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Highlights

The Department of Defense (DOD) is the federal government's largest purchaser of contractor services, spending $118 billion in fiscal year 2003 alone--an increase of 66 percent since fiscal year 1999. DOD is expected to rely increasingly on contractors to carry out its mission. In recent reports, DOD has identified inadequate surveillance on service contracts. This report examines how DOD manages service contract surveillance. It looks at the extent of DOD's surveillance on a selection of service contracts, reasons why insufficient surveillance occurred, and efforts to improve surveillance.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense 1. To help improve service contract surveillance and further mitigate risk, the Secretary of Defense should ensure that the proper surveillance training of personnel and their assignment to service contracts occurs no later than the date of contract award.
Closed - Implemented
DOD concurred with the recommendation and completed implementation on January 10, 2006. On December 20, 2005, the Defense Procurement and Acquisition Policy Office, OUSD (AT
Department of Defense 2. To help improve service contract surveillance and further mitigate risk, the Secretary of Defense should develop practices to help ensure accountability for personnel carrying out surveillance responsibilities.
Closed - Implemented
DOD concurred with the recommendation and on December 6, 2006, the Director, Defense Procurement and Acquisition Policy, OUSD (AT&L), issued a memorandum that, among other things, requires DOD components to ensure that the contribution of surveillance personnel (Contracting Officer Representatives, CORs) in assisting in the monitoring or administration of contracts is addressed as appropriate in the performance reviews of these individuals.
Department of Defense 3. To help improve service contract surveillance and further mitigate risk, the Secretary of Defense should ensure that DOD's service contract review process and associated data collection requirements provide information that will provide more management visibility over contract surveillance.
Closed - Implemented
DOD concurred with the recommendation and implemented it by Under Secretary of Defense for Acquisition, Technology and Logistics issuing new Acquisition of Services Policy on October 2, 2006. The new policy covers DOD management of the acquisition of services and contains a requirement for Senior Officials to review a list of Acquisition Strategy Requirements for all categories of services. The list includes a requirement for contract tracking and oversight by tracking procedures or processes used to monitor contract performance including the existing or planned management approach following contract award and the quality assurance surveillance or written oversight plans and responsibilities.
Department of Defense 4. To help improve service contract surveillance and further mitigate risk, the Secretary of Defense should revise the October 2004 policy on proper use of other agencies' contracts to include guidance on conducting surveillance of services procured from other agencies' contracts.
Closed - Implemented
DOD concurred with the recommendation and has completed implementation. The Acting Director, Defense Procurement and Acquisition Policy, OUSD(AT&L), issued a policy memorandum on September 20, 2005, entitled "Interagency Acquisition: A Shared Responsibility" to the Military Departments, Defense Agencies, DOD Field Activities and others. The memo specifically stated "all parties to an interagency acquisition must ensure that the duties and responsibilities of contract administration and oversight are clearly assigned and correctly performed."
Department of Defense 5. The Secretary of Defense should direct the Secretary of the Army to assign surveillance personnel to conduct surveillance, as appropriate, on ongoing Contract Advisory and Assistance Services contracts awarded prior to April 2004.
Closed - Implemented
DOD concurred with the recommendation and implemented it as part of a December 6, 2006, memorandum issued by the Director, Defense Procurement and Acquisition Policy, OUSD(AT&L). This memorandum contains a requirement for DOD Components to ensure that properly trained surveillance personnel (Contracting Officer Representatives, CORs) are identified on active contracts for services in support of DoD requirements. This requirement applies DOD-wide and to all active contracts for services in support of DOD requirements.

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