Objective
We determined whether the Army provided adequate oversight of the National Afghan Trucking Services 3.0 (NAT 3.0) contracts.
Background
The purpose of the National Afghan Trucking program is to provide U.S. and Coalition forces with secure and reliable means of distributing reconstruction material, security equipment, fuel, miscellaneous dry cargo, and life support assets to and from forward operating bases and distribution sites throughout Combined Joint Operations Area–Afghanistan.
The NAT 3.0 contractors provide personnel, equipment, tools, materials, supervision, and other items necessary to provide the safe, timely, and reliable ground transportation of supplies and assets. On March 14, 2017, Army Contracting Command (ACC)–Rock Island awarded two firm fixed price contracts to two Afghan trucking companies. ACC‑Rock Island awarded an additional contract to a third Afghan trucking company on February 2, 2018. The NAT 3.0 service contracts are multiple-award, indefinite‑delivery indefinite-quantity contracts with a maximum combined value not to exceed $93 million.
ACC-Rock Island, ACC-Afghanistan, and the Resolute Support Sustainment Brigade (RSSB) oversee the NAT 3.0 contracts.
ACC‑Rock Island, which provides global contracting support to the Army, assigned a contracting officer to award the NAT 3.0 contracts.
On April 19, 2017, ACC-Rock Island delegated oversight responsibilities and contract administration to ACC-Afghanistan. As a result, ACC-Afghanistan is responsible for ensuring contractor compliance with contractual quality assurance requirements and for reviewing and evaluating contractor performance. ACC-Afghanistan appointed an administrative contracting officer (ACO) to execute these responsibilities.
The RSSB, located in Afghanistan, is the requiring activity for the NAT 3.0 contracts. The RSSB is responsible for nominating and providing trained contracting officer’s representatives (CORs) that provide contractor oversight and assess whether contractor performance is in accordance with a detailed monitoring plan known as a quality assurance surveillance plan. This oversight includes reviewing invoices and transportation movement requests to verify accurate costs associated with NAT 3.0 missions.
Finding
We determined that the Army did not fully monitor contractor costs or provide continuous oversight of contractor performance for the NAT 3.0 contracts. Specifically, the CORs did not:
- review or verify all transportation movement request data submitted by the contractors before the contracting officer approved invoices because the ACO and CORs did not develop a review process to ensure that the costs associated with all transportation movement requests were accurate, and the CORs did not have the specialized experience necessary to conduct these reviews; and
- complete monthly surveillance checklists from March to October 2017, or monthly status reports from March to September 2018, because the ACOs accepted only one form of surveillance, instead of ensuring the CORs completed the surveillance checklist and monthly status report, which are required for conducting surveillance.
As a result, the Army does not have assurance that the NAT 3.0 contractors’ services, valued at $41.3 million as of December 2018, complied with contract requirements for the delivery of supplies and assets. Without reviewing and validating all invoice data before approving invoices, the Army may overpay the NAT 3.0 contractors. For instance, the Army relied upon contractor-submitted data instead of e-mails maintained by the ACO and CORs to verify that, for missions that required a security escort, contractors requested the escort by the mission start date. If the contractor requested the escort by the mission start date, and the contractor misses the required delivery date due to a security escort delay, no deductions are applied to the contractor. However, the Army waived $1.3 million in deductions for contractors missing required delivery dates from June through August 2018 without verifying that the contractors requested a security escort by the mission start date and were eligible to have the deduction waived. In addition, the Army used an incorrect performance work statement to determine payment amounts on the May and June 2018 invoices, resulting in overpayments to the contractors. Furthermore, without conducting the required surveillance, the Army cannot hold contractors accountable based on performance and may award future task orders to non-performing contractors.
Recommendations
We recommend that the ACC–Afghanistan Commander:
- Instruct the CORs and ACO to review and update the quality assurance surveillance plan to include approved oversight guidance for invoice reviews that establishes procedures for reviewing transportation movement requests to determine whether costs are accurate.
- Develop a program and requirement to train NAT 3.0 CORs responsible for reviewing invoices or designate a qualified official to perform invoice reviews to verify that costs associated with the contractor performance are accurate.
- Review the May and June 2018 invoices to determine the amount overpaid to the contractors as a result of using the incorrect performance work statement and request a return of the funds overpaid.
- Develop procedures that identify the required surveillance documents the ACO should review each month, and ensure that CORs perform the required monthly surveillance and upload the documents to COR Tracking Tool as required.
Management Comments and Our Response
During the audit, we briefed ACC-Afghanistan and RSSB officials on the oversight deficiencies we identified. The officials agreed with our findings and immediately initiated corrective actions.
Specifically, on November 4, 2018, the ACC-Afghanistan quality assurance specialist provided the audit team a draft of the updated quality assurance surveillance plan. In January 2019, the NAT 3.0 lead COR was further updating the quality assurance surveillance plan with procedures and specific guidance for conducting invoice reviews. In addition, on January 21, 2019, the ACC‑Rock Island contracting officer issued a memorandum requiring the use of statistical sampling methods in evaluating mission performance data for the NAT 3.0 monthly invoices. According to the contracting officer, due to the volume of transportation movement requests, it would be impractical to examine all mission performance data; therefore, statistical sampling methods should be used instead. On March 28, 2019, the ACC-Afghanistan Deputy provided an updated quality assurance surveillance plan which included the approved sampling procedures. The action taken is sufficient to close the recommendation.
As of March 28, 2019, ACC-Afghanistan officials were in the process of hiring two contract price/cost analysts who will be responsible for training and assisting CORs on ACC-Afghanistan contracts. Specifically, the contract price/cost analysts will assist with reviewing invoices and developing tools, such as spreadsheets and pivot tables, to improve the CORs’ ability to review, track, and analyze invoices and payments. In addition, ACC‑Afghanistan officials are in the process of finalizing a training program and requirement to train NAT 3.0 CORs responsible for reviewing invoices. The action taken is sufficient to resolve the recommendation. We will close the recommendation when we verify that ACC‑Afghanistan officials have appointed a qualified official to train CORs to perform invoice reviews or finalized the program and requirement to train NAT 3.0 CORs responsible for reviewing invoices.
On January 27, 2019, the ACO issued a notice to the contractors for the overpayment that resulted from using the incorrect performance work statement in May and June 2018. The notice informed the contractor that the U.S. Government intended to recoup the amounts overpaid through deductions to future invoices. The U.S. Government will recoup a total of $323,988.87 from the three contractors. As of March 18, 2019, two of the three NAT 3.0 contractors have agreed to repay the U.S. Government. ACC-Afghanistan is working to recoup the overpayment made to the third contractor who is no longer on the contract. The actions taken are sufficient to resolve the recommendation. We will close the recommendation when we verify the funds have been recouped from the contractors.
On December 21, 2018, the NAT 3.0 ACO provided a draft Administrative Contracting Officer COR Tracking Matrix. The matrix identifies the required surveillance documents the ACO should review and ensure are uploaded in COR Tracking Tool. On March 16, 2019, the ACC-Afghanistan Commander provided the approved surveillance matrix. The action taken is sufficient to close the recommendation.
This report is a result of Project No. D2018-D000JB-0187.000.