Report | April 11, 2014

Commercial Multimodal Cargo Procedures in Dubai Were Generally Effective, but Contract Oversight Could Be Improved

DODIG-2014-058

Objective

This is one in a series of reports regarding U.S. Transportation Command’s (USTRANSCOM’s) support of the Afghanistan drawdown. Our objective was to determine whether effective procedures were in place to process equipment at transfer locations in Southwest Asia. We evaluated whether the security, accountability, and timeliness of commercial multimodal procedures in Dubai were effective and whether controls were in place to provide oversight of the process.

Finding

USTRANSCOM generally used effective procedures for processing commercial multimodal cargo in Dubai. However, U.S. Central Command’s Customs and Border Clearance Agents (CBCAs) did not always apply U.S.-compliant seals because they followed outdated guidance. As a result, unauthorized individuals could gain access to, and potentially steal, Government cargo during transit. When notified, U.S. Central Command officials promptly took action to fix the deficiency. In addition, USTRANSCOM contracting officials did not provide sufficient oversight because they structured the contract to minimize Government involvement. Specifically, USTRANSCOM contracting officials did not appoint a contracting officer’s representative (COR) in Dubai to oversee contractor operations because the contract structure allowed oversight from headquarters, instead of Dubai. In addition, contracting officials did not test contractor-submitted electronic data interchange transactions used to verify contractor performance because they did not develop internal control procedures to validate the in-transit visibility (ITV) data. Additionally, they did not maintain records of all subcontractors performing under the contract because the contract did not require the prime contractors to submit the names of their subcontractors. As a result, the prime contractors contacted the 840th Transportation Battalion officials in Dubai to resolve cargo-processing problems instead of officials with delegated contractual authority. In addition, contracting officials had minimal assurance that the prime contractors submitted accurate ITV transactions and were unable to identify subcontractors excluded from receiving Federal contracts.

Recommendations

We recommend the Director, USTRANSCOM Acquisitions, require the contracting officer to appoint a COR in Dubai; periodically test contractor-submitted ITV transactions; and require the prime contractors to semi-annually submit a list of all subcontractor companies.

Management Comments

The Deputy Commander, USTRANSCOM, generally addressed the recommendations; however, comments on Recommendation 2 partially addressed the recommendation. Therefore, we are requesting additional comments on Recommendation 2 by May 12, 2014.