Open Recommendations

Rec. 1.a.1: The DoD OIG recommended that the Under Secretary of Defense for Acquisition and Sustainment, in coordination with the Program Executive Officer for the F'35 Joint Program Office modify the F'35 air vehicle sustainment contract to include incentive metrics and associated remedies that closely align with or support the performance requirements outlined in the bilateral Performance'Based Arrangement or obtain a waiver for not including the performance requirements from each Military Service.

Rec. 1.a.2: The DoD OIG recommended that the Under Secretary of Defense for Acquisition and Sustainment, in coordination with the Program Executive Officer for the F'35 Joint Program Office modify the F'35 air vehicle sustainment contract to include contract requirements that contain specific metrics and associated remedies, including the development of metrics for action requests, property transfer responses, and resolution timelines.

Rec. 1.a.3: The DoD OIG recommended that the Under Secretary of Defense for Acquisition and Sustainment, in coordination with the Program Executive Officer for the F'35 Joint Program Office modify the F'35 air vehicle sustainment contract to include property clauses the Defense Contract Management Agency considers necessary in future option years.

Rec. 1.b: The DoD OIG recommended that the Under Secretary of Defense for Acquisition and Sustainment, in coordination with the Program Executive Officer for the F'35 Joint Program Office enforce the requirement for Lockheed Martin to provide a completed DD Form 250, Material Inspection and Receiving Report, or its electronic equivalent.

Rec. 2.a: The DoD OIG recommended that the Program Executive Officer for the F'35 Joint Program Office align the contracting officers representative responsibilities to monitor and report impactful evaluation data on Lockheed Martins performance, including the impact of cannibalization of spare parts on aircraft readiness, and update these responsibilities in the Quality Assurance Surveillance Plan.

Rec. 2.b: The DoD OIG recommended that the Program Executive Officer for the F'35 Joint Program Office provide all contracting officers representatives a detailed Performance Work Statement and appropriate access to databases and information required to accomplish effective oversight.

Rec. 2.c: The DoD OIG recommended that the Program Executive Officer for the F'35 Joint Program Office coordinate with the Military Services to complete a workforce study to determine appropriate contracting officers representative requirements and staffing levels for the F'35 air vehicle sustainment contract.

We recommend the Director, Nuclear Asset Sustainability Projects, take steps to ensure that project managers include Supply Chain in the solicitation and bid evaluation processes in a timely manner.

We recommend the Director, Nuclear Asset Sustainability Projects, take steps to ensure that independent estimates are completed as required.

We recommend the Director, Nuclear Asset Sustainability Projects, take steps to ensure that estimation checklists are completed as required.

Revise policies and procedures to strengthen internal controls over the review of expenditures charged to ARC and reported as non‑ARC matching cost share. The revised policy should require a documented review of expenditures for allowability in accordance with the Uniform Guidance prior to reporting, including procedures to ensure unallowable costs are identified, excluded, and not claimed for reimbursement or cost share. Additionally, the policy should clearly define roles and oversight responsibilities to ensure consistent compliance with federal cost principles.

Work with ARC to resolve the questioned cost totaling $19,040 of ARC funded equipment cost.

Revise policies and procedures to reflect the updated process for progress report tracking to ensure the timely submission of progress reports.

Identify alternative methods for calculating the average cost to process Old-Age, Survivors, and Disability Insurance (OASDI) and/or Supplemental Security Income overpayments to ensure consistency across both programs.

Terminate collection activities for the 15 low-dollar overpayments we identified that had not been terminated or collected.

Review the remaining population of 3,733 low-dollar OASDI overpayments and terminate collection activities where appropriate.

Determine the criteria for when the cost of collection is not cost-beneficial and update policy to specify when collection actions should be terminated or suspended.

We recommend the Senior Vice President, Generation Projects and Fleet Services, to update the project management procedure to define rework and provide guidance for documenting and tracking rework.

We recommend LAN implement a process to allocate indirect costs to funding sources with sufficient documentation to allow for third party review.

We recommend LAN update its written policies to comply with LSC requirements and reflect current cost allocation practices.

We recommend LAN establish a review process requiring verification of PTO coding before submission to their Finance Department. Staff should be trained in the correct use of timekeeping codes, and all LAN employees should timely provide the Finance Department with complete timekeeping records, including category codes.

We recommend LAN develop a comprehensive standard operating procedure that outlines the current wage allocation and reconciliation process, including clear guidelines on documenting adjustments or changes to the process, personnel responsibilities, and timelines.

We recommend LAN review and revise system access controls to limit administrative rights to essential personnel, aligning user rights with specific roles. At a minimum, we recommend that LAN designate one individual as primary administrator to ensure that payroll staff cannot modify or approve their own pay.

We recommend LAN implement controls to ensure all disbursements are properly coded in the accounting system with grant codes and are supported by source documentation clearly indicating the funding source.

We recommend LAN implement a process to ensure only allowable expenses are allocated to LSC in accordance with applicable LSC requirements and guidance.