Contractors becoming DOD mainstay

The Defense Department has increased its reliance on contractors to maintain operations in the past decade because its personnel have been pulled away on military duty, according to a new report.

Following relatively constant spending levels from fiscal 1995 to fiscal 2000, the money going to the private sector skyrocketed from fiscal 2000 to fiscal 2005. In that time period, DOD's operations and maintenance costs increased 57 percent, from $133.4 billion to $209.5 billion, according to a Government Accountability Office report released today.

An increase in military obligations because of the war on terrorism without an increase in personnel led DOD to rely more on the private sector, the report states.

Several other factors added to the uptick. DOD officials told GAO the federal government has a policy of relying on the private sector for commercial services that are not inherently governmental. DOD initiatives, such as competitive sourcing, also contributed to the increase.

DOD's costs for service contracts in areas related to operations and maintenance, such as information technology and administrative services, increased about 73 percent ? from $55.4 billion to $95.9 billion ? from fiscal 2000 to fiscal 2005, the report states.

Spending on data processing and telecommunications increased from $6.3 billion in fiscal 2000 to $11 billion in fiscal 2005, the report states.

DOD spent about 40 percent of its budget to operate and maintain the military forces in fiscal 2005. The operations and maintenance budget is considered one of the major components of funding for readiness.

Matthew Weigelt writes for Federal Computer Week, an 1105 Government Information Group publication.

About the Author

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

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