Defense Management
Issues in Contracting for Lodging and Temporary Office Space at MacDill Air Force Base Gao ID: GAO-04-296 January 27, 2004Since the September 11, 2001, attacks and the beginning of Operation Iraqi Freedom, thousands of National Guard and Reserve members have been activated and mobilized to military installations across the country. Some installations, like MacDill Air Force Base in Tampa, Florida, where more than 3,000 reservists have been mobilized, have had to arrange for off-base lodging in local hotels and apartment buildings. In addition, MacDill, which serves as U.S. Central Command headquarters, has had to set up temporary office space for staffs of coalition partner nations. Public concerns have been raised about these arrangements. GAO was asked to review (1) the extent to which MacDill used cost-effective measures to provide off-base lodging for reservists and (2) whether a contract providing office space for coalition partners was adequately managed to control costs.
During recent mobilizations, MacDill contracting officials used two practices that effectively reduced the overall cost of off-base lodging for reservists on extended temporary duty to below that allowed by the General Services Administration's (GSA) lodging rate. Officials used a simplified acquisition procedure--Blanket Purchase Agreements (BPA)--to obtain prices that were at or below the maximum allowable GSA rate of $93 per day for Tampa, Florida. MacDill officials obtained daily lodging rates of $71 to $93 per unit for two-bedroom apartments. The BPAs also provided greater flexibility in vacating units without incurring penalties. In addition, MacDill officials reduced per person lodging costs further by implementing a roomsharing policy for personnel at certain ranks. When two reservists shared a two-bedroom unit (about 600 reservists), the cost dropped by up to 55 percent of the daily GSA rate. Overall, during fiscal year 2003, MacDill reported that it saved about $12.6 million using these practices. Our review of local rental costs showed that BPA prices were similar to those paid by corporate entities for comparable lodging units, but were lower on a perperson basis because of lodging sharing arrangements. From project initiation to settlement of the contractor's claim, the Coalition Village II contract suffered from questionable acceptance of the winning offer, poor record keeping, undocumented contracting decisions, and changes to contract requirements that were not properly coordinated with contracting officials. Although MacDill officials determined that the winning offer was received on time, only the first page of the proposal was received by the established deadline. Contract costs for the project, which was implemented under tight time constraints, increased by more than $367,000 over the winning offer of $142,755. However, due to the absence of proper documentation in the contract files, we were unable to fully assess the basis for additional costs paid to the contractor or the extent to which costs might have been avoided or minimized.
RecommendationsOur 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: Team: Phone:GAO-04-296, Defense Management: Issues in Contracting for Lodging and Temporary Office Space at MacDill Air Force Base
This is the accessible text file for GAO report number GAO-04-296
entitled 'Defense Management: Issues in Contracting for Lodging and
Temporary Office Space at MacDill Air Force Base' which was released on
January 27, 2004.
This text file was formatted by the U.S. General Accounting Office
(GAO) to be accessible to users with visual impairments, as part of a
longer term project to improve GAO products' accessibility. Every
attempt has been made to maintain the structural and data integrity of
the original printed product. Accessibility features, such as text
descriptions of tables, consecutively numbered footnotes placed at the
end of the file, and the text of agency comment letters, are provided
but may not exactly duplicate the presentation or format of the printed
version. The portable document format (PDF) file is an exact electronic
replica of the printed version. We welcome your feedback. Please E-mail
your comments regarding the contents or accessibility features of this
document to Webmaster@gao.gov.
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. Because this work
may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this
material separately.
Report to Congressional Requesters:
United States General Accounting Office:
GAO:
January 2004:
Defense Management:
Issues in Contracting for Lodging and Temporary Office Space at MacDill
Air Force Base:
GAO-04-296:
GAO Highlights:
Highlights of GAO-04-296, a report to Congressional requesters
Why GAO Did This Study:
Since the September 11, 2001, attacks and the beginning of Operation
Iraqi Freedom, thousands of National Guard and Reserve members have
been activated and mobilized to military installations across the
country. Some installations, like MacDill Air Force Base in Tampa,
Florida, where more than 3,000 reservists have been mobilized, have
had to arrange for off-base lodging in local hotels and apartment
buildings. In addition, MacDill, which serves as U.S. Central Command
headquarters, has had to set up temporary office space for staffs of
coalition partner nations. Public concerns have been raised about
these arrangements. GAO was asked to review (1) the extent to which
MacDill used cost-effective measures to provide off-base lodging for
reservists and (2) whether a contract providing office space for
coalition partners was adequately managed to control costs.
What GAO Found:
During recent mobilizations, MacDill contracting officials used two
practices that effectively reduced the overall cost of off-base
lodging for reservists on extended temporary duty to below that
allowed by the General Services Administration‘s (GSA) lodging rate.
Officials used a simplified acquisition procedure”Blanket Purchase
Agreements (BPA)”to obtain prices that were at or below the maximum
allowable GSA rate of $93 per day for Tampa, Florida. MacDill
officials obtained daily lodging rates of $71 to $93 per unit for two-
bedroom apartments. The BPAs also provided greater flexibility in
vacating units without incurring penalties. In addition, MacDill
officials reduced per person lodging costs further by implementing a
room-sharing policy for personnel at certain ranks. When two
reservists shared a two-bedroom unit (about 600 reservists), the cost
dropped by up to 55 percent of the daily GSA rate. Overall, during
fiscal year 2003, MacDill reported that it saved about $12.6 million
using these practices. Our review of local rental costs showed that
BPA prices were similar to those paid by corporate entities for
comparable lodging units, but were lower on a per-person basis because
of lodging sharing arrangements.
Comparison of Prices for Furnished Two-Bedroom, Corporate, and
Military (MacDill) Apartments in Tampa, Florida
[See PDF for image]
Source: GAO analyses.
[a] Amenities include kitchenware, linens, vacuum cleaners, microwave
ovens, and cable television service.
[End of figure]
From project initiation to settlement of the contractor‘s claim, the
Coalition Village II contract suffered from questionable acceptance of
the winning offer, poor record keeping, undocumented contracting
decisions, and changes to contract requirements that were not properly
coordinated with contracting officials. Although MacDill officials
determined that the winning offer was received on time, only the first
page of the proposal was received by the established deadline.
Contract costs for the project, which was implemented under tight time
constraints, increased by more than $367,000 over the winning offer of
$142,755. However, due to the absence of proper documentation in the
contract files, we were unable to fully assess the basis for
additional costs paid to the contractor or the extent to which costs
might have been avoided or minimized.
What GAO Recommends:
GAO is recommending that the Secretary of Defense direct the Secretary
of the Air Force to direct the Commander of the Air Mobility Command
to emphasize to MacDill personnel the importance of adhering to sound
contract management procedures. In commenting on a draft of this
report, DOD partially concurred with GAO‘s recommendation and
identified corrective actions taken or planned.
www.gao.gov/cgi-bin/getrpt?GAO-04-296.
To view the full product, including the scope and methodology, click
on the link above. For more information, contact Barry W. Holman at
(202) 512-8412 or holmanb@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
MacDill Air Force Base Implemented Procedures to Reduce Off-Base
Lodging Costs for Reservists:
Weaknesses in Contract Management Hamper Efforts to Assess Contract
Costs:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Comments from the Department of Defense:
Tables:
Table 1: Differences between BPA Prices and GSA Rates for Off-Base
Apartment Units in Tampa, Florida:
Table 2: Comparison of Prices for Two-Bedroom Furnished, Corporate, and
Military (MacDill) Apartments in Tampa, Florida:
Table 3: Contracted Prices for Bedrooms Used to House Reservists in
Fayetteville, North Carolina, Area:
Table 4: Payments and Claims for Coalition Village II Contract:
Abbreviations:
BPA: Blanket Purchase Agreement:
CENTCOM: U.S. Central Command:
DOD: Department of Defense:
FAR: Federal Acquisition Regulation:
GSA: General Services Administration:
JFTR: Joint Federal Travel Regulations
SOCOM: U.S. Special Operations Command:
United States General Accounting Office:
Washington, DC 20548:
January 27, 2004:
The Honorable Bill Nelson:
Ranking Minority Member:
Subcommittee on Strategic Forces:
Committee on Armed Services:
United States Senate:
The Honorable Jim Davis:
House of Representatives:
Since the September 11, 2001, terrorist attacks, more than 3,000
active-duty, reservists[Footnote 1] and National Guard personnel have
been mobilized to MacDill Air Force Base (MacDill) in Tampa, Florida,
for periods of up to 2 years. Because of this large influx of military
personnel, MacDill, like some other military installations, has had to
arrange for off-base lodging in commercially operated apartment
buildings and hotels for many reservists. In addition, MacDill, which
is headquarters to both the U. S. Central Command (CENTCOM) and the U.
S. Special Operations Command (SOCOM),[Footnote 2] had to provide
temporary office space for foreign military personnel who serve as
liaison officers from coalition partner nations fighting with the
United States in Afghanistan and Iraq. MacDill leased dozens of
trailers to provide office space in two complexes called Coalition
Village I and Coalition Village II.
In the summer of 2003, public concerns were raised in the Tampa area
that reservists assigned to MacDill could be paying apartment rents
that were substantially higher than market prices and that MacDill
officials had not followed proper contracting procedures in obtaining
office trailers for Coalition Village II.
In your initial request, you asked us to conduct a review of the
Department of Defense's (DOD) practices for providing lodging for
military personnel on extended temporary duty. Subsequently, after
discussions with your offices, we expanded the request to include
MacDill's contracting procedures in leasing trailers for Coalition
Village II. Our objectives were to (1) determine the extent to which
MacDill Air Force Base used cost-effective measures to provide off-base
lodging for reservists on extended temporary duty and whether more
cost-effective procedures could be identified at other military
installations and (2) assess whether the contract to provide office
space for coalition partners supporting the war against Iraq was
adequately managed to avoid significant escalation of costs.
To address these objectives, we visited MacDill Air Force Base in
Tampa, Florida, and Fort Bragg Army base and Pope Air Force Base in
Fayetteville, North Carolina. We also reviewed information from five
other Army and Air Force installations[Footnote 3] to determine if they
acquired off-base lodging for reservists on extended temporary duty
and, if so, what practices they used to obtain such services. In
addition, we obtained data from Navy and Marine Corps headquarters
officials about their practices for housing reservists. We also
interviewed contracting officials at MacDill and reviewed contract
files and records related to Coalition Village II. We conducted our
review from July 2003 through December 2003 in accordance with
generally accepted government auditing standards. A more detailed
description of our scope and methodology is provided in appendix I.
Results in Brief:
During recent mobilizations, officials at MacDill Air Force Base in
Tampa used two practices that effectively reduced the overall cost of
off-base lodging for some 1,700 personnel on short-term and extended
temporary duty[Footnote 4] to below the maximum amount allowed under
the General Services Administration's (GSA) standard lodging
rate.[Footnote 5] MacDill's contracting officials used Blanket Purchase
Agreements (BPA)[Footnote 6] with local hotels and apartments to obtain
prices that were at or below the maximum allowable GSA rate of $93 per
day for Tampa. MacDill officials obtained daily lodging rates of $71 to
$93 per unit for two-bedroom apartments and used installation-specific
guidance to lower per-person costs further by requiring personnel at
specified ranks to share lodging. When two reservists shared a two-
bedroom unit (about 600 reservists), the cost dropped by up to 55
percent of the daily GSA rate. The BPAs also provided greater
flexibility in vacating units without incurring penalties. Overall,
MacDill officials estimate that they saved about $12.6 million in
lodging costs in fiscal year 2003, of which about $7.6 million could be
attributed to the use of apartments. In reviewing local rental costs,
we found that on a unit basis, the prices MacDill paid under its BPAs
were similar to those paid by corporate entities for comparable lodging
units, but were lower on a per-person basis due to lodging sharing
arrangements. Although we found some similarities and differences at
other installations that we identified as providing off-base lodging
for military personnel (e.g., Fort Bragg and Pope Air Force Base), our
review did not find any one approach that stood out as being
significantly more cost-effective than other approaches where shared
lodging was required. Other alternatives for acquiring off-base
lodging, such as long-term government leases for blocks of properties,
would need to consider added overhead cost implications associated with
government management of such properties.
From project initiation to settlement of the contractor's claim, the
management of Coalition Village II suffered from questionable
acceptance of the winning offer, poor record keeping, undocumented
decisions regarding changes to the contract, and changes to contract
requirements that were not properly coordinated with contracting
officials. Although MacDill contracting officials determined that the
winning offer of $142,755 was received on time, only the first page of
the proposal was received by the deadline established for receipt of
proposals. The project was implemented under tight time constraints,
and contract costs increased by over $367,000 over the winning offer.
However, we were not able to determine if the government paid for costs
that otherwise might have been avoided or disallowed because of the
absence of proper documentation in contract files. For example,
although changes to the contract were made during twice-weekly meetings
of representatives of the contractor, the customer (CENTCOM), technical
advisors (civil engineers), and contracting staff, no official minutes
of the meetings were maintained to document the agreements reached, who
authorized the changes, or the proposed cost of the changes. Because of
these weaknesses, we were unable to fully assess the basis for
additional costs paid to the contractor for Coalition Village II or the
extent to which costs might have been avoided or otherwise minimized
through more effective contract management.
We are recommending that the Secretary of Defense direct the Secretary
of the Air Force to direct the Commander of the Air Mobility Command to
emphasize to MacDill personnel the importance of adhering to sound
contract management procedures that exist to protect the interests of
the government. Communications should ensure that contract files are
properly maintained and that only authorized personnel initiate changes
to contract requirements, even during time-sensitive procurements.
In commenting on a draft of this report, DOD did not disagree with our
findings but expressed the view that our recommendation was not needed
due to corrective actions that had been planned or taken by the 6TH
Contracting Squadron at MacDill Air Force Base. Because all planned
corrective actions have not been completed, we continue to believe that
our recommendation has merit.
Background:
On September 14, 2001, President Bush proclaimed a national emergency
in the wake of the September 11, 2001, terrorist attacks. In his
proclamation,[Footnote 7] he said he would use various sections of
Title 10 of the United States Code to mobilize additional forces.
Section 12302, in particular, authorizes the President to call up
National Guard and Reserve members to active duty for up to 2 years.
Since September 2001, DOD has activated about 300,000 of the 1.2
million National Guard and Reserve personnel. As of October 8, 2003,
about 166,000 Reserve and National Guard members remained on active
duty. Some of the reservists were assigned to domestic military
installations to provide, for example, base security.
When reserve members are mobilized to serve on active duty at military
installations in the United States, the installations where they serve
arrange lodging for them. If lodging is not available on base,
installations may provide activated reservists with Certificates of
Non-Availability enabling them to acquire off-base lodging in the local
area at prevailing GSA rates. Because of the size and length of the
current mobilization, some installations, like MacDill Air Force Base,
made arrangements with local hotels and apartment vendors to provide
reservists with off-base lodging. The 6TH Contracting Squadron at
MacDill was responsible for developing the BPAs, and the 6TH Services
Squadron/Military Lodging was in charge of assigning reservists to
available lodging. (NOTE: I believe the 6th Contracting Squadron
belongs to the Air Mobility Wing, not to MacDill).
Because mobilized National Guard and Reserve personnel are considered
to be in temporary duty status, their per-diem, travel, and
transportation allowances are governed by DOD's Joint Federal Travel
Regulations. A per-diem allowance is designed to offset the cost of
lodging, meals, and incidental expenses incurred by reservists while
they are on travel status or on temporary duty away from their
permanent duty station. DOD's regulations state that within the
continental United States, travelers are entitled to the per diem set
by GSA for a particular location. Specifically, if a contracting
officer contracts for rooms and/or meals for members traveling on
temporary duty, the total daily amount paid by the government for the
member's lodging, meals, and incidental expenses may not exceed the
applicable GSA per-diem rate.
In December 2002, CENTCOM established plans for providing working
quarters at MacDill for coalition partners supporting Operation Iraqi
Freedom and titled the project Coalition Village II. The project was
modeled after similar working quarters established at MacDill for
coalition partners supporting the war on terrorism, Coalition Village
I. Representatives from CENTCOM and Civil Engineering[Footnote 8]
supported the 6TH Contracting Squadron, which provides contracting
support to MacDill's base tenant units, in its efforts to establish
Coalition Village II. The 6TH Contracting Squadron is a part of the 6TH
Air Mobility Wing, which reports to the Air Mobility Command. The Air
Mobility Command is a component of the United States Transportation
Command.
During the summer of 2003, public concerns were raised in the Tampa
area about the practices used at MacDill to acquire off-base lodging
for reservists and temporary office space for coalition partners in the
war against Iraq. Specifically, these concerns questioned whether
MacDill officials paid above-market rates for apartments; used
competition in awarding BPAs for off-base lodging; and advertised for
bids for lodging services. Questions were also raised about whether the
contract providing office space for coalition partners supporting
military operations in Iraq was adequately managed to avoid excessive
costs.
MacDill Air Force Base Implemented Procedures to Reduce Off-Base
Lodging Costs for Reservists:
In order to reduce the cost of off-base lodging for 1,700 military
personnel and reservists on short-term and long-term temporary duty,
MacDill Air Force Base officials instituted two procedures. MacDill
used BPAs as a flexible procurement method to obtain lodging at prices
that were at or below the maximum allowable GSA rate of $93 per day for
Tampa. MacDill also implemented installation guidance that required
reservists at certain ranks to share two-bedroom apartment units that
further reduced costs on a per-person basis. MacDill officials estimate
that these procedures saved about $12.6 million in off-base lodging
costs in fiscal year 2003. Our review showed that the prices paid by
MacDill were similar to those paid by corporate entities in Tampa for
comparable lodging units, but were lower on a per-person basis due to
lodging sharing arrangements. Our work showed that practices used at
other military installations to provide off-base lodging varied but did
not reveal any one approach that resulted in more significant cost
savings over other approaches, where shared lodging was required.
Alternative approaches for obtaining off-base lodging, such as
obtaining long-term leases for blocks of properties, could be
considered but would require that various factors be weighed in
considering their use.
MacDill's Use of BPAs and Shared Housing Achieved Cost Savings and
Complied with Federal Regulations:
MacDill Air Force Base contracting officials used BPAs to acquire off-
base lodging to handle the large influx of reservists who were
mobilized following the September 11, 2001, terrorist attacks.
According to the Federal Acquisition Regulation (FAR), a BPA is a
simplified method of filling anticipated, repetitive needs for supplies
or services by establishing "charge accounts" with qualified sources of
supply.[Footnote 9] Air Force officials had used this method to acquire
off-base lodging for several years.[Footnote 10] We have no basis to
conclude that the Air Force's use of BPAs was inconsistent with the
FAR.
MacDill contracting officials told us that these agreements provide
them with greater flexibility than contracts would in arranging
temporary lodging. BPAs permit either party to walk away from the
agreement without a penalty. The agreements allow federal travelers to
use their government-issued travel cards to obtain lodging at hotels
and apartments at reduced prices and favorable contract terms. The
costs for reservists who do not have government-issued travel cards are
billed to MacDill under a purchase order.[Footnote 11]
MacDill officials indicated that they go through an established process
to set up an agreement with an apartment vendor or hotel. The process
begins when either MacDill contacts a lodging facility or a facility
contacts MacDill. As part of this initial contact, MacDill schedules an
inspection to ensure that the facility meets its cleanliness, safety,
health, and fire standards. If the facility passes the inspection,
MacDill sets up an agreement with the facility and lists the facility
as a source of lodging for reservists at an agreed-upon daily rate.
MacDill officials told us they review BPAs annually to ensure that
their needs are still being met and to determine if the facility still
meets standards.
MacDill's Practices Achieved Cost Savings:
At the time of our review, MacDill had agreements with 35 vendors (29
hotels and 6 apartment providers) and was housing an average of about
1,700 personnel a day in off-base lodging facilities. Of these, about
900 were in hotels and 800 were in apartments. In September 2003, the
prices that MacDill had obtained for hotel rooms ranged from $44 to $93
per person per day, and for apartment units from $55 to $93 per person
per day (see table 1). The agreements with apartment vendors do not
require security deposits and also allow reservists to leave earlier
than their scheduled departure dates without paying penalties.
Apartment rental officials told us that, in contrast, other apartment
renters must give a 30-day notice before leaving or incur penalties,
such as the loss of 1 month's rent, forfeiture of the security deposit,
or being held liable for the cost of the remaining term of the lease.
The apartments acquired by MacDill are fully furnished. The daily rate
for the apartment covers the cost of utilities, amenities (kitchenware,
linens, vacuum cleaners, microwave ovens, and cable television
service), and weekly maid service. Apartment vendors also do not charge
reservists a 12 percent Florida tax for leases of less than 6 months,
which private renters typically pay.
Table 1: Differences between BPA Prices and GSA Rates for Off-Base
Apartment Units in Tampa, Florida:
Unit type: One-bedroom;
BPA price range per person per month: $1,650- $2,790;
BPA price range per person per day: $55-93;
Difference between BPA price and GSA rate ($93): $38-0;
Average percentage difference[A]: 23.4.
Unit type: Two-bedroom[B];
BPA price range per person per month: $1,065-$1,395;
BPA price range per person per day: $35.50-$46.50;
Difference between BPA price and GSA rate ($93): $57.50-$46.50;
Average percentage difference[A]: 55.4.
Source: GAO analysis of MacDill data.
[A] Based on our analysis of all BPAs.
[B] Based on two persons sharing a two-bedroom unit, with one person in
each bedroom.
[End of table]
In addition to using BPAs to procure off-base lodging for reservists,
MacDill used installation-specific guidance on sharing lodging to
further reduce off-base lodging costs in two-bedroom apartments. The
guidance requires officers at or below the rank of Lieutenant Colonel
and enlisted personnel at or below the rank of Chief Master Sergeant or
Sergeant Major to share two-bedroom apartments. This practice allowed
MacDill to achieve a cost savings of up to 55 percent of the GSA rate
(table 1). For example, if two reservists were sharing a two-bedroom
apartment that costs $93 per day, each would pay half of that amount,
significantly less than the GSA daily rate of $93 per person. Of a
total of 800 reservists housed in apartments, about 600 shared two-
bedroom units.
MacDill officials responsible for lodging operations told us that they
try to place military personnel[Footnote 12] who are on temporary duty
for 45 days or longer in apartments. This allows personnel to have
access to cooking facilities, as well as more room than they would have
in a hotel room. MacDill officials indicated that they consider three
criteria in placing personnel in apartments: (1) whether or not
personnel have access to transportation to get to the base, (2) whether
they are compatible in terms of rank and gender to fill a vacancy in a
two-bedroom apartment, and (3) if these two criteria are met, officials
randomly assign personnel to a unit. However, the officials also must
consider such factors as security or the ability of a particular
apartment complex to accommodate an entire reserve unit.
Based on data that we received from MacDill lodging officials, the base
spent about $23.3 million for 386,466 bed-nights in off-base lodging,
including both short-and long-term stays, in fiscal year 2003. However,
had MacDill paid the maximum allowable GSA rate of $93 per day for the
same number of days, the costs would have amounted to $35.9 million. As
a result, the installation reported that it saved an estimated $12.6
million for off-base lodging costs by using blanket purchase agreements
and requiring apartment sharing. Of the $23.3 million spent in fiscal
year 2003, MacDill paid about $13.9 million for apartment rentals and
about $9.3 million for hotels. The estimated savings attributable to
apartments is about $7.6 million and about $5 million in savings is
attributable to hotels.
MacDill's Lodging Costs Are Similar to Corporate Lodging Prices on a
Unit Basis but Less on a Per-Person Basis:
In our limited review of local rental prices in the Tampa area, we
found that MacDill's lodging costs were comparable with those paid by
corporate entities for the same types of units but were higher than
prices for typical furnished apartments cited in media reports. These
reports compared MacDill's apartment costs with the cost of furnished
apartments that ranged, for example, from $1820 to $1880 ($60.66 to
$62.66 per day) for a two-bedroom unit with maid service and utilities.
In a search of Internet sites listing housing prices in the Tampa area,
we found that individually furnished two-bedroom apartments ranged from
$623 to $1655 ($20.77 to $55.17 per day)--but typically would not
include the full range of services obtained by MacDill.
However, according to apartment brokers that we contacted in the Tampa
area who provide services to corporate entities and private sector
renters as well as MacDill, corporate-style facilities may be the most
appropriate to compare to MacDill's costs. Corporate apartments offer
essentially the same provisions as the apartments that MacDill obtains:
they are fully furnished and the prices include amenities (i.e.,
kitchenware, linens, microwave ovens, vacuum cleaners, and cable
television service), maid service, and utilities. The main difference
is that corporate apartments generally require a minimum 3-month lease
and a 30-day notice to break the lease while MacDill's BPA arrangements
do not require a minimum length of stay or have any penalties if
reservists leave earlier than scheduled.
We found that prices paid per unit by MacDill are comparable to those
paid by corporate entities, but MacDill's prices are generally much
lower on a per-person basis due to lodging sharing arrangements.
According to one apartment broker we interviewed, the price of a
corporate apartment ranged from $46.50 to $114.60 per day. The price
that MacDill pays for a similar apartment at the same complex ranges
from $71 to $93 per day. Another apartment broker we contacted told us
that the corporate rates for his apartments ranged from $76 to $100 per
day, depending on the location of the apartment. The price that MacDill
pays for a similar unit ranges from $71 to $93 per day, with the actual
cost per person in both examples being lower depending on the number of
occupants.
Table 2: Comparison of Prices for Furnished Two-Bedroom, Corporate, and
Military (MacDill) Apartments in Tampa, Florida:
Type: Furnished apartments;
Cost per day: $20.77-$55.17;
Cost per month: $623-$1,655;
Extras beyond furniture: None.
Type: Corporate apartments;
Cost per day: $46.50-$114.60;
Cost per month: $1,395-$3,438;
Extras beyond furniture: Amenities,[A] utilities, maid service.
Type: MacDill apartments via BPAs 1 occupant;
Cost per day: $71-$93;
Cost per month: $2,130-$2,790;
Extras beyond furniture: Amenities, utilities, maid service.
Type: MacDill apartments via BPAs 2 occupants;
Cost per day: Per person $35.50-$46.50;
Cost per month: Per person $1,065-$1,395;
Extras beyond furniture: Amenities, utilities, maid service.
Source: GAO analyses.
[A] Amenities include kitchenware, linens, vacuum cleaners, microwave
ovens, and cable television service.
[End of table]
Public concerns were raised about the absence of advertising and
competition in creating BPAs to provide off-base lodging, suggesting
that increased competition and advertising would help control costs.
However, because a BPA is not a contract,[Footnote 13] competition and
advertising were not required to establish these BPAs.[Footnote 14] In
any event, while MacDill did not hold a competition or advertise for
bids, it did establish BPAs with multiple vendors. According to MacDill
officials, contracts over $25,000 require 15 days to advertise, 30 days
for the vendor to respond, and 15 days to negotiate. MacDill officials
told us that they used BPAs because they could be arranged in a shorter
time frame than solicited contracts. They stated that they were under
extreme time pressures to acquire immediate housing in February 2003
when 325 reservists arrived at MacDill to provide force protection
services.
Approaches Used at Some Other Military Installations Have Similar Cost
Benefits:
Other DOD installations that we contacted during our review either
provided lodging for reservists on base or used similar practices to
reduce off-base lodging costs. In the few selected instances where we
identified the use of off-base lodging, housing officials used a
variety of procurement methods (BPAs, contracts, and purchase orders)
to obtain prices at or below the allowable GSA lodging rate for those
locations. In addition, they required reservists to share hotel rooms
and apartment units. However, our review did not identify any one
approach that stood out as offering more significant cost benefits than
other approaches where shared lodging was required.
Army Installations Use Contracts to Obtain Off-Base Lodging:
In general, the Army installations that we surveyed used purchase
orders or requirements contracts[Footnote 15] to procure off-base
lodging for temporary duty reservists. At the time of our review, Fort
Bragg housed about 2,400 reservists off base. Fort Bragg had awarded
contracts to 25 vendors (20 hotels and 5 apartment providers) to supply
lodging for reservists and had spent an estimated $35 million between
October 2002 and November 2003 for this lodging. The contracted lodging
rates were at or below the maximum allowable GSA lodging rate of $63
per day for Fayetteville. Fort Bragg had also implemented an
installation policy requiring reservists at the rank of sergeant and
below to share hotel rooms as well as apartment bedrooms. This sharing
resulted in average savings of up to 56 percent in relation to the GSA
lodging rate (see table 3)--savings similar to those realized at
MacDill.
Although Fort Bragg used purchase orders immediately after September
11, 2001, the base switched to contracts to obtain off-base lodging
soon thereafter to streamline the process. When they used purchase
orders, for example, contracting officials had to issue a modification
each time a reserve unit increased or decreased its numbers or changed
its length of stay. Two full-time contracting specialists and one part-
time contracting officer were needed to handle the paperwork. According
to Fort Bragg officials, the change to contracts made the process more
economical because contracts require less paperwork and less manpower
to administer.
Unlike MacDill's BPAs, however, Fort Bragg's contracts were based on
the number of bedrooms being rented, irrespective of whether they were
in a hotel or an apartment. Bedrooms were defined as single-or double-
occupancy.[Footnote 16] Fort Bragg's contracted rates were below the
GSA lodging rate of $63 per day and ranged from $32 to $60 per day for
single-occupancy rooms and from $20 to $30 per day for double-occupancy
rooms (see table 3). Thus, at Fort Bragg, two reservists sharing a two-
bedroom apartment with single-occupancy rooms could cost $60 per room
or up to $120 per day. However, if the bedrooms were double-occupancy,
up to four reservists could be housed for $120 per day. The contract
terms required a 72-hour to 2-week notice to vacate the lodging unit
earlier than scheduled.
Table 3: Contracted Prices for Bedrooms Used to House Reservists in
Fayetteville, North Carolina, Area:
Unit type: Single room[B];
Contracted price range per person per day: $32-$60;
Difference between contracted price and GSA rate ($63): $31-$3;
Average percentage savings[A]: 20.8.
Unit type: Double room[C];
Contracted price range per person per day: $20-$30;
Difference between contracted price and GSA rate ($63): $43-$33;
Average percentage savings[A]: 55.7.
Source: GAO analysis of Fort Bragg data.
[A] Based on our analysis of all BPAs.
[B] Based on one person in a room.
[C] Based on two persons in a room; price shown is half the daily rate
of $40-$60 per day. NOTE: THE NUMBERS IN THE THIRD COLUMN NEED TO BE
CONSISTENT. EITHER "$31 - 3" AND "$43 - 33" OR "$3 - 31" AND "$33 -
43":
[End of table]
Fort Bragg's sharing policy required enlisted personnel at the rank of
sergeant and below to share rooms. When a bedroom was to be shared,
Fort Bragg required that each reservist have sufficient space and be
provided with a dresser or chest of drawers in the room.
In contrast to Fort Bragg, Army officials at Fort Hood, Texas, and Fort
Dix, New Jersey, told us that they were able to accommodate most of
their temporary duty reservists on base. In the few cases when off-site
lodging had to be procured, the installation's contracting personnel
used purchase orders to obtain the needed facilities. Officials told us
that, in general, these off-base stays were for 3 to 4 days at Fort
Hood and a maximum of 60 days at Fort Dix. At both bases, enlisted
personnel below the rank of Sergeant First Class were required to share
hotel rooms.
Other Air Force Installations House Most Reservists on Base:
Unlike MacDill Air Force Base, reservists on long-term temporary duty
at Pope, Dover, and McGuire Air Force bases were accommodated on site.
According to an Air Force official, most reservists did not have
transportation and, thus, were given priority for on-site lodging. As a
result, some non-reserve service members had to be placed in off-base
lodging. Like MacDill, these Air Force bases used BPAs to procure their
off-site lodging needs, which were generally for short periods of time.
At the time of our review, Pope Air Force Base had 12 BPAs with hotel
vendors. Pope officials said that they do not use apartments because
most stays off-base are less than a week, and personnel are not
required to share rooms. We were told that, in general, service members
or reservists who are assigned to Pope for extended duty are housed on
base. Under the terms of the BPAs, personnel accommodated in hotels may
vacate the hotel at any time without a penalty. The first priority in
selecting a hotel for off-base lodging is the distance from the base to
the hotel because aircrews sometimes have to leave on short notice.
According to a Pope official, in general about 300 airmen are housed in
off-base lodging facilities each month. Prices for a one-bedroom hotel
room for Pope ranged from $48 to $63, for savings of up to $15 per day
compared with the GSA lodging rate of $63 per day for Fayetteville.
According to a lodging official, Pope spent an estimated $1.825 million
on off-base lodging in fiscal year 2003.
Most Navy and Marine Corps Reservists Receive On-site Lodging:
Our analysis of data provided by Navy officials indicates that the Navy
spent a total of $14.8 million in fiscal year 2003 on contracted and
leased lodging facilities. However, a Navy official told us that, in
most cases, the temporary-duty reservists were accommodated in on-site
lodging. The major exceptions are reservists mobilized in the
Washington, D.C., area. These reservists are provided with Certificates
of Non-Availability, which enable them to acquire lodging in local area
hotels, and they are reimbursed for their lodging costs up to the
maximum GSA rate allowed for the Washington, D.C., area, which
currently is $150 per day. About $11.3 million of the $14.8 million the
Navy spent on contracted and leased lodging facilities was used to
acquire lodging in local markets with Certificates of Non-Availability.
Marine Corps reservists were accommodated in existing on-site
facilities.
Alternative Off-Base Lodging Arrangements Could Be Explored:
The extent and length of the current mobilization has created some
long-term, off-base lodging requirements and associated costs that
appear high when considered on a monthly basis and when compared with
private sector prices that typically, however, offer fewer amenities.
Whether other alternatives for obtaining off-base lodging should be
considered or whether they would be cost effective is unclear. Much
would depend on individual circumstances, local market conditions and
costs, the number of personnel requiring lodging, and the length of the
lodging requirement.
One alternative approach that could be explored might be to obtain
long-term leases for blocks of properties to provide lodging for
reservists on extended temporary duty during times of high
mobilizations. However, MacDill lodging officials told us that this
approach would require them to obtain furnishings, utility hook-ups,
and amenities (i.e., vacuum cleaners, kitchenware, linens) as well as
staffs to manage property inventories and reservation systems.
Government management of such inventories could be viewed as counter to
recent defense initiatives to rely on the private sector for the
provision of commercially available services. MacDill lodging officials
also pointed out that the need for long-term lodging could vanish as
quickly as it materialized, leaving them committed to long-term leases,
property inventories, and the attendant costs. Under the approach
MacDill currently uses, apartment units and hotels assume these risks.
This approach would also need to consider potential force protection
issues that might be of concern with large concentrations of personnel
lodged together off base.
Weaknesses in Contract Management Hamper Efforts to Assess Contract
Costs:
From project initiation to settlement of the contractor's claim, the
management of Coalition Village II suffered from questionable
acceptance of the winning offer, poor record keeping, undocumented
decisions regarding changes to the contract, and changes to contract
requirements that were not properly coordinated with contracting
officials. As a result of these weaknesses, we were unable to assess
the basis for significant cost increases in the contract. These
weaknesses also made it difficult for us to determine whether the
government paid for costs that otherwise might have been avoided or
disallowed.
Challenges Associated with Contract Solicitation, Award, and Pricing
for Coalition Village II:
Coalition Village II was implemented under tight time constraints that
presented unique challenges for the 6TH Contracting Squadron in the
solicitation, award, and pricing of the contract. MacDill contracting
officials reference a March 21, 2003, memorandum from the Air Force's
Deputy Assistant Secretary (Contracting)/Assistant Secretary
(Acquisition) whose subject was, "Rapid, Agile Contracting Support
During Operation Iraqi Freedom." The memorandum encourages, "—every
contracting professional to lean way forward, proactively plan for
known and anticipated customer needs, and put the necessary contract
vehicles and supporting documents in place as soon as possible." The
memorandum further calls for Air Force contracting officers to be a
"community of innovative, even daring risk takers.":
CENTCOM initiated its urgent request for temporary office space to the
6TH Contracting Squadron in February 2003. It requested 14 temporary
office trailers to house additional coalition partners that were
supporting the United States in Operation Iraqi Freedom. CENTCOM said
it needed the trailers in 30 days, and the 6TH Contracting Squadron
used a provision of the FAR, entitled "Unusual and Compelling
Urgency,"[Footnote 17] to meet the tight timeline. Under this
provision, the government is allowed to limit the number of sources and
approve written justifications after the contract is awarded within a
reasonable time, if preparation and approval prior to the award would
unreasonably delay the acquisition. Consistent with the authority for
an urgent and compelling acquisition, MacDill's contracting office
developed a list of three potential contractors. According to a MacDill
contracting official, the office contacted only those contractors who
had proven records of timely and satisfactory performance for similar
work at the base. MacDill issued the solicitation for leasing the
trailers on February 14, 2003, and established 12:00 p.m. Eastern
Standard Time on February 18, 2003, as the deadline for receipt of
proposals.
One contractor, the Warrior Group, did not submit a proposal in time to
meet the deadline, and its proposal was not considered. Two other
contractors were judged to have met the deadline for submitting their
proposals, although acceptance of the winning proposal was
controversial. William Scotsman, the incumbent contractor for the
Coalition Village I project, hand-carried its proposal to the 6TH
Contracting Squadron at 11:31 a.m. on February 18, 2003, and there was
no question that it had met the deadline. The third contractor and
winning offeror, Resun Leasing, faxed its proposal at 3 minutes past
12:00 p.m., according to the time stamp on the fax machine. However,
MacDill contracting officials determined that the fax machine clock was
3 minutes fast, and that the first page of Resun's proposal was
received by the 12:00 p.m. deadline. Although not all the pages of
Resun's proposal were received by the deadline, the contracting officer
determined that because the first page had been received in time, the
entire proposal was timely.
Although Resun's proposal was arguably late, MacDill contracting
officials determined that Resun Leasing was the "lowest price,
technically acceptable offeror" and verbally notified the contractor on
February 18, 2003, to proceed with the project. Resun's initial offer
for the contract was $111,000, but a MacDill contracting official
subsequently noted a computation error, which increased the offer to
$142,755. The offer submitted by William Scotsman was for $196,000.
William Scotsman subsequently questioned MacDill officials about the
propriety of considering Resun's apparently late offer. Nevertheless,
although William Scotsman submitted a timely offer and therefore could
have protested to GAO, it did not protest the award to Resun Leasing
and MacDill's handling of the Resun offer.[Footnote 18] A contracting
official told us that MacDill has now instituted a policy clearly
stating that all pages of a faxed proposal must be received by the
deadline for it to be considered timely.
Numerous modifications to the contract were made after work began on
February 19, 2003. On April 22, 2003, Resumn filed a claim for
additional work, including six additional flagpoles, electrical and
wiring changes, interior and exterior trailer modifications, revised
grounding/lightning protection, interior and exterior locks, and
additional air conditioning units totaling $467,000, but revised the
amount several times. Resumn submitted another revision on June 9,
2003, claiming an amount of $372,172. On May 20, 2003, MacDill
validated $134,000 of the claim, leaving $238,172 to be negotiated. On
July 20, 2003, the contractor acknowledged that it owed the government
$4,977 because of erroneous billing, which left a total of $233,196 to
be negotiated. MacDill officials agreed to pay this amount and issued a
contract modification on July 31, 2003, to capture this change. The
total amount paid for the project was, therefore, $509,951 (see table
4). However, as discussed subsequently, the contract file did not
contain adequate documentation for us to determine how MacDill
officials arrived at this settlement.
Table 4: Payments and Claims for Coalition Village II Contract:
Contract phase: Initial contract award; Date: 02/18/03; Amount paid by
MacDill: $142,755; Amount claimed by contractor: [Empty].
Contract phase: Contractor's claim for additional work; Date: 04/22/03;
Amount paid by MacDill: [Empty]; Amount claimed by contractor:
$467,082.
Contract phase: Amount of claim validated for payment by MacDill; Date:
05/20/03; Amount paid by MacDill: 134,000; Amount claimed by
contractor: [Empty].
Contract phase: Revised contractor's claim for additional work; Date:
06/09/03; Amount paid by MacDill: [Empty]; Amount claimed by
contractor: 372,172.
Contract phase: Additional reduction in contractor's claim due to
erroneous billing; Date: 07/20/03; Amount paid by MacDill: [Empty];
Amount claimed by contractor: -4,977.
Contract phase: Payment on claim for additional work; Date: 07/31/03;
Amount paid by MacDill: 233,196; Amount claimed by contractor: [Empty].
Contract phase: Total amount paid by MacDill; $509,951.
Source: GAO analysis of MacDill data.
[End of table]
Poor Record Keeping, Undocumented Decisions, and the Lack of
Coordination of Changes with Contracting Officials Hamper Ability to
Assess Contract Costs:
Our efforts to assess contract costs for Coalition Village II were
hampered by missing documents in the contract file, undocumented
decisions for properly authorized changes to the contract, and changes
to contract requirements by on-site personnel that were not properly
coordinated with contracting officials. Because of these weaknesses in
contract management, we were unable to determine if the government paid
costs that otherwise might have been avoided or minimized.
Our review of the Resun contract file showed that it was missing
several key documents needed to assess the appropriateness of contract
costs. The file did not contain documentation that the winning proposal
represented a technically acceptable offer[Footnote 19] or an
assessment that the price was reasonable.[Footnote 20] MacDill
contracting officials agreed that poor record keeping was a problem
with the Coalition Village II contract. (NOTE: Need FAR citation for
this statement)The contract file also did not contain documentation to
fully validate the contractor's entire claim. While validation of
$134,000 of the initial claim was documented, there was no
documentation indicating how MacDill officials determined that the
remaining amount of the claim was valid and reasonable.
Further, the file did not contain sufficient documentation regarding
authorized changes to the contract. Modifications to the contract were
made during twice-weekly meetings between representatives of the
contractor, the customer (CENTCOM), technical advisors (civil
engineers), and contracting staff, but no official minutes were
maintained to document the agreements that were reached. In a
memorandum for the record, the contract administrator acknowledged that
a written log of contract changes was not developed. The absence of
documentation of authorized contract modifications makes it difficult
to assess contract costs.
The Resun contract file also did not contain sufficient documentation
to indicate who authorized some contract changes[Footnote 21] or the
cost estimates for some changes. MacDill officials told us that they
were surprised when the contractor submitted the claim for $467,000 to
cover additional work performed under the contract. They said that the
contracting officer and contract administrator were not aware of all
changes that had been made because unauthorized personnel
inappropriately authorized changes to the contract on site without
informing contracting officials. During the rush to get the project
completed, involved parties including representatives of the customer
and technical advisors made on-site changes that were not always
coordinated with the contracting officer. In a memorandum for the
record dated June 29, 2003, the contract administrator wrote that he
did not know about many of the changes, nor did the CENTCOM point of
contact or the representative from civil engineering, who assisted with
contract oversight. The price negotiation memorandum written to
document the final settlement of the claim also notes a lack of
adequate documentation to determine who authorized the extra work. The
absence of these documents along with inadequate documentation of
contract changes makes it difficult to retrospectively assess the
appropriateness of contract costs.
Conclusions:
MacDill Air Force Base and other installations we identified that
provide lodging for reservists on extended temporary duty are often
making efforts to reduce off-base lodging costs by (1) obtaining prices
that are below the maximum allowable rate for lodging established by
GSA and (2) requiring military personnel below specified ranks to share
apartments and/or hotel rooms. While public concerns in the Tampa area
were accurate in citing MacDill's monthly rental costs for some two-
bedroom apartment units of $2,400, these concerns failed to recognize
that GSA establishes lodging rates for travelers on official government
business based on daily per-person rates. Therefore, a two-bedroom
apartment renting for $2,400 per month ($80 per day) shared by two
people results in a daily lodging rate of $40 per person, well below
the maximum allowable GSA rate of $93 per day in the Tampa area. On a
unit basis, these rates are also comparable to corporate housing rates
in the Tampa area, which generally provide furnished units with similar
amenities to those provided to military personnel, though MacDill's
per-person costs were usually lower due to lodging sharing
arrangements.
Each installation we visited had different methods for providing
extended temporary lodging. The majority of installations contacted had
sufficient capacity to provide lodging for reservists on base or made
arrangements to provide lodging off base for other military travelers
on a short-term basis. Installations providing off-base lodging used
different procurement tools (BPAs, purchase orders, and contracts) but
obtained comparable savings regardless of the procurement instrument
used. Local GSA lodging rates are public knowledge and generally
represent the ceiling for acceptable offers. Significant savings over
GSA daily rates were also obtained through the implementation of
installation specific guidance requiring reservists at specific ranks
to share rooms and/or apartments, but the ranks required to share units
varied by installation. Installations also obtained varying terms in
their agreements with hotels and apartment vendors, primarily regarding
penalties for early departures.
The primary factors affecting off-base lodging prices are local market
conditions (the inventory of vacant hotel rooms and apartment units)
and the prevailing GSA lodging rate. An alternative approach to
providing off-base lodging, such as direct leasing of apartment
properties, might be considered but would need to consider other
factors such as the added costs of government management and the
provision of additional services comparable to those now being
provided.
Although Coalition Village II was implemented under extreme time
constraints, effective contract management suffered from questionable
acceptance of the winning offer, poor record keeping, undocumented
decisions, and changes to contract requirements that were not properly
coordinated with contracting officials. We were not able to assess the
basis for additional costs paid to the contractor or the extent to
which costs might have been avoided or minimized because of these
contract management weaknesses.
Recommendation for Executive Action:
We recommend that the Secretary of Defense direct the Secretary of the
Air Force to direct the Commander of the Air Mobility Command to
emphasize to MacDill personnel the importance of adhering to sound
contract management procedures that exist to protect the interests of
the government. Communications should reemphasize that contract files
should be properly maintained and only authorized personnel should
initiate changes to contract requirements, even during time sensitive
procurements. In addition to contracting officials, such communications
should also be provided to contractors, base customers of contracting
services, and contract support personnel.
Agency Comments and Our Evaluation:
In commenting on a draft of this report, the office of the Director,
Defense Procurement and Acquisition Policy, did not dispute the GAO
audit findings regarding the Coalition Village II procurement and
partially concurred with our recommendation. The office suggested that
the recommendation is not needed because the 6TH Contracting Squadron
at MacDill Air Force Base had already taken corrective actions,
including an internal review of Coalition Village II contract files
that resulted in letters of reprimand for a contracting officer and
contract administrator. However, as noted in DOD's response, some of
the more significant actions that relate to the specifics of our
recommendation are planned but not yet completed. Accordingly, we
believe it appropriate to retain the recommendation pending completion
of all indicated corrective actions. We expect to follow up to
determine the extent to which planned actions have been taken. The
comments from the office of the Director, Defense Procurement and
Acquisition Policy, are included in appendix II of this report.
We are sending copies of this report to the Secretary of Defense; the
Secretaries of the Army, the Navy, and the Air Force; the Commandant of
the Marine Corps; the Director, Office of Management and Budget; and
other interested parties. We will also make copies available to others
upon request. In addition, the report will be available at no charge on
the GAO Web site at http://www.gao.gov.
If you or your staff have any questions on the matters discussed in
this letter, please contact me at (202) 512-5581. Key contributors to
this letter were George Poindexter, Vijay Barnabas, Nelsie Alcoser,
Kenneth Patton, Tanisha Stewart, and Nancy Benco.
Barry W. Holman:
Director, Defense Capabilities and Management:
Signed by Barry W. Holman:
[End of section]
Appendix I: Scope and Methodology:
To describe the extent to which MacDill Air Force Base used cost-
effective measures to provide long-term, off-base lodging for
reservists on extended temporary duty, we visited and interviewed
officials from the 6TH Contracting Squadron and 6TH Services Squadron
at MacDill Air Force Base, and we interviewed apartment managers and
brokers in the Tampa, Florida, area. We analyzed records on temporary
lodging rates paid for military personnel housed off-site at MacDill
Air Force Base and the numbers of National Guard and Reserve service
members on extended temporary duty at this installation. We identified
the allowable GSA lodging rate for the Tampa, Florida, area and
compared this amount to the amounts paid for off-base lodging. We
determined whether MacDill Air Force Base used contracts or BPAs to
provide off-site lodging for service members on extended temporary duty
and reviewed the processes followed in developing these procurement
instruments for acquiring off-base lodging. We reviewed the BPAs
MacDill had with hotel and apartment vendors in the Tampa area.
To compare the practices used at MacDill Air Force Base to acquire off-
base lodging to practices at other installations, we visited and
interviewed contracting and lodging officials at Fort Bragg and Pope
Air Force Base. These installations were selected based on our review
of Reserve and National Guard deployment data for force protection
activities and follow-up phone calls to establish that the bases
procured off-base lodging. In addition, we obtained information on
lodging practices at Fort Meyer, Dover Air Force Base, McGuire Air
Force Base, Fort Hood, and Fort Dix. We also contacted Navy and Marine
Corps officials at the headquarters level to determine their practices
for providing lodging for reservists on extended temporary duty. We
identified the allowable GSA lodging rates for Fort Bragg and Pope Air
Force Base and compared these amounts to the amounts paid for off-base
lodging. We determined whether these installations used contracts,
purchase orders or BPAs to provide off-site lodging for service members
on extended temporary duty and the processes followed in developing
these procurement instruments.
We met officials from the Under Secretary of Defense (Personnel and
Readiness), U.S. Air Force (Installations and Logistics Contracting),
and DOD's Per Diem, Travel and Transportation Allowance Committee to
collect information on Department of Defense lodging regulations and
procedures. At each of the installations we visited, we collected and
reviewed lodging policies, procedures, and practices regarding
temporary duty personnel. In addition, we reviewed the requirements in
the Joint Federal Travel Regulations regarding temporary duty travel.
We reviewed all data that we received, but we did not verify the
accuracy of the data provided by DOD or the installations.
To determine if MacDill followed proper procedures in contracting for
the lease of temporary office trailers for Coalition Village II, we
interviewed officials from the 6TH Contracting Squadron, including the
commander, the current contracting officer, the contract administrator,
and other contract staff familiar with the procurement process. In
these discussions, we sought information on the actions taken to
implement the project, the timing of such actions, and the
justification for contracting procedures followed. We reviewed
documents prepared by contracting officials to explain procedures
followed in administering the contract, including a Talking Paper and
Acquisition Timeline of Events for Coalition Village II. In addition,
we reviewed the contract and other documentation in the contract file,
including correspondence, memorandums for the record and the
contractor's claims for payment. We also reviewed relevant provisions
of the Federal Acquisition Regulation (FAR) related to this
procurement. Specifically, we researched FAR authorities related to the
use of "Unusual and Compelling Urgency" in government procurements,
including competition and documentation requirements under such
circumstances. We also researched and analyzed prior GAO bid protest
decisions regarding determinations of timeliness in the acceptance of
electronic submissions of proposals.
We conducted our review from June 2003 through December 2003 in
accordance with generally accepted government auditing standards.
[End of section]
Appendix II: Comments from the Department of Defense:
OFFICE OF THE UNDER SECRETARY OF DEFENSE:
ACQUISITION, TECHNOLOGY AND LOGISTICS:
3000 DEFENSE PENTAGON
WASHINGTON, DC 20301-3000:
JAN 13, 2004:
Mr. Barry W. Holman:
Director, Defense Capabilities and Management
U.S. General Accounting Office:
Washington, D.C. 20548:
Dear Mr. Holman:
This is the Department of Defense (DoD) response to the GAO draft
report, GAO-04-296, "DEFENSE MANAGEMENT: Issues in Contracting for
Lodging and Temporary Office Space at MacDill Air Force Base," dated
December 15, 2003 (GAO Code 350399). We are pleased your review found
that MacDill contracting officials used blanket purchase agreements,
coupled with a room sharing policy, to effectively reduce the overall
cost of off-base lodging for reservists on extended temporary duty to
an amount below the General Service Administration's lodging rate for
Tampa, FL. Enclosed are DoD's detailed comments regarding the
recommendation on page 23 of your draft report.
My point of contact for this report is Mr. Christopher Werner, 703-695-
9764 or christopher.werner@osd.mil. We appreciate the opportunity to
review and comment on your findings.
Enclosure: As stated:
Sincerely,
Signed for:
Deidre A. Lee
Director, Defense Procurement and Acquisition Policy:
GAO CODE 350399/GAO-04-296:
"DEFENSE MANAGEMENT: ISSUES IN CONTRACTING FOR LODGING AND TEMPORARY
OFFICE SPACE AT MACDILL AIR FORCE BASE":
DEPARTMENT OF DEFENSE COMMENTS TO THE RECOMMENDATION:
RECOMMENDATION: The GAO recommended that the Secretary of Defense
direct the Secretary of the Air Force to direct the Commander of the
Air Mobility Command to emphasize to MacDill personnel the importance
of adhering to sound contract management procedures that exist to
protect the interests of the Government. Communications should
reemphasize that contract files should be properly maintained and only
authorized personnel should initiate changes to contract requirements,
even during time sensitive procurements. In addition to contracting
officials, such communications should also be provided to contractors,
base customers of contracting services, and contract support personnel.
(Page 23/Draft Report):
DoD RESPONSE: Partially concur. DoD does not dispute the GAO audit
findings regarding the Coalition Village II procurement. However, there
is no need for this recommendation because the 6th Contracting Squadron
at MacDill Air Force Base had already taken the following corrective
actions in this matter prior to the GAO initiating its review in June
2003:
a. In April 2003, the 6THContracting Squadron conducted an internal
review of the Coalition Village II contract file and found
deficiencies, including the absence of meeting minutes and a lack of
documentation for contract changes. This review resulted in letters of
reprimand being issued to both the contracting officer and to the
contract administrator. The contracting officer was subsequently
replaced.
b. The new contracting officer immediately cautioned the customer,
CENTCOM, as well as Civil Engineering, to refrain from directing any
contractor actions in the future, because only the contracting officer
or his duly appointed representative has the legal authority to direct
changes to the contract.
Additionally, in October 2003, the 6th Contracting Squadron instituted
an on-going training initiative for its personnel to reemphasize
contracting fundamentals, including negotiating contract changes and
properly documenting contract files. Headquarters contracting
personnel from the Air Mobility Command have also scheduled a visit to
MacDill Air Force Base in January 2004, which will include discussion
of the Coalition Village II procurement and the associated remedial
actions taken. The headquarters staff will then develop training based
on the Coalition Village II procurement to help ensure that contracting
personnel throughout the Air Mobility Command follow sound contract
management procedures.
Note: Page numbers in the draft report may differ from those in this
report.
[End of section]
FOOTNOTES
[1] Unless specified otherwise, the terms "reserves" and "reservists"
refer to the collective forces of the Army National Guard, the Air
National Guard, the Army Reserve, the Naval Reserve, the Marine Corps
Reserve, and the Air Force Reserve.
[2] CENTCOM is the unified command responsible for executing military
operations in Afghanistan and Iraq. SOCOM is the unified command that
directs special operations, psychological operations and civil affairs
forces from the Army, Navy, and Air Force under a single commander.
[3] These installations were Fort Hood, TX; Fort Dix, N.J.; McGuire Air
Force Base, N.J.; Dover Air Force Base, Del.; and Fort Meyer, Va.
[4] At MacDill, short-term temporary duty consists of less than 45
days, and long-term or extended temporary duty consists of 45 days or
longer.
[5] DOD's Joint Federal Travel Regulations (JFTR) govern the amount of
per diem, travel, and transportation allowances that reserve personnel
can receive when they are traveling on official government business in
the continental United States. JFTR, Chapter 1, Part A, paragraph U
1000. They are entitled to the per diem set by the General Services
Administration (GSA) for a particular location. At the time of our
review, the maximum allowable GSA rate for lodging in Tampa, Florida,
was $93 per day.
[6] Blanket purchase agreements (BPA) are simplified procurement
procedures used to fill repetitive needs for supplies or services by
establishing "charge accounts" with qualified sources of supply. 48
C.F.R. § 13.303-1.
[7] Proclamation No. 7463, 66 Fed. Reg. 48199 (Sept. 14, 2001).
[8] A contractor, Chugach Management Services, performs the civil
engineering function at MacDill. Chugach Management Services provides
base operations and maintenance, construction management, facilities
operation, and environmental services.
[9] 48 C.F.R.§ 13.303-1.
[10] Air Force Contracting Policy Memo 96-C-04, Aug. 16, 1996,
encouraged officials to use BPAs to obtain off-base housing.
[11] A purchase order when issued by the government means an "offer by
the Government to buy supplies or services including construction and
research and development, upon specified terms and conditions, using
simplified acquisition procedures." 48 C.F.R. § 2.101.
[12] MacDill lodging officials told us they make no distinction in
providing off-base lodging for active duty personnel and reservists in
that they follow the same procedures for both groups.
[13] See Boehringer Mannheim Corporation, B-279238, May 21, 1998, 98-1
CPD ¶ 141.
[14] 48 C.F.R. § 13.302-2.
[15] The Federal Acquisition Regulation (FAR) describes a requirements
contract as providing for "filling all actual purchase requirements of
designated Government activities for supplies or services during a
specified contract period, with deliveries or performance to be
scheduled by placing orders with the contractor." 48 C.F.R. §
16.503(a). As with the BPA, a requirements contract may be used to
acquire supplies or services when the exact times or exact quantities
of future deliveries are not known at the time of contract award. This
type of contract allows flexibility in both quantities and delivery
scheduling and ordering of supplies or services after requirements
materialize.
[16] A single occupancy room has one bed. A double occupancy room has
two beds, along with a chest of drawers or dresser for each bed.
[17] 48 C.F.R. § 6.302-2.
[18] Under GAO's Bid Protest Regulations, a protest by William Scotsman
at this time would be untimely and would not be considered. See 4
C.F.R. § 21.2 (a)(2).
[19] "The relative strengths, deficiencies, significant weaknesses, and
risks supporting proposal evaluation shall be documented in the
contract file." 48 C.F.R. § 15.305 (a).
[20] "The contracting officer shall document the cost or price
evaluation." 48 C.F.R. § 15.305 (a)(1).
[21] 48 C.F.R. § 43.102 (a) provides that "[o]nly contracting officers
acting within the scope of their authority are empowered to execute
contract modifications on behalf of the Government. Other government
personnel shall not (1) Execute contract modifications; (2) Act in such
a manner as to cause the contractors to believe that they have
authority to bind the Government; or (3) Direct or encourage the
contractor to perform work that should be the subject of a contract
modification."
GAO's Mission:
The General Accounting Office, the investigative arm of Congress,
exists to support Congress in meeting its constitutional
responsibilities and to help improve the performance and accountability
of the federal government for the American people. GAO examines the use
of public funds; evaluates federal programs and policies; and provides
analyses, recommendations, and other assistance to help Congress make
informed oversight, policy, and funding decisions. GAO's commitment to
good government is reflected in its core values of accountability,
integrity, and reliability.
Obtaining Copies of GAO Reports and Testimony:
The fastest and easiest way to obtain copies of GAO documents at no
cost is through the Internet. GAO's Web site ( www.gao.gov ) contains
abstracts and full-text files of current reports and testimony and an
expanding archive of older products. The Web site features a search
engine to help you locate documents using key words and phrases. You
can print these documents in their entirety, including charts and other
graphics.
Each day, GAO issues a list of newly released reports, testimony, and
correspondence. GAO posts this list, known as "Today's Reports," on its
Web site daily. The list contains links to the full-text document
files. To have GAO e-mail this list to you every afternoon, go to
www.gao.gov and select "Subscribe to e-mail alerts" under the "Order
GAO Products" heading.
Order by Mail or Phone:
The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent
of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or
more copies mailed to a single address are discounted 25 percent.
Orders should be sent to:
U.S. General Accounting Office
441 G Street NW,
Room LM Washington,
D.C. 20548:
To order by Phone:
Voice: (202) 512-6000:
TDD: (202) 512-2537:
Fax: (202) 512-6061:
To Report Fraud, Waste, and Abuse in Federal Programs:
Contact:
Web site: www.gao.gov/fraudnet/fraudnet.htm E-mail: fraudnet@gao.gov
Automated answering system: (800) 424-5454 or (202) 512-7470:
Public Affairs:
Jeff Nelligan, managing director, NelliganJ@gao.gov (202) 512-4800 U.S.
General Accounting Office, 441 G Street NW, Room 7149 Washington, D.C.
20548:
