Accession Number:

ADA470605

Title:

Defense Contract Management: DOD's Lack of Adherence to Key Contracting Principles on Iraq Oil Contract Put Government Interests at Risk

Descriptive Note:

Congressional rept.

Corporate Author:

GOVERNMENT ACCOUNTABILITY OFFICE WASHINGTON DC

Report Date:

2007-07-01

Pagination or Media Count:

42.0

Abstract:

The Department of Defenses DoD U.S. Army Corps of Engineers Corps awarded the 2.5 billion Restore Iraqi Oil RIO I contract to Kellogg Brown Root in March 2003 in an effort to reestablish Iraqs oil infrastructure. The contract was also used to ensure adequate fuel supplies inside Iraq. RIO I was a cost-plus-award-fee type contract that provided for payment of the contractors costs, a fixed fee determined at inception of the contract, and a potential award fee. The Defense Contract Audit Agency DCAA reviewed the 10 RIO I task orders and questioned 221 million in contractor costs. GAO was asked to determine the following 1 how DoD addressed DCAAs RIO I audit findings and what factors contributed to DoDs decision, and 2 the extent to which DoD paid award fees for RIO I and followed the planned process for making that decision. To accomplish this, GAO reviewed DoD and DCAA documents related to RIO I and interviewed Corps, DCAA, and other officials. GAO recommends that the Secretary of the Army, in contingency situations, ensure that an analysis of the feasibility of following a rigorous award fee process is conducted when using cost-plus-award-fee contracts. In written comments, DoD agreed with the recommendation.

Subject Categories:

  • Administration and Management
  • Mining Engineering
  • Civil Engineering

Distribution Statement:

APPROVED FOR PUBLIC RELEASE