DOD Competitive Sourcing:

Results of Recent Competitions

NSIAD-99-44: Published: Feb 23, 1999. Publicly Released: Feb 23, 1999.

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Pursuant to a congressional request, GAO provided information on the Department of Defense's (DOD) recent competitive sourcing initiatives, focusing on: (1) determining the number of sourcing competitions completed between October 1995 and March 1998 and whether the competitions had been done in accordance with applicable procedures; (2) comparing characteristics such as outcomes of recent competitions with previous competitions in terms of winners of the competitions, time required to complete the competitions, savings produced, and other relevant metrics; and (3) identifying the extent of any problems in implementing the results of the competitions, and plans for government monitoring of contracts awarded as a result of outsourcing.

GAO noted that: (1) the Air Force held the vast majority of competitions completed between October 1995 and March 1998--41 of 53; (2) likewise, 85 percent of the positions competed were in the Air Force; (3) while the number of recently completed competitions is small, the agency procedures and GAO's analysis of a sample of completed cases indicate that DOD components are conducting these competitions in accordance with Office of Management and Budget Circular A-76 guidelines; (4) additionally, GAO identified only ten appeals under the A-76 administrative appeal process, with only one being upheld; (5) the private sector won about 60 percent of recent competitions compared to about 50 percent prior to 1995; (6) also, the time to complete single and multiple function competitions was 18 and 30 months, respectively, compared to an average of about 51 months for all prior competitions; (7) further, the competitions show significant potential for savings, largely driven by personnel reductions; (8) however, the data is too limited at this point to reach any conclusions about trends, and questions exist about the precision and consistency of savings estimates; (9) moreover limitations continue to exist in DOD databases used to record savings from A-76 competitions and their usefulness for tracking changes over time; (10) actions are still required to ensure that improvements are made in these databases and savings estimates from completed competitions are tracked over time; (11) the relatively few implementation problems were independent of whether the private or public sector had won the competition; (12) for example, a storage and warehousing contract was terminated for poor performance after a 19-month performance period; (13) in another case, full implementation of a public maintenance operation was delayed 17 months due to a delay in being able to recruit enough personnel to perform the work; and (14) lastly, resources expected to be devoted to monitoring contracts awarded to the private sector varied depending on the size and complexity of the functions being reviewed.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In September 1999, the Deputy Under Secretary (Installations) issued guidance enhancing the Commercial Activities Management Information System (CAMIS). The revisions to the system provides more accurate cost and savings data and allows the components to track contract modifications and revise projected savings information. The guidance helps to ensure that consistent data is being collected among the components by clarifying reporting definitions. Further, selected data from direct conversions and streamlined cost comparison studies are included in the database.

    Recommendation: The Secretary of Defense should establish specific guidance and milestones for defense components to follow in making needed improvements to their Commercial Activities Management Information System databases to ensure accurate and complete information is developed and maintained.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: In September 1999, the Deputy Under Secretary (Installations) issued guidance enhancing the Commercial Activities Management Information System (CAMIS. The revisions to the system provide more accurate cost and savings data and will allow the components to track contract modifications and revise projected savings information. As an interim measure, DOD's policy document on competitive sourcing (DOD Instructions 4100.33) was revised in September 1999 to reflect these changes. The revised CAMIS will be up and running October 2001.

    Recommendation: The Secretary of Defense should provide defense components guidance for monitoring and making periodic adjustments to savings estimates resulting from competitive sourcing competitions whether won by the private or public sectors. The guidance should specify that changes in costs of work, other than changes in costs unrelated to the competitions such as mission changes or new work, should be used to adjust estimated savings.

    Agency Affected: Department of Defense

 

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