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The Department of Defense (DOD) relies on contractors to perform many of the functions needed to support troops in deployed locations. For example, at Camp Arifjan, Kuwait the Army uses contractors to provide logistics support for operations in Iraq and Afghanistan. Contractors at Camp Arifjan refurbish and repair a variety of military vehicles such as the Bradley Fighting Vehicle, armored personnel carriers, and the High-Mobility, Multi-Purpose Wheeled Vehicle (HMMWV). However, while contractors provide valuable support to deployed forces, we have frequently reported that long-standing DOD contract management and oversight problems increase the opportunity for waste and make it more difficult for DOD to ensure that contractors are meeting contract requirements efficiently, effectively, and at a reasonable price. This report discusses information about Task Order 1 that we developed during our review. Our objectives were to (1) evaluate the contractor's performance of maintenance and supply services under Task Order 1, (2) determine the extent to which the Army's quality assurance and contract management activities implement key principles of quality assurance and contract management regulations and guidance, and (3) determine the extent to which the Army is adequately staffed to perform oversight activities.

Our analysis indicates that the Army is inadequately staffed to conduct oversight of Task Order 1. Authorized oversight personnel positions vacant at the time of our visit in April 2007 included those of a quality assurance specialist, a property administrator, and two quality assurance inspectors. The contracting officer told us that the two civilian positions (the quality assurance specialist and the property administrator) had been advertised but the command had not been able to fill the positions with qualified candidates. The battalion was unsure why the two military positions (the quality assurance inspectors) had not been filled. The lack of an adequate contract oversight staff is not unique to this location. We have previously reported on the inadequate number of contract oversight personnel throughout DOD, including at deployed locations. Army officials also told us that in addition to the two quality assurance inspectors needed to fill the vacant positions, additional quality assurance inspectors were needed to fully meet the oversight mission. According to battalion officials, vacant and reduced inspector and analyst positions mean that surveillance is not being performed sufficiently in some areas and the Army is less able to perform data analyses, identify trends in contractor performance, and improve quality processes. Also, the Army is considering moving major elements of option year 3 (including maintenance and supply services) to a cost plus award-fee structure beginning January 1, 2008. Administration for cost plus award-fee contracts involves substantially more effort over the life of a contract than for fixed-fee contracts. Without adequate staff to monitor and accurately document contractor performance, analyze data gathered, and provide input to the award-fee board, it will be difficult for the Army to effectively administer a cost plus award-fee contract beginning in January 2008.