Defense Acquisitions
Further Actions Needed to Address Weaknesses in DOD's Management of Professional and Management Support Contracts
GAO-10-39, Nov 20, 2009
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In fiscal year 2008, the Department of Defense (DOD) obligated $200 billion on services contracts, including $42 billion for professional and management services. The Government Accountability Office (GAO) previously identified weaknesses in DOD's management and oversight of services contracts, contributing to DOD contract management being on GAO's high-risk list. For selected professional and management support contracts, GAO was asked to examine (1) the extent to which DOD considered the risks of contractors closely supporting inherently governmental functions at key decision points, (2) how DOD implemented performance-based practices, (3) the extent to which DOD designated trained surveillance personnel, and (4) whether a new review process may improve DOD's management of such contracts. GAO reviewed federal regulations, agency policies and guidance, and analyzed seven acquisitions approved from 2004 to 2007 and 64 related task orders for services.
DOD policies do not require assessments of the risks associated with contractors closely supporting inherently governmental functions as part of its management reviews of acquisition strategies nor when task orders are issued for professional and management services. Such risks include the potential loss of government control over and accountability for mission-related policy and program decisions. Though all seven acquisitions and more than 75 percent of the task orders GAO reviewed provided for such services, GAO found no evidence that these risks were among those considered in the documentation reviewed. DOD guidance issued after these acquisitions were approved requires that consideration be given to using civilian personnel rather than contractors when the activities closely support inherently governmental functions. This guidance, however, does not require DOD personnel to consider and document risks posed when contractors perform these activities. Further, DOD personnel were unaware of the need to provide enhanced oversight when contracting for such services. DOD faces challenges in defining requirements and outcome-based measures when acquiring professional and management services. DOD personnel generally expressed task order requirements in terms of a broad range of activities that contractors may perform, but used standards and measures that were not always well-suited to assess outcomes. DOD made more use of objective measures to assess cost and schedule performance, but generally relied on subjective measures to assess the quality of the contractors' work. For example, DOD often measured quality based on the number of complaints lodged against the contractor, which provided little detail into how desired outcomes were achieved. DOD also missed opportunities to include objective measures that may have been better suited to assess outcomes. DOD officials stated that developing outcome-based, objective measures is challenging, but noted that initiatives are under way to better utilize such approaches. DOD has made progress in ensuring that trained surveillance personnel are assigned to monitor contract performance. Surveillance personnel were assigned to all 64 of the task orders GAO reviewed, and all but 3 had received required training. GAO identified, however, 3 instances of surveillance personnel who were not assigned before the contractor began work on a task order and 20 instances of personnel who did not receive training prior to beginning surveillance duties. In September 2008, DOD implemented a new peer review process that is tasked to address, among other issues, contractors closely supporting inherently governmental functions, the use of performance-based practices, and contractor surveillance. As of October 2009, four pre-award reviews and one post-award review of professional and management support contracts have been conducted and it is too early to tell whether such reviews will encourage DOD personnel to address these issues across the range of DOD's services contracts.
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Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
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Recommendations for Executive Action
Recommendation: To better inform acquisition decisions, assist DOD personnel in performing their management oversight responsibilities, and improve DOD's surveillance of services contracts, the Secretary of Defense should revise documentation requirements for DOD's current management review to include information on the extent to which services to be provided will closely support inherently governmental functions as well as the consideration given to using DOD civilian employees to perform such functions.
Agency Affected: Department of Defense
Status: Open
Comments: In providing comments on this report, DOD concurred with this recommendation but has not yet taken any actions necessary to implement it. This recommendation is currently on hold while the Office of Management and Budget (OMB) re-defines government-wide policy on what those functions entail. Action may be taken once OMB finalizes this rule.
Recommendation: To better inform acquisition decisions, assist DOD personnel in performing their management oversight responsibilities, and improve DOD's surveillance of services contracts, the Secretary of Defense should require before the award of any contract or issuance of task order for services closely supporting inherently governmental functions that program and contracting officials consider and document their assessment of the unique risks of these services and the steps that have been taken to mitigate such risks.
Agency Affected: Department of Defense
Status: Open
Comments: In providing comments on this report, DOD concurred with this recommendation but has not yet taken any actions necessary to implement it. This recommendation is currently on hold while the Office of Management and Budget (OMB) re-defines government-wide policy on what those functions entail. Action may be taken once OMB finalizes this rule.
Recommendation: To better inform acquisition decisions, assist DOD personnel in performing their management oversight responsibilities, and improve DOD's surveillance of services contracts, the Secretary of Defense should develop guidance to identify approaches that DOD should take to enhance management oversight when contractors provide services that closely support inherently governmental functions.
Agency Affected: Department of Defense
Status: Open
Comments: In providing comments on this report, DOD concurred with this recommendation but has not yet taken any actions necessary to implement it. This recommendation is currently on hold while the Office of Management and Budget (OMB) re-defines government-wide policy on what those functions entail. Action may be taken once OMB finalizes this rule.
Recommendation: To better inform acquisition decisions, assist DOD personnel in performing their management oversight responsibilities, and improve DOD's surveillance of services contracts, the Secretary of Defense should direct the military departments to review their procedures to ensure that properly trained surveillance personnel have been assigned prior to and throughout a contract's period of performance.
Agency Affected: Department of Defense
Status: Open
Comments: In providing comments on this report, DOD concurred with this recommendation but has not yet taken any actions necessary to implement it. Ongoing efforts to develop a certification system for all DOD contracting officer's representatives (CORs) should address this recommendation. DOD is testing a new electronic system to track all CORs, which contracts they support, and the training courses they have taken (including dates). This system was the result of an inter-departmental working group formed to develop a certification system for all DOD CORs. The working group issued a memo on March 29, 2010, titled "DoD Standard for Certification of Contracting Officer's Representatives (COR) for Service Acquisitions". The memo defines the COR certification requirements, including training and when they must take that training. The working group is also collaborating with the Defense Acquisition University to revise course COR 222 to make it a web-based course so it is available to all DOD CORs. The COR tracking tool is the last piece the working group is developing as part of its efforts to develop a COR certification system. The tool is being revised from an Army Life Cycle Management Command (CECOM) COR tracking tool. The tool is currently being piloted with some offices within DOD but when it would be implemented department-wide is not known.