DOD Competitive Sourcing:

More Consistency Needed in Identifying Commercial Activities

NSIAD-00-198: Published: Aug 11, 2000. Publicly Released: Aug 11, 2000.

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Pursuant to a congressional request, GAO provided information on the Department of Defense's (DOD) efforts to identify functions that could be studied for potential competition between the public and private sectors, focusing on: (1) whether DOD has improved the identification of commercial activities that could be studied under Office of Management and Budget Circular A-76; and (2) the likelihood that DOD will increase the number of functions and positions studied under A-76.

GAO noted that: (1) DOD has improved the identification of commercial activities that could be studied under A-76; (2) in its 1998 Defense Reform Initiative inventory, DOD components identified over 283,000 commercial positions--81,000 more positions than had been identified previously; (3) DOD's 1999 Federal Activities Inventory Reform Act inventory, which built upon the Reform Initiative inventory, identified commercial functions and activities involving over 300,000 civilian positions, excluding military personnel that had been included in the 1998 Reform Initiative inventory; (4) both inventories are viewed by DOD and Office of Management and Budget officials as having improved the quality and consistency of DOD's data on commercial activities; (5) however, GAO's analysis suggests that the military services and Defense agencies did not always consistently categorize similar activities, in part because of the lack of clear guidance on how to identify which activities are inherently governmental, commercial and exempt from competition, and commercial and eligible for competition; (6) although some inconsistencies are likely to continue to exist, their resolution could lead to more activities, or fewer, being identified as eligible for A-76 study; (7) the number of commercial functions and associated positions contained in the inventories will likely change over time based on iterative improvements DOD plans to make to the inventory process and guidance; (8) in addition, DOD's manpower and business process reengineering initiatives and changes in the Defense components' missions and operations could result in changes to the numbers of commercial functions and associated positions in the inventories; (9) DOD does not expect to significantly increase the number of functions studied under its A-76 program based on the identification of additional positions in functions eligible for competition; and (10) several factors, such as geographic dispersion of positions and the inability to separate commercial from inherently governmental activities, may prevent DOD from developing studies for competition under A-76.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: The Office of the Secretary of Defense, Office of Competitive Sourcing expects to issue guidance on or about November 1, 2002. The revised guidance is intended to create a centralized approach and provide consistency among the services and Defense agencies in identifying commercial activities. This guidance is expected to improve the next data submission. An OSD official stated that this should allow them to be in a much better position to analyze the differences in coding of commercial and inherently governmental positions among the defense components. Examples will be placed in the guidance to show what OSD considers commercial or not.

    Recommendation: To improve the way DOD's components categorize activities, the Secretary of Defense should increase consistency in identification of commercial activities among and within the services and Defense agencies by making decisions on whether certain activities, such as child care and public affairs, are generally to be considered eligible for competition.

    Agency Affected: Department of Defense


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