DEFENSE CONTRACT MANAGEMENT AGENCY

3911? A. AVENUE, BUILDING ?10500
FORT LEE, VIRGINIA 238014 809

 

(Signature Date)

SUBJECT: DEFENSE CONTRACT 
REPORT OF ACT VIOLATION
Defense Contract hilanagement A Case 18~01

1 . Appropriation(s) Involved Title. Symbol. and Apportionment Status.

Fiscal ear 2014 (FY14) Defense Operations and Maintenance (DOM) (97 0100)

Fiscal Year 2014 (FY14) Research Development 'I?esting Evaluation (97 0400)
Fiscal Year 2015 (FY15) Defense Operations and l\t?laintenance (DOM) (97 0100)

Fiscal Year 301 5 (FYI 5) Research Development ?l?esting} at liiralnation {97 0400)
Iiiseal 1301 (I Yin) Defense lpemtiuns anti Maintenunu? (I 01003

liist?al Year 3016 (I?Yiti) Research Itex elepntent Festintg Ex alnation (RI (93" 0100;
Iiist'al Year .1017 7) ?Home intentions and Maintenance (i )Okl) E97 01 

1113031 Research Testing; Ci: alnatiun (RI )?I?niEt 0100}
.1 Dct?enset (DONAL 3?30] A.
cnue. Building EOSUO. lion I we. VA 2.130% .1801?

1

it) i?txlijltgiitu I 01 SI 




10? Defense. .?lSitlnt?30H. 17H 3.

iht?t?e \xei?t? amount 13001001 1 ill 1 . '1 llit? 31.1 3.1) lor
the Defense Operations and Maintenance appropriation (97 0100) in fiscal years
14. 15 and 16 as shown on DCMA IWMS Status (Enclosure 4). in accordance
with the Ronald W. Reagan National Defense Act for 2005. and Department of
Defense policy, modernization and enhancement to a system that costs more than
$1 million must be certified and approved by the Investment Review Board and
Defense Business System Management Committee prior to the obiigation of
funds. Effective in FY 14 this included obligations to maintain current services as
well. Title 10 U.S. C. section 2222 makes this requirement subject to the Anti
De?ciency Act (ADA). 10 U.S.C 2222 ?Obligation of Funds in Violation of
Requirements? - The obligation of Department ofDejense?mdsfor a covered
defense business swtem program that has not been certi?ed and approved in
accordance with subsection is a violation of section 1341(o)(1)(A) of title 31.
10 U.S.C. 2222 FOR OBLIGATION OF FUNDS FOR
COVERED DEFENSE BUSINESS Funds available
to the Department of the Defense, whether appropriated or 
?my not be obligated for de?nse business system program that will have a total
cost in excess of$1,000,000 the period ofthe current ?rtureyears defense
program submitted to Congress under section 221 ofthis title unless (I) the
appropriate pro?certi?cation authorityjor the covered do ense business system

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program has determined that (A) the de?ense business system program is in
compliance with the enterprise architecture developed under subsection and
appropriate business process re?engineering e?orts have undertaken to ensure

that -
i. The business process supported by the defense business system program is
or will be a streamlined and e?icient as practicable; and
ii. The need to tailor commerciel?o?the-shelf systems to meet unique

requirements or incorporate unique interfaces has been eliminated or
reduced to the maximum extent practicable;

b. In Fiscal Years 2014, 2015, and 2016, DCMA exceeded the DCMO (CMO)
allocation of Operation and Maintenance Funding. in FY 2014 MS
obligations exceeded the approved 081M allocation of funds by $4,360,685obligations exceeded the approved allocation of funds by
$9,149,175. In FY 2016 1WMS obligations exceeded the approved 
allocation of funds by $3,622,908. Each of these excess obligations is an Amount
Violation of Administrative Subdivisions, (31 U.S.C. 1514). 31 U.S.C. 1514
?Administrative division of apportionments? states: he official having
administrative control of an shall prescribe by regulation a
system of administrative control not inconstant with accounting procedures
prescribed under law. The system shall be designed to:

i. Restrict obligations or expenditures from each appropriation to the
amount. of apportionment or reapportionments of the appropriation; and

ii. Enable the o??icial or head of the executive agency to fix responsibility for
an obligation or expenditure exceeding an apportionment or
reapportionment.

c. The amount violation in FY 14 was $4,360,685 with DCMA obligations of
$6,482,685 and approval by the Deputy Chief Management Of?cer (DCMO) at
for $2,122,000. in FY 15 DCMA exceeded the DCMO authorized amount
of$3,813,000 by $9,149,175 with actual obligations of$12,962,175. in FY 16
DCMA incurred obligations of$15,436,908 exceeding the DCMO approved
amount of $1 1, 814,000 by $3,622,908. in total For these three fiscal years
DCMA exceeded the DCMO authorized amounts for MS by $17,132,768. It
should be noted that DCMA did not capture any in house government cost for
labor and associated expenses as required in accordance with the FM R,
Volume 213, Chapter 18 which requires all funds to be included, notjust the
contract com. The true cost of IWMS was not captured or reported and no
accurate estimate was found. The labor cost from 13 FY 17 would add
additional millions of dollars to the actual cost.

5. Date Violation Occurred.

a. The initial violation occurred on September 30, 2013 when DCMA obligated a
task order in the amount of $396,864 on a dclivcry order contract with Discover
Technologies which was a violation ofthc Purpose Statute U.S.C 1301). This

Ellingc

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was charged to funds but was properly chargeable to funds IAW
the DOD FMR, Volume 2A., Chapterl. Budgeting for information
Technology and Automated Information Systems. The RD'l?drl?E. funds should be
used to develop major upgrades increasing the performance envelope of existing
systems, purchase test articles, and conduct developmental testing and/or initial
operating test and evaluation prior to system acceptance. in general all
development activities involved in bringing a program to its objective system are
to be budgeted in it further states that Commercial woff-the-shelf
(COTS) systems that require engineering design, integration, test} and evaluation
to achieve the objective performance will be budgeted in 

b. DCMA de?ned the desired outcomes of in a leadership brie?ng 1 May
2012 by r. Timothy Callahan. Director ot?Contracting (Enclosure 
replacement system that delivers workflowl?workload methodology across
functional areas, provides superior records management, and meets technical
requirements necessary for the workforce to perform its mission.? In FY 2012
DCMA contacted with Apprio to develop the concept and technical requirements
to replace and enhance the Electronic Data Worktlow (EDW) system. Apprio
provided brie?ngs to DC MA leadership on May 21: 2012 and July 3, 2012
(Enclosure 6 and 7). Mr. Charlie Williams, in, DCMA Director issued a DCMA
?On Point? paper to all DCMA employees stating ?The Agency is implementing
the Integrated Workload Management System (1W MS) to provide more
integrated, efficient. and effective Agency~wide processes. An important first
step in the IWMS incremental deployment will be to replace Electronic Document
Work?ow (EDW) with 1W MS, a huge undertaking. It is very clear that the
DCMA plan was to develop 1W MS as a new system to replace EDW with
enhancements requiring RD?l?ch funds and not for current operations using
The dates of these purpose violations continued in FY 13 and followed additional task orders were issued on contracts. The cost
in FY 12 with Apprio and another supporting contractor (Appian) were properly
charged as since they were for planning of the requirements and not actual
development. The amount violations occurred additional
task orders were issued on the contract and obligations incurred.

c. It also appears that a Time violation occurred in FY 13, when DCMA awarded a
task order to Discover Technologies for COTS. Since funds were used on
the Sept. 30, 2013 award the Bone liidc Need rule would require the government
to receive services within a one year period on a non-servablc basis. DCMA
received COTS software licenses to be used by the developers but it would not
receive 1W MS until the entire system was developed and implemented. This did
not occur until September l, 2017 when the Acting CIO declared 1W MS to be
operational (Enclosure 8).

Type of Violationt'si (Enclosure 9).

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The Business Process Management solution that replaced the Electronic
Document Work?ow (EDW) system was known as the Integrated Workload
Management System (IWMS). preferred material solution was to use a
Commercial Of lithe-Shelf (COTS) Business Management Suite (BPMS)
integrated with SharePoint and e?l?ools capabilities. Financial Management
Regulation (PM R), Volume 2A, Chapter l, paragraph 0l0209 states: ?If an end
item requires design and development in order to accept the COTS or NDI (Non-
Developmental Item), or if Operational Test Evaluation is required to
determine military suitability and effectiveness;. . .then the entire effort is not
COTS or and funding for that effort should be budgeted in 
Therefore use of Operations and Maintenance funding instead
of Research, Development, Testing, and Evaluation (R?D'ch'cE) funding in Fiscal
Years 20l3, 20M, :20! 5, 20l6, and 20! 7 is a purpose violation and /or
augmentation of the appropriation (31 U.S.C l301a). Appropriations
shall be applied only to the objects for which the appropriations i-rcre mode
except as othem'ise provided bylaw. Therefore, each funded Contract
Award, Contract Order, Option Exercised, and Contract Modi?cation in support
of IWMS during ?scal years 20l3, 20M, 2015, 2016U.S.C.
1301a, Purpose Violation.

The corrective action for each of the Purpose Violations (unauthorized
commitments) is for a Contracting Officer, to replace the improper funding with
the appropriate funding, in accordance Federal Acquisition Regulation (FAR)
1.6026 Ratification of unauthorized commitments. The rati?cation limitations
are: I) Supplies and services have been provided and accepted by the
Gavan-intent, or the Government otherwise has obtained or will obtain a bene?t
rcsultingfrom performance oft/re unauthorized commitment; 2) The ratifying
q??icial has the authority to enter into it contractual commitment; 3) the resulting
contract would otherwise have been proper if made by an appropriate contracting
o?iccr; 4) The contracting of?cer reviewing the unauthorized commitment
determines the price to be?iir and reasonable; 5) The contracting officer
recommends and legal counsel concurs in the rccon-imendotion, unless
agency procedures expressly do not require such 6) Funds are
(readable and were available at the time the imauthorized cmnmitmeni was tirade;
and 7) The rati?cation is in accordance with any other limitations prescribed
under agar-icyprocedures. Because the RDil?thE fund period of availability for the
fiscal year 2013, 20l4. 2015, and 2016 has expired these purpose violation are
now Time Violations LLSC. 1502) and cannot be corrected through
ratification procedures. 3l U.S.C. l502 ?Balances available? The balance of
an appropriation or?md limited?ir obligation to a de?nite period is available
only for payment of expenses properly incurred during the period Q/?ovailability
or to complete contracts properly made within that period (?i/availability and
obligated consistent with section 150] oft/iis title. lrlowever, the appropriation or
fund is not available for expenditures for a period beyond the period otherwise
authorized by law.? In addition the period of performance ofthe Contract Orders
and Contract Options have expired and the contract actions are now closed.

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For Official list (Jill)

   

7. _E_i'fegui' Viulfl . eorreer .rrul renrerlioie rhe
amoum and purpose violariens orihe ADA MA rnusi replace ll improperly ohligaied 
funds in - 13 ., FY l7 Willi available liD'l'sel; runds, are made in 
18 funds will be available from rhe apporrionmeni end from prior fiscal years ilrar
{Ire expired but not cancellud, ll will bl: DCMA lo l'cqi additional 
irorn osn (C). The osn in) will have lo rlererurine ir'prinr al year rumls are
available and lino: eurreru fiscal year iunrls would he ihe orher- availahle oprlou.

   

 

   

8. Name. Rank. Position Tiller and ()mulumlion ul'Rcsnonsihlc lndividuuHsl.

 

Mr. Charlie Williams DCMA Dircuior. Failure (0 a business Systems liir
rhe proper and adeqnaie eornrol ol'ageney Funds and resource Lack of proper review
and approval procedures i'orlhc and implemcnlalirrn Orl\\ll\' . Nu!
implernenling l'l'M procu>> and prneedures resuliing in luck ol'pruper 
Sharing and decision process. (Rmil'cd)

 

 

Ms. Marie Greening, SES. DCMA nireelor orOperarions (DCMA Denoiy Direeror).
Failure lo mailliain proper program eonirol over- l\\lMs. For not properly
informing and updaling rhe DCMA direeior or shuns ror schedule. lirudlug nud
reelurieul lililcsuincs. Luck ol'rllreer l'lckl user represemaliou in ilre l'l' 
process. Failure oi'senlor level appropriariou knowledge and oversight.

Mr. laeob Haynes. (35-1 5, DCMA er lnronuarieu 'l'cclinolog). Failure in
provide basic PPM leadership nver IWMS proieer Nor basic
enneepis oiappropriarlon law. For failure io provide rhe DCMA direernr rviih rirnely and
aeeurare slalus or IWMS requesis ror inionnaiion, Nol providing DCMO limcl)
problem siaiemenis required. (Relil'cd)

   

Mr. Jesse Shine, (3345, DCMA's Program 'niigcr. l- hue lo perform proper
dulles as lhe fur including plunningnod mimr ol'milesroues. funding and
reehnierrl progress. Not having rhe required represeu. iv . omees on rhe
PPM ream. Nol undersianding I'cqnil'L'mL-nls lor I'l' developrnenr sysrerns. (Nol employed
hy DCMA)

--GS N, DCMA's l'r 'cci Manager. and
knowingly disobeying llic eeneerns orMs, Collklill. in using 0on vice funds
for rhe cnmraei. Cominuous use <For Official Use Only

approval. Lack of internal controls to prevent the over obligation of MS funds. Lack
of an effective POM process or the programming of investment funds.

Mr. Timothy Callahan, SES, DCMA Director of Contracting. Failure to implement a
peer review process, for major contract actions such as 1W MS. For not notifying the
DCMA Director that funds were not proper for contract. For allowing the
Discover contract award, without proper procurement planning and actions, in order to
meet 30 September award date.

Mr. Michael E. Sainsbury, 5, DCMA Office of General Counsel. For failure to
provide Contracting and the Procurement Center with clear guidance on the required use
of funds for development and enhancement. For not explaining the
difference between a legal opinion and legal information to both Contracting and 

For improper legal advice to Procurement that the continued use of 062M was prOper and
citing ?pick it and stick it.? His assumption that two appropriations and 
were closely related and that was the proper choice initially were both wrong.

Ms. Sharon Philo, SES, Chief General Counsel, DCMA. Lack of leadership and
control, in allowing certain attorneys to make decisions and provide opinions/information
without Chief Counsel review. for critical management decisions. For allowing GC to
concur on initial Discover TO citing funds. (Retired).

9. Signed Statement of Responsible lndividualts). Exhibit #3 A .. l, are the Statements from
the Responsible lndividuals(s), named above. Note: 'l?liese will follow and require coordination
with CC on the notification and response process.

10. Date and Description of How Violation Was Discovered. This ADA was discovered
when .LTG Masiello, DCMA Director, became concerned with the spending on the 
program and what progress was actually being made in developing the system. On March 8,
2017 General Masiello directed the IWMS PM to stand down all current and future development
pending satisfactory answers to her questions and concerns. She assigned her chief of staff, COL
Rene Richardson to investigate issues and brought in an Air Force reserve of?cer (201.
Leslie Beavers with contracting experience to assist. On l0 May 20 7 the Turn Around team
issued a brie?ng to General Masiello prepared by COL Beavers which concluded that DCMA
had spent far in excess of what DCMO had certi?ed and that the funding used was not
authorized for developing 1W MS. Also that major program support was less than 50% complete.
The Acting Mr. Robert Annicelli, first read the legal opinion on or about May 20, 20l?7
which was purported by the former Mr. Haynes and Mr. Stone, the PM, to permit 
funding. Upon learning of this improper use of funding he notified COL Richardson and
COL Beavers. Mr. Annicelli, COL Richardson and COL Beavers briefed General Masiello
about the situation which led General Masicllo to take actions in requesting an ADA
investigation. In this same time period the DCMA director also requested that the 
review DCMA contracting of information technology systems which identified major
deficiencies in their draft report.

I 1. Causes and Circumstances Surrounding the Violation.

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The ADA violations occurred as a direct result command business
that \wtc l: tint- Ilu- Ilct'CM'itH ennunund .e and uppnn nl
pt-needn {or Mb sp 'Iltl'rt Int-L :nhl ptujt-et
null Il'P\l) (tiltt'cph hr  |I\t:ll to manage its horn cradle in gtavt'.
has no ctuttinlluus iltlol matltul nn plug) e~s and
tort-plnrentul I Iinnt in Ilu- 
nut ans there [Wiper tinns ben . and the pt'nptuicnl
Itiperatinns) .rnd the \'uppm'lilln tltleclulillcx h, to and (.0) the pr et
managers uppninted Iur till his ditl ntu illiptatr tn tr pruper 
nnalintntinns niaunge a limjet'l like I\va l'ltet ornr .n the tune
that I\'t'Ms lit-in; planned and implemented (\lr (Itatlie Illinnls) Ilitl nut
hnve hirsute Syx'tcms In place status I'nr planned technical
pru_ -, ntilt tones or L'tnl on eel tug ht so than necexsal} eluu 
could he 'l he Operations led by Ms. Marin: did not
maintain pthper lit-02min mun. current role mm the ltetit In
snre proper prneurement use nt'prnper ltIlttling and that the desired
technical results in the planned little nit: being.l wed. lit Rainier
director, [Rail entlt said that 'ccning ttas 
providing the necessary requested status for Jacob Haynes did not
provide the proper oversight for the prujeet management or IWMS, In his sworn
statements to the preliminary investigator lie was evasive and deferred l0 needing
to question the PM for much orthe information. His deputy, Mr. Gary
Moorcman, was also interviewed and also deferred to the PM as having much of
the information. In iulct' 'ews tvith the former DCMA Director LTCI (Rel)
Wendy Masicllo she said that Mr. Haynes did not provide her with the requested
infomtalion on IWMS status and wl The former L'hiefel' Staff,
COL Rent: Richardson and a special assistant COL Leslie Beuvets also said that
Mr. Haynes was not forthright with the direeto pmviding necessary
information on IWMSs IT was responsible for funding each year for
but did not submit the necessary problem statements in a tinter manner tn
DCMO. in fact the pmblem statement Fur FY 13 IS not submitted ttnlil 30
September by the DCMO Director, Mr. ill lit an MFR Vlarcli 17. 2017,
Mr, Robert Annieelli said that there was a disconnect between the aligning
development work for and the authorized scope ol'tvork in the problem
statement from July 2013 appmved by the not: IRB (See Enclosure 10). I
requested the DOD IRB approval dueulttents for all funding {rum IT as llit'
office or record and none could be provided. Only after a substantial ett'on by
DCMO was I able to obtain the IRB approval documents lbl' each years l3>>
FY I 7) Funding.

   

    
 

   

 

 

 

 

   

 

 

   

         

     

     

 

 

 

 

 

 

The cculivc Ditcclurnfliinaneial management, Ms. Pamela Conklin (S S) did
not provide tlte necessar) financial controls and eversight |n prevent the Iniss use
or for and the ever obligations orthe approved amounts as
authorized by DCMO and the Investment Review Board. In e--mail to -
-dated Sept 2810i} Ms. (Ionklin challenged using funds as being

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inappropriate and being used because investment funds were not available. Ms.
Conklin should have elevated this issue to the director?s office. This miss use of
continued into FY Iii. 15. 16. and l7 without any challenge or objection by
PB. MS. Conklin had oversight by delegation to the fund certiliers but they
continued certifying the use of for the Discover and other 1W MS contracts.
The FAD documents for PDW contained footnotes that funds for IT development
could not be obligated without prior approval of Del) which should have
given PB notice on the obligations of IWMS funds. P8 is also responsible for the
DCMA annual assurance statement on internal controls yet no material weakness
was found or disclosed. The lt?OM process appears to be lacking in that adequate
investment funds were not being submitted in the 5 year cycle required.

The (glflice offieneral Counsel also was a major factor in the miss ustr ofth?k 
funds for IWMS. in it four page memorandum to the Procurement t, enter dated
Sept. 20B (Enclosure Mr. Michael Sainsbury, Associate General
Counsel, wrote a list of options for funding the Business Process Management
Software (BPMS) for IWMS. lt listed nine (31..le in the Discover contract and
the proper appropriation for each one. Both Contracting and lT treated this
memorandum as a legal opinion but it was not. only an information paper. This
investigator verified this with the 0813 General Counsel (See Enclosure 12). This
memorandum should have been much more specific on using for
development and enhancement that this lawyer should have been fully aware of.
The Discover was for a potential value of $70 million and performance option up
to ?ve year so there was no doubt that this was not an annual operating
requirement. When the Discover contract acquisition clearance memorandum
was signed on 29 Sept. 2013 Mr. Gilbert 'l?eal from (BC signed for clearance using
and a task order for $400,000 of computer software. The investment
threshold at this time was $250,000 so it was exceeded. should have
been used since the purpose of the contract was the development of the 1W MS
system. In addition COTS systems requiring engineering design, integration and
test evaluation require in May 20l5 procurement of?cials at DCMA
became concerned that using for was not proper and the director of
the Procurement Center, Amanda Parker asked General Counsel for an opinion.
Mr. Michael Sainsbury replied with a principal called ?pick it and stick it?. He
said that once an election was made for using an appropriation and agency must
continue with it until the end of the ?scal year. However, there were two
important false premises. The first being that two appropriatit?ms are equally
available, and this is not the case for and ltD?l?ch and secondly that the use
of initially was reasonable and this was in fact not the case as r.
Sainsbury falsely assumed it to be. (See Enclosure l3). Ms. Sharron Philo was
Chichounsel and bears responsible for the legal opinions and legal information
provided to DCMA clients is legally sufficient. Mr. 'l?eal was the (if? lawyer on
duty during year end [3 but with no or little experience in contract law so Ms.
Philo should have reviewed his opinion and she should have a peer review for
information like Mr. Sainsbury provided to Procurement officials for something
as important as lW MS.

Sil?ugc

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Fur l'sc ()nly

d. was also a major player in IWMS by awarding lhe eonlrael 
Discover and conimcl ndniinisn-alion. l| should he noted ihul 
farmer DCMA director requested D01) )6 lo do an audil ol'l'l' 'l he
16 drafl uudil reporl found major sllunfalls with FAR and DFAR provisions 
[he [4 conlmcis review including Discover, '1 he Center aided
the Discover l. order-on 30 Seplcniberund there was no 'u ii
lime In (in all ihe necessary prdeuremeni c}clc planning, ieh yc rend 
announces [ml the DCMA leadership uver rules
ihern. There is under pres. in in gel eoniraels awarded al year end.
Mr. Imuihy Callahan. Dircelul C(lulrneling snid he wished he had
done more (0 Discmc award in director. ll is ihc
invesllgamr's opinion ilnn shonld feel {rec in challenge anions ihai
lhey deem in be illegal or inappropriaie rear nl'any rornr ul'mani-Igemcnl
relalialion.

 
      

 

 

 

 

The Scope ofth invesliguiinn and the mclliods used lo accomplish ihe
Flt-rise find (in: v'lan l4) We made
<Fm Ollii'lill Use Only

dale Ms. Cenklin replied le ddn'l musi he used lin- lhe licenses
why do we need lo an under lilm. Ms. replied, "Snunds like we
are splining a l0 inlaid using lhe ruud iype" (Enclosure is). The
problem slalemcnl rm IWMS was nei epproved hy umil 30 Seplember 201 3 and
lhe Task orderen ihe Disenvei- Technology wes awarded rm 30 :0 l3 l'er
S400K in soflwarc licensees. The Acquisition Clearance Memorandum (Euclmurc l7) rm lhis
eomnel was smiled mid nppreued by Conlrucling on 29 20 l3 citing The
requiremems funding was plnvidcd MA ('oiln (Mr. (iilhcri enl) signed lhis
memorandum us did ihe Excullivc nl Lulm ,Mi- (s "lens
was no clearance by Ms. Cmiklill or else in . in die referenced

rerereneed less hm illc award was lei-jusl under lv l4 under RA so
no new sinus would he smhm-ized,

     

   
  

 

 

Disciplinary Aclion 'l'akcn, Defense Contract Agencyr l'unds
Cunirol, 79] 7 dated August 7. 20 IA. discusscs individuals lo he held Iiul)lc, 

penalties for vielalidn erih ADA (Legal Limiunien), and neliens illai violnie pulley
(ndminislmliue limiwlions). he adlninislralivc disciplinc includes suspensinn l'mln dury
\viihmll pny or dismissul l)i ireunvieiednr
knowingly and willfully \lloldling lcgal liiniinnens, include lines or iinpi-isnmnem, hmh.

 

 

 

a. The leadership el'lhe lwe (2) offices i-espensihle for delermining whelher a yielmidn
has occurred \liC appropriate disciplinary action to he lakcn, all: illvolvcd in
[his Ac! violations.

b. Dclailcd disciplinary uelions lnken ure dependem nn findings ul'lhe Diseiplinnry
officer in he appoinlcd by rhe DCMA Dir-color. in l'mure due.

14 Curl'ccliLcA

  

 

n, Dining; ll'lc periinl l3 Mun-ll in 7 .\pnl zllI7. 
l'meniemenl Cenlel- nil Aeqnis iini. il'fmndueled :i prueureinenl Milml duwn
pin-prise erih uni (lmul nus ennduei en hnernnl lune. em
4 lu ului'llir 1icqill~illull 
and the; cusluluus.

 

 

     

 

b. In ol'ZOl Br ofl)clcusc General issued a drafl
rcporl "Dcl'cnsc (:onu-nei Agency'c lcclumlng)' 
l'iojL-cl No. DZOI l'llc rcporl lbulul DCMA
Commuting oilieiels did run properly award I erihe l4 lnfm-mminn 
scn'lcc reviewed. The rcporl in the DCMA nil-color
l0 unsure:

   

DCMA 'lls develop performance- liir 
neuuisilien
ii. CORs or mi inspecliunsund monilm 

 

performance on service 

l' g. 
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 Official to Only

The contracting officer or COR, determines whether the contractor
performed satisfactorily and ensures the work progressed according to the
contract lrelitre they approve invoices;

iv. CORs are nominated, appointed, and terminated and that contracting
of?cers provide CORs with contract-speci?c training; and
v. Requiring activities develop a quality assurance surveillance plan for all

service acquisitions.

c. On 1 March 2018, a DCMA Corrective Action Plan (CPI) Project was chartered
by Ms. Marie Greening, DCMA Deputy Director and Ms. Pam Conklin, 
Executive Director of Finance and Business Operations and Comptroller, to
develop a Corrective Action Plan. With controls identified to eliminate ADA
violations.

d. Defense Acquisition University (DAU) has been contacted for assistance with
developing and administering Fiscal Law and Anti-Deficiency Act resident
training. It is recommended, that the training be provided to all DCMA
Supervisors and above, and to all Program Managers (PMs), all Project Managers,
Approving Officials (AOs), GS 100 Series, Contracting Of?cer Representatives
(CORs) and Contracting Officer "technical Representatives All
identified employee at the conclusion of the training shall correctly identify the
proper type, year, and amount of funding for ten (10) DCMA situations, in three
(3) attempts or less.

c. It is recommended that DCMA develop and foster an internal process and culture
that allows any employee to raise a funding concern to senior leadership. When
concerns are raised, the obligation document will be pause while it is reviewed
and the concern(s) is (are) properly addressed.

l5. Administrative Control ofFunds Control of 1W MS funding was not controlled in the
DA1 financial management system to prevent the over obligation of funds authorized and
approved by the IRB of DCMO. These limits are to he treated as a sub division of
authorized funds and Subject to ADA as specified in Section 22.22 of Title l0, United States
Code.

16. Component or Agencv Coordination .. There appears to be a significant and material
weakness in the administrative control of IT business systems funding between the DCMO and
OSD (C) that directly impacted the over obligation of 1W Mb funds by DCMA. wThane does not
appear to be the necessary coordination between DCMO and 081) (C) for IT system funds that
are approved each ?scal year nor in the actual cost that are obligated and expended each ?scal
year. No interface was found in the OSD (C) financial management system and with the
system managed by the OSD Cost Assessment and Program Evaluation OSD CAPE)
and used by DCMO. This ADA investigator found no correlation at all between what DCMO l'l?
requested, what DCMO approved and with actual execution of funds for lWl?vlS. Each fiscal
year DCMA requested funds which ?(ere then approved by DCMO and no RD'l?Stli
funds were ever obligated for 1W MS. Over $7.5 was approved in funds for 



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with zero obligations. With the proper review of past actual obligations this should never occur.
The DCMA Budget Office and the SNaP?l'l? responsible employee both stated that the 
actual cost being captured was very unreliable and inaccurate. it is noted that using 0&an for the
wrong purpose was also not discovered or disclosed in the annual request and review process
between DCMA and DCMO.

17. Name and Title offlolder ofthe Funds Subdivision. Ms. Pamela Conklin as the
Executive Director of Financial and Business Operations and Chief Financial Officer of
DCMA.

18. Other ?ndings and Observations. The lack of coordination and system interface between
DCMO and noted above in paragraph 16 could also possibly eflect other Dot) Fourth
Estate agencies as well unless they are controlling 11? business system DC MO approvals in their
DAI ?nancial management systems as well as capturing actual obligations. it is an area of
possible financial concern and vulnerability for potential ADA violations for all agencies.

19. Conclusion. Defense Contract Management Agency?s poor acquisition
planning. lack controls, and lack ofcommand oversight were the leading root causes
in each ofthe multiple Anti-Deficiency Act (ADA) violations.

 

a. Acquisition Planning failed to identify and request the proper funding,
in the proper fiscal years to support the plan and method of replacing the
Electronic Data Workl?low (EDW) with the integrated \?v?orklond Managon?tcnt
system (IleiS). The acquisition planning failed to timely identify the required
approvals required for a defense business system. valued over $1 million. The
acquisition plan individual procurement timelines did not provide contracting the
proper time to review. process, and contract actions. ?loo many contract
actions received critical information and funding documents in the last hours of
the fiscal year.

1). lack of internal controls resulted in the repeat of the fiscal year 2014
ADA violations. in fiscal years 29.015.13.016. and 2017. Annual
Assurance Statement should have identified the ADA violations in fiscal year
2014. Quarterly Leadership and reviews should have identified the
over obligation and Maintenance funds and the under
obligation of Research Development Testing 8: Evahnition 

C3

The replacement of HDW with JWMS was a key component to mission
execution. But, there was little. to no Command Oversight ofthc process and the
transition. As senior acquisition officials their oversight ofthc acquisition
planning, assignn?ient of key individuals. and in progress reviews, should have
identi?ed the ADA violations. in fiscal year 2014 or earlier.

d. in accordance with federal Acquisition Regulation the funds
approving officials, contract specialists. and contracting officers requested.
considered, and relied on the advice of specialists in audit. law. engineering.

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information security, transportation, and other fields, as appropriate, to make their
decisions and approvals. These senior leaders (Director of Operations, Director
of Information Management, Program Manager, Project Manager. Comptroller.
Legal Counselors, DCMA Deputy Director, and DCMA Director) all failed to
provide timely and accurate advice to the acquisition decision makers (funds
approving of?cials, contract specialists, and contracting of?cers) and set them and
DCMA up for failure.

e. As a result of the above ?ndings and conclusions, it is recommended that DCMA

lose its Procuring Contract Of?cer authority above the Micro Purchase level. The
National Defense authorization Act for Fiscal Year 20l8 (NDAA FY18) (Public
Law 1 15~9l) (section 806 and 805 respectively) increased the micro~purchase
threshold to $10,000 and the simplified acquisition threshold (SAT) to $250,000.
This recommendation is based on poor acquisition planning, 
lack of internal controls, lack of proper reviews, and lack of
reliable and accurate advice from specialist in program management, project
management, ?nancial management, audit, and law to allow contracting officers
to make informed and proper prc~award and award decisions. pre-
avvard and award actions, above the Micro Purchase Level, can be performed by
the local installation and/or other Department of Defense procuring organizations
(Defense lnibrmation Systems Agency (DISA) or Defense Logistics Agency
with a Memorandum of Agreement (MOA) and/or Memorandum of
Understanding (MOU).

f. it was also observed and reported that nibrmation Technology (IT) has had too
much power and independence from DCIMA leadership and corporate
management in the development and managen?tent of major DCMA business
systems. Each year it was the 1'1? director that submitted the lW MS requirements
to DCMO for approval atong with the problem statements. As the of?ce of
record IT was responsible for providing all of the request to DCMO and all of the
approvals received from DCMO. Despite repeated requests from both the
preliminary investigator and myself this information was not provided and we
were required to obtain it from DCMO. It is recommended that all major lT
decisions for operating systems and hardware be approved by a corporate
body and approved by the directrn?.

Kenneth A. lsittleficld, CGFM
Ol?liccr
Rchircd r?tnnuitant, HQ USAGE
l2 Encis.
1. Appointment of Formal lnvesti gator
2. Report of Primary Review Anti?Deficiency Act Violations Regarding
Integrated Workload management System (lWh-rlS) Contracts

l3 age
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irnr (Hfin'izii UM: Only

3. oflkibnsc IO (I'rojccl N0. 

0140.000) nci'cnse Contract Management Agency's 'i'crinmiogy Service
Cnniriicls

DCMA IWMS Slalus

. Leadership Briefing] May 2012 by .i iallan, 
. Apprio provided briefings lo DCMA lcadc win on May'll, 2012

. Appiio provided briefings I0 DCMA on July 

Amhariznlion dcmrininnlinn Decisinn (ADD) |hc Workicnni 
System (IWMS)

. Acquisition Fiscal Law Background lufonnulion
. Mr. Anniccili MFR 17 March 2017

. 18 Scpiembcr 2013 Memorandum lo l'mcul'cmeni 
.OSD General Cnumcl

. Mr. Sainsbury's email it) IJCMA Procurement 

. illion l'lall
hem:

.Email from Ms. Pamela F. Conklin 28. 2013
I7. 29 ('lcamncc Memorandum

 

   

Annex A: Mr. (:iinriic Williams, SES, Director

Annex 3: Ms. Muric Greening, SES, DCMA Dim-clot (DCMA ncpniy
[)iiwiur)

Annex 0: Mi: Haynes (is--is. 'iuirnninm

Annex 1). Mr, it 3 mi: (1 l'mglum Mm

Annex 1" H, IWMS I'Iuicci 3

Annex i\l i Kculwc [)iiechn'l and ('nniplrullci

Allnux MI: ""01in Val him. 8 . 

Annex H: nsbi (1571i Dt Mr\ (min: "Hiulciui ('iiunxci

Annex 1: Ms. Sharron I'liiluv 

       
    

   

 

     

   

 

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