Report | July 1, 2021

Followup Audit on the U.S. Army’s Management of the Heavy Lift Commercial Transportation Contract Requirements in the Middle East (DODIG-2021-097)

Audit

Publicly Released: July 6, 2021

 

Objective

The objective of this followup audit was to determine whether the Army implemented corrective actions identified in Report No. DODIG‑2017‑095, “U.S. Army’s Management of the Heavy Lift VII Commercial Transportation Contract Requirements in the Middle East,” June 26, 2017, in the Heavy Lift VIII (HL8) contract to improve oversight and performance.

 

Background

Army Contracting Command–Rock Island (ACC‑RI) awarded four HL7 contracts on May 12, 2011, to provide personnel, equipment, and materials necessary to haul cargo and equipment throughout Kuwait, Iraq, and Saudi Arabia. At the end of the period of performance for the HL7 contracts, the ACC‑RI contracting officer issued three extensions that transitioned into the HL8 contract. The HL8 contract was awarded on February 28, 2018, to provide personnel, equipment, and materials necessary to haul cargo and equipment throughout the U.S. Central Command (USCENTCOM) area of responsibility.

USCENTCOM covers 20 nations in the Middle East and Central and South Asia, and operates with subordinate Service component commands, such as U.S. Army Central (USARCENT). USARCENT provides continuous oversight and control of U.S. Army operations and exercises administrative control of all U.S. Army forces throughout the Middle East and Central and South Asia. The 1st Sustainment Command (Theater) (1st TSC) is a subordinate unit under USARCENT and the requiring activity for the HL8 contract. The 1st TSC is responsible for overseeing contractor performance and managing the contract requirements and all cargo movements throughout the Middle East and Central and South Asia. A Movement Control Battalion (MCB) provides movement planning and in‐transit visibility of all ground transportation movement under the HL8 contract. U.S. Army Transportation Battalions are assigned to perform MCB tasks. ACC‑RI provides global contracting support to the Army and is the contract office that awarded the HL8 contract.

Report No. DODIG‑2017‑095, “U.S. Army’s Management of the Heavy Lift VII Commercial Transportation Contract Requirements in the Middle East,” identified that:

  • the Army ordered an average of 39 percent more assets than were needed,
  • Army requirement review boards did not require adequate information to validate the number of HL7 assets requested, and
  • ACC‑RI included excessive guaranteed minimum payments to each of the HL7 contractors.

As a result, the Army wasted $53.6 million throughout the life of the HL7 contracts on services that it did not require.

 

Finding

We reviewed management actions taken in response to the six recommendations from Report No. DODIG‑2017‑095 and determined that USCENTCOM and the Army fully implemented corrective actions to address five of the recommendations and did not fully address one recommendation. We determined that:

  • the 1st TSC worked with USARCENT, ACC‑RI, and MCB officials to validate requirements for HL8 and developed procedures to address poor mission planning and wasted assets (Report No. DODIG‑2017‑095 Recommendation 1.b);
  • the 1st TSC updated its requirement review process standard operating procedures to require specific documents that the requesting units must submit to the review board so that the validation authority could make an informed decision (Report No. DODIG‑2017‑095, Recommendation 1.c);
  • USARCENT updated its policies for the review of transportation requests by relocating the review board from Kuwait to USARCENT headquarters in South Carolina to improve decision making, and conducting training on the review of requirements packages (Report No. DODIG‑2017‑095 Recommendation 2);
  • USCENTCOM established an Execute Order that directed supported units to use the Trans‑Arabian Network (TAN), USARCENT to report all TAN movements in biweekly status reports, and USCENTCOM to perform quarterly assessments of the TAN (Report No. DODIG‑2017‑095 Recommendation 3); and
  • ACC‑RI established a more reasonable and achievable guaranteed minimum and structured the contract so that contractors would obtain the $1 million minimum for services that were actually required (Report No. DODIG‑2017‑095 Recommendation 4).

However, the 1st TSC did not fully implement corrective actions for one recommendation. The 1st TSC did not develop a systemic process for collecting actual HL8 usage data or implement a system for forecasting HL8 requirements (Report No. DODIG‑2017‑095, Recommendation 1.a).

As a result of the 1st TSC officials not fully implementing Recommendation 1.a from the prior report, USARCENT and 1st TSC officials cannot rely on the HL8 usage data that is being collected to monitor HL8 contract performance or identify and address poor mission planning that could lead to wasted HL8 assets. Therefore, the Army may continue to waste HL8 assets similar to the $53.6 million in wasted assets identified in the prior audit of the HL7 contract.

 

Recommendations

Although we are not making new recommendations, one of the six recommendations we reviewed during this audit remains open. We encourage the 1st TSC Commander to fully implement corrective actions to address the intent of Recommendation 1.a from the prior report (Report No. DODIG‑2017‑095). Specifically, the 1st TSC Commander should provide supporting documentation showing consistent data that is based on actual loading and delivery dates and evidence that the information is reported uniformly across the different operating areas and deployed MCBs. In addition, the 1st TSC Commander should provide supporting documentation showing that the 1st TSC is forecasting data to identify trends in heavy lift usage that allows the Army and 1st TSC to better anticipate future customer needs.

 

Management Comments and Our Response

The 1st TSC Deputy Commanding Officer agreed with the recommendation to implement a systemic process for collecting heavy lift asset usage and establish a consistent schedule for analyzing usage information in order to use quantitative and qualitative factors when forecasting requirement quantities on future task orders. The comments from the 1st TSC Deputy Commanding Officer were responsive and addressed the finding of the report. Therefore, Recommendation 1.a from Report No. DODIG‑2017‑095 is resolved but will remain open. We will close the recommendation once management provides documentation demonstrating that the agreed‑upon actions are completed.

 

This report is the result of Proj. No. D2020-D000RG-0165.000.