The Defense Department often uses interagency contracts to circumvent basic contracting practices and spend expired funds, according to the DOD Inspector General’s office. DOD is also failing to properly manage and monitor its own service contracts, the office found.
The DOD IG’s office recently released a series of reports citing numerous abuses in DOD purchases made through the General Services Administration, the Interior Department, NASA, and the Treasury Department. Contracting officials have awarded numerous contracts without competition or price evaluations. Planning and oversight were lacking in almost all cases, the reports stated.
“These problems put the Department of Defense dollars at risk,” said Sen. Daniel Akaka (D-Hawaii), the new chairman of the Senate Armed Services’ Readiness and Management Subcommittee, which held a Jan. 17 hearing on DOD procurement practices.
DOD officials failed to do adequate planning in 55 of 56 task orders placed through GSA and all 61 task orders place through Interior that the IG reviewed. DOD didn’t properly monitor contractor performance for 54 of 56 and 23 of 24 orders awarded through those agencies, respectively.
Similar problems occurred when defense contracting officials used DOD contracts, the IG’s office reported. In reviewing $7.6 billion worth of contracts, auditors found that 90 percent lacked proper cost estimates and 60 percent had no plans to monitor performance.
Overall, DOD obligations for service contracts have grown from $83 billion in fiscal year 2000 to over $140 billion in fiscal 2005. Also, the contractor workforce has almost doubled in that time, from 730,000 to 1.3 million contractor employees.
Meanwhile, the DOD acquisitions workforce is shrinking, down 27 percent between 1999 and 2004. “These trends long ago passed the point where our acquisitions workforce lost the capacity needed to perform its essential function,” Akaka said.
Also, IG has reported 72 potential violations of the Anti-Deficiency Act, where other agencies made purchases using expired DOD funds, in violation of the law and department policy. Acting IG Thomas Gimble said $400 million of those funds should have been returned to the U.S. Treasury and no one has been held accountable to date.
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