Publicly Released: January 25, 2023
Objective
The objective of this evaluation was to determine whether the Military Criminal Investigation Organizations’ (MCIOs) major procurement fraud investigations comply with DoD, Service, and MCIO policy. The investigations under review covered fraud offenses with an alleged loss of $500,000 or more; corruption involving bribery, gratuities, or conflicts of interest; and defective product, non-conforming product, counterfeit material (equipment and supplies), and product substitution. As part of our evaluation, we evaluated 133 major procurement fraud investigations. The 133 investigations consisted of 43 Army investigations, 65 Navy investigations, and 25 Air Force investigations closed from January 1, 2017, to December 31, 2019.
Background
Because procurement fraud investigations are unique in their investigative and administrative requirements specific to the military procurement process, the MCIOs established special units and trained special agents to investigate these types of crimes. The Army Criminal Investigation Division (CID) established the Major Procurement Fraud Unit (MPFU), the Naval Criminal Investigative Service (NCIS) established the Economic Crimes Field Office, and the Air Force Office of Special Investigations (OSI) established the Office of Procurement Fraud.
Findings
Based on our evaluation, we made the following determinations.
- MCIO case agents did not consistently notify, regularly discuss with, or distribute reports to the centralized organizations, resulting in a lack of proper legal advice to case agents and remedy recommendations to the cognizant DoD officials.
- Secretary of the Navy Instruction 5430.92C and Army Regulation 27-40 conflict with a DoD Instruction 7050.05 centralized organization requirement.
- Three of the 133 investigations were insufficient, which likely affected the outcome of those investigations.
Recommendations
We recommend that the Secretary of the Navy review Secretary of the Navy Instruction 5430.92C and the Army Judge Advocate General review Army Regulation 27‑40 to determine whether revisions are necessary to align with DoD Instruction 7050.05. Additionally, we recommend that the MCIO Directors or Commander review and update:
- supervisory procedures as needed;
- policy on proper organizational notifications; and
- investigative procedures for greater alignment to policy requirements.
Management Comments and Our Response
The Secretary of the Navy did not respond to the recommendations and the official responding for the Army CID Director did not agree with a recommendation; therefore, we request comments on the final report within 30 days. The OSI Commander and officials responding on behalf of the Army Judge Advocate General, Army CID Director, and NCIS Director agreed with the remaining recommendations.
This report is a result of Project No. 2021-DEV0SV-0019.000.