Counter Narcoterrorism Technology Program Office Task Orders Had Excess Fees, and the Army Was Incorrectly Billed
Abstract
We reviewed task orders under the Counter Narcoterrorism Technology Program Office (CNTPO) indefinite-delivery, indefinite-quantity (IDIQ) contract to determine whether the Space and Missile Defense Command (SMDC) Contracting and Acquisition Management Office (CAMO) applied the correct fixed fee to material and other direct cost (ODC) contract line items. Our review showed that the task orders contained excess fees on material and ODC contract line items and billing errors on ODC contract line items. SMDC CAMO contracting officers awarded 25 task orders to 2 contractors that contained fees in excess of the rates that were incorporated in the contractors' IDIQ contracts. This occurred because SMDC CAMO management did not verify that contract provisions incorporated into the IDIQ contracts for fees were clear and specific. In addition, SMDC CAMO contracting officers used boilerplate language and did not verify the rates used in the IDIQ contracts or task orders. SMDC CAMO overpaid Raytheon approximately $815,000 and the U.S. Training Center (USTC) approximately $77,000 in fixed fees and will overpay approximately $446,000 to Raytheon and approximately $20,000 to USTC in additional fixed fees if the IDIQ contracts and related open task orders are not modified to reflect the correct rates. Northrop Grumman charged the Army for non-CNTPO work because the contractor was allowed to directly bill for payment without a detailed invoice review. Also, Northrop Grumman double billed the Army for insurance charges because the contracting officer's representative did not conduct in-depth reviews of invoices. Resolving these problems could save $1,526,279. The Deputy Assistant Secretary of the Army for Procurement should conduct a review of contracting officers at the SMDC CAMO. SMDC CAMO should meet with Raytheon and USTC to reach agreement on the return of excess fees paid, ensure that Northrop Grumman refunds the Army, and coordinate a more detailed invoice approval process.
Document Details
- Document Type
- Technical Report
- Publication Date
- Nov 01, 2011
- Accession Number
- ADA555174
Entities
People
- Bruce A. Burton
Organizations
- Office of the Inspector General, U.S. Department of Defense