Military Sealift Command

Weak Controls and Management of Contractor-Operated Ships Gao ID: NSIAD-96-41 December 12, 1995

The Military Sealift Command, whose fleet consists of a mix of government and privately owned vessels, lacks adequate controls to detect and deter abuses by contractor-operated ships. These shortcomings include inadequate verification of crew repairs, review of invoices, and supervision of overhaul work. The Military Sealift Command does not verify that it has received the goods or services it is paying for, in part because there is a disconnect between headquarters reviewers and field-level personnel, whose main concern is the operation but not the cost of the ships' repair. The Military Sealift Command also cannot be certain that contractual requirements are being met. It has no guidelines for systematically establishing personnel requirements, such as those involving citizenship and security. Neither does it regularly compare contractual requirements with contractors' performance in obtaining security clearances and trustworthiness evaluations for crew members. Finally, the Military Sealift Command lacks a formal system to identify and implement best practices to improve contractor performance and reduce costs.

GAO found that MSC: (1) does not require contractors to adequately document minor repairs, crew time, or subcontracted work; (2) does not adequately verify crew-performed repairs, review subcontractor invoices, or supervise overhaul work; (3) lacks sufficient internal controls to adequately manage its ship operation contracts; (4) has no guidelines for systematically establishing personnel requirements; (5) does not ensure that contractors comply with requirements for trustworthiness evaluations and security clearances; (6) has no formal system to identify and implement best practices that could improve contractor performance and reduce costs; and (7) has acknowledged its organizational problems and plans to designate program managers and establish formal lines of accountability.

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.

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