Marine Corps Systems Command's Use of Undefinitized Contractual Actions
Abstract
What We Did: Public Law 99-591, section 908(b) requires the DOD Inspector General to periodically audit undefinitized contractual actions (UCAs) and submit a report to Congress. This is the second in a series of reports discussing DOD compliance with section 2326, title 10, United States Code. We reviewed 88 UCAs with a total not-to-exceed value of about $2.75 billion awarded by the Marine Corps Systems Command (MCSC) from FY 2004 through 2009 to determine whether MCSC contracting officials complied with section 2326, title 10, United States Code and whether they appropriately justified and definitized UCAs at reasonable prices. What We Found: MCSC contracting officials did not consistently comply with statutory requirements for managing 80 of the 88 UCAs. Contracting officials did not prepare adequate requests for authorization to issue 34 UCAs, justify the issuance of 34 UCAs, definitize 57 UCAs within timeframes, support whether the contactor's reduced risk during the undefinitized period was reflected in profit for 45 UCAs, obligate funds within limits for 54 UCAs, or document that the Government received a fair and reasonable price on 15 UCAs. MCSC contracting officials did not consistently comply with UCA restrictions because they did not follow statutory and DOD regulations for requesting to issue a UCA; they issued UCAs unnecessarily because of poor acquisition planning, and customers changed requirements after the UCA issuance; the contractor submitted inadequate proposals; they did not adequately document the profit determination; they were unaware of funding limits; and they did not adequately document that the Marine Corps received a fair and reasonable price. As a result, the Marine Corps assumed increased cost risk in the award and negotiation process and may have paid excess profit.
Document Details
- Document Type
- Technical Report
- Publication Date
- Oct 27, 2010
- Accession Number
- ADA546989
Entities
Organizations
- Office of the Inspector General, U.S. Department of Defense