Another harsh audit for DOD

GAO says staffing deficiencies continue to create Defense contracting problems

The Defense Department’s mismanagement of its acquisition workforce has created an overreliance on private contractors, resulting in poor oversight and delays in acquiring critical technologies. That latest assessment from the Government Accountability Office is further evidence that DOD has not recovered from deep cuts in its acquisition workforce in the 1990s, experts say.

In January, a Defense Acquisition Performance Assessment panel, led by retired Lt. Gen. Ronald Kadish, made a similar finding.

“Effective oversight has been diluted in a system where the quantity of reviews has replaced quality, and the tortuous review processes have obliterated clean lines of responsibility, authority and accountability,” the panel concluded.

DOD obligations for contract goods and services totaled about $270 billion in fiscal 2005, an 88 percent increase compared with fiscal 2000. However, DOD failed to appoint performance monitors to oversee those contracts and paid more than $8 billion in award incentives in that period without holding contractors accountable for their performance, GAO found.

Those problems occurred because DOD neglected the succession planning necessary to replace senior acquisition employees or otherwise keep up with increasing demands on its acquisition workforce, said Comptroller General David Walker, GAO’s top official, during a Sept. 7 hearing of the House Appropriations Committee’s Defense Subcommittee.

Speaking at the same hearing, Kenneth Krieg, undersecretary of Defense for acquisition, technology and logistics, said that creating a 21st-century acquisition workforce was his foremost goal. Krieg cited the Defense Acquisitions Board for adding too much bureaucratic red tape to the acquisition process. Acquisition programs are better managed by each of the services instead of at the DOD headquarters level, he said.

Other procurement experts testified that a lack of trust among various parties has increased acquisition costs and delays.

“This lack of trust leads to putting in place for each process…nonvalue-added activities that are designed to overcome that lack of trust,” said Lt. Gen. Joseph Yakovac, military deputy to the assistant secretary of the Army for acquisition, logistics and technology.

Critics of Defense acquisition programs say they are unhappy about new reporting requirements that DOD created to bridge that lack of trust. “It’s a Catch-22,” said Trey Hodgkins, director of defense programs at the IT Association of America.

“At some point, they stop being able to do what they were hired to do, and they spend all their time doing something else,” Hodgkins said.

Shortcomings in the department’s acquisition workforce will only get worse as the baby boomer generation retires, he added.

Harsher critics said DOD should cancel projects that miss their deadlines and stop paying unearned reward fees to contractors.

“This is about managing and balancing contractor interest with what’s best for the taxpayer and the government,” said John Weiler, executive director of the Interoperability Clearinghouse.

“We have a broken acquisitions process, and in the long run, the taxpayer is paying the fee,” Weiler said.

GAO also reported that DOD might not know the full extent of its acquisition workforce deficiencies because of poor reporting compliance. DOD has a statutory obligation to publish updates on critical acquisition staffing, GAO wrote in a letter to Rep. Terry Everett (R-Ala.), chairman of the House Armed Services Committee’s Strategic Forces Subcommittee.

Proposed reforms focus on better oversightSeveral Democratic lawmakers, led by Rep. Henry Waxman (D-Calif.), ranking member on the House Government Reform Committee, introduced a bill Sept. 13 that they say would fix many of the Defense Department’s contracting workforce problems.

The Clean Contracting Act of 2006 addresses contract management problems by:

  • Requiring federal agencies to devote 1 percent of their procurement budgets to contract oversight, planning and administration.
  • Preventing contractors who oversee other contractors from having connections with companies under their supervision.
  • Requiring agencies to evaluate cost, schedule and performance metrics before granting award fees to contractors.
  • Requiring a two-year period after they leave government service before government employees could work for a contractor they used to supervise.
  • — Josh Rogin

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