GAO: Soaring Use Of Contractors Puts DoD At Risk Of Fraud, Waste

Pentagon spending on goods and services has doubled to $388 billion since 2001, while the defense workforce has remained almost flat, an imbalance that has put "acquisitions at an increased risk of poor outcomes and vulnerability to fraud, waste, and abuse," according to the Government Accountability Office.

The risks come in part from the fact that the Pentagon has no idea, really, exactly whom it has retained, what they can do and what they do for the government. That's in sharp contrast to personnel practices at other "leading organizations," the GAO said.

"GAO found that program office decisions to use contractor personnel are often driven by factors such as quicker hiring time frames and civilian staffing limits, rather than by the nature or criticality of the work," John Needham, GAO director Acquisition and Sourcing Management, said in testimony before Congress. "In comparison with DOD's practices, leading organizations maintain and analyze data on their contractor personnel and take a business-oriented approach to determining when to use contractor support."

But wait, there's more.

"In addition to lacking information on contractor personnel, DOD lacks complete
information on the skill sets of its in-house personnel. DOD also lacks information on the acquisition workforce it needs to meet its mission. Not having this information not only skews analyses of workforce gaps, but also limits DOD's ability to make informed workforce allocation decisions and determine whether the total acquisition workforce--in-house and contractor personnel--is sufficient to accomplish its mission."

As you probably know, the Pentagon has embarked on some modest reforms, including converting several thousand contractor jobs into civil servant positions. But the GAO noted that reforms may not take root if officials don't really know where the gaps are, what people are already doing and what more needs to be done.

Is all of this any surprise? The use of contract personnel has become so routine in recent years. Sometimes it seems as though contractors run certain shops.

Is this a good thing? Please let us know what you think.

By Robert O'Harrow |  April 28, 2009; 4:50 PM ET contracting warnings , defense , gao
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Comments

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Please provide an example where contractors appeared to run a shop? If you are going to make statements like that please provide proof.

Posted by: Dagpotter | April 28, 2009 6:46 PM

Just for fun, citizen-taxpayers, substitute "federal employees" for "contractors" in this post. Then ask yourself whether the item's snarkily put implications sound equally as true with "federal employees." Fact is, OPM can't tell you reliably how many employees the entire government has. Neither can DoD or DHS. And have you read enough GAO and other audit reports about federal employee mismanagement, bad service, negligence, incompetence, file snooping, criminal violations, etc.? The point is: there is no evidence that the government is a cost-effective manager of many things, from wars, to intelligence operations, to environmental clean-ups, to farm subsidies, to VA claims processing. We can't blame most executive agencies' problems on contractors, can we? Then, who gets the blame? No, you can't blame everything on Congress. We get the kind of government (and contractors) we deserve.

Posted by: axolotl | April 28, 2009 8:35 PM

Go to any Army base and you will see contractors running whole organizations like CIF, Food Services, etc...

Look at the entire LOG CAP contract in theater.

Posted by: 20yearArmyvet | April 29, 2009 12:06 PM

Examples of shops: Triper repair shop 31 by Electric Boat, Weapons repair shop 67 by Northup Grumman, Security by Wackenhut, IT by EDS, there isn't a command or entity I have encountered in my twenty years in the DOD that hasn't significantly been taken over by private contractors in recent years.
My experience is that not only have costs escalated with this strategy, but services and responsiveness to customer needs has significantly degraded in the process.
As a micro-economist for the DOD I regularly have to work process improvement between multiple commands and entities, both public and private. It has been my experience that in general, implementing improvements in terms of cost, quality, and schedule are relatively easy when dealing with the public stakeholders. If the contractors are even willing to negotiate, they are either too bound up in corporate rules (not empowered), or willing to give you better quality or schedule at an increased cost, even if you show a cost savings to them.
You think the government can create bureaucracies, try dealing with a government contractor. As a citizen I can lobby my representative to apply pressure to an agency, or sell an idea to a flag officer to give guidance or set policy, but there is little or no flexability when dealing with a contractor. Those contracts are written to give as much return as possible to them, which they obviously use to hire much better lawyers and lobbyists than I have access to as a civil servant.

Posted by: vincentcstamper1 | April 29, 2009 5:00 PM

Dagpotter,

Your challenge is not credible, and a rather tired cliche. Exact contractor names, and contract numbers, are associated with any of the programs about which the GAO issues a report, regarding "contractors running a shop".

These are not amorphous, ambiguous, generic charges, but quite specific with details of the contractors and their corruption provided at the "Particularity level".

"Particularity level" is a term of art, and a requirement in Government whistleblower law, which means the exact number of the contract must be stated and identified in full before a case can be filed with the DOJ. No case could even make it into the Court system without this information.

The fact that the GAO, and the Post, do not publish the exact names of corrupt contractors is more a reflection of the liability laws they would face than any lack of specificity in the charges.

But if you would like details of exact contract numbers, and the contractors names involved with these issues, as well as the "shops they are illegally, improperly, unethically and criminally running", please contact me at MORGANTO.at.AOL.com, and I will be happy to give you as much detail as you require.

Posted by: Morganto | April 29, 2009 6:18 PM

While GAO and John Needham have once again identified an issue about which we have all been long aware and have long advocated the need to address, I am concerned that the way you characterize the issue entirely misses the point. You posit the issue as one of DoD’s “soaring use of contractors” being the root cause of problems when, in fact, GAO’s message was quite different. Indeed, your headline itself suggests that the growth in contractors at DoD is the problem. But GAO does not take a position on whether contractors are good or bad; they simply point out, as we and many others have in recent years (including the Gansler Commission on Army Contracting) that as the Department’s needs have changed, and its workforce mix has changed, the department has not undertaken a truly strategic approach to identifying and developing its internal workforce capabilities and gaps and, equally important, identifying those critical positions which it must retain in-house as core skills. As such, while the GAO report has substance and value, the way you have characterized it again takes the discussion back to whether the “soaring use of contractors” is a good thing. That is not the point. The point is that the department, and the government as a whole, needs to adjust its thinking and workforce strategies to adapt to the new realities and the new face of government. Simply trying to reinvent what once was, or being overly simplistic, does little to address that critical question.


Posted by: factsfirst | April 29, 2009 6:32 PM

The personal experiences expressed by vincentcstamper1 are very similar to my own. I have over thirty years in Federal government acquisition, both as a government employee and a contractor. I recently did two years in Iraq as a contractor before returning to the government service.

Much of the problem reported by the GAO and other auditors (SIGIR, DCAA, etc.) resulted from too little oversight of contractor performance by the government. One thing you learn after many years in procurement is that if no one is watching, things are not being done.

Contractors are profit motivated and typically do not perform tasks that are not being checked or reviewed. When the Bush administration decided to turn over virtually the entire government operation to contractors, they eliminated many of the oversight positions that were intended to ensure that the governemnt was receiving the goods and services for which it was paying and at the level of quality required by the contract.

But, because there were too few trained people available to monitor and provide oversight, these contractors were allowed to perform substandard work, bill for work never performed, use underqualified employees and violate the terms of their contracts in many other ways.

Add to this that far too many of the people sent to Iraq and Afghanistan by the Bush Administration were unqualified and received their jobs for political or dogmatic reasons, the problem became severe very quickly.

It is no accident that soldiers and civilians deployed to the desert are dying from electrocution in the shower of their trailers, eating substandard food, drinking nonpotable water, and receiving insufficient protective gear. Weapons, ammunition, vehicles, construction equipment and many other high-dollar items are being purchased for the Iraqis but are not being properly accounted for. Buildings are being erected that will not last five years.

All of these problems stem largely from failure of oversight on most of the contracts being performed in theater and the situation is only slightly better in CONUS.

The Army in particular fails to place a premium on providing oversight; they just want to obligate the funds and sit back & wait for the contractor to deliver the finished item. By the time it is discovered that things are not as planned, it is far too late to fix the problem.

Posted by: aggieband | April 30, 2009 1:28 PM

The personal experiences expressed by vincentcstamper1 are very similar to my own. I have over thirty years in Federal government acquisition, both as a government employee and a contractor. I recently did two years in Iraq as a contractor before returning to the government service.

Much of the problem reported by the GAO and other auditors (SIGIR, DCAA, etc.) resulted from too little oversight of contractor performance by the government. One thing you learn after many years in procurement is that if no one is watching, things are not being done.

Contractors are profit motivated and typically do not perform tasks that are not being checked or reviewed. When the Bush administration decided to turn over virtually the entire government operation to contractors, they eliminated many of the oversight positions that were intended to ensure that the governemnt was receiving the goods and services for which it was paying and at the level of quality required by the contract.

But, because there were too few trained people available to monitor and provide oversight, these contractors were allowed to perform substandard work, bill for work never performed, use underqualified employees and violate the terms of their contracts in many other ways.

Add to this that far too many of the people sent to Iraq and Afghanistan by the Bush Administration were unqualified and received their jobs for political or dogmatic reasons, the problem became severe very quickly.

It is no accident that soldiers and civilians deployed to the desert are dying from electrocution in the shower of their trailers, eating substandard food, drinking nonpotable water, and receiving insufficient protective gear. Weapons, ammunition, vehicles, construction equipment and many other high-dollar items are being purchased for the Iraqis but are not being properly accounted for. Buildings are being erected that will not last five years.

All of these problems stem largely from failure of oversight on most of the contracts being performed in theater and the situation is only slightly better in CONUS.

The Army in particular fails to place a premium on providing oversight; they just want to obligate the funds and sit back & wait for the contractor to deliver the finished item. By the time it is discovered that things are not as planned, it is far too late to fix the problem.

Posted by: aggieband | April 30, 2009 3:30 PM

I work in IP. My work is initiated and terminated by contractors. My part is to make the governments decision in the middle. The hard part is that the contractors are rotated so much that every 6 months you are retraining a new batch...by the time they catch on they are gone!
We are not saving money using contractors...in some areas we actually pay out more for 10 underpaid, paper pushers to do the same thing 5 halfway trained government workers with benefits can do.
The only winners in this arena are the companies. The contract workers are being exploited. Some have no benefits and none have job security.

Posted by: ENuffSaid1 | May 4, 2009 10:33 AM

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