Report | June 29, 2015

The Air Force Did Not Monitor the Energy Savings Performance Contract at Joint Base McGuire

DODIG-2015-138

Objective

Our objective was to determine whether Air Force controls for monitoring contract performance were effective.

Finding

Air Force controls for monitoring the contractor’s energy savings performance contract (ESPC) performance at Joint Base McGuire were not effective.  Specifically, the contracting officer:

  • did not delegate a contracting officer’s representative to oversee contractor performance; the contracting officer stated this occurred because a qualified civil engineer was not available to perform the duties.
  • did not perform contractor's surveillance, document contractor compliance with contract requirements, or validate actual contractor energy savings; the contracting officer stated this occurred because she was not aware of Air Force and Department of Energy requirements, did not have the technical expertise to validate the actual energy savings, and had other contracting priorities.
  • in conjunction with civil engineering officials, directed payment of four invoices, totaling $18.96 million, and did not approve the contractor’s Post-Installation Report prior to payment. This occurred because the officials did not establish policies and procedures to review invoices and payments.

In addition, civil engineering officials did not provide required training to McGuire engineering, contracting, financial, and legal staff because they were not aware of the Air Force ESPC training requirement. As a result, Air Force officials do not know whether the approximately $19 million spent and approximately $115 million planned for the remaining contract performance will result in energy savings.

Recommendations

We recommend that the Commander, Joint Base McGuire, require the contracting officer delegate to the contracting officer’s representative responsibility to review and inspect project deliverables, review and certify contractor vouchers, and report contractor performance information. The Commander should review and, as appropriate, initiate management or other actions to hold contracting and civil engineering officials accountable for lack of contract surveillance and payment of contractor invoices.

The Commander should also require civil engineering officials to develop a quality assurance surveillance plan and, in coordination with the Air Force Civil Engineering Center, implement ESPC training to applicable staff.

We recommend that the Commander, 87th Contracting Squadron direct the contracting officer to validate actual energy savings achieved for contract performance years 0 through 3 and determine whether the contractor’s performance warranted the energy savings paid.

Management Comments and Our Response

The Air Force did not respond to the recommendations in the report. We request that Air Force officials provide comments on the final report.