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GAO-17-588R 1 (2017-08-09)

handle is hein.gao/gaobaalbc0001 and id is 1 raw text is: cAO U.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Washington, DC 20548 August 9, 2017 Congressional Committees Defense Logistics: Plan to Improve Management of Defective Aviation Parts Should Be Enhanced Defense Logistics Agency (DLA) Aviation supports more than 2,000 weapon systems, with focused support to 130 major weapon systems, and manages more than 1.2 million National Stock Number items. DLA Aviation is responsible for maintaining a sustainable level of inventory in equipment and spare parts to ensure aviation warfighter readiness, among other missions. DLA Aviation purchases spare parts from contractors, stores the parts in DLA distribution depots, and sells and issues parts to Department of Defense (DOD) customers (for example, the military services). According to the Defense Federal Acquisition Regulation Supplement, if nonconforming materiel or services are discovered after acceptance; the defect appears to be the fault of the contractor; any warranty has expired; and there are no other contractual remedies, then the contracting officer shall, among other things, request that the contractor repair or replace the materiel, or perform the service, at no cost to the government.1 DOD has a Product Quality Deficiency Report (PQDR) process that enables customers to identify and investigate defective parts, after which DLA searches the inventory and provides for their return to contractors, if applicable, and obtains restitution. In July 2015, the DOD Inspector General found that the PQDR process lacked sufficient guidance and oversight and recommended that DLA develop an action plan with milestones to improve PQDR processing.2 In February 2016, the DOD Inspector General reviewed PQDRs closed from January through June 2014 and reported that DLA Aviation had not pursued and obtained appropriate restitution for a projected 269 unique items for which contractors had supplied defective parts.3 DLA estimated the parts' value, based on costs incurred, at about $8.5 million, of which DLA stated that it had obtained restitution for about $4.5 million. 1Defense Federal Acquisition Regulation Supplement (DFARS), 48 C.F.R §246.407. 2Department of Defense Inspector General, Defense Logistics Agency Can Improve Its Product Quality Deficiency Report Processing, DODIG-2015-140 (Arlington, Va.: July 1,2015). 3Department of Defense Inspector General, Defense Logistics Agency Aviation Can Improve Its Process to Obtain Restitution from Contractors That Provide Defective Spare Parts, DODIG-2016-052 (Arlington, Va.: Feb. 23, 2016). GAO-17-588R Defense Logistics Page 1

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