& U.S. Army Audit Agency
Seni + Bis Progrese
US. Army Center of Military History
Contract Management
Office of the Director of the Army Staff
Audit Report: A-2007-0059-ALC 31 January 2007Executive Summary
‘Audit Report A-2007-0089-ALC
] ‘ST jantary 2007
K | U.S. Army Center of Military History Contract Management
fe Office of the Director of the Army Staff
Results Key Recommendations
At the request of the Vice Director of the Army Staff (VDAS), we evaluated] We recommended that the
the US, Army Center of Military History's (CMH's) contracting practices Director of the Army Staff
related to the National Museum of the United States Army project. The
‘VDAS initially requested that we focus on FY 03 and 04 contract actions + Cancel the FY 06 solicitation
related to the Army's National Museum project. The VDAS subsequently for National Museum project
requested that we expand ous scope to include FY 05 contract actions, support and coordinate with
evaluation of an FY 06 solicitation’s requirements, and property account- the contracting activity to
ability of artifact purchases and government-furnished property slated to issue a performance-based
FY 03.05 contracts. service contract solicitation
thats firm-fixed-prie for any
During FY 03.05, CMH and its National Museum Division (NMD) didn’t fuatuee museum project
adequately manage contract actions and funding related to the National assistance,
‘Museum project. We identified several internal control deficiencies in the
contract management and funding processes that resulted in actions that
‘weren't in the best interest of the Army. Specifically, required controls weren't
in place, and NMD didn’
+ Require personnel who will
‘oversee contractor perform-
ance to be properly nomi-
nated, trained, and appointed,
and have a fall understanding
of surveillance plan proce-
dures before assuming any of
+ Follow proper procedures to establish contracts and review contract
requirements annually to make changes when necessary.
+ Use the proper type and fiscal year of funds to execute contracts. their administeation duties.
+ Provide effective quality assurance and oversight of National Museum + Requize CMHT’s resource
contracts and contractor personnel. manager to adda statement to
+ Follow proper procedures to account for property furnished to future funding documents on
Follow proper proced for property furnished « the expiration date of funds
: and the potential loss of fund
NMD inappropriately used a General Services Administeation information availabilty if not obligated by
technology contract, valued at about $10.5 million, to perform technical and a certain date
functional services in the planning and designing of the National Museum,
Also, NMD personnel authorized the contractor to purchase over $600,000 in
sare artifacts without the required approval of the Chief, Miltary History.
‘The Office of the Director of the
Army Staff, CMH, and the
Contracting Center of Excellence
‘These deficiencies occurred because CMH didn’t provide sufficient oversight | agreed with our recommendations.
of the project’s management or of the financial controls of the funds spent on | The Office of the Director of the
the project. As a result, we identified about $23.6 million in potential Anti- ‘Army Staff also directed (based on
deficiency Act violations, about $5.7 million of unsupported contract pay- our results) that National Museum
‘ments, and two support contracts for which accountability for government- personnel stop work on a contract
famished property wasn't maintained. CMH informed us that immediate and cancel a draft solicitation,
corrective actions were taken on these conditions during the audit; however, | resulting in about §3.5 million put
wwe were able to evaluate the extent of only some of CMH"’s corrective actions | to better use for other Army
to implement our recommendations. ‘museum projects, :
Verbatim command comments
and the official Army position ace
in the report,DEPARTMENT OF THE ARMY
US. ARMY AUDIT AGENCY
OFFICE OF THE DEPUTY AUDITOR GENERAL
‘ACQUISITION AND LOGISTICS AUDITS
‘3101 PARK CENTER DRIVE
ALEXANDRIA, VA 223021596
31 January 2007
Director of the Army Staff
Principal Assistant Responsible for Contracting, Contracting Center of Excellence
‘This is our report detailing the results of our audit of contract management related to
the National Museum of the United States Army project. We petformed this effort at
the request of the Vice Director of the Army Staff.
We conducted the audit according to generally accepted government auditing
standards and tested internal controls to the extent we considered necessary under
the circumstances. The audit focused on the U.S. Army Center of Military History's
National Museum Division and its management of the contracting process in support
of the National Museum project. The Center's implementation of Recommendation 2
resulted in monetary benefits (based on the estimates we could reasonably make at
the time of the audit,
‘We've included the official Army position on the conclusions, recommendations,
command comments, and monetary benefits in Annex B, For additional information
about this report, contact the Contract Audits Division at 703-681-4929.
1 appreciate the courtesies and cooperation extended to us dusing the audit.
FOR THE AUDITOR GENERAL:
yok yD .
JQ@SEPH P. MIZZONI is
eputy Auditor General
Acquisition and Logistics Audits