Over the past 20 years, GAO has issued more than 20 audit reports identifying the need for practically every major federal agency to manage its consulting services better. However, many of the same problems still exist. The proper use of consulting services is a normal, legitimate way to improve government services and operations, and agencies must continue to have the option to use them where appropriate. The major issues related to the Federal Government's use of consulting services and the efforts made by the executive branch and Congress to deal with a longstanding management problem are summarized.

Various federal agencies did not obtain adequate competition in awarding consulting service contracts. GAO questioned the reasonableness of the fees paid for consulting services and the need for these services in many cases. A substantial portion of the studies performed by government employees and consulting services can be located in four federal repositories, but agencies are not searching these repositories before initiating new studies, and many completed studies are not submitted to the repositories. In some cases, conflicts of interest appeared to exist that could diminish the contractor's capacity to give impartial, objective advice or result in the contractor's being given an unfair advantage when competing for future contracts. Some agencies awarded a disproportionate number of consulting service contracts in the final quarter of the fiscal year. Although the Office of Management and Budget (OMB) issued a bulletin defining consulting services and establishing controls intended to improve the management of these services, GAO found little improvement in agencies' management of these services. It recommended that OMB instruct federal agencies to establish more rigorous procedures for approving consulting service contracts. Agencies had difficulty in using the definition of consulting services and had different interpretations of the definition. The executive branch viewed it much more narrowly than Congress.

Status Legend:

Review Pending-GAO has not yet assessed implementation status.

Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.

Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.

Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.

• Review Pending
• Open
• Closed - implemented
• Closed - not implemented

Recommendation for Executive Action

Recommendation: The Director of OMB should assure that agencies establish effective procedures to fully implement the prescribed management controls and monitor the reports available from the Federal Procurement Data System to make sure the additional written guidance provided to the agencies results in a common understanding of the definition.

Agency Affected:

Status: Closed

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