Contract Management:

No DOD Proposal to Improve Contract Service Costs Reporting

GAO-01-295: Published: Feb 16, 2001. Publicly Released: Feb 16, 2001.

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The Department of Defense (DOD) has not developed a proposal to improve the accuracy of the reporting of contract service costs. Without accurate and reliable information, Congress cannot effectively use the information reported for DOD in the President's budget as it drafts and passes laws that affect spending. Last year, DOD agreed to develop a proposal to resolve this problem. GAO was told recently that DOD's momentum to develop a written proposal had subsided.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Starting in 2003, DOD assigned responsibility to the Defense Procurement and Acquisition Policy (DPAP) to develop an action plan to pilot and develop a DOD-Wide Spend Analysis System that uses technology to centrally automate and reduce the complexity of integrating services contracting, budgetary, and payment data from disparate sources, organize the data into a common taxonomy of services, and increase the amount and quality of information used to support the DOD Strategic Sourcing Program. DOD has worked with the Office of Management and Budget in carrying out these actions.

    Recommendation: The Secretary of Defense should take immediate action to improve the accuracy of contract service costs reporting. Such action should include assigning responsibility for working with the Office of Management and Budget in developing an action plan.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: Starting in 2003, DOD has made much progress in improving the accuracy of contract services cost reporting through the development of a DOD-Wide Spend Analysis System. In November 2004, DOD completed development of the spend analysis system. When fully operational in 2006, the system will pull data from disparate data sources belonging to Army, Navy, Air Force, and other DOD agencies into a 'virtual' spend data warehouse that will provide a common definition of spend by type of service, product, and supplier across DOD components as well as a complete view of services and product spending. The new spend analysis system includes measures to review the data for accuracy and consistency and organizing the data by type of commodity (i.e., service or product).

    Recommendation: The Secretary of Defense should take immediate action to improve the accuracy of contract service costs reporting. Such action should include establishing time frames for completing the action plan.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: Starting in 2003, DOD assigned responsibility to the Defense Procurement and Acquisition Policy (DPAP) organization to implement the plan for a DOD-Wide Spend Analysis System. Under a May 2005 reorganization, DPAP's responsibility for implementing the plan was consolidated into the Supply Chain Systems Directorate.

    Recommendation: The Secretary of Defense should take immediate action to improve the accuracy of contract service costs reporting. Such action should include assigning responsibility for implementing the plan.

    Agency Affected: Department of Defense

 

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