Report | Oct. 26, 2012

Award and Administration of Multiple Award Contracts at Naval Facilities Engineering Command Specialty Centers Need Improvement

DODIG-2013-007

What We Did

This is the second in a series of audits of multiple award contracts (MACs) for services. We reviewed MAC task orders for services at Naval Facilities Engineering Command (NAVFAC) Specialty Centers to determine whether the task orders were properly competed, and whether contracting officer's representatives (COR) performed adequate oversight. We reviewed 20 task orders, valued at $101.2 million, awarded under 4 MACs.

What We Found

Contracting officials at Specialty Center Acquisition, NAVFAC (SCAN) generally provided contractors a fair opportunity to compete for task orders awarded under MACs. However, contracting officials limited competition for two task orders by not sending the solicitation or amended solicitation to all contractors under the MAC because they believed that they had the authority to exclude contractors from receiving the solicitation. In addition, contracting officials did not adequately determine price reasonableness on six task orders awarded having only one proposal, valued at $45.6 million, and on nine modifications with prices increases, valued at $3.8 million, because they relied on unsupported independent Government cost estimates (IGCE) to make their determinations. As a result, NAVFAC did not have assurance that the services acquired resulted in a fair and reasonable price for DoD. CORs at Naval Facilities Engineering Service Center (NFESC) did not perform adequate surveillance on 18 task orders, valued at $100.2 million. Contracting officers and the CORs did not understand quality assurance surveillance plan requirements; the contracting officers misinterpreted the internal contract administration policy; and the CORs relied on unauthorized NAVFAC personnel to perform surveillance functions, including reviewing invoices which included unsupported other direct costs, totaling $556,590. As a result, SCAN did not have assurance that the contracted services were received.

What We Recommend

We recommend the Director, SCAN:

  • verify that all contractors under a MAC contract receive the Request for Task Order Proposal, even if the request is amended to incorporate changes.
  • verify that the IGCEs and fair and reasonable price determinations are adequately supported.  

We recommend the Director, SCAN, coordinate with the Commander, NFESC, to require:  

  • Contracting officers to appoint a COR for each task order.
  • CORs to document surveillance performed and report progress to the contracting officer.  

Management Comments and Our Response

The Commanding Officer, Naval Facilities Engineering and Expeditionary Warfare Center, agreed with the recommendations, and the comments were responsive. No further comments are required.