Defense Budget
Fourth Quarter Obligation Rates and Contract Obligations for Fiscal Years 2006-09 Gao ID: GAO-10-527R March 31, 2010This letter formally transmits the briefing in response to the National Defense Authorization Act for Fiscal Year 2010 (Pub. L. No. 111-84), which requires GAO to review Department of Defense (DOD) policies related to year-end spending and the rate of obligations incurred by DOD in the fourth quarter of fiscal years 2006 through 2009, as compared with the obligations incurred in the first three quarters of those fiscal years for both 1-year and multi-year appropriations. GAO is required to report to the Committees on Armed Services of the Senate and House of Representatives by March 31, 2010.
GAO-10-527R, Defense Budget: Fourth Quarter Obligation Rates and Contract Obligations for Fiscal Years 2006-09
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GAO-10-527R:
United States Government Accountability Office:
Washington, DC 20548:
March 31, 2010:
Congressional Committees:
Subject: Defense Budget: Fourth Quarter Obligation Rates and Contract
Obligations for Fiscal Years 2006-09:
This letter formally transmits the enclosed briefing in response to the
National Defense Authorization Act for Fiscal Year 2010 (Pub. L. No.
111-84), which requires GAO to review Department of Defense (DOD)
policies related to year-end spending and the rate of obligations
incurred by DOD in the fourth quarter of fiscal years 2006 through
2009, as compared with the obligations incurred in the first three
quarters of those fiscal years for both 1-year and multi-year
appropriations. GAO is required to report to the Committees on Armed
Services of the Senate and House of Representatives by March 31, 2010.
On March 19, 2010, we provided the briefing to staff of your respective
committees.
We are sending copies of this report to the appropriate congressional
committees. We are also sending copies to the Secretary of Defense and
the Under Secretary of Defense (Comptroller) and the Secretaries of the
Army, the Air Force, and the Navy. The report also is available at no
charge on the GAO Web site at [hyperlink, http://www.gao.gov].
Should you or your staff have any questions concerning this report,
please contact Sharon L. Pickup at (202) 512-9616 or Bill Woods at
(202) 512-8214. Contact points for our Office of Congressional
Relations and Public Affairs may be found on the last page of this
report. Key contributors to this report were Donna Evans, Assistant
Director; Robert Brown; Jason Jackson; Mae Jones; Julia Kennon; Lonnie
McAllister; Charles Perdue; Stephen Pruitt; and Patrick Washington.
Signed by:
Sharon L. Pickup:
Director:
Defense Capabilities and Management:
Enclosure:
List of Committees:
The Honorable Carl Levin:
Chairman:
The Honorable John McCain:
Ranking Member:
Committee on Armed Services:
United States Senate:
The Honorable Ike Skelton:
Chairman:
The Honorable Howard McKeon:
Ranking Member:
Committee on Armed Services:
House of Representatives:
[End of section]
Enclosure:
DOD's Fourth Quarter Obligation Rates and Contract Obligations for
Fiscal Years 2006-09:
Briefing for Congressional Committees:
March 31, 2010:
Overview:
* Objectives;
* Background;
* Scope & Methodology;
* Objective 1:
- Policies and Guidance for Obligating Funds;
* Objective 2:
- Fourth Quarter Obligation Rates for MILPERS;
- Fourth Quarter Obligation Rates for O&M;
- Obligation Rates for Procurement;
- Obligation Rates for RDT&E;
* Objective 3:
- Fiscal Years 2006-09 Contract Obligations;
- Undefinitized Contract Actions (UCAs).
Objectives:
1) To what extent has DOD established policies or guidance regarding
the obligation of funds in the fourth quarter of the fiscal year?
2) To what extent has DOD incurred obligations in the fourth quarter
of fiscal years 2006-09 for both 1-year and multi-year appropriations?
3) To what extent has DOD incurred contract obligations in the fourth
quarter of a fiscal year as compared with obligations incurred in the
previous three quarters, and to what extent are those fourth quarter
obligations incurred for competitive contracts?
Background:
The Fiscal Year 2010 National Defense Authorization Act requires GAO
to review obligations incurred by the DOD in the fourth quarter of
fiscal years 2006-09 for 1-year and multi-year appropriations and to:
* compare those obligations with those incurred in the first three
quarters of the fiscal year and;
* determine whether DOD's financial execution policies contributed to
hastened year-end spending.
DOD has certain time frames to obligate funds for its various
appropriation accounts:
* For 1-year appropriations such as Military Personnel (MILPERS) and
Operation & Maintenance (O&M) accounts, DOD generally has 1 year to
obligate funds before they expire and;
* For multi-year appropriations, such as Procurement and Research,
Development, Test & Evaluation (RDT&E), DOD generally has 3 and 2
years, respectively, to obligate funds before they expire.
The Conference Report, H. Rept. 111-288, accompanying the Fiscal Year
2010 National Defense Authorization Act noted:
* In 1979 and 1980, the Senate Subcommittee on Oversight of Government
Management held hearings and issued a report entitled Hurry-Up
Spending in which it found that the rush to obligate expiring funds
before the end of the fiscal year frequently resulted in lack of
competition, poorly defined statements of work, inadequately
negotiated contracts, and the procurement of low-priority items or
services.
* The Subcommittee's work contributed to the passage of the
Competition in Contracting Act of 1984 (P.L. 98-369, Div. B., title
VIII).
In 1998, GAO reported that systemic procurement reforms, including the
Competition in Contracting Act of 1984, had addressed most issues
raised in the Subcommittee's report but that some problems persisted
(See Year End Spending: Reforms Underway but Better Reporting and
Oversight Needed, GAO/AIMD-98-185).
Contracts generally must be competed, but there are statutory
exceptions (such as urgency) that permit non-competitive awards.
Agencies also can use undefinitized contract actions (UCAs) when they
need to make awards before reaching agreement on all contract terms.
GAO has reported that UCAs are considered to be risky for the
government because contractors lack incentives to control costs before
reaching final agreement on contract terms. (See Defense Contracting:
DOD Has Enhanced Insight into Undefinitized Contract Action Use, but
Management at Local Commands Needs Improvement, GA0-10-299).
Scope & Methodology:
Reviewed legislation, DOD's Financial Management Regulation, and
internal budget guidance and policies from the Office of the Under
Secretary of Defense, Comptroller and service components.
Interviewed officials from the Office of the Under Secretary of
Defense, Comptroller and service components to determine whether DOD
had established guidance or policies concerning the obligation of
funds in the fourth quarter.
Obtained data on obligation rates from Under Secretary of Defense,
Comptroller and Defense Finance and Accounting Service data for 1-year
appropriations (MILPERS and O&M) and multi-year appropriations
(Procurement and RDT&E) for fiscal years 2006-09. For purposes of this
analysis, we reviewed active and reserve component obligations for
each of the military services, which include both base and
supplemental funding for each fiscal year.
* For 1-year appropriations, we compared obligation rates incurred in
the fourth quarter to obligation rates incurred in the total remaining
three quarters.
* For multi-year appropriations, we identified total obligation rates
for each year of the appropriated funds' availability and for the
fourth quarter of the last year of availability.
* To analyze appropriations whose last year of availability fell in
fiscal years 2006-09, the time period specified in the mandate, in
some cases, we had to obtain obligation data from fiscal years prior
to 2006. For example:
- For Procurement appropriations, which have 3 years of availability,
we reviewed fiscal years 2004-09 data.
- For RDT&E appropriations, which have 2 years of availability, we
reviewed fiscal years 2005-09 obligation data.
Since 1995, GAO has designated DOD's financial management as a high-
risk area due to, among other things, DOD's pervasive financial and
related business management system deficiencies. For example, we have
reported on the unreliability of DOD's financial transaction data,
including accounting for obligations, and the lack of reasonable
assurance over DOD's compliance with legal limitations on the use of
appropriated funds. Consequently, we are unable to ensure that DOD's
reported obligations are complete, reliable, and accurate, and they
should therefore be considered approximations. For the purposes of our
review, we verified that the data we collected were consistent with
the data recorded in source documents, but we did not independently
assess the reliability of the data.
We used unaudited Federal Procurement Data System-Next Generation
(FPDS-NG) data to identify both the percentage and dollar amounts
obligated for competed and non-competed contracts in fiscal years 2006
through 2009. The system does not break down contracting data by
appropriation. We believe that the system's data used for these
analyses are sufficiently reliable for the purposes of this review.
However, the data on UCAs were not sufficiently reliable.
We conducted this performance audit from November 2009 to March 2010
in accordance with generally accepted government auditing standards
(GAGAS). Those standards require that we plan and perform the audit to
obtain sufficient, appropriate evidence to provide a reasonable basis
for our findings and conclusions based on our audit objectives. We
believe that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
DOD provided technical comments on a draft of this product, which we
incorporated.
Objective 1: Policies and Guidance for Obligating Funds:
Neither DOD nor the military services have policies or guidance that
specifically address the obligation of funds in the fourth quarter of
the fiscal year. However, the Air Force has developed guidance that
discourages spending resources at the end of the fiscal year merely
because they are available, and encourages reporting unused funds to
headquarters.
DOD is subject to a statutory limitation (the 80/20 rule) that states:
not more than 20 percent of 1-year appropriations may be obligated
during the last 2 months of the fiscal year.
* A passage in the DOD Financial Management Regulation refers to the
80/20 rule and states: Each year, the general provisions of the DOD
Appropriations Act require a certification that not more than 20
percent of the appropriations in that act, which are limited for
obligation during the current fiscal year, shall be obligated during
the last 2 months of the fiscal year (i.e. the "80/20 rule).
Supplemental funds are not subject to the 80/20 rule.
* The Office of the Under Secretary of Defense, Comptroller and the
service components create annual spending plans to monitor obligations
throughout the year and use this information to certify whether the
80/20 rule was addressed.
Objective 2: Fourth Quarter Obligation Rates for MILPERS--Active and
Reserve Components:
For fiscal years 2006 through 2009, the active and reserve components
obligated between 25.1 percent and 26.6 percent of its MILPERS
appropriations in the fourth quarter, as shown on the following slide.
DOD officials explained that obligation rates may appear higher in the
fourth quarter because, for example, of cyclical occurrences, such as
a summer surge in recruiting, an increase of troop end-strength, and
an increased availability of reserve component members for annual
training during the summer months. DOD officials also explained that
other factors, such as a higher rate of permanent change of station
actions may affect fourth quarter obligation rates as well.
Figure: Fourth Quarter Obligation Rates for MILPERS--Active and
Reserve Components:
[Refer to PDF for image: 4 pie-charts]
Fiscal year 2006:
QTR 1-3 obligations: 74.9%; $86.5 billion;
QTR 4 obligations: 25.1%; $28.9 billion.
Fiscal year 2007:
QTR 1-3 obligations: 73.3%; $87.1 billion;
QTR 4 obligations: 26.7%; $31.6 billion.
Fiscal year 2008:
QTR 1-3 obligations: 74.1%; $92.8 billion;
QTR 4 obligations: 25.9%; $32.4 billion.
Fiscal year 2009:
QTR 1-3 obligations: 73.7%; $98.9 billion;
QTR 4 obligations: 26.3%; $35.2 billion.
Source: GAO analysis of DOD data.
[End of figure]
Objective 2:
Fourth Quarter Obligation Rates for MILPERS by Service Component--
Active:
Fourth quarter MILPERS obligation rates for the active service
components ranged from 24.2 percent to 27.3 percent for fiscal years
2006 through 2009, as shown on the following slide.
DOD officials explained that obligation rates may appear higher in the
fourth quarter because, for example, of cyclical occurrences, such as
a summer surge in recruiting, an increase of troop end-strength. DOD
officials also explained that other factors, such as a higher rate of
permanent change of station actions may affect fourth quarter
obligation rates as well.
Table: Fourth Quarter MILPERS Obligation Rates by Active Service
Component (FY 2006-09):
Active service component: Army;
2006: 24.2%;
2007: 27.3%;
2008: 25.6%;
2009: 26.6%.
Active service component: Air Force;
2006: 25.7%;
2007: 26.6%;
2008: 26.4%;
2009: 25.8%.
Active service component: Navy;
2006: 25.3%;
2007: 25.4%;
2008: 24.9%;
2009: 25.0%.
Active service component: Marine Corps;
2006: 24.9%;
2007: 25.4%;
2008: 25.7%;
2009: 26.3%.
Source: GAO analysis of DOD data.
[End of table]
Objective 2: Fourth Quarter Obligation Rates for MILPERS by Service
Component--Reserve:
Fourth quarter MILPERS obligation rates for the reserve service
components ranged from 17.9 percent to 30.4 percent for fiscal years
2006 through 2009, as shown on the following slide.
DOD officials explained that obligation rates may appear higher in the
fourth quarter because, for example, of cyclical occurrences, such as
a summer surge in recruiting, an increase of troop end-strength, and
an increased availability of reserve component members for annual
training during the summer months.
Table: Fourth Quarter MILPERS Obligation Rates by Reserve Service
Component (FY 2006-09):
Reserve service component:Army Reserve;
2006: 29.2%;
2007: 27.2%;
2008: 27.9%;
2009: 29.5%.
Reserve service component:Army Guard;
2006: 27.9%;
2007: 30.4%;
2008: 28.4%;
2009: 29.4%.
Reserve service component:Air Force Reserve;
2006: 19.5%;
2007: 20.6%;
2008: 20.7%;
2009: 17.9%.
Reserve service component:Air Guard;
2006: 22.3%;
2007: 23.8%;
2008: 26.9%;
2009: 25.0%.
Reserve service component:Navy Reserve;
2006: 24.8%;
2007: 28.1%;
2008: 27.4%;
2009: 26.8%.
Reserve service component:Marine Corps Reserve;
2006: 23.7%;
2007: 23.4%;
2008: 22.2%;
2009: 30.0%.
Source: GAO analysis of DOD data.
[End of table]
Objective 2: Fourth Quarter Obligation Rates for O&M--Active and
Reserve Components:
For fiscal years 2006 through 2009, the active and reserve components
obligated between 27.6 percent and 29.5 percent of its O&M
appropriations in the fourth quarter, as shown on the following slide.
DOD officials explained that obligation rates may appear higher in the
fourth quarter because, for example, DOD received supplemental funding
late in the fiscal year.
Figure: Fourth Quarter Obligation Rates for O&M--Active and Reserve
Components:
[Refer to PDF for image: 4 pie-charts]
Fiscal year 2006:
QTR 1-3 obligations: 70.5%; $113.8 billion;
QTR 4 obligations: 29.5%; $47.6 billion.
Fiscal year 2007:
QTR 1-3 obligations: 72.4%; $127.3 billion;
QTR 4 obligations: 27.6%; $48.5 billion.
Fiscal year 2008:
QTR 1-3 obligations: 72.4%; $141.5 billion;
QTR 4 obligations: 27.6%; $53.9 billion.
Fiscal year 2009:
QTR 1-3 obligations: 71.7%; $141.4 billion;
QTR 4 obligations: 28.3%; $55.8 billion.
Source: GAO analysis of DOD data.
[End of figure]
Objective 2: Fourth Quarter Obligation Rates for O&M by Service
Component--Active:
Fourth quarter O&M obligation rates for the active service components
ranged from 23.3 percent to 32.2 percent for fiscal years 2006 through
2009 as shown on the following slide.
DOD officials explained that obligation rates may appear higher in the
fourth quarter because, for example, DOD received supplemental funding
late in the fiscal year.
Table: Fourth Quarter O&M Obligation Rates by Active Service Component
(FY 2006-09):
Active service component: Army;
2006: 31.0%;
2007: 25.6%;
2008: 27.1%;
2009: 31.0%.
Active service component: Air Force;
2006: 31.9%;
2007: 32.1%;
2008: 30.2%;
2009: 29.0%.
Active service component: Navy;
2006: 25.7%;
2007: 27.1%;
2008: 25.6%;
2009: 23.3%.
Active service component: Marine Corps;
2006: 32.0%;
2007: 27.1%;
2008: 32.2%;
2009: 31.9%.
Source: GAO analysis of DOD data.
[End of table]
Objective 2: Fourth Quarter Obligation Rates for O&M by Service
Component--Reserve:
For fiscal years 2006 through 2009, fourth quarter obligation rates
for the reserve component ranged from 19.6 percent to 41 percent as
shown on the following slides.
DOD officials explained that obligation rates may appear higher in the
fourth quarter because, for example, DOD received supplemental funding
late in the fiscal year.
Table: Fourth Quarter O&M Obligation Rates by Reserve Service
Component (FY 2006-09):
Reserve service component: Army Reserve;
2006: 27.7%;
2007: 30.0%;
2008: 30.6%;
2009: 28.8%.
Reserve service component: Army Guard;
2006: 26.0%;
2007: 26.5%;
2008: 21.9%;
2009: 25.2%.
Reserve service component: Air Force Reserve;
2006: 27.3%;
2007: 28.5%;
2008: 25.3%;
2009: 25.6%.
Reserve service component: Air Guard;
2006: 21.9%;
2007: 25.0%;
2008: 26.5%;
2009: 22.8%.
Reserve service component: Navy Reserve;
2006: 25.7%;
2007: 26.2%;
2008: 26.1%;
2009: 19.7%.
Reserve service component: Marine Corps Reserve;
2006: 38.8%;
2007: 19.6%;
2008: 41.0%;
2009: 22.7%.
Source: GAO analysis of DOD data.
[End of table]
Objective 2: Obligation Rates for Procurement for Service Components--
Active:
For procurement, the active service components obligated 75.3 percent
or more of the appropriation in the first year that funding was
available and then significantly smaller percentages in the second and
third years.
For the fourth quarter of the third year of funding availability,
obligation percentages were 1.9 percent or less, as shown on the
following slide.
Table: Procurement Obligation Rates by Year of Funding Availability
(FY 2006-09):
Funding availability by fiscal year: 2004-06;
1st year: 89.9%;
2nd year: 7.7%;
3rd year: 2.4%;
Fourth quarter, 3rd year: 1.0%.
Funding availability by fiscal year: 2005-07;
1st year: 86.9%;
2nd year: 10.5%;
3rd year: 2.5%;
Fourth quarter, 3rd year: 0.8%.
Funding availability by fiscal year: 2006-08;
1st year: 80.8%;
2nd year: 15.7%;
3rd year: 3.5%;
Fourth quarter, 3rd year: 1.5%.
Funding availability by fiscal year: 2007-09;
1st year: 75.3%;
2nd year: 19.3%;
3rd year: 5.4%;
Fourth quarter, 3rd year: 1.9%.
Source: GAO analysis of DOD data.
[End of table]
Objective 2: Obligation Rates for Procurement:
For procurement, the active service components obligated 70.8 percent
or more of the appropriation in the first year that funding was
available and then obligated significantly smaller percentages in the
second and third years.
For the fourth quarter of the third year of funding availability,
obligation rates were 2.7 percent or less, as shown on the following
slide.
Table: Procurement Obligation Rates by Year of Funding Availability by
Service (FY2009):
Service: Army;
1st year, FY 2007: 75.5%;
2nd year, FY 2008: 20.2%;
3rd year, FY 2009: 4.3%;
Fourth Quarter 3rd year, FY 2009: 1.1%.
Service: Air Force;
1st year, FY 2007: 75.1%;
2nd year, FY 2008: 18.6%;
3rd year, FY 2009: 6.3%;
Fourth Quarter 3rd year, FY 2009: 2.7%.
Service: Navy;
1st year, FY 2007: 76.7%;
2nd year, FY 2008: 17.6%;
3rd year, FY 2009: 5.7%;
Fourth Quarter 3rd year, FY 2009: 2.2%.
Service: Marine Corps;
1st year, FY 2007: 70.8%;
2nd year, FY 2008: 23.1%;
3rd year, FY 2009: 6.1%;
Fourth Quarter 3rd year, FY 2009: 1.4%.
Source: GAO analysis of DOD data.
[End of table]
Objective 2: Obligation Rates for RDT&E:
For RDT&E, the active service components obligated 86.5 percent or
more of the appropriation in the first year that funding was available
and then significantly smaller percentages in the second year.
For the fourth quarter of the second year of funding availability,
obligations rates were 2.7 percent or less, as shown on the following
slide.
Table: RDT&E Obligation Rates by Year of Funding Availability (FY 2006-
09):
Funding availability by fiscal year: 2005-06;
1st year: 91.0%;
2nd year: 9.0%;
Fourth quarter, 2nd year: 1.6%.
Funding availability by fiscal year: 2006-07;
1st year: 88.6%;
2nd year: 11.4%;
Fourth quarter, 2nd year: 1.9%.
Funding availability by fiscal year: 2007-08;
1st year: 88.7%;
2nd year: 11.3%;
Fourth quarter, 2nd year: 2.3%.
Funding availability by fiscal year: 2008-09;
1st year: 86.5%;
2nd year: 13.6%;
Fourth quarter, 2nd year: 2.7%.
Source: GAO analysis of DOD data.
[End of table]
Objective 2: Obligation Rates for RDT&E:
For RDT&E, the active service components obligated 84 percent or more
of the appropriation in the first year that funding was available and
then significantly smaller percentages in the second year.
The percentage of RDT&E funds obligated in the fourth quarter of the
last year of funding availability was 2.9 percent or less, as shown on
the following slide.
Table: RDT&E Obligation Rates by Service by Year of Funding
Availability (FY 2009):
Service: Army;
1st year, FY 2008: 88.3%;
2nd year, FY 2009: 11.7%;
Fourth quarter, 2nd year, FY 2009: 2.5%.
Service: Air Force;
1st year, FY 2008: 84.0%;
2nd year, FY 2009: 16.0%;
Fourth quarter, 2nd year, FY 2009: 2.9%.
Service: Navy;
1st year, FY 2008: 88.7%;
2nd year, FY 2009: 11.3%;
Fourth quarter, 2nd year, FY 2009: 2.4%.
Source: GAO analysis of DOD data.
Note: The Marine Corps is included in the Navy's RDT&E appropriation.
[End of table]
Objective 3: Fiscal Years 2006-2009 Contract Obligations:
Contract obligations by quarter for fiscal years 2006 through 2009
vary and show no consistent pattern.
Figure: Fiscal Years 2006-2009 Contract Obligations:
[REfer to PDF for image: 4 pie-charts]
Total 2006 contract obligations, $298.5 billion:
Q1: 22.3%;
Q2: 31.1%;
03: 18.9%;
Q4: 27.7%.
Total 2007 contract obligations, $329.3 billion:
Q1: 30.2%;
Q2: 22.6%;
03: 19.7%;
Q4: 27.5%.
Total 2008 contract obligations $377.8 billion:
Q1: 23.5%;
Q2: 25.6%;
03: 18.5%;
Q4: 32.4%.
Total 2009 contract obligations $379.8 billion:
Q1: 27.5%;
Q2: 23.4%;
03: 19.0%;
Q4: 30.1%.
Source: GAO analysis of Federal Procurement Data System-Next
Generation data.
[End of figure]
Objective 3: Fiscal Year 2006 Contract Obligations: Competed vs. Non-
Competed:
The percentage of contract obligations competed was highest (68.3%) in
the fourth quarter.
Figure: Fiscal Year 2006 Contract Obligations: Competed vs. Non-
Competed:
[Refer to PDF for image: horizontal bar graph]
Quarter: Q1;
Competed: 60.8%;
Not Competed: 39.2%;
Total: $66.4 billion.
Quarter: Q2;
Competed: 56.4%;
Not Competed: 43.6%;
Total: $92.9 billion.
Quarter: Q3;
Competed: 63.7%;
Not Competed: 36.3%;
Total: $56.6 billion.
Quarter: Q4;
Competed: 68.3%;
Not Competed: 31.7%;
Total: $82.6 billion.
Quarter: Total year, 2006;
Competed: 62.1%;
Not Competed: 37.9%;
Total: $298.5 billion.
Source. GAO analysis of Federal Procurement Data System-Next
Generation data.
[End of figure]
Objective 3: Fiscal Year 2007 Contract Obligations: Competed vs. Non-
Competed:
The percentage of contract obligations competed was highest (68.6%) in
the fourth quarter.
Figure: Fiscal Year 2007 Contract Obligations: Competed vs. Non-
Competed:
[Refer to PDF for image: horizontal bar graph]
Quarter: Q1;
Competed: 54.5%;
Not Competed: 45.5%;
Total: $99.4 billion.
Quarter: Q2;
Competed: 64.7%;
Not Competed: 35.8%;
Total: $74.5 billion.
Quarter: Q3;
Competed: 65.5%;
Not Competed: 34.5%;
Total: $64.9 billion.
Quarter: Q4;
Competed: 68.6%;
Not Competed: 31.4%;
Total: $90.5 billion.
Quarter: Total year, 2006;
Competed: 62.9%;
Not Competed: 37.1%;
Total: $329.5 billion.
Source. GAO analysis of Federal Procurement Data System-Next
Generation data.
[End of figure]
Objective 3: Fiscal Year 2008 Contract Obligations: Competed vs. Non-
Competed:
The percentage of contract obligations competed was highest (65.6%) in
the fourth quarter.
Figure: Fiscal Year 2008 Contract Obligations: Competed vs. Non-
Competed:
[Refer to PDF for image: horizontal bar graph]
Quarter: Q1;
Competed: 56.6%;
Not Competed: 43.4%;
Total: $88.7 billion.
Quarter: Q2;
Competed: 63.6%;
Not Competed: 36.4%;
Total: $96.7 billion.
Quarter: Q3;
Competed: 63.1%;
Not Competed: 36.9%;
Total: $70.0 billion.
Quarter: Q4;
Competed: 65.6%;
Not Competed: 34.4%;
Total: $122.5 billion.
Quarter: Total year, 2006;
Competed: 62.5%;
Not Competed: 37.5%;
Total: $377.8 billion.
Source. GAO analysis of Federal Procurement Data System-Next
Generation data.
[End of figure]
Objective 3: Fiscal Year 2009 Contract Obligations: Competed vs. Non-
Competed:
The percentage of contract obligations competed was highest (72.2%) in
the fourth quarter.
Figure: Fiscal Year 2009 Contract Obligations: Competed vs. Non-
Competed:
[Refer to PDF for image: horizontal bar graph]
Quarter: Q1;
Competed: 54.7%;
Not Competed: 45.2%;
Total: $104.4 billion.
Quarter: Q2;
Competed: 65.7%;
Not Competed: 34.2%;
Total: $89.0 billion.
Quarter: Q3;
Competed: 66.8%;
Not Competed: 33.2%;
Total: $72.2 billion.
Quarter: Q4;
Competed: 72.2%;
Not Competed: 27.8%;
Total: $114.2 billion.
Quarter: Total year, 2006;
Competed: 64.8%;
Not Competed: 35.1%;
Total: $379.8 billion.
Source. GAO analysis of Federal Procurement Data System-Next
Generation data.
[End of figure]
Objective 3: Undefinitized Contract Actions (UCAs):
Available data show that obligations for UCAs are about 5 percent of
total contract spending: $18 billion in potential obligations out of
$378 billion in total contract spending in fiscal year 2008.
Data limitations prevented us from analyzing spending on UCAs by
quarter.
As we have previously reported,[A] data limitations also hinder DOD's
full understanding of the extent to which UCA's are used. For example,
* Eight of the 24 contract actions that should have been included in a
required DOD report on UCA's were omitted.
DOD reporting requirements are still in flux, i.e., DOD has proposed
including unpriced change orders in UCA reporting.
[A] Defense Contracting: DOD Has Enhanced Insight into Undefinitized
Contract Action Use, but Management at Local Commands Needs
Improvement, GA0-10-299 (Washington, D.C.: Jan. 28, 2010).
[End of section]
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