Defense Management:

DOD Faces Challenges Implementing Its Core Competency Approach and A-76 Competitions

GAO-03-818: Published: Jul 15, 2003. Publicly Released: Jul 15, 2003.

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The Department of Defense (DOD) is pursuing a new initiative involving a core competency approach for making sourcing decisions--that is, sourcing decisions based on whether the function is core to the agency's warfighting mission. In determining how to best perform non-core functions, DOD's position is that its components should look beyond just the use of public-private competitions under Office of Management and Budget (OMB) Circular A-76 in making sourcing decisions, and consider other alternatives such as partnering or employee stock ownership. GAO was asked to assess (1) the department's progress in assessing its core functions as a basis for sourcing decisions, (2) the plans and progress DOD has made in identifying and implementing alternatives to A-76, and (3) the current status of DOD's A-76 program.

Progress in assessing core functions has been varied and limited across major Defense components, affected somewhat by ambiguous definitions of the term "core function." In some instances additional guidance was obtained, but definitions of core remain somewhat broad and subjective, and will likely remain so in the future. Army and Air Force have led within DOD in assessing core functions, but the Army has done the most, and found, contrary to its expectations, that distinguishing between core and non-core functions does not, by itself, prescribe a sourcing decision. Other factors must also be considered such as risk and operational considerations. The range of alternatives to A-76 likely to be pursued under the core competency-based approach is not yet clear, but DOD has made some progress toward identifying and/or using some alternatives through pilot projects and other efforts by the services as they have focused on the core initiative. However, the use of alternatives could be limited without special legislative authorities and/or repeal of various existing prohibitions, and some could be tempered by the department's efforts to meet the A-76 competitive sourcing goals set by OMB. DOD reported that as of June 1, 2003, it has met OMB's short-term goal to use the A-76 process to study 15 percent of the positions identified in DOD's commercial activities inventory by the end of fiscal year 2003. However, meeting the longer-term goal to study at least 50 percent (226,000) of its nearly 453,000 commercial activity positions through fiscal year 2008 will present a challenge. This is nearly double the number of positions that DOD has previously studied during a comparable time period, and providing sufficient resources (financial and technical) to complete the studies may prove challenging. Also, the defense components, particularly the Air Force, plan to transfer certain military personnel into warfighting functions and replace them with government civilian and/or contractor personnel. This will require the components to reprioritize their funding for operation and maintenance accounts, because it is from those accounts the services must fund replacement civilian or contractor personnel.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: The Senior Executive Council no longer exists within DOD. There is no longer a formal core competency program in DOD to assess. Therefore, the recommendation is no longer applicable and the recommendation was closed as not implemented.

    Recommendation: The Secretary of Defense, through the Senior Executive Council, should clarify its expectations for DOD components in making sourcing decisions based on core competency assessment results and provide additional guidance identifying the range of additional factors to be considered once the determination is made that a function is not considered core.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: House Report 109-359, FY 06 Defense Appropriations, directed the department to include comprehensive data on the military to civilian conversion program in future budget justification materials.In an Office of the UnderSecretary of Defense, Comptroller memo, dated January 17, 2006, for the Fiscal Year 2007 budget justification book, the following was required by all military components in regards to military civilian conversions: The Components are to include within their budget justification materials an exhibit that includes:(a) the number of conversions completed in two prior fiscal years, (b) the number of positions filled by civilian contractors or goveernment employees, (c) the number of conversions expected to occur in the budget year, (d)the number of civilian contractors and government employees expected to be hired, and (e) a detailed explanation of cost estimates. In addition, the Department of the Army, in a memo dated, October 19, 2005 on Army Military to Civilian Conversions stated the following: "After process reviews are complete and a business case is made for a civilian position, develop, program and identify offsets (savings) to fully fund civilian backfills. . ." According to an official from the Office of the Undersecretary of Defesne, Personnel and Readiness, for the Navy and Air Force, end strength will be reduced by military positions identified for conversion. Therefore, the military personnel account will be decreased, allowing funds to be approved for movement to the O&M account which funds either government civilian or contractor employees.

    Recommendation: The Secretary of Defense should require DOD components to ensure that decisions to convert functions performed by military personnel to performance by civilians or contractors are predicated on having clearly identified sources of funding to support those decisions.

    Agency Affected: Department of Defense

 

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