DOD Functions Contracted Out Under OMB Circular A-76:

Contract Cost Increases and the Effects on Federal Employees

NSIAD-85-49: Published: Apr 15, 1985. Publicly Released: Apr 22, 1985.

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Pursuant to a congressional request, GAO reported on the long-range cost to the government and the effects on government employees by the Department of Defense contracting out commercial functions under Office of Management and Budget Circular A-76.

GAO found that, of the 20 functions that were contracted out between October 1978 and February 1981, all but one of the functions had subsequent contract cost increases. However, savings were still realized on 17 of the functions. Savings were not realized on two functions and GAO could not determine whether savings were realized on one function. In a review of the effect that 31 contracting-out functions had on government employees, GAO found that of 2,535 employees affected, 74 percent obtained other government positions. Most of the remaining employees resigned, retired, or obtained employment with contractors. Five percent of the employees were separated involuntarily.

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