INSPECTOR GENERAL
U.S. Department of Defense
KEYNOTE SPEAKER
RANDOLPH STONE
DEPUTY INSPECTOR GENERAL
FOR POLICY AND OVERSIGHT,
OFFICE OF INSPECTOR GENERAL
INTEGRITY  EFFICIENCY  ACCOUNTABILITY  EXCELLENCE
INTEGRITY  EFFICIENCY  ACCOUNTABILITY  EXCELLENCE
MR. RANDOLPH R. STONE
DEPUTY IG FOR POLICY AND OVERSIGHT
February 24, 2015
DOD IG & QUALITY ASSURANCE
DOD IG & QUALITY ASSURANCE
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
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DOD IG & QUALITY ASSURANCE
INTEGRITY  EFFICIENCY  ACCOUNTABILITY  EXCELLENCE
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DOD IG & QUALITY ASSURANCE
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
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
 Provide Policy and Oversight for
DoD Audit Functions (APO)
o Review and Approve all DoD Policy
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DOD IG & QUALITY ASSURANCE
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
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DOD IG & QUALITY ASSURANCE
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.
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DOD IG & QUALITY ASSURANCE
Quality Standards for Inspection and Evaluation (Blue Book)
1. Competency
8. Records Maintenance
2. Independence
9. Timeliness
3. Professional Judgment
4. Quality Control
10. Fraud, Other Illegal Acts,
and Abuse
5. Planning
11. Reporting
6. Data Collection
and Analysis
12. Follow-up
7. Evidence
14. Working Relationships
and Communication
13. Performance Measurement
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DOD IG & QUALITY ASSURANCE
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.”
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DOD IG & QUALITY ASSURANCE
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.
INTEGRITY  EFFICIENCY  ACCOUNTABILITY  EXCELLENCE
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DOD IG & QUALITY ASSURANCE
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.
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DOD IG & QUALITY ASSURANCE
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.
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DOD IG & QUALITY ASSURANCE
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.
INTEGRITY  EFFICIENCY  ACCOUNTABILITY  EXCELLENCE
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DOD IG & QUALITY ASSURANCE
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
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DOD IG & QUALITY ASSURANCE
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
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DOD IG & QUALITY ASSURANCE
DOD IG SUBPOENAS ISSUED TO DCIOs - FY 2014
OTHER, 28, 4%
AFOSI, 121, 17%
DCIS, 132, 19%
USACIDC, 335, 48%
NCIS, 86, 12%
AS OF: SEPTEMBER 30, 2014
TOTAL = 702
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DOD IG & QUALITY ASSURANCE
SUBPOENA REQUEST BY TYPE OF INVESTIGATION - FY 2014
NATIONAL SECURITY, 2, 0%
OTHER, 48, 7%
COMPUTER RELATED CRIME,
104, 15%
THEFT/LARCENY OF
GOVERNMENT PROPERTY OR
FUNDS, 140, 20%
CRIMES AGAINST PERSONS,
121, 17%
PUBLIC CORRUPTION, 45, 6%
PROCURMENT FRAUD, 175,
25%
PAY, ALLOWANCE &
ENTITLEMENT FRAUD, 67, 10%
TOTAL = 702
AS OF: SEPTEMBER 30, 2014
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UNCLASSIFIED
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
 SECRET
www.dodig.smil.mil/hotline
 TOP SECRET
www.dodig.ic.gov/hotline
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