Observations on the Department of Defense Service Contract Inventories for Fiscal Year 2008
GAO-10-350R, Jan 29, 2010
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The Department of Defense (DOD) is the federal government's largest purchaser of contractor-provided services and relies on contractors to support its varied missions. DOD's contractors provide a range of services, such as consulting and administrative support, information technology services, and weapon system and base operations support. However, DOD contract management has been on our high-risk list since 1992, and our recent work continues to identify weaknesses in DOD's management and oversight of services contracts. In particular, we have reported on the need for reliable data on how service acquisition dollars are spent to make informed contract management decisions and achieve positive acquisition outcomes. Congress has enacted legislation in recent years to increase the availability of information on services acquisitions to improve DOD's ability to manage these purchases. As part of those efforts, the National Defense Authorization Act for Fiscal Year 2008 amended 10 U.S.C. 2330a to require DOD to submit an annual inventory of the activities performed pursuant to contracts for services for or on behalf of DOD during the preceding fiscal year. These inventories are to contain a number of different elements for the service contracts listed, including information on the functions and missions performed by the contractor, the funding source for the contract, and the number of contractor full-time equivalents (FTE) working under the contract. Once compiled, the inventories are to be reviewed by senior DOD officials and used to inform a variety of acquisition and workforce decisions.
In July 2009, DOD transmitted a report to Congress containing the inventories for fiscal year 2008, in which the Departments of the Army, Navy, and Air Force identified $96 billion spent to acquire contractor services and 596,219 contractor FTEs providing services. In compiling their respective inventories, the military departments used different methodologies, relying on a mixture of existing data systems, contractor-entered data, manual compilation of some data elements, or estimates. Key differences between the departments' methodologies include how they identified service contracts, the categories of services included in each inventory, and how they determined the number of contractor FTEs. Furthermore, the data reported in each of the inventories were not complete. DOD has acknowledged limitations associated with the methodologies used and currently has an effort under way to develop a new, more consistent approach for compiling future inventories.