DOD IG Blasts JSTARS Sustainment Contract Work

The Air Force overpaid in contracts for E-8C JSTARS sustainment and did not meet aircraft availability metrics needed for aircraft operators to meet their mission requirements from 2011 to 2015, according to a Defense Department Inspector General report released Monday. The report, which was finalized in November but publicly released Monday, focused on an Air Force Space and Special Systems cost-plus-award-fee contract initially awarded to Northrop Grumman in 2000 to sustain 16 E-8Cs. The total contract was about $7 billion, with 16 annual contract option periods. The Inspector General reviewed option periods stretching from May 2011 through October 2015, and found that the JSTARS contracting officer did not establish adequate oversight, establish an aircraft availability metric, establish a cost performance incentive, and properly manage portions of the award fee. Because of these missteps, the contract officer paid unallowable award fees of $7.6 million, according to the DOD IG report. The contract management office spent about $1.1 billion in this time period “without achieving its acquisition objective to increase aircraft availability while reducing sustainment cost,” the report states. Because of this, the ability of the 116th and 461st Air Control Wings was impacted because the aircraft were not available. Going forward, the IG recommends that the Air Force verify the appropriateness of contractor-proposed over and above work, create criteria to motivate Northrop Grumman to reduce costs, determine if the unallowable award fees can be recouped, and conduct periodic reviews of the JSTARS contract. (Read the report; Caution, large-sized file.)