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The American Spark
Pentagon Not Reporting Many Activities Performed By Contractors

By Cliff Montgomery - Oct. 31st, 2016

The Defense Department (DOD) hires private contractors to perform more of its duties than any other single
federal entity. Yet the Pentagon often produces little evidence of how many private contractors it employs or
precisely what actions those contractors perform,
according to a eye-opening study released today by the
Government Accountability Office (GAO)

Years after Congress passed laws in an attempt to rectify such problems, numerous Defense Department
“components may continue to under-report the extent to which contractors were providing services that are
closely associated with inherently governmental functions, a key review objective to help ensure that DOD

has proper oversight in place.”

Below, The
American Spark quotes the Highlights of the GAO report:

Why GAO Did This Study

DOD [Defense Department] is the government’s largest purchaser of contractor-provided services. In 2008,
Congress required DOD to compile and review an annual inventory of its contracted services to identify the
number of contractors performing services and the functions contractors performed.

“In 2011, Congress required DOD to use that inventory to inform certain decision-making processes, including
workforce planning and budgeting. GAO has previously reported on the challenges DOD faces in compiling,
reviewing, and using the inventory.

“Since 2011, GAO made 13 recommendations intended to improve DOD’s use of the inventory. Of these,
DOD has yet to fully address 8 open recommendations.

“Congress included a provision in statute for GAO to report on DOD’s required reviews and plans to use the
inventory. This report assesses the extent to which DOD components (1) reviewed contracts and activities in
the fiscal year 2014 inventory of contracted services, and (2) developed plans to use the inventory for decision

“GAO reviewed relevant laws and guidance and 40 components’ inventory review certification letters, and
interviewed DOD acquisition, manpower, and programming officials.

What GAO Found

“In fiscal year 2014, 40 Department of Defense (DOD) components in total certified that they had conducted
an inventory review. Components are required by DOD guidance to address six elements in their certification
letters, including, for example, identifying any inherently governmental functions and unauthorized personal
services contracts.

“More components—21 out of 40—addressed all of the required review elements compared to prior years.
However, DOD components may continue to under-report the extent to which contractors were providing
services that are closely associated with inherently governmental functions, a key review objective to help
ensure that DOD has proper oversight in place.

“For example, GAO’s analysis indicates that DOD obligated about $28 billion for contracts in 17 categories—
such as professional and management support services—that the Office of Federal Procurement Policy and
GAO identified as more likely to [be] closely associated with inherently governmental functions.

“In comparison, components identified [only] a total of $10.8 billion in obligations or dollars invoiced for
contracts that included work identified as closely associated with inherently governmental functions—either
within the 17 categories or for any other category of service.

“Most of these functions were identified by the Army using its long-standing review process.

“The military departments have not yet developed plans to use the inventory to inform workforce mix, strategic
workforce planning, and budget decision-making processes, as statutorily required.

“DOD has made some recent progress on requiring components to identify an accountable official to lead
efforts to develop plans and establish processes for using their inventories in decision making, a step GAO
recommended in November 2014.

“However, DOD faces continued delays in deciding on the path forward for its underlying inventory data
collection system, staffing its inventory management support office, and formalizing the roles and
responsibilities of that office and stake-holders.

“GAO previously recommended that DOD address these issues to improve the usefulness of the inventory.
DOD concurred with these recommendations but has not yet addressed them.

“These continued delays hinder DOD’s ability to use the inventory of contracted services as intended,

including using the inventory data to inform workforce and budget decision-making processes.

What GAO Recommends

“GAO is not making new recommendations in this report. In its comments, DOD noted that it intends to
address GAO’s eight open recommendations, including those related to determining its approach for
compiling the inventory and defining the roles and responsibilities of a key support office and stake-holders.”

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