Publicly Released: August 5, 2020
Objective
The objective of this audit was to determine whether the Air Combat Command, Acquisition Management and Integration Center’s (AMIC’s) oversight and management of the Remotely Piloted Aircraft (RPA) Operations and Maintenance Support contract ensured that the contractor complied with required maintenance procedures and performance requirements.
During the audit, we expanded our review to also determine whether AMIC verified the accuracy of contractor invoices prior to payment and only reimbursed the contractor for contractually eligible costs.
Background
AMIC is a subordinate organization of the Air Combat Command and is responsible for the planning, awarding, and managing the Air Combat Command’s aircraft maintenance-related contracts. In March 2018, AMIC awarded AECOM Management Services, Inc. a 7-year, indefinite-delivery indefinite-quantity, firm-fixed-price contract with a $961 million ceiling, to provide operations and organizational-level maintenance support to sustain the combat and training capability of the MQ-9 Reaper (MQ-9) and the RQ-4 Global Hawk (RQ-4) RPAs. An RPA is an unmanned aircraft that is piloted from a remote location. Organizational-level maintenance includes routine MQ-9 and RQ-4 maintenance and operations support includes pilot and sensor operator teams responsible for flying missions and performing organizational-level maintenance.
Since March 2018, AMIC has issued eight firm-fixed-price task orders, totaling $133 million, for MQ-9 and RQ-4 RPA operations and maintenance support at 4 overseas locations and 12 continental U.S. locations. Each task order includes the base year and up to six consecutive 12-month option years, for a total of 7 years. The task orders include cost reimbursable contract line items for reimbursable items, including the labor uplift rates for contracted personnel who deploy to contingency locations where danger pay is authorized by the contract, such as Kandahar Airfield, Afghanistan, and expenses for contracted personnel travel to and from a deployed location.
To oversee and manage the RPA contract, AMIC provided a program manager, contracting officer, and contracting officer’s representatives (CORs).
The program manager is responsible for developing the performance work statement and the quality assurance surveillance plan, assessing contractor performance, and reviewing the contractor’s invoices. The contracting officer awards and administers the contract, approves invoices for payment, monitors the contractor’s invoices, and appoints CORs.
The CORs for the RPA contract act as the eyes and ears for the contracting officer and are responsible for monitoring the contractor’s performance to verify compliance with the performance work statement requirements.
Finding
AMIC ensured that the RPA contractor complied with contractually required maintenance procedures and performance requirements. Specifically, we determined that for all eight task orders awarded under the RPA base contract for the MQ-9 and RQ-4, AMIC properly:
• appointed active duty airmen with prior aircraft maintenance experience as CORs to perform observations of contractor performance and thoroughly document noncompliance;
• established procedures in a performance work statement and quality assurance surveillance plan to ensure COR oversight of critical contract performance requirements; and
• used award fees to motivate the contractor to meet contract requirements and continuously improve its performance.
Furthermore, AMIC verified the accuracy of contractor invoices prior to payment and only reimbursed the contractor for contractually eligible costs.
However, AMIC did not formally document its invoice review process. Instead of having written procedures, AMIC staff stated that they reviewed 100 percent of contractor invoices relying on informal guidance from the contracting officer and program manager to ensure AMIC only paid the contractor for contractually compliant performance and reimbursement costs eligible under the terms of the contract. We reviewed a statistical sample of 33 of 139 firm-fixed-price invoices, and 30 of 70 cost reimbursable invoices, and did not find any instances of the contractor claiming ineligible costs for reimbursement.
As a result of AMIC’s contract oversight, AMIC had assurance that the $124 million spent on the RPA contract was for contractually compliant services and only included costs eligible for reimbursement. However, without a documented invoice review process, future contracting and program management staff may inconsistently review invoices, which could result in payments to the contractor for ineligible costs.
Recommendation
We recommend that the AMIC Director direct the RPA Operations and Maintenance Support Contract program manager and contracting officer to develop and implement formal procedures detailing who is responsible for conducting invoice reviews and the methodology for conducting those reviews.
Management Actions Taken
During the audit, we told the program manager and contracting officer that a weakness existed in AMIC’s invoice review procedures. This weakness was that AMIC did not formally document who was responsible for invoice reviews and the specific procedures the reviewer would follow. The program manager agreed with our observation; developed invoice review procedures; and immediately informed the officials responsible for conducting the reviews of the newly documented invoice review process. In July 2020, AMIC documented the invoice review procedures in the program management division’s Portfolio Management Plan.
Management actions addressed our recommendation; therefore, this recommendation is closed.
This report is the product of Proj. No. D2020-D000RJ-0078.000