The Army wasted $53.6 million over six years because officials mismanaged commercial transport contracts that were used to move equipment throughout the Middle East, according to a recently released audit.
Auditors with the Defense Department Inspector General noted in the June 26 report that Army officials ordered nearly 40 percent more transportation assets than they needed during the period from 2011 to 2016 and failed to analyze or continuously evaluate transportation requirements.
Army officials also failed to identify or correct inefficiencies in their planning and execution of transportation missions, according to the report.
Those practices resulted in $53.6 million in wasted money among four contractors who were paid a total of $207.2 million.
Auditors identified 36 instances in the six-year period when Army officials ordered more than double the number of assets it used. They noted nine instances when officials ordered at least "10 times the number" of 25-passenger buses, freezer vans and baggage trucks than it actually used.
Efficient use of the contracts rose and fell from a low of 26 percent wasted assets in 2015 to a high of 48 percent wasted in 2012.
The Army used the following contractors used between 2011 and 2016:
- El Hoss Engineering & Transport for $57.3 million.
- IAP Worldwide Services for $30.3 million.
- KGL Transportation Company for $105.6 million.
- PAE Government Services for $14 million.
The contracts were part of the Heavy Lift program that supports Operation Inherent Resolve and the Trans-Arabian Network. The original contracts were used to provide transportation in Kuwait, Iraq and Saudi Arabia.
This period reviewed was the seventh iteration of the program and is referred to as HL7.
In 2016, officials with Army Contracting Command-Rock Island expanded those contracts to move cargo between Kuwait, Jordan, Bahrain, Oman, Qatar and United Arab Emirates.
An earlier audit this year also found that Army officials did not provide effective oversight or administration of the HL7 contracts.
The IG auditors recommended in their report that the commander of U.S. Central Command direct units to use the Trans-Arabian Network, establish measurements and conduct quarterly assessments of the network's performance and effectiveness.
They also recommended that the commander of U.S. Army Central develop procedures so that review boards would both confirm the need for commercial transportation and the number of heavy lift assets that are requested.
The report recommended that the commander of 1st Sustainment Command use a system and schedule to track heavy lift usage to identify poor planning or execution to update standard operating procedures.
The Army Contracting Command-Rock Island executive director did not respond to recommendations that would ensure the Army "does not pay for services that it will not use" in future heavy lift program contracts. But the command's contracting officer told auditors that they would use more conservative "guaranteed minimums" when awarding contracts.
That move has resolved the auditor's concern, according to the report.
CENTCOM officials agreed to implement the recommended changes, as did officials with 1st TSC. The G-4 of Army Central agreed in part but did not explain how or when procedures would be updated. Auditors marked that portion unresolved until Army Central officials provide the additional information and timeline.