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MARAD Has Taken Steps To Develop a Port Infrastructure Development Program but Is Challenged in Managing Its Current Port Projects

Self-Initiated
Project ID: 
CR2013117

In 2003, the Maritime Administration (MARAD) was authorized to administer funds for developing and modernizing the Port of Anchorage, the main seaport in Anchorage, AK. MARAD has since been authorized to administer two other port projects in Hawaii and the Port of Guam. Given significant setbacks at the Port of Anchorage project, including construction problems and schedule delays, we evaluated MARAD’s (1) oversight and risk management of port infrastructure development projects, and (2) oversight of port infrastructure projects’ contract planning and administration.

We found that MARAD did not establish effective oversight mechanisms when it initiated its port infrastructure development responsibilities. For example, MARAD did not adequately define its oversight responsibilities or establish a sound risk management process. MARAD has recently taken steps to more clearly define its role in the Port of Guam project. While MARAD has taken steps to develop a congressionally mandated Port Infrastructure Development Program, it has not yet completed it. Our review also determined that MARAD did not effectively manage its port project contracts. Between 2003 and 2011, the Port of Anchorage project’s cost estimate grew over four and a half times from $211 million to $1 billion, with scheduled completion slipping 8 years. The Port of Anchorage project had significant contracting problems stemming from MARAD’s inadequate planning, lack of reliable cost estimates, and noncompliance with Federal contracting requirements when awarding and administering the port contracts.

MARAD concurred with all nine of our recommendations. For six recommendations, MARAD provided appropriate action plans. For the remaining three recommendations, we are requesting that MARAD provide additional information.

Recommendations

Open

Closed

Closed on 05.01.2015
No. 1 to MARAD

Develop guidance for port project management plans and organizational charts that outline the roles, responsibilities, and relationships of public and private stakeholders.

Closed on 05.01.2015
No. 2 to MARAD

Consistently define and document MARAD's oversight responsibilities for port infrastructure development.

Closed on 05.01.2015
No. 3 to MARAD

Develop formal risk management policies and procedures consistent with industry best practices.

Closed on 02.12.2014
No. 4 to MARAD

Implement policies and procedures for (a) analyzing and documenting decisions related to selecting the appropriate legal arrangement (e.g., contracts or assistance agreements) before obligating funds, and (b) requiring written agreements for payment of matching funds.

Closed on 08.10.2017
No. 5 to MARAD

Implement procedures to help ensure that MARAD's contract planning efforts comply with Federal acquisition regulations and requirements. These procedures should include establishing acquisition plans and contract administration plans in a timely manner, and maintaining supporting documentation for their rationale; and developing independent Government cost estimates, and validating cost estimates provided by entities other than MARAD.

Closed on 08.06.2014
No. 6 to MARAD

Implement procedures to help ensure that MARAD's contract award and execution efforts comply with Federal acquisition regulations and requirements. These procedures should include awarding and terminating contracts, especially those awarded through the 8(a) Business Development Program; and reviewing and providing written justifications for the use of proprietary technology or other factors that may limit competition on port contracts.

Closed on 07.16.2014
No. 7 to MARAD

Implement procedures to help ensure that MARAD's management of cost-plus-award-fee contracts complies with Federal acquisition regulations and requirements. These procedures should include establishing timely award fee plans and properly executing those plans—including conducting award fee evaluations, documenting the results, and approving award fee payments.

Closed on 07.30.2015
No. 8 to MARAD

Implement procedures to help ensure that MARAD's contract administration and oversight efforts comply with Federal acquisition regulations and requirements. These procedures should include issuing timely contracting officer's technical representative (COTR) designation letters with appropriate descriptions of their roles and responsibilities; maintaining complete contract files, including COTR files; and conducting semiannual or interim contractor performance evaluations.

Closed on 01.08.2016
No. 9 to MARAD

Provide a comprehensive action plan for developing a congressionally mandated Port Infrastructure Development Program (PIDP), including milestones for incorporating each of the preceding recommendations into the program. The plan should also require MARAD to prepare clear and specific budget requests that specify how the Agency would use all Federal funding received for PIDP purposes.