Pentagon Must Improve Oversight of Defective Spare PartsTweet
February 25, 2016
The Pentagon’s logistics support office failed to properly account for—and hold contractors accountable for—millions of dollars in defective parts for weapon systems, according to a new report by the Department of Defense (DoD) Inspector General (IG).
The IG found that the Defense Logistics Agency (DLA) did not obtain restitution or reimbursement from contractors who produced faulty or non-conforming spare aircraft parts. DLA also failed to ensure that defective parts were removed from the supply chain. As a result, the IG concluded that DLA passed up at least $12.3 million in refunds and put warfighter readiness and safety at risk.
For example, DLA did not seek reimbursement for 16 defective power cable assemblies valued at more than $65,000. Some of the cable assemblies had an unauthorized splice that could cause a short circuit and potentially result in loss of life.
In another example, after the Marine Corps identified 43 wiring harnesses that were incorrectly manufactured, DLA did not properly search DoD’s inventory to make sure that all similarly substandard wiring harnesses were returned to the contractor. As a result, 203 of these defective, potentially hazardous parts remained in inventory. Additionally, DLA failed to recover more than $133,000 in refunds from the contractor responsible for the glitch.
DLA was also unable to assure the IG that it had obtained replacements for dozens of defective parts costing hundreds of thousands of dollars that were sent back to the contractors.
“By not completing the necessary actions, [DLA] missed opportunities to hold poor-performing contractors accountable and for DoD to receive the appropriate restitution,” according to the report. The IG also emphasized that repairing or replacing defective parts “consume[s] numerous valuable hours and energy” and requires “additional maintenance and delays in the return of the aircraft to mission ready condition.”
This is the second time this month the IG has documented waste and mismanagement involving defense aviation contractors. Two weeks ago, the IG reported that inadequate oversight at Robins Air Force Base caused the government to pay maintenance depot contractors millions of dollars in excessive profits. (Robins is also where, according to the new report, the IG discovered defective C-5 aircraft spare parts worth almost $826,000 that had not been returned to the contractor.)
The IG’s most recent findings are troubling, but not surprising. The Project On Government Oversight has long been aware of flaws in the government’s acquisition of spare parts. We are also familiar with poor management of DoD’s inventory, as well as the constant challenge of overseeing a vast network of contractors. We remain optimistic, however, that the tireless work of watchdogs like inspectors general will lead to improvements.
Neil Gordon is an investigator for the Project On Government Oversight. Neil investigates and maintains POGO's Federal Contractor Misconduct Database.
Topics: Contract Oversight
Authors: Neil Gordon
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