Federal Contracting: Congressional Action Needed to Address Long-standing Problems with Reporting of Advisory and Assistance Services

Since 1994, the Office of Management and Budget (OMB) has been required by law to collect and report obligations for advisory and assistance services (A&AS) in the President's budget. The initial intent for this requirement is not clear, however. The statutory definition of A&AS covers three broad categories of management and professional support services. For many years, GAO and others have reported on inaccuracies in agencies' reporting of A&AS obligations. This report follows up on GAO's past work, pursuant to the fiscal year 2007 Defense Authorization Act. GAO assessed (1) whether reported A&AS obligations are accurate or used for management purposes and (2) the extent to which A&AS contracts are used for recurring services and for longer than 5 years and the contract types and vehicles used. GAO analyzed legislative history and reviewed 334 randomly selected contract files across 10 agencies, the results of which are generalizable to locations visited.

Agencies' reported A&AS obligations are inaccurate to the point of being meaningless and are not used for management purposes. GAO found a range of factors that contribute to significant inaccuracies in these data. Almost 20 percent of the 334 contract actions GAO reviewed were erroneously identified as A&AS, including services such as fitness center maintenance and telecommunications cabling installation. Agency officials frequently cited the broad nature of the A&AS definition as a problem. Agencies GAO reviewed generally encountered challenges in tying reported A&AS obligations to their corresponding contracts because of the lack of integration of procurement and budget data systems. Agency and OMB officials unanimously told GAO they do not use reported A&AS obligations for management or other purposes. Acquisition officials said they oversee their A&AS contracts, as they do their other professional services contracts, with established contract management procedures. Reflecting the lack of a clear distinction between A&AS and general professional services contracts, DOD retracted its A&AS directive and replaced it with general service contracting guidance in 2004. Even as far back as 1996, a code to specifically designate A&AS contracts was removed from the Federal Procurement Data System, the government's procurement information system. Agencies frequently awarded contracts for A&AS on a recurring basis and to the same contractor. Overall 63 percent of the A&AS contract actions were issued on other than a sole-source basis. Most task order contracts reviewed met the A&AS statutory period of performance limit of 5 years; but 2 exceeded and 10 had the potential (if options were exercised) to exceed this limit. Agencies used various contract types and vehicles to procure A&AS. Almost half of the actions GAO reviewed were time-and-materials, and over 40 percent were under interagency vehicles, primarily orders under the General Services Administration's schedule contracts.