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Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) competitive sourcing activities, focusing on: (1) the extent to which actual savings have been achieved or can be expected as a result of competitions; and (2) DOD's efforts to improve processes for identifying and tracking changes to cost and savings estimates.

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Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense 1. To improve the precision of savings estimates resulting from A-76 studies, the Secretary of Defense should: (1) develop an appropriate mechanism for assessing changes in A-76 savings in a systematic manner and require components to use data obtained in tracking the implementation of A-76 study results to update initial savings and projected savings estimates during the annual budget process; and (2) study the potential to use a costing methodology as an interim measure to provide a better estimation of baseline and other costs used to estimate savings from A-76 studies.
Closed - Implemented
The Office of The Secretary of Defense's Competitive Sourcing and Privatization Office is in the process of updating and converting its current Commercial Activities Management Information System into a web-based system. This system is scheduled to be fielded by approximately November 2002. This system is being updated to include data elements that will allow DOD to assess changes in A-76 savings for each individual competition, and track the implementation of the study results. Currently, the Marine Corps is using activity-based costing when conducting its A-76 competitions.

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