Report | April 14, 2014

Defense Hotline Allegations Concerning the Fort Huachuca, Army Contracting Command-Aberdeen Proving Ground Contract Administration and Oversight Functions

DODIG-2014-061

Results in Brief

Objective

Our   objective   was   to   review   the   adequacy of cost-control procedures and contract administration for cost-plus-award-fee contract W91RUS-10-C-0001 used at Fort Huachuca, Army Contracting Command–Aberdeen Proving Ground.  In addition, the audit addresses three allegations concerning administration of the contract raised to the Defense Hotline.

Findings

Fort Huachuca, Army Contracting Command–Aberdeen Proving Ground officials could  improve  the  administration  and oversight of cost-plus-award-fee contract W91RUS-10-C-0001, with a total estimated value of $286,541,416. Specifically, Fort  Huachuca, contracting  officials  did  not:

  • include adequate documentation to support incremental funding modifications within the contract file;
  • properly authorize contract oversight or update the quality assurance surveillance plan; or 
  • evaluate  contractor perfor mance with standards that were compliant with the Army Federal Acquisition Regulation Supplement.

This occurred because contracting officials used one contract modification to fund multiple work assignment orders (WAOs) and did not identify which WAOs were funded in the modification; misinterpreted the Army Contracting Command Pamphlet 70-1 and did not designate or train work assignment order authors and test officers as alternate  contracting officer’s representatives, as required.   In addition, contracting officials were unaware of the Army Federal Acquisition Regulation Supplement requirements regarding contractor performance criteria and used conflicting wording in the award-fee plan.

As  a  result, Fort Huachuca contracting  officials  may  have overpaid for contract cost increases.  Furthermore,  we determined that one of the three Defense Hotline  allegations was  partially  substantiated.  This  allegation  was  addressed during the audit.  The other two allegations were unsubstantiated.

We issued a quick reaction memorandum on January 16, 2014, based    on    concerns    regarding    the    contract    administration for  contract  W91RUS-10-C-0001.  Fort  Huachuca  officials responded to the memorandum on February 5, 2014, with acceptable  corrective  actions  for  the  follow-on  contract  to provide an audit trail from contract modifications to WAOs; properly authorize and train test officers; update the quality assurance surveillance plan; and revise the award-fee plan. Therefore, we are not making any recommendations.

Management Comments

We do not require a written response to this report. We provided a discussion draft to Fort Huachuca, Army Contracting  Command–Aberdeen Proving Ground officials.