Not only have contractors suffered big delays and glitches with a Pacific Ocean incinerator to destroy chemical arms, they also apparently overcharged the Army for travel, vacations and work that auditors suspect was never done.
That is according to a report by the U.S. Army Audit Agency obtained by the Deseret News through the Freedom of Information Act.That is important to Utah because the plant at Johnston Atoll is supposed to work out problems with a controversial process to destroy chemical arms before eight similar plants are built in the continental states - including at Tooele Army Depot.
Because of Johnston's delays and some tight congressional deadlines for destruction of aging chemical arms, the Army began construction of the new Tooele plant before testing at Johnston was completed and its lessons could be applied - although the Army has said lessons will be applied before actual operations begin.
The Johnston Atoll plant is seeking to refine a process pioneered at a small pilot plant at Tooele. As the Deseret News revealed in 1989, the pilot plant had eight accidents with deadly nerve gas that released up to eight times the legal hourly limit. Previous reports have documented technical problems and delays at Johnston - including beginning testing 34 months behind the original schedule, and then managing in early months of testing to operate only 22 percent of the time.
But the new report shows auditors also question whether contractors have been overcharging the government and whether they have been overly rewarded for less-than-superior work. Among the problems were:
- Possible overcharges for labor. Auditors said many contractor employees claimed to be working 80 to 101 hours per week, but no proof such as time-clock cards was provided.
A visit by auditors on Aug. 2, 1989, showed that contractors' records claimed 138 employees were working that day, but "government representatives could locate only 96 employees." Reports said other surveillance showed "excessive breaks, conversation not related to work and excessive time for meals."
- Possible overcharges for travel. Auditors found the Army had paid the contractor $11,500 for employee roundtrips to their homes from the remote island, even though they did not make the trips.
The contractor also charged $1,087 and $688 for different employees' airfares on the same flights. The contractor also charged about $105,000 for lodging, rental cars and fuel without providing receipts.
- Possible overcharges for vacations. Auditors said the contractor essentially charged the government twice for employee vacations by adding a 6.75 percent charge on labor payments to cover vacations, but then adding actual vacation payments into labor charges. Employees at Johnston are given two weeks vacation for every three months worked.
- Possibly giving too much to contractors in bonuses for good performance. Auditors said nearly $150,000 too much was given for contractors merely doing "good" work. Army command disagreed, however, in a review of the audit. But command did say a better method of giving the contractor incentives is needed.
- Possibly giving unnecessary tax breaks to contractors' workers. The Army agreed to pay all federal income tax obligations of contractors' workers - about $46 million.
The contractor said that was necessary to attract workers to the remote island. But auditors complained, "The contractor did not provide documentary evidence to support this . . . (and the Army) did not perform a comparative analysis to determine whether additional compensation was reasonable and necessary."
Auditors suggested more thorough review and verification of future contractors' charges, and suggested that more people be hired to monitor and evaluate the contractor's performance. Army command agreed with those suggestions.