion over the life of the contract, with an additional $59.4 million paid to the contractor in award fees.
KBOSSS contract oversight is a responsibility shared by ASG-KU, Army Contracting Command–Rock Island (ACC-RI), and 408th Contracting Support Brigade (408th CSB). Monthly performance feedback to the contractor is provided through the performance evaluation meeting (PEM), which includes representatives from ASG-KU, ACC-RI, and 408th CSB. Every 6 months the contractor is evaluated by the Fee Evaluation Board, where the award fee is determined based on the monthly performance feedback. The award fee must be earned and is used to motivate improved contractor performance in areas critical to program success.
The Army did not effectively monitor contractor performance for the KBOSSS contract. Specifically, ASG-KU, ACC-RI, and 408th CSB did not ensure:
- the quality assurance surveillance plan (QASP) and the surveillance checklists, which are used to ensure the contractor is complying with the contract requirements, were updated to reflect current contract requirements. This occurred because ACC-RI and 408th CSB did not establish written guidance that clearly defined the roles and responsibilities of KBOSSS oversight personnel. Specifically, ACC-RI and 408th CSB did not establish a formal process to disseminate contractual changes.
- contracting officer’s representatives (CORs) provided consistent surveillance of the contractor. This occurred because ASG-KU and 408th CSB did not develop a process to accurately track CORs and COR reporting, which created gaps in contractor monitoring.
- contractor ratings within the monthly PEM, which are used to determine the contractor’s award fees, were accurate. Specifically, CORs developing the ratings did not consider identified contractor deficiencies or validate contractor-provided data. This occurred because ACC-RI and 408th CSB did not define PEM requirements for personnel responsible for contract oversight.
As a result, the Army did not have reasonable assurance that the KBOSSS contractor complied with all contract requirements or earned the entire $13 million in award fees paid during the last two Fee Evaluation Board award periods.2 In addition, at least one significant environmental and potential health hazard went unresolved. Specifically, the lack of effective contract oversight allowed a wastewater lagoon at Camp Buehring to become stagnant for years, which continues to expose military and civilian personnel to potentially hazardous conditions.
We recommend that the Executive Director, ACC-RI, in coordination with the Commander, 408th CSB, establish formal written guidance that clearly defines roles and responsibilities of KBOSSS personnel. Specifically, define the process to disseminate contract requirement changes and the PEM rating requirements and roles and responsibilities for personnel responsible for contract oversight.
We recommend that the Commander, ASG-KU, in coordination with the Commander, 408th CSB, develop a process to accurately track incoming and outgoing CORs and COR reporting to ensure oversight responsibilities are adequately covered.
Management Actions Taken
During the audit, we informed ASG-KU, ACC-RI, and 408th CSB officials that deficiencies existed with the monitoring of contractor performance for the KBOSSS contract.
ASG-KU, ACC-RI, and 408th CSB immediately initiated steps to improve the oversight of the KBOSSS contract. ASG-KU now maintains a current list of CORs, their assigned contract, and their redeployment dates to track departure dates and ensure replacement CORs are in place in order to avoid gaps in surveillance. In addition, the Commander, ASG-KU, instituted a monthly contract review board meeting where all CORs brief him on monthly COR reporting and surveillance. Furthermore, ASG-KU implemented mandatory monthly training for all CORs. A contracting officer will provide CORs guidance on proper contract oversight techniques and procedures.
408th CSB initiated an immediate comprehensive review of the number of COR personnel required to properly conduct contract oversight. 408th CSB mandated the use of the COR Tracking Tool for monthly COR reports, nominations, appointments, and terminations to ensure an accurate list of COR personnel can be generated.
ACC-RI, in coordination with 408th CSB, began to develop a contract administration plan that will clearly establish and define the roles, responsibilities, and expectations of the Government stakeholders tasked with the administrative processes and oversight of the KBOSSS contract. ACC-RI anticipates the completion of the plan by March 2017.
In October 2016, 408th CSB relieved the contractor of contractual responsibility for all but environmental tasks concerning the Camp Buehring lagoons. In addition, 408th CSB issued an NCR for failure to perform environmental tasks. In addition, the Army has initiated a project to address the inoperable lagoons. The project consists of upgrading aeration lagoons at Camp Buehring. At the conclusion of the project, the lagoons will be fully functional, which will eliminate the hazardous conditions.
The management actions taken, once fully completed, will address the concerns we identified; therefore, we are not making any additional recommendations. Both recommendations are resolved. Recommendation 1 will be considered closed upon publication of the Contract Administration Plan. Recommendation 2 will be considered closed upon validation of the established COR tracking process. We will continue to monitor the implementation of these recommendations, including the completion of the lagoon aeration project.
A cost-plus-award-fee contract is a cost-reimbursement contract that provides for a fee consisting of a base amount fixed at inception of the contract and an award amount based on a judgmental evaluation by the Government.
2 The last two Fee Evaluation Boards were for the 6-month performance period from March 29, 2015 to September 28, 2015 where the contractor earned 93 percent of the pool, and the subsequent 6-month period from September 29, 2015 to March 28, 2016 where the contractor earned 96 percent. At the time of our audit, the March to September 2016 Fee Evaluation Board information had not been released.
This report is a result of Project No. D2016-D000JB-0188.000.