U.S. Department of Defense KEYNOTE SPEAKERasq.org/asd/2015/04/dod-ig-quality-assurance.pdf · inspector general u.s. department of defense integrity efficiency accountability excellence

INSPECTOR GENERAL U.S. Department of Defense

INTEGRITY EFFICIENCY ACCOUNTABILITY EXCELLENCE

KEYNOTE SPEAKER

RANDOLPH STONE DEPUTY INSPECTOR GENERAL

FOR POLICY AND OVERSIGHT,

OFFICE OF INSPECTOR GENERAL

INTEGRITY EFFICIENCY ACCOUNTABILITY EXCELLENCE

DOD IG & QUALITY ASSURANCE

MR. RANDOLPH R. STONE DEPUTY IG FOR POLICY AND OVERSIGHT February 24, 2015

INTEGRITY EFFICIENCY ACCOUNTABILITY EXCELLENCE 3

STATUTORY MISSION (IG ACT 1978)

o Presidentially Appointed Senate Confirmed Can not be active duty or reserve military

Conduct and supervise audits and investigations to improve the operations and effectiveness of the DoD • Keep Secretary of Defense and Congress fully informed about

problems and deficiencies

• Principal Adviser to the Secretary of Defense for matters relating to the prevention and detection of fraud, waste, and abuse

• IG employees independent of DoD personnel system

IG Act/Section 8 (unique to DoD IG) – provide policy direction for audits and investigations relating to fraud, waste, and abuse and program effectiveness

Staff DoD Hotline






Policy and Oversight o Statutory:

Provide Policy and Oversight for DoD Criminal Investigative Functions (IPO)

Administer DoD Subpoena Program, Contractor Disclosure and Counterfeit Parts Reporting Programs

Provide Policy and Oversight for DoD Audit Functions (APO)

o Review and Approve all DoD Policy

o Conduct Technical Assessments of DoD Operations and Programs (TAD)

Conduct Technical Inspections and Evaluations

Provide Technical Advice and Support for all DoD IG efforts


QA Projects Spotlight

o Safety Assessment of the 40mm Grenades, Aug 2013

o Quality Assurance Assessment of the F-35 Lightning II Program, Sept 2013

o EKV Quality Assurance and Reliability Assessment, Sept 2013

o Military Housing Inspections – Japan and Republic of Korea, Sept 2013 thru March 2014

o C-5 Reliability Enhancement and Re-Engining Program Hotline Evaluation, Nov 2014



Quality Standards For Inspectors General

o AUDITS: Government Auditing Standards (Yellow Book or GAGAS)

Comptroller General of the United States (GAO)

o INSPECTIONS & EVALUATIONS: Quality Standards for Inspection and Evaluation (Blue Book)

Council of the Inspectors General on Integrity and Efficiency (CIGIE)*

o INVESTIGATIONS: Federal Rules of Criminal and Civil Procedure in addition to CIGIE Quality Standards for Investigations

* CIGIE statutorily established as an independent entity within the executive branch by "The Inspector General Reform Act of 2008,“ to develop policies, standards, and approaches to aid in the establishment of a well-trained and highly skilled workforce in the offices of the IGs.




Quality Standards for Inspection and Evaluation (Blue Book)

1. Competency

2. Independence

3. Professional Judgment

4. Quality Control

5. Planning

6. Data Collection and Analysis

7. Evidence

8. Records Maintenance

9. Timeliness

10. Fraud, Other Illegal Acts, and Abuse

11. Reporting

12. Follow-up

13. Performance Measurement

14. Working Relationships and Communication


Independence

“In all matters relating to inspection work, the inspection organization and each individual inspector should be free both in fact and appearance from personal, external, and organizational impairments and independence.”



Nexus for DoD IG Involvement with QA o Self-Initiated – at OIG discretion

o DoD Hotline

FY14 – 20,402 contacts, $551.5 million recovered, safer products and equipment for military personnel and DoD employees.

Anyone, members of the public and DoD civilian employees, military members, and DoD contractors, may file a complaint with the DoD Hotline.

o DCMA

DCMA contracting officers and Quality Assurance personnel reporting Non-Conforming products, Defective Products, Product Substitution, and Counterfeit Material, etc.

DCMA Fraud Net – Web based program/form to report allegations of fraud, waste, abuse, or mismanagement of federal funds to DCMA.




o Whistleblower

Discloses information concerning: violation of law, rule or regulation; abuse of authority or regulation; substantial and specific danger; gross mismanagement; gross waste of funds; a substantial and specific danger to public health and safety.

• Protected communication/disclosure made to someone designated by law, rule or regulation to receive the information (OIG, OSC, Congress, etc.).

• Statutes provide for protection from whistleblower reprisal for Federal employees, contractors/subcontractors.

o Qui tam

Civil lawsuit under the False Claims Act:

• Rewards Relator (i.e., whistleblower) if case recovers funds for the USGov ($6 Billion recovered in FY14).

• Schemes include: product substitution, failure to meet contract specs, and other types of QA shortcomings.

• Successful Relators are entitled to at least 15 % and up to 30% of funds recovered for the USGov.



Poor QA and Unintended Consequences o Criminal Remedies

Title 18 • Fraud Involving Aircraft or Space Vehicle Parts in Interstate or Foreign Commerce (§38)

• Conspiracy to Defraud USGov (§286)

• False Claim (§287)/False Statements (§1001)

• Conspiracy (§371)/Major fraud (§1031)

• Production of Defective War Material (§2154)

• Destruction of Material – Defense Material (§2155)

Penalty: Jail and/or Monetary Fines

o Civil Remedies Title 15

• False Description of [geographic] origin (§1125).

Title 31 • False Claim Act (§3729-3732) [including but not limited to Qui tam suits]

Penalty: Monetary Fines and Penalties.



Poor QA and Unintended Consequences o Administrative Remedies – Suspension and Debarment - FAR Subpart 9.4 (48 C.F.R. §9.400 – §9.409)

Policy

• May be applied to both business entities and individuals.

• Criminal indictment is deemed “adequate evidence” to support Suspension; preponderance of evidence required for Debarment.

Penalty/Effect

• Suspension/Debarment (S/D) constitutes S/D of all divisions of the contractor unless specified otherwise.

• No solicitation of/awards to S/D contractors/subcontractors unless the USGov determines a compelling reasons for such actions.

• S/D contractors cannot serve as agents or representatives of other contractors with the USGov .

Time Frames

• Suspension: If no legal proceeding has been initiated within 12 months, suspension shall be terminated unless DoJ requests an extension for up to an additional 6 months.

• Debarment: Period commensurate with seriousness of the cause, but generally not for more than 3 years.



Poor QA and Unintended Consequences o Suspension and Debarment (Cont’d)

Causes

• Fraud or criminal offense related to obtaining/performing USGov contract.

• Violation of federal criminal law involving fraud, conflict of interest, bribery or gratuity violations.

• Conduct indicating a lack of business integrity/honesty of a USGov contractor or subcontractor.

• Intentionally affixing a “Made in America” inscription on a product when it was not made in the U.S.

• Willful failure to perform in accordance with terms of one or more contracts.

• Violations of the civil False Claims Act.

Frequency – FY 2013 Stats

• Suspension – 267 (DoD) of 887 USGov wide

• Debarment – 726 (DoD) of 1,696 USGov wide


DoD SUBPOENA PROGRAM

o Authorized by IG Act of 1978 and FY 2010 NDAA

Duces Tecum – documents and tangible evidence

Ad Testificandum – testimonial

o Utilized in QA type Investigations by the DCIOs

Including but not limited to:

• Defense Contractor Records

o Manufacturing, Inspection, Financial, etc.

• Financial Records – Banks, Credit Unions, Credit Cards, etc.

• Stolen DoD property – eBay/PayPal, Craigslist, etc.

• Internet Service Providers and Social Media, etc.

• Cellular and Phone

• Healthcare



AFOSI, 121, 17%

DCIS, 132, 19%

NCIS, 86, 12%

USACIDC, 335, 48%

OTHER, 28, 4%

DOD IG SUBPOENAS ISSUED TO DCIOs - FY 2014

TOTAL = 702 AS OF: SEPTEMBER 30, 2014



COMPUTER RELATED CRIME,

104, 15%

CRIMES AGAINST PERSONS, 121, 17%

PROCURMENT FRAUD, 175, 25%

PAY, ALLOWANCE & ENTITLEMENT FRAUD, 67, 10%

PUBLIC CORRUPTION, 45, 6%

THEFT/LARCENY OF GOVERNMENT PROPERTY OR

FUNDS, 140, 20%

OTHER, 48, 7% NATIONAL SECURITY, 2, 0%

SUBPOENA REQUEST BY TYPE OF INVESTIGATION - FY 2014

TOTAL = 702 AS OF: SEPTEMBER 30, 2014



SECRET www.dodig.smil.mil/hotline

TOP SECRET www.dodig.ic.gov/hotline

Internet: www.dodig.mil/Hotline

Toll-free: 800-424-9098 877-363-3348

FAX: 703-604-8567

Mail: DoD Hotline THE PENTAGON WASHINGTON, D.C. 20301-1900

UNCLASSIFIED UNCLASSIFIED

http://www.dodig.smil.mil/hotline

http://www.dodig.ic.gov/hotline

http://www.dodig.mil/Hotline

Documents

U.S. Department of Defense KEYNOTE SPEAKERasq.org/asd/2015/04/dod-ig-quality-assurance.pdf · inspector general u.s. department of defense integrity efficiency accountability excellence