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United States Government Accountability Office: 
GAO: 

Testimony: 

Before the Subcommittee on Technology, Information Policy, 
Intergovernmental Relations and Procurement Reform, Committee on 
Oversight and Government Reform, House of Representatives: 

For Release on Delivery: 
Expected at 1:30 p.m. EST: 
Wednesday, November 16, 2011: 

Acquisition Workforce: 

DOD's Efforts to Rebuild Capacity Have Shown Some Progress: 

Statement of John P. Hutton, Director:
Acquisition and Sourcing Management: 

GAO-12-232T: 

GAO Highlights: 

Highlights of GAO-12-232T, a testimony before the Subcommittee on 
Technology, Information Policy, Intergovernmental Relations and 
Procurement Reform, Committee on Oversight and Government Reform, 
House of Representatives. 

Why GAO Did This Study: 

The Department of Defense (DOD) is the government’s largest buying 
entity and has recognized that rebuilding the acquisition workforce is 
a strategic priority. The federal government’s current budget and long-
term fiscal pressures underscore the importance of a capable and well-
functioning workforce. GAO and others have long recognized that the 
size and capabilities of the workforce across the government warrant 
the attention of the Congress. 

This statement discusses (1) DOD’s progress in addressing challenges 
faced in rebuilding the capacity of the acquisition workforce, and (2) 
insights into the efforts by the Defense Contract Management Agency 
(DCMA) to rebuild its contract oversight capacity. This statement is 
drawn from our broad body of work on DOD contract management and 
acquisition workforce as well as a report issued earlier this month on 
DCMA’s efforts to rebuild capacity. We also obtained updated 
information from DOD with regard to its acquisition workforce 
competency assessments and workforce hiring. 

What GAO Found: 

DOD has made some progress in rebuilding the capacity of the 
acquisition workforce. For example, DOD reported that it hired about 
5,900 civilians into the acquisition workforce in fiscal year 2010 
using the Defense Acquisition Development Workforce Fund or as a 
result of decisions to convert functions previously performed by a 
contractor to performance by government personnel. DOD’s plans for 
further growing the acquisition workforce remain uncertain because of 
budget issues. Building workforce skills and expertise is just as 
important, however, as increasing the size of the acquisition 
workforce. DOD also made progress in completing competency 
assessments, which identify the current skills and capabilities of the 
workforce and help identify areas that needed further management 
attention. DOD officials reported that DOD has completed three 
assessments, including contracting, life cycle logistics, and program 
management, and is drafting final reports for another six assessments. 
One area where DOD still faces challenges is determining the 
effectiveness of its training in improving acquisition outcomes. GAO 
recommended in 2010 that if DOD is to fully assess performance 
improvements, it needs to go beyond measuring the size of the 
workforce. DOD did not concur with the recommendation, stating that it 
believed existing metrics were sufficient to assess the impact of its 
training efforts on acquisition outcomes. GAO continues to believe DOD 
needs to develop additional metrics. Further, to help improve 
acquisition outcomes, GAO reported that DOD needed to assess the 
skills and competencies of and training provided to those people who 
have a role in acquisition but who are outside what DOD has formally 
defined as the acquisition workforce. GAO recommended that DOD 
establish criteria for identifying these personnel, assess the 
critical skills needed to perform their role in the acquisition 
process, and designate an organization that has the responsibility to 
track DOD’s progress in identifying, developing, and overseeing 
personnel outside the defined acquisition workforce. DOD concurred 
with these recommendations. 

The challenges DCMA is experiencing in rebuilding its capacity are 
illustrative of those faced by DOD. DCMA performs a critical role in 
helping to manage and oversee contractor performance. GAO’s November 
2011 report found that DCMA is attempting to rebuild its workforce, 
making increased use of the Defense Acquisition Workforce Development 
Fund. For example, in fiscal year 2011, DCMA reported it hired 1,221 
new employees under this authority, a substantial increase from 166 
hired in fiscal year 2009. GAO also noted that by the late 1990s, DCMA 
had lost the majority of its contract cost/price analysts, which, 
according to DCMA, meant many of its pricing-related contract 
administration responsibilities, such as negotiating forward-pricing 
rate agreements and establishing final indirect cost rates and billing 
rates, were no longer performed to the same level of discipline and 
consistency as in prior years. As a result, DCMA reported that DOD’s 
acquisitions were subjected to unacceptable levels of cost risks. Over 
the last 2 years, DCMA reports it has hired 279 new contract 
cost/price analysts and cost monitors (bringing the agency’s total 
number to about 400), extensively using the Defense Acquisition 
Workforce Development Fund to do so. 

What GAO Recommends: 

GAO is not making any new recommendations in this statement. GAO has 
previously made recommendations to DOD to help address DOD’s workforce 
challenges. DOD generally agreed with most of the recommendations and 
has efforts under way to implement them. 

View [hyperlink, http://www.gao.gov/products/GAO-12-232T]. For more 
information, contact John Hutton at (202) 512-4841 or huttonj@gao.gov. 

[End of section] 

Chairman Lankford, Ranking Member Connolly, and Members of the 
Subcommittee: 

I am pleased to be here today to discuss our recent work on 
acquisition workforce issues. GAO and others have long recognized that 
the size and capabilities of the workforce across the government 
warrant the attention of the Congress. The federal government's 
current budget and long-term fiscal pressures underscore the 
importance of a capable and well-functioning workforce. 

Today I would like to focus in particular on the government's largest 
buying entity and discuss our issued work on the challenges facing the 
Department of Defense's (DOD) acquisition workforce.[Footnote 1] In 
our February 2011 high-risk report, we noted that among the actions 
DOD needed to take to improve outcomes on the hundreds of billions of 
dollars spent annually on goods and services was to ensure that its 
acquisition workforce was adequately sized, trained, and equipped to 
meet the department's needs.[Footnote 2] Our work has found that a 
lack of an adequate number of trained acquisition and contract 
oversight personnel contributed to unmet expectations and has placed 
DOD, at times, at risk of potentially paying more than necessary. 

Likewise, DOD has recognized that rebuilding its acquisition workforce 
is a strategic priority. According to the Office of the Under 
Secretary of Defense for Acquisition, Technology, and Logistics 
(USD/AT&L), to successfully accomplish the acquisition mission and 
ensure the best value for the expenditure of public resources, DOD 
will place greater emphasis on having a high-quality workforce with 
the right competencies and skill sets. To do so, DOD issued an 
acquisition workforce plan in April 2010 that identified planned 
workforce growth in support of the Secretary of Defense's strategy to 
resize and rebalance the acquisition workforce. 

My statement today will address DOD acquisition workforce issues from 
two perspectives. First, I will provide an overview of DOD's progress 
in addressing challenges faced in rebuilding the capacity of the 
acquisition workforce. I will then provide specific insights into the 
efforts of the Defense Contract Management Agency (DCMA) to rebuild 
its contract oversight capacity. This statement today is drawn from 
our broad body of work on DOD contract management and acquisition 
workforce, including work reflected in our February 2011 high-risk 
update as well as our October 2010 and September 2011 acquisition 
workforce reports.[Footnote 3] Additionally, we relied on our November 
2011 report that assessed the progress and challenges facing DCMA. 
[Footnote 4] We also obtained updated information from DOD with regard 
to its acquisition workforce competency assessments and workforce 
hiring data. This work was prepared in accordance with generally 
accepted government auditing standards. Those standards require that 
we plan and perform the audits to obtain sufficient, appropriate 
evidence to provide a reasonable basis for our findings and 
conclusions based on our audit objectives. We believe that the 
evidence obtained provides a reasonable basis for our findings and 
conclusions based on our audit objectives. 

DOD's Progress in Addressing Challenges in Rebuilding the Capacity of 
the Acquisition Workforce: 

DOD has made some progress in rebuilding the capacity of the civilian 
acquisition workforce and in completing competency assessments, which 
identify the current skills and capabilities of the workforce and help 
identify areas that needed further management attention. Included 
among the workforce issues facing DOD are (1) determining the right 
size of the acquisition workforce, (2) updating acquisition training 
based on ongoing competency assessments and measuring the effect of 
training on acquisition outcomes, and (3) identifying personnel 
outside the acquisition workforce who have a role in acquisition. 

Steps Taken to Increase the Size of the Acquisition Workforce: 

In April 2009, the Secretary of Defense announced his intent to 
increase the size of the acquisition workforce, in part, to (1) help 
address concerns that DOD had become too reliant on contractors to 
support core functions and (2) rebuild the capacity and skill sets 
that had been eroded in the years that followed the downsizing of the 
workforce in the 1990s. DOD's April 2010 acquisition workforce 
strategic plan identified an objective of increasing the civilian 
acquisition workforce, which totaled about 118,000 civilians as of 
September 2009, by 20,000 personnel by fiscal year 2015. This growth 
would be accomplished both through the hiring of new personnel using 
funding provided through the Defense Acquisition Workforce Development 
Fund[Footnote 5] as well as through the "insourcing"--or conversion to 
government performance--of functions that were being performed by 
contractor personnel. Data provided by the USD/AT&L indicate that DOD 
hired about 5,900 individuals using the Defense Acquisition Workforce 
Defense Fund as well as through insourcing in fiscal year 2010. 

DOD officials also noted that a combination of other factors, 
including hiring by the military departments (excluding those hired 
using the Defense Acquisition Workforce Development Fund or that were 
the result of an insourcing decision), movement within DOD from one 
career field to another, or administrative changes, such as 
reclassifying existing positions as being within the acquisition 
workforce, increased the total reported number of civilians within the 
acquisition workforce by about 8,500. Overall, DOD officials reported 
that the civilian acquisition workforce was about 133,000 at the end 
of fiscal year 2010. 

The department's plans for growing the acquisition workforce remain 
uncertain. In August 2010, the Secretary of Defense announced that the 
insourcing initiative was being halted, though DOD would continue to 
insource positions on a case-by-case basis. Further, because of 
anticipated future budget constraints, the Secretary of Defense 
announced in March 2011 a hiring freeze for DOD's overall civilian 
workforce, but he indicated that the initiatives using the Defense 
Acquisition Workforce Development Fund would continue. DOD had planned 
to issue an updated strategic workforce plan for the acquisition 
workforce earlier this year but has not yet done so, in part, because 
of the uncertainty regarding future budgets. DOD officials indicated 
that the plan may not be released until April 2012. At this time, we 
do not know whether DOD's updated plan will include information on the 
funding needed to achieve its acquisition workforce objectives. 

DOD Efforts to Identify Competencies and Update Acquisition Workforce 
Training: 

Just as important as increasing the size of the acquisition workforce 
is building workforce skills and expertise. Our work has shown that 
federal agencies need to determine the occupations, skills, and 
competencies critical to achieving their missions and goals, as well 
as to identify any gaps between their current workforce and the 
workforce they will need in the future.[Footnote 6] By taking these 
steps, agencies would be in a better position to adjust to changes in 
technology, budget constraints, and other factors that alter the 
environment in which they operate. The DOD acquisition workforce is no 
exception. 

The Defense Acquisition Workforce Improvement Strategy outlines a 
competency assessment strategy for the acquisition workforce as a 
means to assess workforce capability using updated and validated 
enterprise-wide models, data and information. In September 2010 we 
reported DOD had completed only one of its planned 13 assessments. 
[Footnote 7] Over the past year, however, DOD has reported making 
progress in completing some of the remaining 12 assessments. For 
example, according to the Deputy Director of AT&L human capital 
initiatives, DOD has completed two additional competency assessments. 
Thus, competency assessments have now been completed in the areas of 
contracting, life-cycle logistics, and program management. DOD is 
drafting the final report for another six competency assessments. 

DOD officials have reported that they have used these competency 
assessments, in part, to help revise the training curriculum for its 
contracting career field. DOD's contracting competency assessment 
found that there was inconsistency in fundamental contracting skills 
and in the source selection process and that more advanced training on 
pricing was needed. In March 2011, the Office of Defense Procurement 
and Acquisition Policy announced plans to revise the training 
standards for its contracting career field, effective October 1, 2011. 
According to DOD, the changes in the curriculum incorporated more 
emphasis on pricing, services contracting, and competition, among 
other things, and were based on the competency assessments and 
discussions with senior procurement executives and contracting 
leaders. Similarly, in August 2011 DOD noted plans to make changes in 
its purchasing and industrial/contract property management curricula. 

One area where DOD still faces challenges is determining the 
effectiveness of its training in improving acquisition outcomes. We 
reported in 2010 that if DOD is to fully assess performance 
improvements, it needs to go beyond measuring the size of the 
workforce.[Footnote 8] We recommended that DOD establish milestones 
for the development of metrics to measure how acquisition 
certification training improves the proficiency and capability of the 
acquisition workforce, in order to demonstrate and track how training 
efforts contribute to improved acquisition workforce performance. DOD 
did not concur with the recommendation stating that it believed 
existing metrics were sufficient to assess the effect of its training 
efforts on acquisition outcomes. We continue to believe DOD needs to 
develop additional metrics. 

DOD Needs to Look Beyond the Formally Defined Acquisition Workforce: 

To help improve acquisition outcomes, our September 2011 report noted 
that DOD needed to assess the skills and competencies of and training 
provided to those people outside what DOD has defined as the 
acquisition workforce.[Footnote 9] These people include those who may 
set requirements or serve as the contracting officer's representatives 
to help manage and oversee contractor performance--functions that are 
key to acquisition outcomes. GAO found that personnel with acquisition-
related responsibilities represented more than half of the 430 
personnel involved with 29 services acquisition contracts reviewed. In 
this report, we also noted that several organizations have been 
tracking and managing the acquisition workforce, but no DOD 
organization has (1) systematically identified personnel outside of 
what has been defined as the acquisition workforce and the related 
competencies, or (2) been given responsibility for the identification, 
development and oversight of this group. DOD is not required to 
identify personnel outside the acquisition workforce and has not 
established a process to do so. As DOD officials noted, identifying 
this population is challenging, in part because it is a transient one 
dispersed across many DOD organizations. Additionally, these people 
come from a variety of career fields and are often involved in 
acquisitions as a secondary duty. DOD has taken action to identify 
part of this population--such as requirements personnel for major 
weapon systems--but has not done this for all personnel with 
acquisition-related responsibilities outside the acquisition 
workforce. We also found that DOD has limited information to gauge the 
current and future demand for training this population or the 
effectiveness of the current training that is available. We 
recommended that DOD establish criteria for identifying these 
personnel, assess the critical skills needed to perform their roles in 
the acquisition process, and designate an organization that has the 
responsibility to track DOD's progress in identifying, developing, and 
overseeing personnel outside the defined acquisition workforce. DOD 
concurred with the recommendations. 

Rebuilding DCMA's Capacity: 

The challenges DCMA is experiencing in rebuilding its capacity is 
illustrative of those faced by DOD. DCMA performs a critical role in 
helping to manage and oversee contractor performance. Specifically, it 
has responsibilities for providing contract administration services 
for DOD's buying activities and working directly with defense 
contractors to help ensure that goods and services are delivered on 
time, at projected cost, and meet performance requirements. In 
addition, as a designated combat support agency, DCMA is tasked with 
providing contract administration and support to combatant commanders 
during contingency operations. The preponderance of DCMA's workforce 
is included in the defined acquisition workforce. 

In November 2011, we reported on how DCMA is positioning itself to 
meet its missions.[Footnote 10] We noted that DCMA has undergone an 
evolution to become the agency it is today. For example, DCMA's 
workforce decreased from an estimate of about 24,000 in 1990 to a low 
of about 9,300 in 2008. While senior DCMA officials said the 
workforce's downsizing made sense for much of the 1990s, because there 
were efficiencies to be gained and its workload was generally 
decreasing, this changed in the early 2000s, when DCMA's workload 
started to increase, but its workforce numbers continued to 
decline.[Footnote 11] As the workforce declined, however, the agency 
experienced significant erosion of expertise, such that it could not 
fulfill all of its oversight functions. 

Since 2008, DCMA has been rebuilding its workforce, and to do so, has 
made increasing use of the Defense Acquisition Workforce Development 
Fund. For example, in fiscal year 2011, DCMA reported it hired 1,221 
new employees under this authority, a substantial increase from 166 
hired in fiscal year 2009. These new employees include 3-year interns 
as well as journeymen, described by DCMA officials as individuals with 
extensive experience in a certain business area. Some contract 
management office leaders told us, however, they were not sure that 
they would have enough operations and maintenance-funded positions 
available to be able to retain the journeymen and interns they had 
originally hired using the Defense Acquisition Workforce Development 
Fund. DCMA leadership noted that the agency is requesting increased 
operations and maintenance funding to convert these positions in the 
future. 

As noted earlier, building workforce skills and expertise is just as 
important as increasing the size of the acquisition workforce. Our 
November 2011 report noted that by the late 1990s, DCMA had lost the 
majority of its contract cost/price analysts, which, according to 
DCMA, meant many of its pricing-related contract administration 
responsibilities, such as negotiating forward pricing rate agreements 
and establishing final indirect cost rates and billing rates, were no 
longer performed to the same level of discipline and consistency as in 
prior years. As a result, DCMA reported that DOD's acquisitions were 
subjected to unacceptable levels of cost risks. In one recent example, 
a DCMA official told us about a case where an administrative 
contracting officer, lacking support from contract cost/price analysts 
had, for simplicity, incorrectly blended a contractor's overhead rates 
rather than deriving separate rates for different areas (e.g., general 
and administrative, and manufacturing). 

Over the last 2 years, DCMA reports it has hired 279 new contract 
cost/price analysts and cost monitors (bringing the agency's total 
number to about 400), extensively using the Defense Acquisition 
Workforce Development Fund to do so. Further, in 2009, DCMA created 
the Cost and Pricing Center, with a mission of developing and 
sustaining the agency's expertise in pricing. DCMA officials said the 
center has helped to hire contract cost/price analysts for its 
contract management offices. It also develops and conducts training 
for the growing DCMA contract cost/price analyst workforce. 

DCMA also identified ongoing concerns with its ability to effectively 
carry out its quality assurance responsibilities because of workforce 
size and capability shortfalls, increasing the risk to the warfighter 
and the taxpayers.[Footnote 12] For example, DCMA reported an increase 
in customer complaints in the form of reported quality deficiencies in 
products. One action DCMA reports it is taking to address the issues 
related to its quality assurance capabilities is defining 
certification training for its quality assurance personnel. DCMA also 
reports it is moving toward standardizing position descriptions as a 
way to establish consistent expectations for its quality assurance 
workforce. DCMA has emphasized increasing the number of quality 
assurance personnel and estimates this will continue through 2016. 

Even with DCMA's recent efforts to rebuild workforce capacity, the 
large percentage of retirement-eligible employees presents challenges. 
Over half of DCMA's workforce is retirement eligible or qualified for 
early retirement incentives. For example, as of the end of fiscal year 
2010, about 24 percent of the DCMA workforce was eligible to retire, 
and an additional 28 percent qualified for early retirement 
incentives. The large number of retirement-eligible employees 
continues to make DCMA vulnerable to the loss of valuable technical 
expertise and organizational knowledge. In part, DCMA plans to 
mitigate this risk through aggressive recruiting and knowledge 
management activities, such as bringing back retired annuitants to 
help raise the skill levels of the newer employees. 

Concluding Observations: 

In conclusion, Mr. Chairman, DOD has focused much needed attention to 
rebuild its acquisition workforce and has made some progress in terms 
of growing the workforce, identifying the skills and competencies it 
needs, and using such information to help update its training 
curriculum. More needs to be done, however, especially for those 
individuals who do not fit within the traditional definition of DOD's 
acquisition workforce. The fiscal and budget challenges facing this 
nation and DOD underscore the need for DOD to strategically manage its 
workforce to ensure that they have the right skills, capabilities, and 
training to effectively acquire and manage the billions of dollars DOD 
spends on goods and services each year. These same fiscal and budget 
pressures may present DOD with additional challenges in meeting its 
acquisition workforce goals. Whether DOD achieves all of its 
previously planned growth and related workforce improvement 
initiatives remains uncertain, but what is certain is the department 
can ill-afford not to succeed in preparing its workforce to meet its 
future needs. 

Chairman Lankford, Ranking Member Connolly, and members of the 
Subcommittee, this concludes my prepared statement. I would be happy 
to respond to any questions you may have at this time. 

Contacts and Acknowledgment: 

For further information about this statement, please contact me at 
(202) 512-4841 or huttonj@gao.gov. Contact points for our Offices of 
Congressional Relations and Public Affairs may be found on the last 
page of this statement. Individuals who made key contributions to this 
statement include Penny Berrier, Assistant Director; Timothy DiNapoli; 
Laura Holliday; Victoria Klepacz; John Krump; and Janet McKelvey. 

[End of section] 

Footnotes: 

[1] The Defense Acquisition Workforce Improvement Act recognized 
acquisition as a multidisciplinary career field for DOD comprised of 
11 functional areas (Pub. L. No. 101-510, § 1202(a) (1990) (codified, 
as amended, at 10 U.S.C. §1721 (a), (b)). The 11 functional areas are--
program management; systems planning research, development, 
engineering, and testing; procurement, including contracting; 
industrial property management; logistics; quality control and 
assurance; manufacturing and production; business, cost estimating and 
financial management, and auditing; education, training, and career 
development; construction; and joint development and production with 
other government agencies and foreign countries. Since the act was 
passed, DOD has expanded the original list of 11 functional areas to a 
total of 16 career fields/paths. 

[2] GAO, High-Risk Series: An Update, [hyperlink, 
http://www.gao.gov/products/GAO-11-278] (Washington, D.C.: February 
2011). 

[3] [hyperlink, http://www.gao.gov/products/GAO-11-278]; GAO, Defense 
Acquisition Workforce: DOD's Training Program Demonstrates Many 
Attributes of Effectiveness, but Improvement Is Needed, [hyperlink, 
http://www.gao.gov/products/GAO-11-22] (Washington D.C.: Oct. 28, 
2010); and GAO, Defense Acquisition Workforce: Better Identification, 
Development, and Oversight Needed for Personnel Involved in Acquiring 
Services, [hyperlink, http://www.gao.gov/products/GAO-11-892] 
(Washington, D.C.: Sept. 28, 2011). 

[4] GAO, Defense Contract Management Agency: Amid Ongoing Efforts to 
Rebuild Capacity, Several Factors Present Challenges in Meeting its 
Missions, [hyperlink, http://www.gao.gov/products/GAO-12-83] 
(Washington, D.C.: Nov. 3, 2011). 

[5] The National Defense Authorization Act for Fiscal Year 2008 
established the Defense Acquisition Workforce Development Fund to 
provide additional funds for the recruitment, training, and retention 
of acquisition personnel of the Department of Defense. Pub. L. No. 110-
181 § 852; codified in 10 U.S.C. § 1705. 

[6] GAO, Workforce Planning: Interior, EPA, and the Forest Service 
Should Strengthen Linkages to Their Strategic Plans and Improve 
Evaluation, GAO-10-413 (Washington D.C.: Mar. 31, 2010); [hyperlink, 
http://www.gao.gov/products/GAO-11-278]; GAO, Human Capital: Further 
Actions Needed to Enhance DOD's Civilian Strategic Workforce Plan, GAO-
10-814R (Washington, D.C.: Sept. 27, 2010); and GAO, Human Capital: A 
Guide for Assessing Strategic Training and Development Efforts in the 
Federal Government, [hyperlink, 
http://www.gao.gov/products/GAO-04-546G] (Washington, D.C.; Mar. 2004). 

[7] [hyperlink, http://www.gao.gov/products/GAO-10-814R]. 

[8] [hyperlink, http://www.gao.gov/products/GAO-11-22]. 

[9] [hyperlink, http://www.gao.gov/products/GAO-11-892]. 

[10] [hyperlink, http://www.gao.gov/products/GAO-12-83]. 

[11] DCMA measures its workload in terms of obligations the government 
has incurred, but not yet paid, also known as unliquidated obligations. 

[12] Relatedly, in 2008, we found that DOD's quality specialists, 
including those at DCMA, had to scale back the amount of oversight 
they provided as a result of downsizing. GAO, Best Practices: 
Increased Focus on Requirements and Oversight Needed to Improve DOD's 
Acquisition Environment and Weapon System Quality, [hyperlink, 
http://www.gao.gov/products/GAO-08-294] (Washington, D.C.: Feb. 1, 
2008). 

[End of section] 

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