DOD vows to reduce contractor role

The Defense Department says it will speed up how quickly it removes contractor employees from the contract specialist role.

The move comes in the wake of a Government Accountability Office report that was critical of how many contract employees are working for the Army's Contracting Center of Excellence.

In a letter to GAO that was part of a report released this week, Shay Assad, director of Defense Procurement, Acquisition Policy and Strategic Sourcing, said the Army would eliminate the role of contractors at the center within 180 days or move work to other parts of the government where federal employees would perform it.

The GAO report, "Army Case Study Delineates Concerns with Use of Contractors as Contract Specialists," took issue with the role of contractors on several fronts.

The areas targeted include the extent to which contractors are used, risks such as organizational conflicts of interests that arise from using contractors, the higher cost of using contractors and the appropriateness of the contract vehicles used to hire the contractors.

Contractors supported 24 percent to 30 percent of all procurement actions from fiscal 2005 through 2007, GAO said. Auditors found that on 42 contract actions at the center, contractors had prepared documents, such as contract modifications, and had received past-performance questionnaires and technical evaluations and assisted in preparing statements of work.

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

One of GAO's concerns was the Army's use of contractors as a stopgap measure to fill vacancies and not as part of an overall strategy.

The center "has not taken into consideration what constitutes a reasonable and feasible balance of the number of government versus contractor personnel or developed a training program for its permanent government employees," GAO said.

Stan Soloway, president of the Professional Services Council and a columnist for Washington Technology, said the GAO report shouldn't be seen as a call to stop using contractors.

"GAO didn't say they shouldn't be using contractors," Soloway said. "The real issue is when you do contracting like this, you need extra oversight and diligence. The question is, Does [DOD] have the core capabilities to do that?"

The bigger problem is the lack of government contracting employees. DOD has the positions but hasn't been able to fill them, Soloway said.

The idea of moving contracting work away from the center to other parts of the government won't work because "there is a shortage across all of government," he said. "This is an issue that isn't going to go away."

CACI International Inc. is the contractor with the bulk of private-sector contract specialists at the Army center.

In a statement released Wednesday, CACI said it supports the government's efforts to better define the roles and responsibilities of contractors. "CACI has consistently provided our armed forces with good value," the company said in a statement. "CACI's resources also allow our military leaders the enormous budgeting flexibility to utilize our expertise for extended missions or short periods of time."

Although GAO did not find examples of improper decisions, it did criticize the process for mitigating organizational conflicts of interest.

CACI told GAO that it keeps its business unit doing the contract support work separate from the rest of the company.

For example, the company physically separates employees from the other groups and keeps proposal databases separate. Bonuses and other financial incentives for the contracting unit are not tied to the performance of other operating units.

Contractor employees working with the Army are trained to report potential conflicts of interest to their supervisors, and employees are then removed. CACI and center employees gave GAO several examples of when this process worked, according to the report.

But GAO said the process relies too heavily on individuals reporting problems, and government managers might not have enough visibility into the process.

In his response to the GAO report, Assad said he agreed with the recommendations and was taking action. The center has already reduced the number of contractor employees from 31 in 2007 to 17 as of Feb. 26. The center is also working to implement recommendations of the Gansler Commission. Its November report recommended hiring more contracting officers, training them better, making contracting a career track and improving contracting tools.

"I view this to be a matter of grave concern," Assad said.

About the Author

Nick Wakeman is the editor-in-chief of Washington Technology. Follow him on Twitter: @nick_wakeman.

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