Government Contractors: Measuring Costs of Service Contractors Versus Federal Employees
GGD-94-95
Published: Mar 10, 1994. Publicly Released: Mar 10, 1994.
Skip to Highlights
Highlights
Pursuant to a congressional request, GAO reviewed various comparisons of the costs of using contractors versus federal employees to perform services, focusing on the comparisons' methodologies, their strengths and weaknesses, and results.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| Congress may wish to explore with OMB the best way to reconcile the administration's objective of downsizing the government with the objective of providing federal agencies the flexibility to accomplish the government's work in the most cost-effective manner including, where needed, increased competition between the public and private sectors. |
Closed – Implemented
|
Following the report, Senator Pryor introduced language into the Federal Work Force Restructuring Act of 1994 (P.L. 103-226, March 30, 1994) that added the requirement that the activities affected by agency downsizing not be contracted out except in cases where a cost comparison showed that it was advantageous to the government. This legislative action, in effect, implemented the recommendation for those advisory and assistance services affected by agency downsizing. |
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Office of Management and Budget | As part of its overall effort to improve the procurement of services, OMB should extend a cost-comparison requirement to advisory and assistance services. As part of its guidance to agencies in preparing cost comparisons for advisory and assistance services, OMB should recognize that noncost factors also need to be considered and specify any circumstances that might exempt an agency from the cost-comparison requirement. However, if a decision is made not to conduct a cost comparison, such a decision should be adequately justified and documented. |
Closed – Implemented
This recommendation has been implemented. Senator Pryor introduced language into the Federal Workforce Restructuring Act of 1994 (P.L. 103-226) adding the requirement that the activities affected by agency downsizing not be contracted out except in cases where a cost comparison shows it is advantageous to the government. On August 19, 1994, OMB advised all agencies that, "In those instances where conversions to contract may be appropriate, agencies should rely on the cost comparison requirements of OMB Circular A-76, where applicable."
|
| Office of Management and Budget | OMB should work with Congress to explore ways to meet the administration's workforce reduction objective and provide agencies with sufficient authority and flexibility to accomplish the government's work in the most efficient and effective manner--either by using government employees or by contract, or some combination of both. |
Closed – Implemented
On August 19, 1994, OMB advised all agencies that "In those instances where conversions to contract may be appropriate, agencies should rely on the cost comparison requirements of OMB Circular A-76, where applicable."
|
Full Report
Office of Public Affairs
Topics
Competitive procurementConsultantsContract costsContractor personnelCost effectiveness analysisDownsizingFederal employeesFederal procurement policyPrivatizationProcurement regulationsService contractsStatistical methods