Report | Sept. 4, 2015

Controls Over the Al Udeid Air Base Military Construction Cost Estimation Process Need Improvement

DODIG-2015-169

Objective

Our audit objective was to evaluate DoD’s requirements development process for Military Construction (MILCON) projects at Al Udeid Air Base (AUAB), Qatar. Specifically, we determined whether the user had a valid requirement and whether the requirement was developed in accordance with applicable guidance and in consideration of DoD’s mission in Southwest Asia (SWA) for two MILCON projects valued at $30.5 million* at AUAB, Qatar.

Finding

DoD identified valid requirements and developed the two planned AUAB MILCON projects we reviewed in consideration of DoD’s mission in SWA. However, the project cost estimates were unsupported for both projects. Specifically:

  • U.S. Army Corps of Engineers Middle East District (USACE MED) validated the consolidated squadron operations primary facility cost estimate at $12 million, but USACE MED and U.S. Air Forces Central Command, Civil Engineer Directorate (USAFCENT A7) did not maintain documentation to support the estimate. Without documentation to support USACE MED cost estimates, we used the Unified Facilities Criteria (UFC) to estimate a facility cost of $14.7 million, which was 23 percent higher than USACE MED’s validated cost estimate.
  • USACE MED validated the cargo marshalling yard primary facility cost estimate at $7.1 million using costing factors other than those established within the UFC. USACE MED and USAFCENT A7 did not maintain documentation to support the estimate or explain why the criteria were not used. Without documentation to support USACE MED cost estimates, we used the UFC to estimate a facility cost of $8.8 million, which was 24 percent higher than USACE MED’s validated cost estimate.
  • USACE MED and USAFCENT A7 did not have documentation to support the consolidated squadron operations facility and cargo marshalling yard supporting facility costs.

This occurred because USACE MED and USAFCENT A7 did not have a process to formally validate and maintain supporting documentation for MILCON primary and supporting facility cost estimates. As a result, the primary facility costs for the consolidated squadron and cargo marshalling yard may be underestimated by $4.5 million; supporting facility costs may also be incorrectly valued; and USAFCENT A7 may not request appropriate funding for those projects. Unsupported costs could also result in USAFCENT A7 submitting inaccurate budget estimates to Congress for other SWA MILCON projects, which could result in projects not properly funded. Underfunded programs also require Congressional notification when additional funding requests exceed 25 percent of the original project value.

Management Actions Taken

During the audit, USACE MED and USAFCENT A7 officials took action to formally validate cost estimates and revised the project cost estimates for the consolidated squadron and cargo marshalling yard. USACE MED also updated its costing data and issued guidance to ensure that subsequent MILCON project estimates were adequately validated and documented. Based on the actions taken, we did not make recommendations in this report.