Report | April 29, 2016

Followup Audit: DLA Officials Took Appropriate Actions to Address Concerns With Repair Parts for the High Mobility Multipurpose Wheeled Vehicle DODIG-2016-083

Objective

We determined whether the Contracting Officer, Defense Logistics Agency (DLA) Land and Maritime, implemented Recommendations B.2.a and b in Report No. DODIG-2014-054 as agreed.

Report No. DODIG-2014-054, “Defense Logistics Agency Land and Maritime Paid Too Much for High Mobility Multipurpose Wheeled Vehicle Repair Parts,” (HMMWV) was issued on April 4, 2014. The audit identified 49 repair parts for the HMMWV available for purchase through the Integrated Logistics Partnership contract that required a unit‑of-issue conversion. This conversion was required when the contractor’s unit of issue differed from the Government’s. Recommendation B.2.a pertained to the identification of any authorized overpayments for any other HMMWV repair parts. Recommendation B.2.b pertained to the alignment of AM General’s repair part prices with the Government standard units of issue on future delivery orders and invoices.

Finding

We determined that DLA Land and Maritime officials implemented Recommendation B.2.a as a greed. DLA Land and Maritime officials reconciled billing records for HMMWV repair parts that required a unit‑of‑issue conversion from February 2009 through September 2013 as agreed to in Recommendation B .2.a. Further, DLA Land and Maritime officials conducted monthly reconciliations through October 2015 to close out billing transactions for both the Integrated Logistics Partnership and follow-on contracts. DLA Land and Maritime found, and we confirmed, that no further overpayments occurred. In addition, we confirmed that DLA Land and Maritime officials issued $1.62 million in credit memos against AM General, and that $1.62 million was credited to the Government.

We determined that DLA Land and Maritime officials did not fully implement Recommendation B.2.b as agreed. Our review of DLA Land and Maritime’s billing reconciliations indicated that the unit‑of-issue conversion problem still existed. However, DLA Land and Maritime officials took appropriate actions to address the unit‑of-issue conversion problem. Specifically, DLA Land and Maritime continued to perform monthly reconciliations and updated their standard operating procedures with steps to ensure the unit of issue matched the unit price. Although the problem still existed, we determined it did not result in further overpayments.

Recommendations

We are not making recommendations in this report. Although DLA Land and Maritime officials did not fully implement Recommendation B.2.b, they took appropriate actions to address the unit-of-issue conversion problem and we did not find any evidence of further overpayments.

Management Comments and Our Response

  We provided a discussion draft of this report to management for review and comment. Management concurred with our conclusion and did not have any comments on the discussion draft. Therefore, no written response to this report is required.

 

This report is a result of Project No. D2015-D000XD-0260.000.