DOD Competitive Sourcing

In compliance with Office of Management and Budget Circular A-76, the Department of Defense (DOD) compiles each year an inventory of commercial activities done in house in order to identify those activities that could be subject to competition. Although DOD has improved the identification of commercial activities that could be studied under A-76, the military did not always consistently categorize similar activities, in part because of a lack of clear guidance on how to identify which activities are inherently governmental, commercial and exempt from competition, and commercial and eligible for competition. Furthermore, the number of commercial activities in the inventories will likely change over time, although DOD does not expect to significantly increase the number of activities. Such factors as geographic dispersions of positions and the inability to separate commercial from inherently governmental activities may prevent DOD from developing studies for competition under A-76.

GAO noted that: (1) DOD has improved the identification of commercial activities that could be studied under A-76; (2) in its 1998 Defense Reform Initiative inventory, DOD components identified over 283,000 commercial positions--81,000 more positions than had been identified previously; (3) DOD's 1999 Federal Activities Inventory Reform Act inventory, which built upon the Reform Initiative inventory, identified commercial functions and activities involving over 300,000 civilian positions, excluding military personnel that had been included in the 1998 Reform Initiative inventory; (4) both inventories are viewed by DOD and Office of Management and Budget officials as having improved the quality and consistency of DOD's data on commercial activities; (5) however, GAO's analysis suggests that the military services and Defense agencies did not always consistently categorize similar activities, in part because of the lack of clear guidance on how to identify which activities are inherently governmental, commercial and exempt from competition, and commercial and eligible for competition; (6) although some inconsistencies are likely to continue to exist, their resolution could lead to more activities, or fewer, being identified as eligible for A-76 study; (7) the number of commercial functions and associated positions contained in the inventories will likely change over time based on iterative improvements DOD plans to make to the inventory process and guidance; (8) in addition, DOD's manpower and business process reengineering initiatives and changes in the Defense components' missions and operations could result in changes to the numbers of commercial functions and associated positions in the inventories; (9) DOD does not expect to significantly increase the number of functions studied under its A-76 program based on the identification of additional positions in functions eligible for competition; and (10) several factors, such as geographic dispersion of positions and the inability to separate commercial from inherently governmental activities, may prevent DOD from developing studies for competition under A-76.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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