The Project On Government Oversight has long voiced concerns about the cost of service contracts and the potential waste of billions of dollars. Service contract spending accounts for 63 percent of the $445 billion spent on federal contracts in FY 2014. That’s $282 billion on service contracts—not exactly chump change. Despite those numbers, oversight of service contract spending is mostly off limits around Washington, DC.
For years we have been imploring Congress to pay attention to this spending and require cost comparisons to ensure the government is using the most appropriate and cost effective workforce. Without data and cost comparisons, the government is wasting money and, inside the Defense Department, hurting readiness capabilities. Senator Claire McCaskill (D-MO) gets it, and she has made attempts to hold the executive branch accountable through hearings and letters. Various Representatives made similar attempts in 2011 and again in 2012, but little has changed through the years.
This week, Representative Tammy Duckworth (D-IL) added her name to the list of people who care about controlling excessive service contract spending. In a recent House Armed Services Committee hearing, Representative Duckworth asked Secretary of Defense Ashton Carter about the Department of Defense’s (DoD) plans to track the service contractor workforce numbers and spending, and about the specific data systems DoD was rolling out to do so. (See Duckworth's comments in the video below.)
Secretary Carter was wise to inform the Committee that he would report back later with the answer. Unfortunately, I don’t think DoD, and specifically the Office of Personnel and Readiness (P&R), have the answers. Former Secretary of Defense Leon Panetta, former Acting Under Secretary of Defense for P&R Jessica Wright, and Acting Assistant Secretary of Defense (Readiness and Force Management) Stephanie Barna have all failed to follow through on their promises to Congress when it comes to responding to specific inquiries about DoD efforts to comply with service contract reporting laws.
Despite some congressional involvement and promising rhetoric by federal officials, the Department of Defense and the civilian agencies have not been very helpful in solving the problem. In fact, last year POGO wrote to DoD detailing internal DoD efforts to hinder service contract spending improvements. Things aren’t much better on the civilian side, as the Office of Management and Budget has waived the collection of certain statutory service contracting data elements.
Earlier this month, the Congressional Budget Office (CBO) admitted that “[r]egrettably, CBO is unaware of any comprehensive information about the size of the federal government’s contracted workforce.” The government isn’t adequately tracking or overseeing most of the hundreds of billions of dollars it spends on service contracts.
Let’s hope that Representative Duckworth gets a better response from DoD than Senator McCaskill received, which was essentially that DoD doesn’t have answers and therefore can’t respond to questions about service contracts. Moreover, let’s hope that Representative Duckworth gets more answers than POGO did—DoD sent us a dismissive and disgraceful letter stating that DoD is “keenly aware of the statutory requirements associated with contracted services and is fully engaged in ensuring [DoD] complies with the enacted legislation.” The law requiring DoD to produce inventories for service contracts was signed in 2001 (Sect. 801), and as of last year, Acting Assistant Secretary Barna was still trying to organize efforts (Encl. 1) to meet those statutory requirements. What has DoD been doing for those 13 years? The ball is in Ashton Carter’s court, and he should push to find the root of the problem, hold P&R accountable, and obtain data that will save money and allow for well-informed budgetary and readiness decisions.