Publicly Released: April 20, 2023
Objective
The objective of this audit was to determine whether Army contracting personnel executed contract administration responsibilities for dining, medical, and facilities sustainment services in support of Operation Allies Welcome (OAW) in accordance with Federal and DoD policies.
Background
On August 14, 2021, the Army awarded a task order under the Logistics Civil Augmentation Program (LOGCAP) V contract. The LOGCAP V task order included dining, medical, and facilities sustainment services in support of OAW at four Army installations—Camp Atterbury, Indiana; Fort Bliss, Texas; Fort McCoy, Wisconsin; and Fort Pickett, Virginia. The LOGCAP V task order included a price ceiling of $1.9 billion.
Finding
Army contracting personnel complied with Federal and DoD guidance for contract oversight by ensuring that contracting officer’s representatives (CORs) were officially appointed, completed required COR training, performed contract oversight procedures, and ensured the contractor took corrective actions to address deficiencies.
However, the procuring contracting officer (PCO) did not ensure invoices were reviewed before payment to verify contractor-reported costs. This occurred because the PCO solely relied on the Defense Contract Audit Agency (DCAA) prepayment reviews, which did not address whether invoiced amounts were allowable, allocable, or reasonable.
As a result, while the LOGCAP V contractor provided adequate dining, medical, and facilities sustainment services to Afghan evacuees, the Army does not have assurance that the $1.6 billion paid to the contractor was allowable, allocable, and reasonable.
Recommendations
We recommend that the Army Contracting Command–Rock Island, Executive Director:
- Request that the DCAA review the allowability, allocability, and reasonableness of the $1.6 billion paid to the contractor.
- Request a refund from the contractor for any excess payment or arrange for payment to the contractor for any under-billed costs that the DCAA identifies.
- Issue guidance to reinforce the importance of the contracting officer and COR roles and involvement in review of invoices before payment.
Management Comments and Our Response
Army officials agreed to request that the DCAA review the allowability, allocability, and reasonableness of the $1.6 billion paid to the contractor and to request a refund from the contractor for any excess payment or arrange for payment to the contractor for any under-billed costs that the DCAA identifies. Therefore, these recommendations are resolved and will remain open.
Army officials partially agreed with the recommendation to issue guidance to reinforce the importance of the contracting officer and COR roles and involvement in review of invoices before payment. ACC-RI officials stated they would work with the Army Sustainment Command and DCAA to develop a process to review vouchers before payment. The proposed actions meet the intent of the recommendation. Therefore, the recommendation is resolved and will remain open.
This report is a result of Project No. D2022-D000RJ-0133.000.