DATE: March 15, 2000

FROM: Barry McVay, CPCM

SUBJECT: Department of Defense; Contracts for Professional, Administrative, and Management Support Services

SOURCE: Department of Defense Inspector General (DODIG) Report No. D-2000-100, March 10, 2000

AGENCIES: Department of Defense (DOD)

SYNOPSIS: In an audit conducted by the DODIG to evaluate procurement procedures for professional, administrative, and management support services, the DODIG found that every one of 105 contract actions had problems or violations, and that the 15 contracting activities and program offices "did not adequately manage the award and administration of the 105 contract actions."

EDITOR'S NOTE: DODIG Report No. D-2000-100 is available on the Internet at http://www.dodig.osd.mil/audit/reports/00100sum.htm or from the Secondary Reports Distribution Unit of the Analysis, Planning and Technical Support Directorate at 703-604-8937 or fax: 703-604-8932.

SUPPLEMENTAL INFORMATION: From 1992 through 1999, DOD procurement of services increased from $39.9 billion to $51.8 billion, and the largest sub-category of contracts for services was for professional, administrative, and management support services, valued at $10.3 billion, an increase of 54% between 1992 and 1999. To evaluate procurement procedures for professional, administrative, and management support services, and management control programs, the DODIG selected 46 contracts (valued at $6.6 billion) and 59 task orders (valued at $142 million), consisting of 21 fixed-price actions and 84 cost-reimbursement actions, from 15 contracting activities and program offices, all dated in Fiscal Year 1997 or Fiscal Year 1998. These 105 actions included services of more than 104 million labor hours, or 50,230 staff years.

The DODIG found that every contract action suffered from one or more of the following problems (most had several problems):

One of the primary reasons for this is the 50% reduction of the DOD acquisition workforce between FY90 and FY99 (from 460,516 to 230,556), with no corresponding reduction in workload (DODIG Report No. D-2000-088, DOD Acquisition Workforce Reduction Trends and Impacts). The DODIG also concluded that the acquisition workforce was inadequately trained, and that DOD procurement system controls have material weaknesses.

The report provides many examples of the problems found:

The DODIG made the following recommendations:

The Army and the Navy have concurred with the findings and most of the recommendations. However, the Air Force and the Under Secretary of Defense (Acquisition Reform) have not responded. The DODIG has requested their comments by May 10, 2000.

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

Copyright 2000 by Panoptic Enterprises. All Rights Reserved.

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