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Followup Audit on Army’s Business Case Analysis to Transition Human Immunodeficiency Virus Testing In-House DODIG-2019-050

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Objective

 

We determined whether the U.S. Army Medical Command (MEDCOM) corrected problems identified in DoD Office of Inspector General report, Report No. DODIG-2017-066, “Army Did Not Support Business Case Analysis Recommending Transition of Human Immunodeficiency Virus Testing,” March 14, 2017.

 

Background

 

Report No. DODIG-2017-066 determined that Walter Reed Army Institute of Research (WRAIR) personnel did not adequately support or document their business case analysis (BCA) for bringing Human Immunodeficiency Virus (HIV) testing in-house. We made two recommendations in that report—that MEDCOM personnel:

 

  • re-perform the BCA for HIV testing to address the six problems related to the development and support of the February 2016 BCA; and

  • do not enter into any leases to move the Army laboratories until the BCA was re-performed.

 

The intent of the recommendations was to ensure that MEDCOM made the best decision on where to perform future HIV testing.

 

The MEDCOM Chief of Staff agreed with the recommendations and stated that the estimated completion date for the revised BCA was June 30, 2017. MEDCOM and WRAIR personnel prepared a March 2018 BCA and subsequently revised the BCA in August and September 2018. We assessed the September 2018 BCA during this audit.

 

Finding

 

In this followup audit, we determined that MEDCOM personnel corrected the problems identified in Report No. DODIG-2017-066. Specifically, WRAIR personnel re-performed the BCA and ensured that the analysis:

 

  • included only HIV testing and how it affected the Army readiness mission in the BCA problem statement and scope;

  • included three or more courses of actions and alternatives versus only including the status quo and MEDCOM’s preferred course of action;

  • consistently used total costs associated with the project;

  • used well-defined and measurable alternative selection criteria; and

  • was adequately documented and supported.

 

MEDCOM personnel also did not enter into any leases while WRAIR personnel re-performed the BCA. Additionally, WRAIR personnel updated leasing costs and assumptions made in the September 2018 BCA. As a result of the above actions, the September 2018 BCA supported MEDCOM’s decision to transfer HIV testing from the current contractor to the Army’s HIV Diagnostics and Reference Laboratory. Therefore, we closed the two prior recommendations.

 

However, in this followup audit, we determined that although WRAIR personnel updated leasing costs and assumptions in the September 2018 BCA, they did not include the most updated information used to rank the course of action to transfer HIV testing from the current contractor to the Air Force Epidemiology Laboratory. Specifically, WRAIR personnel did not consider the changes the Air Force made to its HIV testing platform and automation. If WRAIR personnel had considered this information, the Army’s HIV Diagnostics and Reference Laboratory still would outscore the Air Force Epidemiology Laboratory. However, the Air Force Laboratory would score higher than continuing testing at the contractor.

 

As a result, MEDCOM may overpay for HIV testing if it continues with the current contractor after the contract ends. We concluded that the Army could save at least $4.4 million each year if the Army transitions HIV testing to the Air Force Epidemiology Laboratory until the Army moves its HIV Diagnostics and Reference Laboratory into leased space and can accept the full Army HIV testing mission.

 

Recommendations

 

We recommend that the MEDCOM Chief of Staff compare HIV testing services provided by the Air Force Epidemiology Laboratory to services performed under contract W81K04-19-D0003 and determine whether the Army should transition testing to the Air Force Epidemiology Laboratory when contract W81K04‑15‑D0006’s period of performance ends on February 27, 2019, until the Army HIV Diagnostics and Reference Laboratory is moved into leased space and can accept the full Army HIV testing mission.

 

Management Comments and Our Response

 

The MEDCOM Interim Chief of Staff agreed to compare the Air Force’s HIV testing services against contract W81K04-19-D0003 to determine whether the Army should transition testing to the Air Force until the Army moves its HIV laboratory into leased space and can accept the full Army HIV testing mission. The MEDCOM Interim Chief of Staff stated that this analysis would be completed by February 15, 2019. In addition, the Interim Chief of Staff stated that MEDCOM could not validate the potential monetary benefits presented in the report because the report did not include information demonstrating that the Air Force cost per test fully accounted for all costs. He further stated that the MEDCOM comparison will analyze whether costs savings can be achieved by using the Air Force Epidemiology Laboratory during the transition. The Interim Chief of Staff addressed the recommendation and we acknowledge that MEDCOM personnel cannot validate the $4.4 million in potential savings until MEDCOM completes its comparison of the services performed under the contract and the services provided by the Air Force. Therefore, the recommendation is resolved but will remain open. We will close the recommendation once we receive and review MEDCOM’s comparison of the Air Force’s HIV testing services against contract W81K04-19-D0003.

 

This report is a result of Project No. D2018-D000AW-0192.000.