Inspector General Robert P. Storch announced today that the Department of Defense Office of Inspector General released the Audit of the Army’s Management of Army Prepositioned Stock (APS)–5 Equipment. The APS program strategically positions equipment worldwide to reduce deployment response times.
“This report highlights the need for the Army to hold its contracting officials accountable for ensuring that prepositioned equipment is ready when needed and that taxpayer dollars spent by contractors to accomplish this are spent properly,” IG Storch stated.
The audit found that the Army did not consistently and effectively manage the contractor’s execution of the storage, maintenance, and accountability of APS-5 equipment in Kuwait according to Army policy. Specifically, the contractor did not protect nearly 5,900 pieces of equipment from environmental conditions, perform required maintenance on equipment and weapons, or accurately account for weapons and sensitive items. As a result, the Army issued APS-5 equipment that was not mission-ready to military units in Syria and the U.S. European Command.
The report also identified that, despite issuing 157 nonconformance reports over six years, Army contracting officials never enforced a provision of the APS-5 contract intended to hold the contractor accountable for poor performance through reduction of the contractor’s fixed fees -- fees that, based on the terms of the contract, could total nearly $1 million. Additionally, the DoD OIG found that Army contracting officials did not review invoices before payment and, as a result, the Army does not have assurance that more than $130 million paid to the APS-5 contractor resulted in receipt of contracted services.
The DoD OIG issued 15 recommendations to Army officials to address the lack of oversight of APS-5 equipment. The DoD OIG recommended that the Army take administrative action to hold the contracting officer accountable for failing to properly oversee the APS-5 contract. The DoD OIG also recommended that the Army request the Defense Contract Audit Agency review APS-5 contract invoices.
The DoD OIG will monitor progress toward the implementation of these recommendations.