U.S. Navy/Military Sealift Command

The Navy depends upon a privately run sealift tanker fleet to transport jet fuel and other petroleum products to ports worldwide. A GAO review found understaffed and unqualified crews--some with felony records; deteriorating vessels plagued by everything from massive oil leaks to inoperable life boats; and poor oversight by the Military Sealift Command. The lack of maintenance, which harmed the ships' safety and mission readiness, ended up costing the federal government an additional $20 million. Weaknesses in the Command's contract administration included the absence of (1) a program manager, (2) a written designation of departmental responsibilities for the program, and (3) a Contracting Officer's Technical Representative to monitor the performance of the contractor operating the nine tankers from 1990 until 1993. GAO summarized this report in testimony before Congress; see: Military Sealift Command Contracts: Contract Abuses Resulted in Poorly Maintained Ships, Unqualified Crews, and Increased Cost to Government, by Richard C. Stiener, Director of the Office of Special Investigations, before the Subcommittee on Oversight of Government Management, Senate Committee on Governmental Affairs. GAO/T-OSI-95-3, Oct. 12, 1994 (eight pages).

GAO found that: (1) all of the nine tankers reviewed had numerous problems that could adversely affect the ships' crews, the environment, and the tanker-leasing program; (2) contractors do not have incentives to spend their funds on preventive maintenance and provide competent crew members because unspent maintenance and personnel funds in fixed-price contracts remain with the contractor; (3) the lack of ship maintenance oversight has compromised tanker safety and mission readiness, and resulted in a $20-million cost increase to MSC; (4) the lack of qualified and fully staffed tanker crews has contributed to oil spills and mission security and efficiency problems; (5) MSC has not enforced contract crewing requirements because it does not have a system to determine contractor compliance with crewing requirements; and (6) weaknesses in MSC contract administration practices include the absence of a single program manager, written program instructions, and a contracting officer's technical representative to monitor contractor performance.