Weaknesses in Awarding Fees for the Broad Area Maritime Surveillance Contract
INSPECTOR GENERAL DEPT OF DEFENSE ARLINGTON VA
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What We Did This is first in a series of reports on the contract supporting the Broad Area Maritime Surveillance BAMS program. This report addresses award fees for the contract. The BAMS contract with Northrop Grumman has a value of 1.8 billion and is in the third year of a seven year contract. BAMS program officials did not have the proper controls in place to assess contractor performance and provide fair and reasonable award fee determinations for the contractor. What We Found BAMS program officials did not create a proper award fee plan, or justify 4.1 million in fees paid and the use of about 1 million in rollover fees. Further, the BAMS contracting officer did not justify the use of a cost-plus-award-fee contract. These conditions occurred because the BAMS contracting officer did not perform his duties, and program officials were unaware of cost-plus-award-fee contract criteria and did not follow the award fee plan or applicable award fee guidance. As a result, the BAMS contracting officer and fee determining official may have erroneously paid up to 4.1 million in fees to the contractor. By improving the award fee process, BAMS officials can mitigate the risk of erroneously paying as much as 87.3 million for future award fees.
- Administration and Management