United States: DoD Inspector General Publishes Annual Oversight Plan

Lynne Halbrooks is a Partner in Holland & Knight's Washington D.C. office

The 2016 Oversight Plan

On December 10, 2015, the Office of the Inspector General (OIG) for the Department of Defense published its Oversight Plan for Fiscal Year 2016. While the Defense OIG has published an annual audit plan in past years, this is the first comprehensive oversight plan to include input from across the OIG, not just auditors. A review of the planned projects will reveal to government contractors if an acquisition they were involved in, or a DoD program they support, is going to be audited or evaluated.

While the Defense OIG does not typically focus on contract audits, its oversight of the Department's contract management can lead to fraud referrals as well as public reports with findings that are embarrassing to contractors. This post highlights some of the planned projects that might of interest to government contractors, but is not all-inclusive. For the complete plan, please refer to the OIG website.

The Oversight Plan groups the OIG's planned projects into the following four categories reflecting the IG's FY 2016 Priorities: (1) National Security; (2) Readiness & Safety; (3) Business Transformation; and (4) Quality Leadership. Most, but not all of the planned projects involving government contractors fall under the grouping "Business Transformation: Building the Force of the Future."

OIG Planned Projects of Interest to Government Contractors

The Oversight Plan includes some projects that will be of a more general interest to government contractors, including audits of the following: (1) the Army's contractor past performance assessment reports ("CPARS"); (2) the Army's single award IDIQ contracts; (3) service contracts at U.S. Special Operations Command; (4) DISA's award and administration of the Global Information Systems Grid Management Support Operations Contract; (5) the Navy's use of GSA' Federal Supply Shedules for purchases of supplies; (6) whether DCAA Field Detachment audit support is in compliance with applicable directives, policies, and guidelines; and, (7) security controls over contractor identification credentials issued for DoD installation access.

In addition to the foregoing, DoD OIG will continue to focus on audits of sole-source commercial or non-commercial spare partss procurements. While the 2016 Plan lists specific audits of Air Force and Navy purchases, the OIG intends to perform multiple audits on various contractors, weapons systems, or contracts they identify throughout the year.

Some of the specific acquisitions that will be the subject of a DoD OIG audit include Air and Space Operations Center-Weapons System Increment 10.2, the Navy's Mine Countermeasures Mission on the Littoral Combat Ship, and the Small Diameter Bomb Increment II. These reviews will examine primarily whether the DoD is adequately managing the acquisition and focus on requirements, acquisition strategy, and/or testing development. Additionally, the OIG plans to review whether Navy Acquisition Category IV programs are adequately managed.

The Oversight Plan also indicates the OIG will be performing a series of audits related to the award and administration of Seaport-e Task Orders. Two specific audits planned by the OIG that could have an impact on the contracting community depending on their findings are the audit of contractor profit on DoD depot labor at Corpus Christi Army Depot and the audit of Defense Logistic Agency's compliance with the Berry Amendment and Buy America Act.

Finally, the OIG's Oversight Plan includes contract oversight in the ongoing contingency operations including reviews of Base Operations Support Contracts in the CENTCOM area of responsibility, and the DoD's oversight of information operations contracts, the Air Combat Command Heavy Lift Seven contract, and TRANSCOM's Theater Express II contracts – all supporting Operation Inherent Resolve.

Notably, the plan is designed to be flexible and updated as necessary. It is not all-inclusive of the work the OIG will conduct in Fiscal Year 2016, but includes the oversight projects contemplated as of October 30, 2015.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.