Paul Chassy, Ph.D., J.D.Tweet
Year Started At POGO: 2007
Areas of expertise: Government Contracting and the Law of Government Administration
On September 26, 2013, the Government Accountability Office (GAO) issued Human Capital: Opportunities Exist to Further Improve DoD’s Methodology for Estimating the Costs of Its Workforces (GAO-13-792).
Federal agencies are misleading Congress about the true cost if hiring service contractors. Responses from OMB, DHS, and the Army show that the government is negligent in ensuring that it is hiring the most cost-efficient workforce.
It is clear that an increasing number of Senators and Representatives are concerned about the Department of Defense’s (DoD) inability to account for how it expends hundreds of billions of dollars each year to procure services from contractors. It is equally clear that DoD has not adequately addressed these concerns or rectified its inept accounting system and budgeting process.
Senators and Representatives recently received a letter from the Professional Services Council (PSC) responding to their letters to Secretary of Defense Leon Panetta, in they criticized the Department of Defense's (DoD) efficiency initiative, which aims to reduce costs by scaling back the civilian workforce to 2010 levels rather than compliance with mandates to reduce reliance upon contractors. We would like to offer some perspective on a number of points raised in the PSC letter.
The Project On Government Oversight (POGO) provides the following public comment to DFARS Case 2011-013, “Defense Acquisition Regulations System; Defense Federal Acquisition Regulation Supplement; Only One Offer.” (76 Fed. Reg. 44293, July 25, 2011) The proposed rule, issued by the Department of Defense (DoD), seeks comments on amending the Defense Federal Acquisition Regulation Supplement (DFARS) to address acquisitions using competitive procedures in which only one offer is received. POGO is an independent nonprofit organization that investigates and exposes corruption and other misconduct in order to achieve a more accountable federal government. Accordingly, POGO has a keen interest in the subject matter of the proposed rule and supports the rule, as well as its objectives.
Service contract award dollars have dramatically increased in recent years based on the assumption that shifting work to the private sector saves taxpayer dollars. POGO’s report compares total annual compensation for federal and private sector employees with federal contractor billing rates in order to determine whether the current costs of federal service contracting serves the public interest. Previous analyses have only focused on employee salaries and compensation and not federal contractor billing rates. POGO’s study shows that the federal government approves service contract billing rates that, on average, pay contractors 1.83 times more than the government pays federal employees in total compensation, and more than 2 times the full compensation paid in the private sector for comparable services. Given that one-quarter of all discretionary spending now goes to service contractors, a reassessment of the total federal work force, with a focus on contractor billing rates, could save taxpayers billions of dollars annually.
The Project On Government Oversight (POGO) provides the following public comment to DFARS Case 2010-D020, “Defense Federal Acquisition Regulation Supplement; Representation Relating to Compensation of Former DoD Officials.” (76 Fed. Reg. 32846, June 6, 2011) The proposed rule, issued by the Department of Defense (DoD), seeks comments on amending the Defense Federal Acquisition Regulation Supplement (DFARS) to require contract offerors to submit representations at the time contracts for commercial items are awarded that all former DoD officials covered by the Procurement Integrity Act (41 U.S.C. § 2104) are in compliance with post-employment restrictions set forth at DFARS 203.171-3 and DFARS 252.203-7000. The proposed rule requires a representation that former DoD employees employed by the contractor are also in compliance with additional post-employment restrictions of 18 U.S.C. 207 and 5 CFR parts 2637 and 2631, including FAR 3.104-2.
The Defense Department’s methodology for comparing workforce costs has created a stir. Advocates for government workers and advocates for the contractors are fighting about necessary improvements, but facts and data should prevail, not myths.