IG Cites Oversight Issues In BAMS Contract

The Pentagon needs to do a better job enforcing its Broad Area Maritime Surveillance contract, a recent Defense Department Inspector General (IG) report says.

“DOD officials did not have the proper controls to validate the contractor charges and performance for the BAMS contract,” the IG said in its report, released late last month.

The Navy BAMS contract with Northrop Grumman, valued at $1.8 billion, is in the third year of a seven-year contract, the IG notes, and is part of a major acquisition program worth more than $19 billion.

BAMS is an offshoot of Northrop’s Global Hawk UAV and represents a major foray by the Navy into strategic unmanned aerial systems. But the Navy and Defense Contract Management Agency (DCMA) officials need to improve their management and administration of the BAMS contract, the IG says.

Specifically, “BAMS contracting officials did not review 39 contractor bills or validate whether the BAMS contractor was entitled to $329.3 million in payments, create or maintain a complete government-furnished property listing, or properly plan to share more than 5,000 specialized tools and testing equipment, worth more than $150 million, with the Air Force Global Hawk program,” the IG says.

These conditions occurred because BAMS contracting officials did not properly perform all of their assigned duties, comply with federal and defense policies, or complete necessary training requirements, according to the report.

As a result, the IG warns, “The BAMS program is at risk for increased costs, schedule delays, and not meeting the needs of the warfighter.”

The IG says that, based on its inquiries, Northrop reduced costs on the BAMS contract by $206,000 for travel expenses that were not covered.

DCMA officials did not develop a complete quality assurance surveillance plan, perform any contractor inspections to validate the contractor’s performance or the $329.3 million paid, revalidate outdated and previously acquired Earned Value Management (EVM) systems from 1975 and 1978, or perform the necessary surveillance of the BAMS subcontractors’ EVM systems.

“These conditions occurred because DCMA officials did not complete their assigned duties or comply with EVM guidance,” the IG reports. “As a result, contract quality requirements may not be met and Navy and Office of the Secretary of Defense acquisition officials made decisions based on contractor EVM systems that may not be fully reliable.”

The IG recommends that the Defense Contract Audit Agency, DCMA and Naval Air Systems Command expedite the incurred cost audits, conduct an administrative review of BAMS contracting officials, create and maintain a complete and auditable government-furnished property listing, improve contractor surveillance and quality assurance, revalidate outdated or previously acquired EVM systems and perform surveillance of the EVM systems.