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DoD Service Contract Budget & Spending Data Don’t Match Up

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Today, the Project On Government Oversight sent a letter to congressional and executive branch officials, highlighting the Department of Defense’s (DoD) inability to provide sufficient oversight of the hundreds of billions of dollars spent each year to procure services from contractors. Without reliable and accurate data, how can Congress hold DoD accountable for complying with requirements for submitting accurate budget requests? Additionally, in the absence of government transparency, how are taxpayers to know whether their dollars are being spent in a cost-effective fashion?

POGO analyzed DoD’s responses to congressional inquiries; testimony given at Senator Claire McCaskill’s March hearing, “Contractors: How Much Are They Costing the Government?”; and DoD policy and budgetary records. POGO found inconsistencies in DoD’s claims about making cost-efficient policy and human capital decisions. POGO’s review of DoD service contracting budget and spending documents found that it expends between 2.35 and 3.53 times more of its funding on service contracts than on its civilian workforce, and that the cost of an average contractor full-time equivalent (CFTE) is between 2.94 and 8.60 times more than an average DoD civilian full-time equivalent (GFTE). In short, the numbers are grossly out of proportion, and there need to be improvements in comparative cost modeling and service contracting data in order to control costs and protect taxpayers.

POGO has been following service contract cost issues for years. In 2011, we published a report comparing the cost of government and contractor employees. Our report found that the government doesn’t always save money by contracting out services. In fact, on average, the government is spending nearly twice as much on contractors as on federal employees performing comparable work.

We are asking Congress to request a Government Accountability Office study of cost modeling systems to ensure DoD is able to maintain a balanced and cost-effective workforce as required by law. Additionally, POGO recommends that the National Defense Authorization Act for FY 2013 include improvements to service contract inventories that will allow DoD to better compare federal employee and service contract costs.

With sequestration looming and the government strenuously trying to reduce federal spending, someone has to focus their attention on service contract spending and whether the government is wasting billions of taxpayer dollars on a contractor workforce that is unsustainable.

By: Scott H. Amey, J.D.
General Counsel, POGO

scott amey Scott Amey is General Counsel for the Project On Government Oversight. Some of Scott's investigations center on contract oversight, human trafficking, the revolving door, and ethics issues.

Topics: Contract Oversight

Related Content: Contractor Accountability, Waste

Authors: Scott H. Amey, J.D.

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