Report: Army relies heavily on contractors for acquisition support

The Army relies heavily on private companies to meet growing contracting demands and, as a result, the service has blurred the limits of what work firms  should do in government contracting, a new report states.

The Government Accountability Office said in a report released today that contractors made up 42 percent of contracting specialists in the Army Contracting Agency’s Contracting Center of Excellence in August. The center also spent more than $2.8 million in fiscal 2007 on contracting support services from two companies — CACI and the Raven Group. That figure is more than 27 percent higher than paying for the salary and other costs of a similar grade government employee, GAO said.

Although nearly half of the center’s staff is contractors, officials there told GAO  they have not considered the appropriate balance between contractors and government contract specialists, GAO said.

In a March 24 letter to GAO, Shay Assad, director of Defense procurement, acquisition policy and strategic sourcing, said these issues are a “matter of grave concern.” Assad said he would meet with Army procurement executives “to accelerate the transition of contractors out of the contract specialist role.”

If the Army can't eliminate the role of contractors acting as contract specialists by September, Assad said he would urge the Army to transfer the workload to other Defense Department contracting agencies or other federal agencies.

GAO recommended that the center find an appropriate mix of contractors and government employees performing contracting and develop plans to reach that balance by filling positions with government employees.

Leaning on contractors was a stopgap measure begun in 2003 as the center’s acquisition workload increased dramatically after the terrorist attacks of 2001 and the war in Iraq. Since then, the center has continued to rely on contractors. For example, from 2005 to 2007, contractors worked on 24 percent to 30 percent of the center’s contracting actions, GAO said.

As the center moved away from placing simple orders against General Services Administration’s schedule contracts and began to award its own contracts, officials started to assign work, even inherently governmental work, based on knowledge and experience and not on whether an employee is from the public or private sector, GAO said.

GAO found that on 42 contract actions, contractors had prepared a range of documents, such as contract modifications. They had also received past performance questionnaires, technical evaluations and assisted in preparing statements of work.

However, the contracting officers at the center told GAO they make the final decisions on contracts, such as contract awards, while the contractors can recommend a course of action.

Lawmakers have voiced concerns about contractors in the federal workplace and the blurry lines between work that only government employees should perform and what contractors are doing.

Sen. Joseph Lieberman (I-Conn.), chairman of the Homeland Security and Governmental Affairs Committee, said conflicts of interest in federal contracting are unacceptable and must be rooted out.

“Every day, contractors work side by side with federal employees, and yet the government might not even know when the self interests of contractors are pitted against the interests of the American taxpayer,” Lieberman said in response to GAO’s report.

He said the danger is particularly acute when contractors are doing contracting work.

Lieberman recommended an immediate overhaul of federal ethics policies to ensure that conflicts of interests don’t impair the impartiality of contractors or their employees.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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