Federal Productivity:

DOD's Experience in Contracting Out Commercially Available Activities

GGD-89-6: Published: Nov 28, 1988. Publicly Released: Dec 29, 1988.

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In response to a congressional request, GAO provided information on the Department of Defense's (DOD) implementation of the Office of Management and Budget (OMB) Circular A-76 Program, which requires agencies to assess the relative costs of contracting for the performance of agency operations.

GAO found that: (1) DOD estimated $613 million in annual savings and also attributed increased competition between contractors and federal employees to A-76 implementation; (2) federal managers believed that the A-76 cost study process was time-consuming, difficult, and disruptive to the labor force; (3) DOD took up to 8 years to complete some cost studies, leading some employees to seek other positions; (4) about 74 percent of employees displaced by A-76 found other federal jobs, 7 percent found contractor employment, 5 percent were involuntarily separated, and the remainder retired or resigned; (5) the A-76 program's goal may not be achieved because agencies have studied only 26 percent of the 149,980 federal commercial activities positions that OMB targeted for study; and (6) to stimulate compliance, OMB plans to reduce agencies' budget submissions based on agencies' anticipated A-76 savings.

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