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The U.S. military needs to do a better job understanding and monitoring its long-term maintenance contracts, according to a new report from the Government Accountability Office.
GAO says that neither the Defense Department nor the services knows the extent to which weapon system programs rely on long-term maintenance contracts. Nor do officials even collect the data they need to help them understand these long-term contracts.
While individual military components may be shaping contracts to suit their own needs, “what’s not there is the department being able to provide lessons learned and what you should look for,” said Belva Martin, GAO’s director for acquisition and sourcing management. “What’s not there is the ability to look across the department over time to see which types of contracts work best in different situations.”
By failing to track contracts across the services, DoD opens a window to potentially problematic scenarios. In some cases, government buyers may create contracts in which the government does not own its technical data, but rather leaves it in the hands of contractors. Other contracts may limit government’s ability to have maintenance work performed at a government depot.
GAO found considerable inconsistencies in the contracts it scrutinized.
A nine-year contract for the Air Force KC-10 tanker, for instance, delivered bonuses based on contract term and cost containment, while a 10-year Air Force contract for the C-130J omits both of these. Instead, it offers monetary incentives and includes a scheduled price negation, both of which the KC-10 contract leaves out.
GAO is not asking for every contract to include every element: Some purchasing vehicles might not be appropriate for every situation. The report does suggest that there should at least be some baseline expectations. “What can you say at the department level? You can say that you should at least have two of these elements or three of these elements. That is what we are getting at,” Martin said.
GAO said long-term contracts should at least ensure the government has the right its own technical data. “Once the decision to forgo technical data is made, DoD’s leverage in terms of being able to complete maintenance support or to do the work in house is largely lost,” Martin said.
GAO found a shortfall in long-term maintenance contract data, noting that the department does not collect information on the effectiveness of various incentives and cost-control tools. The report recommends the Defense Department collect and analyze information on long-term maintenance contracts, and proposes the department share lessons learned, especially in the areas of incentives and cost controls.
“If a particular contract type works, and one component has found ways to incentivize contractors, you want to let others know. But first you need data,” Martin said.
