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Audit of Air Force Accountability of Government Property and Oversight of Contractual Maintenance Requirements in the Contract Augmentation Program IV in Southwest Asia DODIG-2019-103

Audit

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Publicly released: July 22, 2019

Objective

The objective of this audit was to determine whether the Air Force accounted for Government-furnished property (GFP) and provided oversight of contractual maintenance requirements in the Contract Augmentation Program IV in Southwest Asia. We reviewed four Air Force Contract Augmentation Program (AFCAP) IV task orders in Kuwait, Qatar, and the United Arab Emirates.

Background

In June 2015, the Air Force Installation Contracting Agency (AFICA) awarded eight AFCAP IV contracts to provide logistic and sustainment support to deployed forces executing contingency operations worldwide. Four of the eight AFCAP IV contracts provide services such as dining facilities, vehicle maintenance, and engineering in support of Operations Inherent Resolve and Freedom’s Sentinel to sustain U.S. personnel at locations throughout Southwest Asia. In this audit, we reviewed four task orders, valued at $95.9 million, under two of the four Southwest Asia contracts, for services to Kuwait, Qatar, and the United Arab Emirates.

AFICA’s 772nd Enterprise Sourcing Squadron, operating at Tyndall Air Force Base, Florida, awarded the AFCAP IV contracts and subsequent task orders. Personnel from the 772nd Enterprise Sourcing Squadron act as procuring contracting officers (PCOs) for the four AFCAP IV task orders we selected, and personnel from the 379th and 380th Air Expeditionary Wing Mission Support Groups are responsible for the accountability, administration, and oversight of GFP under AFCAP IV. The 379th and 380th Mission Support Groups provide accountable property officers who are required by DoD Instruction 5000.64 to establish and maintain Air Force GFP records, and administrative contracting officers and contracting officers’ representatives, who are appointed by the PCO and are required to administer and oversee the contracts in Kuwait, Qatar, and the United Arab Emirates.

AFCAP IV uses contractors to provide Government customers with civil engineering, base construction, and logistic operations, including dining facility and food services, vehicle maintenance and management operations, and professional engineering services. The Air Force provides GFP, such as mobile power generators and street sweepers, to enable the contractors to provide the services outlined in their contracts. The Federal Acquisition Regulation defines GFP as property in the possession of, or directly acquired by, the Government and subsequently furnished to contractors for the performance of a contract. The Air Force “Process Guide for Accountability of Government-furnished Property” requires the PCO to validate completed GFP lists in the contracts and furnish those lists to the accountable property officer when the contract is awarded. The accountable property officers use the GFP lists to establish and maintain accountable property records in an accountable property system of record. Each AFCAP IV contract contains clauses from the Federal Acquisition Regulation that require the contractors to create and maintain separate, complete records of all GFP identified in the contract.

Findings

The Air Force did not account for GFP under four AFCAP IV task orders in Kuwait, Qatar, and the United Arab Emirates. Specifically:

  • accountable property officers in the 379th and 380th Mission Support Groups did not include 2,081 of 2,091 known AFCAP GFP items or their associated dollar value in Air Force accountable records as of February 2019;
     
  • PCOs did not consistently include complete GFP lists with the data elements required to establish accountable records in awarded contracts; and
     
  • administrative contracting officers and contracting officers’ representatives in the 379th and 380th Mission Support Groups did not conduct joint inventories of AFCAP GFP with the contractor within the 30-day timeline required in the contracts or reconcile the joint inventory results with the GFP lists in the contracts.

The Air Force did not account for GFP under these task orders because AFCAP IV PCOs did not follow established DoD and Air Force requirements to maintain GFP lists in contracts; include required data elements, such as item value, in GFP lists; and provide GFP lists to the accountable property officers. In addition, the AFCAP IV PCOs did not:

  • delegate property administration duties, or ensure the Chief of Air Forces Central Command (AFCENT) Contracting Division delegated property administration responsibilities;
     
  • coordinate with the requiring activity to establish specific GFP surveillance measures in the quality assurance surveillance plan (QASP), such as procedures to oversee AFCAP IV contractor management of GFP records; or
     
  • train administrative contracting officers and contracting officers’ representatives to conduct oversight of contractor GFP records.

As a result of the Air Force’s lack of accountability and oversight of GFP items provided to contractors in Kuwait, Qatar, and United Arab Emirates, the Air Force does not know the value of GFP provided to contractors, has no oversight of the property, and cannot hold the contractors accountable for how they manage GFP, including property damage and losses.

In addition, the Air Force did not consistently include the value of GFP listed in the contracts and included only the value of GFP for the Government property items provided to the Qatar base support contractors, one of the four task orders we reviewed. Therefore, based on the value of the GFP items included in the base support task order, the Air Force understated its FY 2018 asset balances on the balance sheet by at least $5 million.

The Air Force also did not verify that AFCAP IV base support or dining facility contractors performed contracted services for routine maintenance and repairs on Government property.

The Air Force did not perform oversight of contracted services for maintenance and repairs of Government property because the AFCAP IV PCOs did not coordinate with the requiring activity to establish clear Government property surveillance measures in the QASP, such as procedures to oversee contractor performance of routine maintenance tasks and repairs.

As a result of the Air Force’s lack of oversight of contractually required maintenance services, the Air Force and the contractors do not have assurance that the base support contractors in Qatar maintained at least $20.6 million of Government property in accordance with contract requirements.1 In addition, because preventive maintenance is an integral method for sustaining equipment through its useful life, the lack of oversight of AFCAP IV contractual maintenance requirements could impair Air Force operations in Southwest Asia, including services for dining facilities, power generation, and airfield lighting.

Recommendations

To improve the accountability of GFP under AFCAP IV task orders, we recommend, among other things, that the Chief of AFICA’s 772nd Enterprise Sourcing Squadron Contracting Division:

  • establish GFP accountability training for PCOs;
     
  • require PCOs to coordinate with the accountable property officers and AFCAP IV contractors to jointly verify the GFP provided in each task order and modify the contracts to reflect an accurate list of GFP;
     
  • update AFICA’s delegation procedures to ensure that PCOs assign property administration duties to deployed administrative contracting officers and contracting officers’ representatives; and
     
  • direct the PCOs to coordinate with the requiring activity in order to update AFICA’s AFCAP IV QASPs to include detailed property administration and GFP oversight procedures.

In addition, we recommend that the Principal Director of the Defense Pricing and Contracting Division in the Office of the Under Secretary of Defense for Acquisition and Sustainment make existing GFP training resources mandatory for all contracting personnel and coordinate with the Services to implement GFP training courses for contingency contracting personnel.

Finally, we recommend that the Chief of AFCENT’s Contracting Division update Air Force secondary delegation procedures to specify that deployed administrative contracting officers receive not only verbal instruction, but also a written delegation to outline the specific contract administration duties each administrative contracting officer is responsible for performing.

Management Comments and Our Response

The Principal Deputy Assistant Secretary of the Air Force (Acquisition, Technology, and Logistics), responding for the Chief of the AFICA’s 772nd Enterprise Sourcing Squadron Contracting Division, agreed with our recommendations directed to the Air Force and stated that the Air Force will provide evidence of actions taken to document closure for all resolved recommendations. For example, she stated that by December 2019 the Air Force will provide documentation to confirm that PCOs, administrative contracting officers, and contracting officer’s representatives accomplished GFP accountability training; PCOs modified the AFCAP IV contracts to incorporate accurate GFP lists; and PCOs updated the AFCAP IV QASP templates to include detailed property administration and oversight procedures. We will close resolved recommendations when we verify that the Air Force’s planned actions are complete.

The Senior Procurement Analyst representing the Office of the Under Secretary of Defense for Acquisition and Sustainment, Defense Pricing and Contracting Division, agreed with our recommendation to make existing GFP training resources mandatory for all contracting personnel and coordinate with the Services to implement GFP training courses for contingency contracting personnel. The representative stated that the Principal Director, Office of the Under Secretary of Defense for Acquisition and Sustainment, Defense Pricing and Contracting Division, will direct the Defense Acquisition University to expand the use of the existing training and ensure it is available for the entire procurement workforce and to track use of the training by the procurement workforce. Therefore, this recommendation is resolved, and we will close the recommendation when we verify the planned actions are complete.

This report is a result of Project No. D2018-D000RJ-0200.000