Audit of DoD Hotline Allegations Concerning the DoD Ordnance Technology Consortium Award Process (DODIG-2022-073)

What We Did:

The objective of this audit was to determine whether Army Contracting personnel, in coordination with DoD Ordnance Technology Consortium (DOTC) Program Office personnel, awarded other transactions (OT) in accordance with applicable Federal laws and DoD policies; and the DOTC award process provided for the use of competitive procedures to the maximum extent practicable.

We initiated this audit based on a complaint the DoD Office of Inspector General received through the DoD Hotline. The complainant alleged that the DOTC OT award process did not provide for competition to the maximum extent practicable as required. The hotline complaint made three main allegations: (1) the page limit on white paper submissions potentially limited competition, (2) white paper evaluation criteria were inconsistently applied, and (3) white paper ratings were changed after evaluations.

What We Found:

Although Army contracting personnel, in coordination with the DOTC Program Office, awarded OTs in accordance with the United States Code, based on the limited criteria governing OTs and the flexibilities afforded by Federal laws and DoD policies, they should make improvements to the DOTC award process in order to mandate the use of competitive procedures to the maximum extent practicable. We identified deficiencies in the execution of the DOTC award process. Specifically, Army contracting and DOTC Program Office personnel did not:

• track all individuals performing white paper technical evaluations, maintain adequate documentation to support source selection decision rationale, or support source selection decisions with information obtained outside of the source selection process because the DOTC award process lacked the necessary controls and did not ensure all statements in the source selection decision document were supported; and

• make source selection decisions based on complete information because Army contracting personnel and the DOTC Program Office allowed source selection decisions based only on the information obtained during the white paper process and did not require further requests for additional proposal information to clarify partial or missing information.

As a result, contracting officials made award decisions without seeing all of the technical evaluations and the OTs awarded did not have documentation to fully support fair and transparent competition, as required by the Office of the Under Secretary of Defense for Acquisition and Sustainment (OUSD[A&S]) OT Guide. Additionally, contracting personnel relied on that limited information and cost data to determine best value to the Government when making contract award decisions. This lack of complete information resulted in projects that significantly exceeded the original cost estimates by at least $33.4 million and experienced considerable delays when contracting personnel relied on statement of work negotiations to refine contractor proposals.

What We Recommend:

We recommend that the DOTC Program Office, in coordination with Army Contracting Command New Jersey:

• Implement controls over the source selection process to ensure that all individual technical evaluators document their evaluations in the Business Information Database System and the contract files;

• Train source selection officials to highlight what information should be included in making source selection decisions;

• Implement controls over the source selection decision process to ensure that selection decisions properly reflect only the documentation obtained during the source selection process;

• Implement controls over the award process to ensure source selection officials requesting additional proposal and cost information when needed to make informed selection decisions based on complete information; and

• Update the training provided to requiring activities including additional source selection information prior to award.