Navy audit found gaps in ship service contracts

[nitpicker]

http://www.sandiegouniontribune.com/news/2016/apr/06/husbanding-audit/

Navy audit found gaps in ship service contracts

By Greg Moran | 5:48 p.m. April 6, 2016

An audit commissioned by the top brass of the U.S. Navy in response to the ongoing “Fat Leonard” bribery case concluded the service had “significant” vulnerabilities overseeing contractors who provide goods and services to ships in foreign ports -- well beyond the Seventh Fleet where the scandal erupted.

The 69-page report from the Naval Audit Service found widespread problems in how the Navy administers contracts for port services. Because of those weaknesses, auditors concluded the Navy can’t be sure it received full value on all of the servicing contracts it examined, which totaled $686 million. The audit was completed at the end of 2014. The San Diego Union-Tribune obtained a copy using a Freedom of Information Act request filed last year.

Auditors repeatedly faulted the Navy for weak supervision in nearly every area of port services, also known as “husbanding.” The Navy has come to rely increasingly on private contractors over the past decade to provide the services, which include pumping sewage, providing ground transportation, supplying fresh water and scores of other tasks over the past decade.
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A Navy spokesman said this week that since the audit’s completion the service has adopted many of the recommendations and changed how it oversees the contracts.
(snip)

The findings included:

• There were no internal controls in place to prevent another contractor, Inchcape Shipping Services, from improperly charging a markup on some items. The amount of the markups was redacted from the report, but it appears to have gone undetected for at least three years. In February, the Department of Justice joined a whistleblower lawsuit against the company, alleging it overcharged the government for millions of dollars in port services.

• Two contracts were poorly written, allowing ship supply officers an unlimited amount of authority to order supplies and services. A review of a dozen port visit files showed the supply officers ordered $439,000 worth of items that weren’t authorized under the contract.

[nitpicker]

1. Link to the audit report

http://cdn.sandiegouniontrib.com/news/documents/2016/04/06/Navy_Port_Services_Audit.pdf

[liberal N proud]

2. Things are not so ship shape

Sorry sailors, it was too easy