Contract Security Guards: Army's Guard Program Requires Greater Oversight and Reassessment of Acquisition Approach
Published: 2006-04-03T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Following the terrorist attacks of September 11, 2001, increased security requirements and a significant number of active duty and reserve personnel sent overseas to support the war on terror left the Department of Defense (DOD) with fewer military personnel to rely on to protect domestic installations. To correct this shortage, Congress is temporarily allowing DOD to use contract security guards to fulfill roles previously performed by military employees. The U.S. Army has awarded contracts worth nearly $733 million to acquire contract guards at 57 Army installations, an investment far greater than those made by other DOD services so far. The requesters asked GAO to assess how the Army has been managing and overseeing its acquisition of security guard services, particularly with regard to the Army's (1) acquisition strategy, (2) employment screening, (3) training of contract guards, and (4) award fee process. This report also discusses DOD's mandated November 2005 report to Congress on the contract guard program.
section_title: What GAO Found
paragraphs: The Army's three-phased approach for acquiring contract security guards has relied heavily on sole-source contracts, despite the Army's recognition early on that it was paying considerably more for its sole-source contracts than for those awarded competitively. The Army has devoted twice as many contract dollars--nearly $495 million--to its sole-source contracts as to its competed contracts and has placed contract security guards at 46 out of 57 installations through sole-sourcing. These sole-source contracts were awarded to two Alaska Native corporation firms under the Small Business Administration's 8(a) Business Development Program. Congress has provided these firms with special advantages in the 8(a) program. During initial planning, the Army worked with a contractor who had not performed guard services before to refine the contract performance work statement. The Army's procedure for screening prospective contract guards is inadequate and puts the Army at risk of having ineligible guards protecting installation gates. The Army found that, at two separate installations, a total of 89 guards were put to work even though they had records relating to criminal offenses, including cases that involved assault and other felonies. Thorough background checks lag far behind the rate at which contract guards are put to work, and the initial screening process relies on prospective guards to be honest when filling out job application forms. In response to an earlier GAO report, DOD agreed to revise its antiterrorism standards to put into place a better mechanism for verifying the trustworthiness of contractors. The Army has given its contractors the responsibility to conduct most of the training of contract guards, and the Army cannot say with certainty whether training is actually taking place and whether it is being conducted according to approved criteria. GAO found that there is no requirement for the Army to certify that a contract guard has completed required training and that Army performance monitors do not conduct oversight of training as a matter of course. GAO also found missing or incomplete training records at several installations. At three installations, guards were certified by the contractor before training had been completed. An investigation discovered that at one installation, contractor personnel had falsified training records; the Army subsequently paid the contractor over $7,000 to re-qualify the guards. The Army has paid out more than $18 million in award fees, but the fees are based only on compliance with basic contractual requirements, not for above-and-beyond performance. Over the life of the contract guard program, the Army has paid out almost 98 percent of the available award fees. The practice of routinely paying contractors nearly the entire available award fee has created an environment in which the contractors expect to receive most of the available fee, regardless of acquisition outcomes. GAO found that many Army performance monitors were not conducting all of the required inspections of contractor activity in order to rate performance.

section_title: Letter
paragraphs: In the aftermath of the September 11, 2001, attacks, the Department of  Defense (DOD) sent numerous active-duty, U.S.-based personnel to  Afghanistan, Iraq, and other destinations to support the global war on  terror. These deployments depleted the pool of military security guards at  a time when DOD was faced with increased security functions at its U.S.  installations. To ease this imbalance, Congress temporarily authorized  DOD to waive a prohibition against the use of contract security guards at  domestic military installations. Subsequently, DOD has turned to  contractors to help fulfill the security guard function at a growing number  of installations. We recently reported that the government’s increasing  reliance on contractors for missions previously performed by government  employees highlights the need for sound planning and contract execution.
The congressional authority allowing DOD to hire contract guards initially  was to expire in December 2005, but Congress extended the waiver  authority through September 2006, on the condition that DOD submit a  report to Congress addressing various aspects of the security guard  program. DOD submitted the report in November 2005. The National  Defense Authorization Act for Fiscal Year 2006 has further extended the  waiver authority through September 2007. The Army, the first service to  use the authority, has awarded contracts worth nearly $733 million to  acquire contract guards at 57 installations. We were asked to assess how  the Army has been managing and overseeing its acquisition of security  guard services. Specifically, we determined (1) what acquisition approach  the Army used, (2) whether the Army ensures that the guards are  effectively screened for employment, (3) whether the Army ensures the  guards are adequately trained, and (4) the Army’s rationale for providing  the contractors with award fees and how the award fee process is being  implemented. This report also discusses DOD’s November 2005 report to  Congress.
To address these objectives, we obtained and analyzed key documents,  including Army and contractor policies, procedures, and records, as well  as policies and procedures followed by the U.S. Air Force and the  Department of Homeland Security’s Federal Protective Service for their  contract security guards. We selected 11 Army installations to visit by   (1) ensuring that each of the Army’s security guard contractors were  included and (2) choosing installations that represented a range of  contractor performance evaluation outcomes, from perfect scores to  lower average scores (according to March/April 2005 Army assessments).  These installations are cited in appendix II. In addition, we met with  officials at the Army’s Installation Management Agency, the Army’s Office  of the Provost Marshal General, and the Army Contracting Agency. We  also met with the contractors and subcontractors that provide security  guards to the Army. We examined the November 2005 “Department of  Defense Installation Security Guard Requirement Assessment and Plan”  and met with the head of the working group that prepared the report.  Further details on the scope and methodology of our review can be found  in appendix I. We conducted our review from May 2005 to February 2006  in accordance with generally accepted government auditing standards.
subsections: section_title: Background
paragraphs: Since late 1982, Congress has, for the most part, prohibited DOD from  contracting for security guards at U.S. domestic installations. According to  the legislative history, the prohibition was originally enacted because of  concerns about the uncertain quality and reliability of private security  guard services, base commanders’ potential lack of control over  contractor personnel, and the right of contractor personnel to strike.  Following the terrorist attacks of September 11, however, DOD directed  installation commanders to ensure that all vehicles, identification cards,  badges, and other forms of identification were inspected for authorized  access to military installations. These increased security requirements  created an increased demand for personnel to perform security-related  tasks. Initially, security requirements were filled at military installations  with active duty and reserve component personnel. However, as reserve  personnel reached their mandatory release dates from active duty and as  competing demands for both reserve and active component personnel  grew, resources became constrained. DOD reported that contracting for  security guard services was deemed necessary and practical to allow it to  simultaneously support increased demands for military forces and to meet  heightened security requirements for continental U.S. installations and  facilities. Accordingly, in the Bob Stump National Defense Authorization  Act for Fiscal Year 2003, Congress temporarily authorized DOD to waive  the prohibition against contracting for security guard functions, thereby  minimizing the department’s need to use military personnel to perform  these functions.
The congressional waiver authority was predicated on an expectation that  without the contract guards, military personnel would be used to perform  the increased security function. In addition, it was expected that contract  guards would perform their jobs as well as the military personnel who had  previously served in that capacity. The 2003 authorization act required that  in order to use the authority, the following stipulations must be met:    Recruiting and training standards for contract security guards must be  comparable to standards for DOD personnel who perform security  guard functions.
Contract security guards must be effectively supervised, reviewed, and  evaluated.
Employment of contract security guards must not cause a reduction in  the security of the military installation.
The waiver authority was initially set to expire in December 2005, but the  Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005  extended the authority through September 2006, provided that DOD  submit a report to Congress on the contract guard program. The report,  entitled “Department of Defense Installation Security Guard Requirement  Assessment and Plan,” was submitted to Congress on November 22, 2005.  The National Defense Authorization Act for Fiscal Year 2006 again  extended the waiver authority an additional year, through September 2007.
The Army, Air Force, and Navy each have employed contract security  guards under the waiver authority. The Army was the first to begin  acquiring guards and has used the waiver authority most extensively; as of  December 2005, it had contracted for security guards at 57 installations,  whereas contract guards are being used at 18 Air Force and 5 Navy  installations. Several key players are involved in the Army’s contract  security guard program.
Army Office of the Provost Marshal General: This office directs  policy for all matters relating to Army law enforcement, police  intelligence, physical security, criminal investigations, provost marshal  activities, and military police and provides oversight of these  resources. The Office of the Provost Marshal General was the requiring  agency that determined and prioritized security guard requirements at  each installation and identified the number of guards needed.
Installation Management Agency (IMA): Formed in 2002, IMA is  responsible for centralized oversight of U.S. Army bases and for  administering all aspects of the contract guard program according to  the requirements set by the Provost Marshal General. IMA is  responsible for developing the guard contracts’ performance work  specifications, which specify what the Army expects the contractors to  do, such as detailing the requirements for screening and training.
Army Contracting Agency (ACA) (northern region): This was the  contracting agency for the guard program. It awarded six fixed-price,  award-fee contracts and has issued task orders under these contracts  for guards at 57 installations. The contracting officer has designated an  IMA official as the government’s primary oversight representative for  the guard program.
Army installations: These are the recipients of contract guards.
Installation officials are responsible for ensuring that the contractor’s  performance is evaluated daily and that the guards are screened and  trained by reviewing contractor-supplied records. Installation  personnel provide input to IMA as part of the award-fee process.
U.S. Small Business Administration (SBA): SBA oversees the 8(a)
Business Development Program and is responsible for issuing  regulation and policy concerning the program. Although SBA has  delegated contracting authority to DOD for 8(a) procurements, SBA  district offices—in this case, the Alaska district office—must approve  any proposed contract going to an 8(a) firm and are to be notified if  8(a) contracts are modified.
Contractors: Two of the four contractors providing security guards  are 8(a) Alaska Native corporation firms, both of which have  subcontracted a portion of the work to security guard firms that are  large businesses. ANCs were created by Congress to help settle Alaska  Native land claims and to foster economic development for Alaska  Natives, have been accorded special advantages under SBA’s 8(a)  Business Development Program. 8(a) ANC firms are considered small  disadvantaged businesses, and as long as they meet relevant size  standards for the procurement and other eligibility requirements, they  can be awarded contracts noncompetitively for any dollar amount.  Generally, acquisitions offered to other 8(a) businesses where the  contract value is more than $3 million or $5 million (for manufacturing)  must be competitively awarded. The other two contractors are not ANC  firms.
When acquiring services, a federal agency’s first course of action is  typically to develop an acquisition strategy. Ideally, this would involve  examining and weighing several alternatives. Once the Army decided to  use contract security guards, it began analyzing its contracting options.  ACA could have chosen from among numerous contract vehicles available  to acquire the guard services. It had the option of awarding a new contract  or using existing interagency contracts through other federal agencies. For  example, the General Services Administration (GSA) awards   governmentwide contracts, including contracts for security guard services,  under its Federal Supply Schedule (Schedule) program to help federal  agencies make purchases in less turnaround time on a competitive basis  for commonly used items or services.
To motivate contractors to perform well, the Army chose to use monetary  incentives called award fees. Award fees allow agencies to adjust the  amount of fee paid to the contractor based on performance. We recently  questioned how effectively these fees are being used at DOD because its  programs have paid contractors large amounts of fees on acquisitions that  are experiencing problems. We reported that DOD has little evidence to  support its belief that these fees improve contractor performance and  acquisition outcomes.
Separately, we have reported on concerns involving the trustworthiness of  contractors and subcontractors who have access to U.S. military  installations. DOD officials have told us that they have not evaluated the  trustworthiness of some contractors because the department’s existing  antiterrorism standards do not specifically require them to do so. In  response to our recommendations, DOD officials are in the process of  revising the standards to verify trustworthiness of contractors and  subcontractors and better control access to installations, facilities, and  sensitive areas.
section_title: Army’s Approach for Acquiring Contract Security Guards Relies Mostly on 8(a) Sole-Source Contracts
paragraphs: The Army has awarded two sole-source contracts, totaling almost   $495 million, to 8(a) ANC firms to acquire the bulk of its contract guards,  even though contracting officials pointed out that using competed GSA  Schedule contracts would have been just as fast and less costly. We found  that the Army hired an inexperienced contractor to help refine the  performance work statement, failed to monitor certain subcontracting  limitations under 8(a) contracts, and turned again to the 8(a) sole-source  contracts in a third acquisition phase despite knowing that its competed  contracts for the same services, awarded in the second acquisition phase,  had cost 25 percent less than the initial 8(a) sole-source contracts.
subsections: section_title: Army Used Three-Phased Acquisition Approach
paragraphs: An understanding of the Army’s approach for acquiring contract security  guards requires getting a broad overview of the three phases of the  acquisition, knowing how much the Army has spent so far to acquire  guards and who the key players are, and following the chronology of  contracting events. Table 1 presents the three-phased approach and shows  in which phase the Army used 8(a) sole-source contracts or competitive  contracts.
Since the Army’s contract security guard program began in 2003, the Army  has devoted almost twice as many contract dollars to sole-sourcing under  the 8(a) program as it has to full and open competition. Figure 1 shows  that 46 out of 57 Army installations received their contract guards through  8(a) sole-source contracts in phases one and three and that the guards for  the remaining 11 installations were acquired through competed contracts.
Table 2 shows how the acquisition approach began taking shape before  the Army settled on its three-phased approach and who the key players  were.
section_title: Army’s Sole-Source Approach Centered on Contracting with 8(a) ANC Firms
paragraphs: Even though the use of the GSA Schedule was identified as a possible  acquisition approach, the Army decided that the best course of action for  the first acquisition phase was to award contracts to 8(a) ANC firms,  believing that use of the GSA Schedule would have taken longer, would  not have allowed a consolidated approach at the national level, and would  have diluted the Army’s purchasing power. The Army was not able to  provide us with any analysis showing how it made these determinations.  We found that other federal agencies, such as the U.S. Air Force and the  Department of Homeland Security’s Federal Protective Service, have used  GSA Schedule contracts to obtain their security guards. According to the  Air Force contracting officer, using GSA Schedule contracts was  considered the more efficient, faster method to obtain the guards. The Air  Force has used these contracts to obtain contract security guards at   18 bases at an annual estimated cost of $29 million. The Federal Protective  Service manages and oversees 10,000 armed contract security guards that  were mostly obtained under GSA’s Schedule program.
SBA’s Alaska district office, in a May 2003 letter to ACA, stated that it was  “marketing” a particular 8(a) ANC firm to meet the Army’s security guard  requirements. According to ACA officials, this firm was already being  considered by the Army. A second 8(a) ANC firm that had approached the  Army was also considered. Before awarding the contracts to these  companies, the contracting office asked the Defense Contract  Management Agency to evaluate the firms’ capabilities. The agency rated  one of the firms—the one SBA had marketed to the Army—as “high risk”  for performance because it had experience manufacturing goods but no  experience providing services. The risk was mitigated somewhat because  of anticipated support and assistance from the company’s parent  corporation, the Defense Contract Management Agency said, and because  the firm had chosen to team up with a subcontractor experienced in  providing security guard services. Subsequently, in a process known as  “alpha contracting,” Army officials worked together with this ANC firm to  finalize the contract guard performance work statement by refining  specific tasks for feasibility and affordability. The resulting performance  work statement was then used on all of the security guard contracts.
During a second acquisition phase in September 2003, the Army awarded  four competed contracts. In evaluating the contractors’ cost proposals for  the second acquisition phase, the Army recognized that the same  contractors involved in the first phase submitted cost proposals  considerably higher than the winning proposals. But the Army turned  again to these same contractors in phase three, adding 37 more  installations to the 8(a) sole-source contracts. The Army took this action  despite knowing that the government was paying considerably less for the  phase-two competed contracts. An ACA analysis computing the cost per  contract employee showed that the competitive contracts cost about   25 percent less than the 8(a) sole-source contracts. ACA officials told us  that the Army returned to the ANC firms in part because doing so was an  easy method of obtaining additional security guards and because they  were pleased with the ANC firms’ performance. In addition, IMA officials  asserted that because the phase three requirements were not finalized  until within 90 days of when the contract guards were required, a  competitive solicitation was not possible.
In phase three, the ANC firms’ contracts were modified to expand the  ceiling prices to a total value of $480 million each. When modifying the  contracts, ACA did not comply with a requirement to notify SBA. In  delegating procurement authority under the 8(a) program to DOD, SBA  requires that DOD provide a copy of contracts, including modifications, to  the SBA district office within 15 working days of the date of award or of  contract modification. The Army contracting officer was unaware of this  requirement and said she does not send 8(a) modifications to SBA.  However, after being made aware of this requirement, the contracting  officer said that contract modifications will be forwarded to the  appropriate SBA office.
section_title: ANC Firms Subcontracted with Large Security Guard Companies
paragraphs: Under the 8(a) program, businesses can subcontract up to 50 percent of  the personnel costs incurred under each service contract. The two ANC  firms have established agreements with their subcontractors, large  security guard companies, intended to ensure that the subcontractors  perform 49 percent of the work, while ANC firms retain 51 percent. As of  December 2005, more than $200 million has been subcontracted under the  Army’s guard contracts.
The ANC firms have taken different approaches to dividing the workload  with their subcontractors. One divides the workload on an installation  basis, while the second firm decided to share workload by staffing the  gates at each installation partially with its own employees and partially  with the subcontractor’s employees. In the latter case, the guards’ uniform  patches reflect the names of both companies.
The Army’s contracting officer is responsible for determining whether the  ANC firms are complying with the 50-percent limit on subcontracting, but  this is not being done. The contracting officer told us that the contractors’  proposed approach for complying with the limitation on subcontracting is  reviewed each time additional work is awarded to the ANC firms, but  actual performance is not monitored to ensure compliance. We found  confusion as to who is responsible for the monitoring. The contracting  officer pointed to SBA; the contracting officer representative in IMA  pointed to ACA. In practice, the Army is relying on the prime contractors  themselves to ensure that their subcontractors stay below the 50-percent  limit. The two firms told us they monitor their compliance with the  required 50/50 split.
section_title: Army Procedures Do Not Provide Assurance That Contract Security Guards Are Adequately Screened
paragraphs: The Army’s screening process is unreliable because of lack of adherence  to Army policy, a time lapse of as much as 2 years from the start of interim  employment until detailed nationwide background checks are completed;  and a reliance on job applicants to self-report accurate information on  their employment application forms. The combined effect of these  weaknesses has put the Army at risk of staffing its gates with contract  security guards who are not qualified for the job and in fact has resulted in  applicants with criminal histories, including felons, being employed as  guards. We have previously reported on, and made recommendations  concerning, the inadequacy of screening measures used for contract  employees with access to military installations and other sensitive areas.
subsections: section_title: Two-Part Screening Process Has Significant Weaknesses
paragraphs: Army policy requires all prospective contract guards to undergo a two-part  screening process—an initial screening conducted by the contractor  followed by a thorough, more detailed screening conducted by the federal  government. Table 3 highlights the activities required for each part of the  process and who is responsible for conducting the various screening  activities.
IMA requires contractors to conduct local agency checks before offering  interim employment to prospective employees. Training, such as firearms  training and weapons qualifications, cannot begin until the local agency  checks have been completed and the results are favorable. If the results  are unfavorable, employment is not offered.
Weaknesses in the screening process have led to risky situations, as the  following examples illustrate:    A contractor had permitted guards to take firearms training and start  working even before their local agency checks were completed.
In April 2005, the Army found that 61 guards had been put to work at  one installation even though they had records relating to criminal  offenses, about two dozen of which involved felonies or domestic  violence and abuse cases. One of the guards had an active warrant and  was arrested while performing his duties. The Army found similar  circumstances at another installation in August 2005 with a different  contractor. Twenty-eight guards were identified in the Army’s Crime  Records Center database as having records relating to criminal  offenses, including assault, larceny, possession and use of controlled  substances, and forgery.
At another location, we found that paperwork to initiate national  agency checks had not been submitted for any of the 128 guards hired  during a 2-year period. The contractor had been responsible for  initiating and submitting these checks between December 2003 and  March 2004, but did not follow through and was out of compliance with  the terms of its contract. In March 2004, it became the responsibility of  installation officials, rather than the contractors, to submit the national  agency checks. However, the officials told us they had not received the  new direction from IMA and thus did not comply with it. The officials  said that they have now submitted the required paperwork to initiate  the national screening process. An IMA official told us that national  agency checks had never been conducted for guards at another  installation either.
An Army official at another location informed us that national agency  checks were pending for the 8 guard files we sampled. However, the  installation’s security office found no record of a national agency check  ever being initiated for 3 of these guards.
At the same installation, when we asked for documentation of  compliance with the Army’s regulation for certifying the reliability and  suitability of prospective and current contract security guards, we were  provided with documents that were missing key screening information.  For example, the section addressing the screening of personnel records  was not completed and the name of the physician conducting the  medical examination was not included. Also missing was information  demonstrating that guards had been briefed on the Army’s reliability  standards and objectives. These documents were all signed and dated  by the Army’s certifying official on the day they were sent to us.  Moreover, the certifying official did not fill out the section on the form  indicating whether the individual was or was not suitable for  employment.
section_title: Initial Screening Process Relies on Individuals to Self-Report Information
paragraphs: The Army’s reliance on job applicants to be forthcoming and accurate on  their application forms affects the quality of the local agency checks. The  contractor asks for typical employment information, such as full name,  other names or aliases, Social Security number, addresses during the most  recent five-year period, and employment history. The local agency check is  dependent on full and accurate disclosure on these forms. The contractor  itself does not conduct the check, but hires an outside firm to perform this  task, and each firm uses the job applicant’s information as a basis for  conducting the check. If the applicant falsifies information or neglects to  include former addresses outside the county and state of current  residence, the local agency check may not search existing records in those  jurisdictions, and the contractor may never know that the applicant is  unsuitable for hire. Furthermore, how the checks are conducted varies  among the different firms. For example, one firm conducted a statewide  investigation, while another company checked records in all 50 states and  57 counties.
Because Army policy allows interim employment after a local agency  check uncovers no problems, a contract guard who successfully hid a  criminal history during the job application process could be working at an  installation gate, using a firearm, until a national agency check discovers  the truth. When we brought these concerns to IMA officials, they stated  that permitting interim employment is the fastest, most effective means of  putting contract guards at the gates. IMA officials also asserted that the  issues we found only highlight that the contract security program is  working as intended because individuals with criminal histories ultimately  were caught. The officials were unwilling to explore other options to  mitigate the potential risk of having extended periods of time during which  unsuitable individuals were guarding Army installations.
section_title: DOD Planning Actions to Improve Screening Process for Contractors
paragraphs: In 2003 and 2004, we reported on the inadequacy of screening measures  used for contract employees with access to military installations, facilities,  and sensitive areas, and the risks posed to military forces. As a result of  our work, the Assistant Secretary of Defense, Special Operations and Low  Intensity Conflict, is revising the department’s antiterrorism standards to  require a more thorough screening of contract personnel, including  security guards, at military installations. The standards, however, have not  been completed or approved—and no specific time frame is set for their  approval.
In addition, in response to a Homeland Security Presidential Directive  regarding the need to establish a common identification standard for  federal employees and contractors, DOD is strengthening its screening  process to include new, secure, and reliable credentials that will be used  by DOD employees as well as contract personnel. These credentials will  not be issued unless employees and contract personnel pass the national  agency check. According to DOD’s implementation plan, the revised  screening improvements are to be implemented by October 2006. The  Federal Acquisition Regulation has also been amended to require  contractors to comply with the agency’s personnel identity verification  process.
Between now and when the new screening improvements are  implemented, the Army could mitigate the risk of hiring personnel with  criminal records by supplementing the local agency check with  background information accessed through the Army’s Crime Records  Center database, which maintains information from Army law  enforcement records. The Army’s Criminal Investigation Command has  recommended that these checks be done on prospective security guard  employees.
Another supplemental source of information is the Federal Bureau of  Investigation’s National Crime Information Center (NCIC) database. The  NCIC database is a national index of theft reports, warrants, missing- persons reports, and other criminal justice information submitted by law  enforcement agencies across the United States in a secure, electronic  format in real time. While not a perfect solution, since it also relies in part  on self-reported information, use of this database would give the Army  access to detailed background information on prospective contract guards  with far less turnaround time than it currently takes the Office of  Personnel Management to conduct national agency checks. In fact, the  Army’s Criminal Investigation Command recommends use of the NCIC  database. Some Army installations, concerned about the time lapse  between the local and the national agency checks, have used it to mitigate  what they perceive as risks associated with hiring guards based only on  the local agency check. IMA officials, however, have repeatedly instructed  installations not to use the NCIC database, citing an Army policy from  1993 that, they assert, does not permit its use. An IMA official told us that  the purpose of requiring the contractor to perform the screening function  is to reduce the Army’s costs and to streamline the background check  process with, IMA asserts, adequate results.
During our review, officials from the Office of the Provost Marshal General  told us that they recognized the need for interim improvements in the  screening process and said they would contact the Federal Bureau of  Investigation to explore the feasibility of the Army using the NCIC  database.
section_title: Lax Oversight and Training Irregularities Raise Doubts About the Adequacy of the Guards’ Training
paragraphs: The Army may not have in place adequately trained contract security  guards protecting its installations because contractors are given  responsibility to conduct nearly all of the training; and neither IMA nor  Army installation personnel provide sufficient oversight to know whether  training is actually conducted in accordance with contractual provisions,  training records are accurate and complete, and contractors are adhering  to standards. We found instances where the contractors were not  complying with requirements to track and maintain records of employee  training and where contractors’ training techniques were inconsistent.
subsections: section_title: Weaknesses in Army’s Training Program Include Inadequate Oversight, Poor Record keeping, and Lack of Compliance with Standards
paragraphs: The Army requires contractors to train their guards in 19 competencies  listed in table 4.
The Army requires that the contractors conduct training in these 19 areas  before the guards are put to work and annually thereafter.
subsections: section_title: Government Oversight Lacking
paragraphs: While contractors are required to make training records and certifications  available for Army installations to review, Army personnel are not required  to certify the training. Even though some installations officials said they  have taken the initiative to have their performance monitors observe the  guard training on a periodic basis, we found at 4 installations that  monitoring of the training is not consistently done, if at all. According to  IMA officials, government monitors should be supervising the contractors  on a daily basis and should be observing guard training in accordance with  the Quality Assurance Surveillance Plan. We found, however, that  training is not referenced in the plan. In fact, the plan states that the  government is responsible for ensuring its stated needs are met while  allowing the contractor sufficient latitude to allow accomplishment of the  desired task with a “minimum of oversight.”
Lack of government oversight may have contributed to a situation where a  contractor’s training records were falsified. In 2005, an investigation  discovered that contractor personnel at one installation had falsified  training records relating to firearms qualification. The contractor  subsequently determined that its employees had not followed the  company’s procedures and had validated training for individuals who had  in fact not properly qualified. The installation required the guards to be  requalified in firearms, which cost the Army over $7,000. At least three  guards could not qualify. The supervisor of the guards and training officer  involved in the incidents were terminated by the contractor. According to  Army officials at that installation, they have since stepped up their on-site  observations of the weapons training.
section_title: Training Records Incomplete
paragraphs: We found that poor documentation in the training files also contributed to  some installations not knowing whether guard training is meeting contract  requirements. Our analysis of individual training records found several  instances of missing documentation and irregularities. Each of the  installations we visited documented and maintained the training records  differently. The lack of detail, in some cases, would make it impossible for  a government performance monitor to know whether the guards had been  trained as required. We also found that at three installations, the  contractor had certified security guards as trained before records  indicated that the training had been completed, including one case where  a guard was certified before the weapons qualification training had even  started. At another installation, officials determined the guards did not  need to train in one or more of the specific training topics found in the  performance work statement. However, according to installation officials,  IMA was not informed of this decision, nor was this deviation noted in  individual training records.
section_title: Training Techniques and Tasks Not Standardized
paragraphs: While the Army requires contractors to train their employees in the   19 competency areas, it is left to the contractors to determine how to  structure the training. The Army provides little guidance in terms of  training content or techniques. As a result, we found a lack of  standardization across installations. For example:    weapons training conducted in a simulation room with moving targets  versus only classroom lectures;    prospective guards given unlimited tries to pass weapons training  versus being allowed only three tries;  firearm training conducted within the first 3 days of training—because  this is an area prospective guards are likely to fail—versus during the  third week of training; and    a subcontractor using its own, detailed weapons re-qualification policy  that the prime contractor has not endorsed and does not follow.
Because the contractors have a large amount of leeway in how they  conduct the training, this variation is not surprising.
section_title: Potential Improvements for Contract Security Guard Training
paragraphs: While the Army does not require its performance monitors to oversee  contract security guard training, other federal agencies do require such  government oversight. For example, the Air Force and the Federal  Protective Service, both of which use contract guards, require government  officials to observe and certify that the guards have successfully  completed weapons-firing qualification.
Also, we have previously reported on the benefits of centralized  development of training content, including standardization. Centralizing  design can enhance consistency of training content and offer potential  cost savings. Additionally, centralization can help agencies realize cost  savings through standardization of record keeping and simplified and  more accurate reporting on courses, certifications, educational attainment,  costs, or standards. The Transportation Security Administration, for  example, has taken several steps to strengthen its review of air carriers’  crew member security training curriculum. These steps include developing  a standard review form for inspectors and trainers to use to enhance  consistency in the review process.
Based on our review of a draft IMA document, the Army is considering a  requirement that the contractors submit periodic status reports specific to  each installation, using a standard form that includes an update on  training. This training update would include the number of new hires  trained, annual refreshers and continuing education classes, and weapons  qualifications. In December 2005, IMA officials conducted a briefing to the  installation monitors that discussed the need to inspect training and  training records.
section_title: Continued Need for Award Fees Is Questionable
paragraphs: The Army’s strategy of using award fees to motivate contractors has  resulted in over $18 million in fee payouts for complying with the basic  contractual requirements—not for exceeding what the contract requires.  We identified a number of concerns with the award-fee process and  question the continued need for award fees under the security guard  program.
subsections: section_title: Award-Fee Plan Rewards Basic Compliance
paragraphs: Each of the Army’s security guard contracts uses the same award-fee plan,  which spells out criteria for evaluating contractor performance, and the  final ratings dictate how much money is to be paid in award fees. In our  comparison of the award-fee plan with the contract’s statement of work,  we found that the award fee is not designed to elicit “above-and-beyond”  performance. Rather, the award-fee plan merely requires contractors to  meet contractual requirements.
The evaluations are conducted on a semiannual basis. Each of four award- fee factors is worth a certain percentage of the total score. In addition,  under each factor, a score between 0 and 100 can be given. A score from  91 to 100 is considered excellent performance, 81 to 90 is very good, 70 to  80 good. A score of 69 or below is considered satisfactory or below  performance, resulting in no award fee. See table 5 for an overview of the  award-fee factors used in conducting the semiannual evaluations.
section_title: Army Has Awarded Almost All Available Award-Fees
paragraphs: As of February 1, 2006, a total of $18.76 million in award fees was available  in the contract guard program. Only $0.42 million or almost 2 percent was  not earned by the contractors. As figure 2 shows, IMA has authorized  almost all of its available award fees.
The Army’s practice of routinely paying its contractors nearly the entire  available award fee creates an environment where contractors expect to  receive most of the available fee, regardless of acquisition outcomes. We  recently reported that DOD frequently pays most of the available award  fee to contractors regardless of their performance outcomes.
The award fees being paid to the security guard contractors are in addition  to the profit they have already built into their prices. We found that under  the terms of their contracts, not all of the contractors are eligible to  receive the same percentage of award fee—even though they are all  performing under the same performance work specification. Three of the  four contractors negotiated a fee equal to 5 percent of their annual  contract value, but the other negotiated only 3 percent. One contractor  told us that it offered to reduce its fee but ACA officials refused, stating  that they believed the 5 percent fee was necessary to motivate  performance.
section_title: Army Performance Monitors Not Consistently Complying with Award-Fee Plan
paragraphs: Among the criteria used to rate the contractors’ performance are the  results of on-site inspections of the guards. Army performance monitors  are required to conduct inspections, evaluate performance, take into  account any comments from persons who have had dealings with the  guards, assign ratings commensurate with performance, and report their  ratings to IMA’s award-fee review board. The board comprises members  familiar with the contract requirements, and the board makes the final  recommendation to IMA’s award-fee determining official about how much  the contractors should receive in award fees.
We found that at over half of the 11 Army installations we visited, the  government monitors rated performance without having conducted all of  the required inspections. Several monitors stated that limited resources  prevented them from conducting the inspections. Three monitors told us  they have not been conducting weekly checks of the contractors’  performance. Another monitor said it was a “waste of time” to go around  counting guards to ensure the contractor has provided enough employees  to meet contract requirements. Several monitors told us that they are not  conducting the required blind checks, where they attempt to get on base  using false identification. In one case, the monitor said this check is  impractical because the contract guards know him by sight. One monitor  told us that in deriving the ratings, he starts at 100 and lowers the rating if  there are inadequacies in performance.
Lack of guidance from IMA was a complaint among the monitors we  interviewed. For example, several monitors told us that they have no  quantifiable way of determining whether a contractor who performs in an  excellent manner in a certain evaluation factor should receive a score of  91 or 100. For lack of any other method, they ultimately use subjective  reasoning to make their decisions. Several monitors have taken it upon  themselves to establish their own methods for determining where the  ratings should fall. One created a checklist that he fills in each week, and  at the end of each evaluation period the weekly ratings are used to derive  an overall rating. Another convenes a “mini” award-fee board at the  installation to obtain formal input from other government officials familiar  with the contractor’s performance. Actions such as these demonstrate that  some monitors are attempting to inject more rigor into the award-fee  process, but the result is a lack of uniformity in criteria for determining  award-fee payouts. Although monitors said they have brought this issue to  IMA’s attention, the agency has not issued any clarifying guidance. IMA  and ACA officials indicated they believe the award-fee plan provides  sufficient guidance for the performance monitors to follow.
section_title: IMA Award-Fee Board Has Recommended Consistently High Ratings
paragraphs: March/April 2005 marked the end of an award fee evaluation period. Our  analysis found that, of the 50 recommendations given by the award fee  board to the fee determining official, all were in the “excellent” range, with  29 receiving scores of 100 percent and 10 others receiving 99 percent.  None fell below 91 percent. Table 6 shows that this result is typical of the  pattern over the life of the contract guard program, with 66 percent of  contractor evaluations receiving a score of 99 or 100 percent.
section_title: Award-Fee Board’s Processes Lack Rigor
paragraphs: We found that IMA’s award-fee board did not always carefully review  performance monitors’ input in making award fee determinations. An IMA  official said that “rubber stamping” by the board may have led to an error  that we found in the course of our audit work. During the March/April  2005 evaluation period, the board mistakenly reviewed an evaluation  report covering the wrong period and recommended 99 percent of the  available award fee be paid to the contractor at the time this contractor  was under investigation for falsifying training records. To rectify the error,  the board later recommended lowering the score from 99 to 90 percent of  the available award fee amount. The government monitor at this  installation was unaware that the board had reviewed the wrong report or  that it had initially awarded the contractor 99 percent of the award fee.
IMA’s appeals process also raises questions about the integrity of the  award-fee process. During the March/April 2005 evaluation period, the  award-fee board raised over 25 percent of performance monitors’ ratings.  Sometimes the board raised the scores unilaterally because members  believed the monitors were being too critical of the contractor’s  performance. Sometimes the scores were raised because the performance  monitors did not, in the board’s view, provide sufficient narrative to  support their scores. In these cases, the board normally raised the scores  without contacting the monitors for additional support. In reviewing  performance evaluations, we found that some performance monitors, on  the basis of poor contractor performance, gave the contractors relatively  low ratings—in the “good” range with a score between 70 and 80—but the  IMA board often raised the scores. For example, for the “sound  management of government property” factor, a performance monitor  provided a score of 80 because the contractor had three vehicular  accidents. IMA raised the score for this factor to 95 because the contractor  remedied the problem and paid for damages. This action resulted in the  contractor receiving an overall performance score of 99 and almost  $55,000 in award fees for that period.
Contractors, upon receiving award-fee evaluations, are allowed to rebut  the scores, either in person or by letter. The board has raised ratings after  hearing rebuttals during the appeals process, but it is not IMA’s policy to  inform performance monitors when their submitted scores are changed. In  the March/April 2005 evaluation period, IMA adjusted 14 of the   50 performance monitor assessments. IMA raised the scores for 13 of  them—increases ranging from 2 to 15 percent—and lowered the score for  one by 6 percent. In one case, a performance monitor reported that the  contract guards were not able to detect a fake installation vehicle pass,  which was presented to gain access at nine different control points. The  performance monitor also reported that five guards, in violation of  standard operating procedures and Army regulation, fired on a vehicle  leaving the installation. After the contractor appealed the score, IMA  raised the rating of 90 (very good) to 96 (excellent), awarding the  contractor almost $246,000.
In another case, a performance monitor had deducted 10 points under the  factor “effective contribution to a positive Army image,” in part because a  contractor employee had been arrested off-post with 100 prestamped  passes to the base in his possession. The contractor protested its rating,  arguing that the incident occurred off-post and involved no negative  publicity. IMA added back 2 points, awarding the contractor almost  $97,000.
We also found that in one case, IMA reduced the installation monitor  performance rating from 99.1 to 93.1 points, both scores considered  excellent, because the contractor had refused to provide pepper spray to  its guards, as required. Even though the contractor was not in compliance  with the contract, over $100,000 in award fee was authorized.
section_title: Continued Need for Award Fee Questionable
paragraphs: During the acquisition planning for the guard contracts, ACA’s contract  attorney questioned the appropriateness of using an award fee. In his  memorandum to the contracting officer, he stated that the government has  already dictated the standards to the contractor in the statement of work,  and if those standards are insufficient, the government should raise the  standards. The attorney concluded that he was unconvinced that adding  an award fee made good business sense and was in the best interest of the  government. Nevertheless, ACA prepared a written justification for use of  award fees which asserts, among other reasons, that award fees were  needed to motivate the contractors because of the “extremely subjective”  nature of the performance evaluation. The Federal Acquisition Regulation  states that fixed-price contracts, where the contractor’s profit is already  built into the base price, may include award fees to motivate a contractor  when other incentives cannot be used because the contractor’s  performance cannot be measured objectively. However, IMA’s award-fee  plan sets forth a number of objective factors, such as providing the  required coverage at the gates and wearing proper uniforms, on which  monitors are to base their ratings.
ACA’s justification also states that the award fee is needed to motivate a  “better than satisfactory” performance. As discussed above, the  contractors are merely required to comply with the basic terms of the  contract, not to perform above and beyond, to earn the fee. The initial  stated intent of having the award fee was that the fee would motivate the  contractors to provide security guards as quickly as possible—within 90  days or fewer of contract award. The award-fee plan was subsequently  modified to remove the 90-day requirement now that guards are in place,  and it now reflects the evaluation criteria outlined in table 5. The Army’s  continued need to use award fees well after the contractors have achieved  full operational capability is unclear. IMA officials said they like the award  fee because it gives them leverage to deal with the contractors and results  in the contractors being more responsive.
In addition, the ACA contracting officer, who is handling all of the Army’s  guard contracts and task orders, told us she finds the award-fee  administration time-consuming and cumbersome, because she must  modify each task order every 6 months to reflect the award-fee decisions.  We found errors in the administration of the program. For example, in one  incident the contractor was overpaid $47,548, but this administrative error  was not recognized for over a year. In two other examples, award fees  were based on an incorrect amount and the contractor was underpaid by  about $130,000.
section_title: DOD Report to Congress Does Not Address Some Key Issues Pertaining to the Army’s Guard Program
paragraphs: The Ronald W. Reagan National Defense Authorization Act for Fiscal Year  2005 extended the waiver authority for hiring contract guards through  September 2006, but the extension hinged in part on a required report by  DOD on its contract guard program. The report, “Department of Defense  Installation Security Guard Requirement Assessment and Plan,” was  delivered to Congress on November 22, 2005. The report addresses Army,  Navy, and Air Force experience with contract guards. On the basis of our  work with the Army, which has acquired the vast majority of contract  guards, we believe additional observations should be provided on some of  the report’s statements.
The report describes the use of contract security guards as “cost- effective,” but at the same time states that the Air Force has  determined that cost-effectiveness must be determined base by base  because of differing locations and economic circumstances. We found  during our review that the issue of cost-effectiveness is not clear-cut. In  fact, there are differing opinions on this subject even within the Army.  The Deputy Assistant Secretary of the Army’s Director for Programs  and Strategy prepared an independent cost evaluation in April 2005  entitled “Contracting Versus Using Department of the Army Civilians to  Provide Installation Security.” The study found that using Department  of the Army civilian guards is significantly less costly than using  contract guards. IMA officials disagree, emphasizing that the cost  evaluation does not calculate the challenges imposed by the Army’s  current personnel system in hiring civilians or the benefit of  contracting this function in the flexibility it offers IMA.
The report states that “assessments to date determined that they   perform on par with military security guards.” When  we asked the report’s working group chairman for the basis for this  statement, we were told that input from installation officials had been  obtained. IMA officials, who assisted in writing the report, told us that  the assessments refer to the award-fee performance evaluations. Those  evaluations, however, are used to determine how the contractors, not  individual contract guards, are performing; they do not compare  contract guards with military security guards.
The report states that “contracts for security services are specific  concerning the training, performance and supervision of security  guards. Effective oversight ensures that installation and facility  security is not diminished.” We found that the oversight function  performed by the Army, specifically training, needs improvement.
The report cites quality assurance surveillance plans that are supposed  to be prepared by government representatives and used by installation  performance monitors. We found that the Army’s quality assurance  surveillance plan, which applies to each of the 57 installations using  contract security guards, mirrors the award-fee plan, which  performance monitors have found to be unclear.
The report states that “on-site visits of installations by the headquarters  of the respective services are conducted to ensure proper enforcement  of the performance work statements.” However, IMA officials did not  visit all 57 installations. In fact, they told us that in 2005, they  conducted 17 on-site visits to enforce the performance work statement.  At the 11 installations we visited, we found that improvements were  needed in training and screening oversight. At one installation, it took  over 2 years before IMA found that the contractor and the installation  were not in compliance with the performance work statement.
The report states that “local security checks and National Agency  Checks are performed on all prospective employees.” As we found  during our review of the Army’s guard program, weaknesses in the  screening process have led to unscreened personnel guarding the gates,  and the checks had not been performed on all contract guards.
The report characterizes the contracts to the ANC firms as set-aside  8(a). Set-aside 8(a) generally refers to cases when there will be  competition among 8(a) firms. In fact, these were sole-source contracts  under the 8(a) program. According to ACA officials, future reports will  make this clarification.
section_title: Conclusion
paragraphs: To make the best use of taxpayer dollars and achieve its desired outcomes  in relying on contractors to guard military installations, the Army requires  sound acquisition planning, leading to prudent contract awards, and  rigorous monitoring of contractor performance. A lack of diligence in  these areas, coupled with the practice of awarding fees for compliance  with basic contractual requirements, indicates that the Army needs to do  more to achieve its goals. The Army needs to take a stronger role in  overseeing contractor performance, and we believe a reassessment of the  acquisition approach is called for.
section_title: Recommendations
paragraphs: We are making the following seven recommendations to the Secretary of  Defense to improve management and oversight of the contract security  guard program. We recommend that the Secretary of the Army be directed  to take the following seven actions:    Direct the ACA to take the following two actions:  reassess its acquisition strategy for contract security guards, using  competitive procedures for future contracts and/or task orders,  remove award-fee provisions from future contracts and task orders  under existing contracts.
Direct IMA to take the following four actions:    monitor the status of DOD’s revised antiterrorism standards and  implement them into Army policy for screening of contract security  guards as deemed suitable,    direct installations to use the Army’s Crime Records Center and the  National Crime Information Center databases to supplement initial  screening (local agency check) of contract security guards until the  new standards are in effect,  issue a standardized recordkeeping format for contractors to show  that the guards have met all training requirements, and  require installation performance monitors to review training files to  ensure that initial training certification is achieved as well as  subsequent annual recertification.
Direct the Office of the Provost Marshal General to require an Army  official to monitor and certify contractor training of guards, especially  weapons-qualification training.
section_title: Agency Comments
paragraphs: We provided a draft of this report to DOD for review and comment. In  written comments, DOD agreed with the findings and stated that the  Department of the Army is implementing the seven recommendations.  DOD stated that these recommendations will strengthen the contracting  process and help ensure that the department receives the best security  guard support available.
The department’s comments are reprinted in appendix III.
We are sending copies of this report to the Secretary of Defense, the  Secretary of the Army, the Director of the Office of Management and  Budget, and interested congressional committees. We will make copies  available to others upon request. This report will also be available at no  charge on the GAO Web site at http://www.gao.gov  If you have any questions about this report or need additional information,  please contact me at (202) 512-4841or Schinasik@gao.gov. Contact points  for our Offices of Congressional Relations and Public Affairs may be found  on the last page of this report. Key contributors to this report were   David E. Cooper, Director; Michele Mackin, Assistant Director;   Noah Bleicher; Lily Chin; Todd Dice; Paul Gvoth; Arthur James Jr.;   Robert Rapasky; Holly Reil; and Russ Reiter.
section_title: Appendix I: Scope and Methodology
paragraphs: The Army, Air Force, and Navy each have employed contract security  guards under the congressional waiver authority. At the time of our  review, the Marine Corps had not yet used the authority. We focused our  review on the Army’s use of contract security guards because it (1) was  the first activity to use the waiver authority and (2) had used the authority  substantially more than the Air Force or Navy. The first Army contract  security guard contract was awarded in July 2003, whereas the Air Force  and Navy contracts did not start until May and June 2004, respectively. In  addition, the Army has contracted for security guards at 57 installations,  whereas contract security guards are being used at 18 Air Force and   5 Navy installations.
During our audit, we conducted interviews with Army officials from the  Installation Management Agency (IMA), the Army Contracting Agency, and  the Office of the Provost Marshal General. We visited 11 Army installations  that are currently using contract security guards and met with government  and contractor officials at each location. Officials from these   11 installations are responsible for a total of 14 different installations.  These installations represent approximately 25 percent of the   57 installations that have the contract security guard program in place. We  used two factors to determine which installations to visit: the contractor  and the March/April 2005 performance monitor assessments. Our analysis  of these evaluations ensured we visited at least 1 installation per  contractor that had a perfect score, where the average of the four award- fee rating categories was 100 percent--typically, these were locations IMA  had recommended we visit. To provide a balanced view, we then chose   2 other locations for each contractor with lower averages and a wide  variation in the range of scores for the categories. We visited   3 installations per contractor, except in the case of Coastal International  Security, which provides guards at only 2 locations.
At the 11 installations, we collected an arbitrary sample of the personnel  files, including screening and training records. We met with officials  responsible for and collected documentation related to the contract  security guard program at (1) Adelphi Laboratory Center, (2) Fort Belvoir,  (3) Fort Campbell, (4) Fort Detrick, (5) Fort Drum, (6) Fort Eustis/Fort  Story, (7) Fort Meade, (8) Fort Myer/Fort McNair, (9) Redstone Arsenal,  (10) Fort Riley, and (11) Fort Stewart/Hunter Army Airfield. We also met  with officials from the four contractors and two subcontractors that  provide guard services to the Army: Akal Security, Alutiiq Security and  Technology (with Wackenhut Services as a subcontractor), Chenega  Integrated Systems (with Vance Federal Security Services as a  subcontractor), and Coastal International Security. We also consulted with  officials from the Army Audit Agency, Air Force Audit Agency, and the  Army Criminal Investigation Command.
To address the Army’s acquisition strategy, we reviewed the various  proposals for and the ultimate acquisition plan used by the Army  Contracting Agency. We reviewed Defense Contract Management Agency  analysis on the Alaska Native corporation (ANC) firms. We also reviewed  federal regulations pertaining to ANCs under the Small Business  Administration’s 8(a) Business Development Program. We reviewed each  contract and its subsequent modifications. We analyzed the task orders to  determine the cost of the different contract vehicles the Army used to  obtain its contract security guards. We compared the Army’s acquisition  strategy with that of other agencies using contract security guards,  specifically the U.S. Air Force and the Department of Homeland Security’s  Federal Protective Service. We also held discussions with officials from  these two agencies.
To assess whether the Army ensures that the contract security guards are  effectively screened, we reviewed screening requirements in the  performance work statement and analyzed the selected personnel  screening files at the 11 installations we visited. We reviewed screening  requirements the Air Force and Federal Protective Service have for their  contract security guards. We interviewed officials at the installations,  including contractors, and IMA. We shared the specific results of our file  review of screening records with installation and contractor officials. We  reviewed our prior reports on combating terrorism and consulted with  representatives from the Department of Defense’s Office of Special  Operations and Low Intensity Conflict and the Federal Bureau of  Investigation.
To determine whether the Army ensures the contract security guards are  adequately trained, we reviewed the training requirements outlined in the  performance work statement and Army regulation 190-56, The Army  Civilian Police and Security Guard Program (June 1995), in addition to  analyzing the sample of personnel training files at the 11 installations we  visited. We interviewed installation officials, including contractors, and  IMA. We shared the specific results of our file review of training records  with installation and contractor officials. We reviewed the report on the  falsification of training records prepared by a contractor and consulted  with an official from the Defense Criminal Investigative Service. We also  reviewed the training requirements for contract security guards at the Air  Force and the Federal Protective Service.
To assess the Army’s rationale for providing the contractors with award  fees and how the award fee process is being implemented, we reviewed  the Federal Acquisition Regulation to determine what circumstances are  appropriate for using an award fee with a firm fixed-price contract. We  reviewed the Army Contracting Agency’s “Contract Incentives Guide”  (November 2004), and our recent report Defense Acquisitions: DOD Has  Paid Billions in Award and Incentive Fees Regardless of Acquisition  Outcomes (December 2005). We compared the government monitors’  evaluation reports with the criteria in the award-fee plan as well as with  the final scores approved by the IMA fee determining official. We analyzed  the requirements in the performance work statement and compared them  with the award fee-plan. Because the Army does not maintain information  on how much it is paying in award fees, we reviewed each task order to  identify the award fees authorized and whether contract modifications  were executed. At each of the installations visited, we discussed the  award-fee process with the performance monitors and obtained their  observations and concerns.
We conducted our review from May 2005 to February 2006 in accordance  with generally accepted government auditing standards.
section_title: Appendix II: List of Army Installations Using Contract Security Guards
paragraphs: Akal Security, Inc.
Coastal International Security, Inc.
Akal Security, Inc.
Akal Security, Inc.
Coastal International Security, Inc.
Akal Security, Inc.
Akal Security, Inc.
Akal Security, Inc.
Akal Security, Inc.
Akal Security, Inc.
3    ANC- 8(a) sole-source  3    ANC- 8(a) sole-source  1    ANC- 8(a) sole-source  3    ANC- 8(a) sole-source  3    ANC- 8(a) sole-source  3    ANC- 8(a) sole-source   from the ANCs’  sole-source contracts under the 8(a) program.
Phase 2: Installations obtaining contract security guards under the full and open competition  contracts.
Phase : Installations obtaining contract security guards starting in fiscal year 2004 and later from the  ANCs’ sole-source contracts under the 8(a) program.