Department Of Defense Audit Report - Laboratory Support Services for Environmental Testing - Executive Summary

Office of the Inspector General, DoD

February, 21 1997

Report No. 97-098
(Project No. XK-0053)

Introduction. Commercial laboratories provide environmental test services to DoD organizations for the environmental compliance and restoration programs. DoD organizations are responsible for ensuring that all necessary contract administration procedures are followed and that quality assurance procedures are performed to ensure the quality of all environmental tests received. DoD costs of all environmental tests for FYs 1993 through 1995 were not readily available because DoD did not account for the number of environmental testing facilities and the costs of environmental tests (Appendix C). However, the 18 DoD organizations that we reviewed used 110 environmental testing contracts with contract orders valued at $27.1 million during FYs 1993 through 1995. See Appendix A for a complete list of these organizations.

Audit Objectives. The overall audit objective was to evaluate the cost and operational effectiveness of laboratory support services provided for environmental testing. Specifically, we determined whether DoD organizations (the Army, Navy, Air Force, and Defense Logistics Agency) were effectively managing their contracts for environmental test services and whether DoD organizations were effectively performing quality assurance procedures on environmental test results received from commercial laboratories. The audit also evaluated the management control programs at the audited DoD organizations as applicable to the audit objectives.

Audit Results. The 18 DoD organizations reviewed were not efficient and effective in the procurement and administration of environmental testing contracts. The procedures used resulted in environmental test prices ranging from a difference of 23 to 662 percent for the same tests, high procurement and administrative costs, and unreliable test results (Part I).

Summary of Recommendations. We recommend that the Deputy Under Secretary of Defense (Environmental Security) establish an integrated process action team with the Services and the Defense Logistics Agency, obtaining assistance from the Office of the Deputy Under Secretary of Defense (Acquisition Reform) and the Director of Defense Procurement, as needed, to consolidate the requirements of environmental tests; develop standardized quality assurance procedures; establish adequate procedures to administer contractor performance; and establish procedures to ensure inclusion of adequate Government remedy clauses in environmental testing contracts.

Management Comments. The Principle Assistant Deputy Under Secretary of Defense (Environmental Security) nonconcurred with the portion of the recommendation establishing an integrated process action team. The Principle Assistant stated that in September 1996, he established an Environmental Laboratory and Testing Working Group to review laboratory and testing issues. He will add representatives to the group from the Offices of the Director, Defense Procurement and Deputy Under Secretary of Defense (Acquisition Reform) to address quality assurance and contract performance issues. See Part I for a discussion of management comments and Part III for the complete text of management comments.

Audit Response. The planned actions satisfy the intent of the recommendation. Therefore, no additional comments are required.

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