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In 2007, the Department of Defense (DOD) paid contractors $158.3 billion for a range of services, including contract specialists. To better understand the use of contractors in this role, GAO initiated a case study, under the authority of the Comptroller General, at the Army Contracting Agency's (ACA) Contracting Center of Excellence (CCE). GAO determined (1) the extent to which and why CCE relies on contractor contract specialists, (2) how risks of contractor use are mitigated, (3) how the cost of the contractors compares to that for CCE's government employees, and (4) whether the contract vehicles were appropriate. GAO reviewed a random sample of contract files to understand the contractors' duties and responsibilities, compared compensation costs, and reviewed documents from the General Services Administration (GSA), under whose contracts CCE ordered the contract specialists.

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Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense 1. The Secretary of Defense should issue guidance to clarify the circumstances under which contracts risk becoming improper personal services contracts and to provide direction on how the risk should be mitigated.
Closed - Implemented
Based on our report, Congress included a provision in Section 831 of the National Defense Authorization Act for Fiscal Year 2009 requiring DOD to develop guidance related to personal services contracts to (1) require a clear distinction between employees of the DOD and employees of DOD contractors, (2) provide appropriate safeguards with respect to when, where, and to what extent DOD may enter into a contract for the procurement of personal services, and (3) assess and take steps to mitigate the risk that, as implemented and administered, non-personal services contracts may become personal services contracts. Pursuant to Section 831, the Defense Federal Acquisition Regulation Supplement (DFARS) was amended in May 2011 to provide the required guidance on personal services contracts. In addition to amending DFARS, DOD added a section to DOD Instruction 1100.22, revised in April 2010, that describes an inappropriate personal services contractual arrangement and provides guidance on assessing whether or not the work is personal in nature.
Department of the Army 2. To help ensure that CCE has sufficient qualified government personnel to meet its mission, and uses contractors appropriately, the Secretary of the Army should direct ACA to work with CCE in identifing the appropriate mix of contractor and government contract specialists over the long term and develop a plan to help fill positions to achieve the desired balance.
Closed - Implemented
Agency response indicates that it agrees with the recommendation and that the long-term goal is to staff Contracting Center of Excellence (CCE) with government contract specialists. CCE has put forth an aggressive recruitment effort and states that it has decreased the number of contractor personnel from 31 in 2007 to 17 as of Feb. 2008. Further reductions in contractor personnel are anticipated. We consider this recommendation implemented, as the "appropriate mix" of the contract specialists over the long term, in the Army's view, is an all-government workforce.
Department of the Army 3. To help ensure that CCE has sufficient qualified government personnel to meet its mission, and uses contractors appropriately, the Secretary of the Army should direct ACA to work with CCE in implementing a training program designed to ensure that CCE's permanent employees develop and maintain needed skills.
Closed - Implemented
Army response stated that Contracting Center of Excellence (CCE) has implemented the recommendation, including formulation of individual development plans, a variety of training mechanisms, compliance with DOD certification requirements, and formal training at least once a quarter. In addition, during fiscal year 2009, CCE implemented once-a-month training provided by its legal office and training by the Directorate of Contracting in areas where issues have arisen on Wednesdays (when the office is closed).
Department of the Army 4. To help ensure that CCE has sufficient qualified government personnel to meet its mission, and uses contractors appropriately, the Secretary of the Army should direct ACA to work with CCE in implementing formal oversight procedures to ensure that contractors identify themselves as such in all interactions external to CCE, including telephone communications, e-mail signature lines, and documents, as required by the Federal Acquisition Register.
Closed - Implemented
Army concurred with the recommendation and stated that an information paper re-enforces policies on contractor identification. The information paper requires contractors to identify themselves as contractors, and include the name of their firm, in all written correspondence and telephone communications. Contracting Center of Excellence (CCE) plans to review emails sent by contractor employees to ensure they are properly identified; such identification was added to CCE's contract file checklist. CCE has also re-organized the way that work is assigned, so that contractor representatives, not government contracting officers, assign work to contractor employees.
General Services Administration 5. The Administrator of GSA should strengthen internal controls to guard against situations where contractors advertise services on the GSA Advantage Web site that are not in their underlying GSA schedule contracts.
Closed - Implemented
GSA agreed with the recommendation. In the 60-day letter it stated that GSA will conduct a survey of contractor postings on GSA Advantage to determine the extent to which contractors are advertising products or services not awarded in their contracts. Based on the survey results, GSA said it would develop appropriate remedial actions to address the identified concerns. GSA said it would also consider the extent to which it may be necessary to conduct similar compliance surveys on a periodic and random basis going forward. On October 21, 2009, GSA informed GAO of survey and analysis completion, and the agency forwarded the results to GAO. GSA found minor discrepancies in the rates set forth in some Advantage files and planned to take immediate steps to ensure that the correct rates were posted to Advantage for the particular contracts. GSA found no instance in which a contractor advertised products or services that had not been awarded in its underlying schedule contract and, concluding that there was not a systemic problem, decided that no further action was needed.

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