Report | May 5, 2015

Program Manager Medium andHeavy Tactical Vehicles Needs toImprove Acquisition Practices

DODIG-2015-116

Objective

The objective was to assess the propriety of allegations made to the Defense Hotline concerning acquisition practices at Program Executive Office Land Systems; Program Management Office, Medium and Heavy Tactical Vehicles. Specifically, we determined whether Command followed proper procedures for urgent acquisitions of the Automatic Fire Extinguishing Systems for the Medium Tactical Vehicle Replacement. We also assessed whether funding was based on well-defined and validated requirements. This is the second of two audits that addressed the acquisition practices in the Program Manager Medium and Heavy Tactical Vehicles (PM MHTV) office.

Findings

Of four allegations made to the Defense Hotline, we substantiated one, partially substantiated one, and did not substantiate two allegations. Specifically, we:

  • substantiated that the PM MHTV office requested funding for unknown, future engineering change proposals;
  • did not substantiate that the PM MHTV initiated acquisitions before there was a documented and validated requirement;
  • partially substantiated the PM MHTV did not fully document acquisition decisions; or make sure they were made by the proper authority;
  • did not substantiate that the PM MHTV committed to equipment solutions without considering life-cycle costs or other alternative solutions.

The PM MHTV plans to buy an additional 3,500 Automatic Fire Extinguishing System (AFES) units for the Medium Tactical Vehicle Replacement, at an estimated cost of $24 million, on a sole-source contract that was not justified. Also, the PM MHTV provided the milestone decision authority inaccurate and incomplete information to determine the system’s suitability as an abbreviated acquisition program and its readiness to enter production. As a result, any cost reductions that could be achieved through competition for 3,500 additional units will be lost. In addition, there was no assurance that the Government will receive the best value.

Recommendations

We recommend the:

  • Program Manager, Medium and Heavy Tactical Vehicles develop and implement procedures that document the process used to define, validate, fund, and execute requirements; provide documentation that the 3,500 additional AFES units will be purchased using full and open competition; and provide the milestone decision authority with the results of the live-fire testing before requesting approval to procure additional AFES units.
  • Assistant Commander for Contracts, Marine Corps Systems Command, provide additional training to contracting staff that emphasizes the Federal Acquisition Regulations for determining price reasonableness and documenting those decisions in the contract files.

Management Comments and Our Response

Program Executive Officer Land Systems, Marine Corps agreed with Recommendations A.1, A.2, B.1, and B.3. Although Program Executive Officer disagreed with Recommendation B.2, proposed actions meet the intent of the recommendation and no further comments are required.