The Navy Needs To Strengthen Facilities Construction and Maintenance Contracting Practices and Management Controls

GAO reported on its review of 61 naval facility maintenance contracts which were awarded by the Naval Facilities Engineering Command (NAVFAC) between fiscal years 1972 and 1982. GAO chose the contracts for this review because it believed that they showed significant opportunities for contract administration improvement.

GAO found a need for improvements when procurements are being planned and contracts are being formed. These included the need for better: (1) financial planning; (2) needs determinations; (3) plans and specifications reviews; and (4) preaward contract reviews. Furthermore, GAO found that the following improvements were needed in contract administration: (1) contract enforcement and project acceptance; (2) pricing adjustments; (3) inspection of contractor performance; (4) documentation; and (5) payment procedures. GAO found several factors that contributed to poor procurement practices, including limited organizational oversight and infrequent and cursory examinations by the contracts procedures review boards. Both GAO and the Navy found that problems tended to be repeated rather than corrected because NAVFAC did not: (1) determine whether prior audit findings were isolated examples or symptomatic of a commandwide condition; or (2) make more than a minimal effort to communicate the problems to other units. GAO also found that yearend spending and an increasing volume of maintenance contracts contributed to poor procurement practices.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: John Landicho Team: General Accounting Office: National Security and International Affairs Division Phone: (202) 275-6504