Service Contract Inventories: Missed Opportunities For Transparency

Last month, the Government Accountability Office (GAO) released a new report in April 2012 detailing a continuing issue at the Department of Defense (DoD) that is not foreign across government; the lack of transparency when it come to service contracts.

The GAO report looks at two issues inherent in the struggles at DoD; lack of clear oversight on service contracts and the continuing issue of contractors performing inherently governmental functions.

One issue identified was the reliance on the Federal Procurement Data System-Next Generation (FPDS-NG) for the inventory for most defense components other than the Army.

DOD acknowledged a number of factors that limited the utility, accuracy, and completeness of the inventory data. For example, FPDS-NG does not identify more than one type of service purchased for each contract action, provide the number of contractor full-time equivalent personnel, or identify the requiring activity. As before, the Army used its Contractor Manpower Reporting Application to compile its fiscal year 2010 inventory. This system collects data reported by contractors on services performed at the contract line item level, including information on labor hours and the function and mission performed. DOD officials noted that the Army’s current process complies with legislative requirements.

What the GAO recommends is for DoD to create processes and adopt similar systems such as the Army, since the other services use their own methodologies, processes, or simply do not follow the requirements.

This problem is endemic across government, and I do not understand why GAO is recommending separate processes for DoD. This is a “big data” problem, as the requirements for transparency are not possible given the current data collection processes and systems anywhere.

The overall issue is one of workforce, and the need to analyze spending on the biggest expenditure, which is on service contracts. Without comprehensive, accurate data, how are decisions to be made on insourcing, continuity of service contracts for mission performance, and ensuring contractors are not performing inherently governmental functions.

The guidance from the Office of Federal Procurement Policy is more than adequate, and agencies are in full swing providing the information. However, the jury is still out on the utility of the information, let alone the accuracy. Further, the information on FTE counts is still mostly a work in progress, which seems to be a vital gap in this data collection exercise.

Most beneficial across government is not to create new systems, but to simply retool FPDS-NG to ensure that the data being collected is complete to meet the overall reporting requirements with a simple data field. Current contract management systems should automate this process, such that the complete data sets are collected from the contract file, which should include contract management data.

Combined with this relatively simple and inexpensive fix (let me take a deep breath as I write that), the Office of Management and Budget should provide more clear guidance on how to use the inventories in decision making regarding manpower, and the appropriate use of contractors.

This is a solid opportunity to consolidate a vital data issue that is common across government, but the GAO recommends that DoD and federal agencies should continue the fragmented approach to collecting this data.

This is one area where the “uniqueness” argument across organizational boundaries does not hold water. Transparency and the ability to make workforce decisions with complete and accurate data is a federal government issue, not just one for the Defense Department.