Feb. 1, 2018 —
We determined whether the Defense Threat Reduction Agency (DTRA) adequately monitored contractor performance and conducted sufficient invoice reviews for goods and services provided under the Cooperative Threat Reduction contract, HDTRA1-11-D-0007. For this audit, we reviewed task order 11, which is being performed in the Philippines.1
DoD uses the Cooperative Threat Reduction program to prevent the proliferation of weapons of mass destruction, and reduce chemical, biological, radiological, and nuclear threats. The Cooperative Threat Reduction program is in over 30 countries, including the Philippines. DTRA is the implementing agency for the DoD Cooperative Threat Reduction program. During our audit, DTRA was executing a Proliferation Prevention Program-related task order in the Philippines. The Proliferation Prevention Program addresses the trafficking and proliferation of weapons of mass destruction, and its materials, components, technology, and expertise. On June 1, 2015, DTRA awarded task order 11, valued at $30.8 million with a period of performance from June 1, 2015, to November 30, 2017.2 DTRA awarded task order 11 for the construction of two regional National Coast Watch Stations, three substations, and a Joint Maritime Law Enforcement Training Center to support the Philippines Maritime Proliferation Prevention Project. Task order 11 also provided weapons of mass destruction detection equipment and training for the Philippine National Police-Maritime Group, the Philippine Coast Guard, and the Philippine Bureau of Customs.
Overall, DTRA adequately monitored contractor performance and conducted sufficient invoice reviews for task order 11. Specifically, DTRA personnel:
- monitored and documented contractor performance and tracked cost data;
- ensured contractor performance was timely and within the scope of work;
- ensured contractor-furnished materials and services complied with the contract;
- reconciled contract invoices with disbursement
- verified that contractor invoices were reasonable.
However, the DTRA contracting officer did not prepare a quality assurance surveillance plan to document the work requiring surveillance, the method of surveillance, or the process used to review invoices, as required. DTRA contracting officials stated that they did not prepare a quality assurance surveillance plan because the contract included both goods (construction and equipment) and services (training); therefore, a quality assurance surveillance plan was not required. However, the Defense Federal Acquisition Regulation Supplement requires that a quality assurance surveillance plan be prepared for service contracts and does not make a distinction for contracts that provide both goods and services. Without a quality assurance surveillance plan, DTRA cannot ensure that frequent contracting officer’s representative rotations and personnel turnover will not adversely affect the consistent, long-term quality assurance methods used to validate contractor performance.3 DTRA also cannot ensure that systematic quality assurance methods are in place to validate that contractor quality control efforts are timely, effective, and are delivering the results specified in the contract or task order. If properly implemented, a quality assurance surveillance plan should establish a detailed, continuous quality assurance process for rotational contracting officer’s representatives, and help ensure consistent high standards of contractor oversight.
We recommend that the Defense Threat Reduction Agency Director, Acquisition, Finance, and Logistics, establish implementing guidance to clarify that all contracts for services require a quality assurance surveillance plan, whether or not goods are also provided under the contract. We also recommend that the Director develop and implement a quality assurance surveillance plan for all ongoing service contracts and task orders, whether or not goods are also provided under the contract.
Management Comments Required
As of January 26, 2018, the Defense Threat Reduction Agency Director, Acquisition, Finance, and Logistics, had not responded to our December 19, 2017 request for comments on our draft report recommendations. Therefore, we are issuing our final report without the Director’s comments, and the recommendations are unresolved. We request that the Director provide comments on the final report.
1 We will be referring to task order 11 of contract HDTRA1-11-D-0007 as “task order 11” throughout the report. We will also be referring to contract
HDTRA1-11-D-0007 as “the contract” throughout the report.
2 Modification 13, issued on August 29, 2017, extends the period of performance for contract line item numbers 0001, 0002, 0003, and 0006 from
November 30, 2017 to January 31, 2018.
3 A contracting officer’s representative is designated by the contracting officer to assist in the technical monitoring or administration of a
contract. Contracting officer’s representatives observe whether contractors comply with all contract requirements and that overall
contractor performance is commensurate with the level of payments.