Contingency Contracting
Improvements Needed in Management of Contractors Supporting Contract and Grant Administration in Iraq and Afghanistan Gao ID: GAO-10-357 April 12, 2010The Departments of Defense (DOD) and State and the U.S. Agency for International Development (USAID) have relied extensively on contractors in Iraq and Afghanistan, including using contractors to help administer other contracts or grants. Relying on contractors to perform such functions can provide benefits but also introduces potential risks, such as conflicts of interest, that should be considered and managed. Pursuant to the National Defense Authorization Act for Fiscal Year 2008, GAO reviewed (1) the extent to which DOD, State, and USAID rely on contractors to perform contract and grant administration in Iraq and Afghanistan; (2) the reasons behind decisions to use such contractors and whether the decisions are guided by strategic workforce planning; and (3) whether agencies considered and mitigated related risks. GAO analyzed relevant federal and agency policies and agency contract data, and conducted file reviews and interviews for 32 contracts selected for case studies.
DOD, State, and USAID'suse of contractors to help administer contracts and grants was substantial, although the agencies did not know the full extent of their use of such contractors. GAO found that the agencies had obligated nearly $1 billion through March 2009 on 223 contracts and task orders active during fiscal year 2008 or the first half of fiscal year 2009 that included the performance of administration functions for contracts and grants in Iraq and Afghanistan. The specific amount spent to help administer contracts or grants in Iraq and Afghanistan is uncertain because some contracts or task orders included multiple functions or performance in various locations and contract obligation data were not detailed enough to allow GAO to isolate the amount obligated for other functions or locations. Overall, the agencies relied on contractors to provide a wide range of services, including on-site monitoring of other contractors' activities, supporting contracting or program offices on contract-related matters, and awarding or administering grants. For example, Air Force Center for Engineering and the Environment officials noted that contractors performed quality assurance for all of the center's construction projects in Iraq and Afghanistan. In another example, USAID contractors awarded and administered grants on USAID's behalf to support development efforts in Iraq and Afghanistan. Decisions to use contractors to help administer contracts or grants are largely made by individual contracting or program offices on a case-by-case basis. In doing so, the offices generally cited the lack of sufficient government staff, the lack of in-house expertise, or frequent rotations of government personnel as key factors contributing to the need to use contractors. Offices also noted that using contractors in contingency environments can be beneficial, for example, to meet changing needs or address safety concerns regarding the use of U.S. personnel in high-threat areas. GAO has found that to mitigate risks associated with using contractors, agencies have to understand when, where, and how contractors should be used, but offices' decisions were generally not guided by agencywide workforce planning efforts. DOD, State, and USAID took actions to mitigate conflict of interest and oversight risks associated with contractors helping to administer other contracts or grants, but did not always fully address these risks. For example, agencies generally complied with requirements related to organizational conflicts of interest, but USAID did not include a contract clause required by agency policy to address potential conflicts of interest in three cases. Also, some State officials were uncertain as to whether federal ethics laws regarding personal conflicts of interest applied to certain types of contractors. In almost all cases, the agencies had designated personnel to provide contract oversight. DOD, State, and USAID contracting officials generally did not, however, ensure enhanced oversight as required for situations in which contractors provided services closely supporting inherently governmental functions despite the potential for loss of government control and accountability for mission-related policy and program decisions.
RecommendationsOur 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.
Director: John P. Hutton Team: Government Accountability Office: Acquisition and Sourcing Management Phone: (202) 512-7773GAO-10-357, Contingency Contracting: Improvements Needed in Management of Contractors Supporting Contract and Grant Administration in Iraq and Afghanistan
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Report to Congressional Committees:
United States Government Accountability Office:
GAO:
April 2010:
Contingency Contracting:
Improvements Needed in Management of Contractors Supporting Contract
and Grant Administration in Iraq and Afghanistan:
GAO-10-357:
GAO Highlights:
Highlights of GAO-10-357, a report to congressional committees.
Why GAO Did This Study:
The Departments of Defense (DOD) and State and the U.S. Agency for
International Development (USAID) have relied extensively on
contractors in Iraq and Afghanistan, including using contractors to
help administer other contracts or grants. Relying on contractors to
perform such functions can provide benefits but also introduces
potential risks, such as conflicts of interest, that should be
considered and managed.
Pursuant to the National Defense Authorization Act for Fiscal Year
2008, GAO reviewed (1) the extent to which DOD, State, and USAID rely
on contractors to perform contract and grant administration in Iraq
and Afghanistan; (2) the reasons behind decisions to use such
contractors and whether the decisions are guided by strategic
workforce planning; and (3) whether agencies considered and mitigated
related risks. GAO analyzed relevant federal and agency policies and
agency contract data, and conducted file reviews and interviews for 32
contracts selected for case studies.
What GAO Found:
DOD, State, and USAID‘s use of contractors to help administer
contracts and grants was substantial, although the agencies did not
know the full extent of their use of such contractors. GAO found that
the agencies had obligated nearly $1 billion through March 2009 on 223
contracts and task orders active during fiscal year 2008 or the first
half of fiscal year 2009 that included the performance of
administration functions for contracts and grants in Iraq and
Afghanistan. The specific amount spent to help administer contracts or
grants in Iraq and Afghanistan is uncertain because some contracts or
task orders included multiple functions or performance in various
locations and contract obligation data were not detailed enough to
allow GAO to isolate the amount obligated for other functions or
locations. Overall, the agencies relied on contractors to provide a
wide range of services, including on-site monitoring of other
contractors‘ activities, supporting contracting or program offices on
contract-related matters, and awarding or administering grants. For
example, Air Force Center for Engineering and the Environment
officials noted that contractors performed quality assurance for all
of the center‘s construction projects in Iraq and Afghanistan. In
another example, USAID contractors awarded and administered grants on
USAID‘s behalf to support development efforts in Iraq and Afghanistan.
Decisions to use contractors to help administer contracts or grants
are largely made by individual contracting or program offices on a
case-by-case basis. In doing so, the offices generally cited the lack
of sufficient government staff, the lack of in-house expertise, or
frequent rotations of government personnel as key factors contributing
to the need to use contractors. Offices also noted that using
contractors in contingency environments can be beneficial, for
example, to meet changing needs or address safety concerns regarding
the use of U.S. personnel in high-threat areas. GAO has found that to
mitigate risks associated with using contractors, agencies have to
understand when, where, and how contractors should be used, but offices‘
decisions were generally not guided by agencywide workforce planning
efforts.
DOD, State, and USAID took actions to mitigate conflict of interest
and oversight risks associated with contractors helping to administer
other contracts or grants, but did not always fully address these
risks. For example, agencies generally complied with requirements
related to organizational conflicts of interest, but USAID did not
include a contract clause required by agency policy to address
potential conflicts of interest in three cases. Also, some State
officials were uncertain as to whether federal ethics laws regarding
personal conflicts of interest applied to certain types of
contractors. In almost all cases, the agencies had designated
personnel to provide contract oversight. DOD, State, and USAID
contracting officials generally did not, however, ensure enhanced
oversight as required for situations in which contractors provided
services closely supporting inherently governmental functions despite
the potential for loss of government control and accountability for
mission-related policy and program decisions.
What GAO Recommends:
GAO is making recommendations to improve State‘s and USAID‘s ability
to plan for the use and mitigate risks of contractors performing
contract and grant administration functions. State and USAID generally
concurred with the recommendations. GAO made similar recommendations
to DOD in 2009, with which it concurred. DOD had no additional
comments.
View [hyperlink, http://www.gao.gov/products/GAO-10-357] or key
components. For more information, contact John P. Hutton at (202) 512-
4841 or huttonj@gao.gov.
[End of section]
Contents:
Letter:
Background:
Agencies' Reliance on Contractors to Support the Administration of
Contracts and Grants in Iraq and Afghanistan Is Substantial:
Offices Used Contractors to Address Contingency-Related Challenges,
but Decisions Are Not Guided by Agencywide Strategies:
Agencies Did Not Always Mitigate Risks Related to Contractors
Supporting Contract or Grant Administration Functions:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Summary of Agency Contracts and Task Orders:
Appendix III: Comments from the Department of State:
Appendix IV: Comments from the U.S. Agency for International
Development:
Appendix V: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Examples of On-site Monitoring of Contractor Activities:
Table 2: Examples of Contracting Office Support:
Table 3: Examples of Program Office Support on Contract-Related
Matters:
Table 4: Examples of Awarding or Administering Grants:
Table 5: Reasons Agencies Cited in Case Studies for Using Contractors
to Support Contract and Grant Administration in Iraq and Afghanistan:
Table 6: Examples of Reasons Agencies Cited for Using Contractors in
Iraq and Afghanistan:
Table 7: DOD Contracts and Task Orders Active in Fiscal Year 2008 or
the First Half of Fiscal Year 2009 That Include Administration
Functions for Other Contracts or Grants in Iraq and Afghanistan:
Table 8: State Contracts and Task Orders Active in Fiscal Year 2008 or
the First Half of Fiscal Year 2009 That Include Administration
Functions for Other Contracts or Grants in Iraq and Afghanistan:
Table 9: USAID Contracts and Task Orders Active in Fiscal Year 2008 or
the First Half of Fiscal Year 2009 That Include Administration
Functions for Other Contracts or Grants in Iraq and Afghanistan:
Abbreviations:
COR: contracting officer's representative:
DOD: Department of Defense:
FAR: Federal Acquisition Regulation:
FPDS-NG: Federal Procurement Data System - Next Generation:
JCC-I/A: Joint Contracting Command - Iraq/Afghanistan:
LOGCAP: Logistics Civil Augmentation Program:
USAID: U.S. Agency for International Development:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
April 12, 2010:
Congressional Committees:
The Department of Defense (DOD), the Department of State (State), and
the U.S. Agency for International Development (USAID) have relied
extensively on contractors in Iraq and Afghanistan to undertake
reconstruction projects, provide security for U.S. government
officials and facilities, and support U.S. forces. During fiscal year
2008 and the first half of fiscal year 2009, DOD, State, and USAID
reported obligating $38.6 billion on contracts in Iraq and
Afghanistan. Additionally, State and USAID have relied on grantees to
support critical efforts such as infrastructure and economic
development in Iraq and Afghanistan. We have previously reported on
problems with the administration of these contracts and grants,
including a shortage of government personnel to monitor performance.
[Footnote 1] Without adequate contract oversight, agencies risk being
unable to identify and correct poor contractor performance in a timely
manner and ultimately may risk paying contractors more than the value
of the services they performed. Additionally, oversight of grantees is
critical to creating and sustaining performance accountability.
In some cases, the government has turned to contractors to help
support its performance of contract and grant administration
functions. Contract and grant administration functions represent the
government's primary mechanism for assessing whether it is getting the
expected products or services from contractors or whether grantees are
performing in accordance with grant programs. Examples of such
functions include on-site monitoring of contractor activities,
supporting contracting and program offices on contract-related
matters, and awarding grants and monitoring grantee performance. Using
contractors to support these functions can provide benefits, such as
flexibility to meet immediate needs, but it can also introduce risks
the government needs to consider and manage. For example, contractors
performing certain contract or grant administration functions may
closely support the performance of inherently governmental functions,
which increases the risk that government decisions will be
inappropriately influenced by, rather than independent from,
contractor actions. In addition, reliance on contractor support to
meet agency missions can increase the risk of conflicts of interest
among companies and individuals, particularly for cases in which
contractors closely support inherently governmental functions.
In the National Defense Authorization Act for Fiscal Year 2008,
Congress directed us to report annually on DOD, State, and USAID
contracts in Iraq and Afghanistan, including information on any
specific contract or class of contracts that the Comptroller General
determines raises issues of significant concern.[Footnote 2] Pursuant
to that mandate, this report addresses DOD, State, and USAID's use of
contractors, including personal services contractors, to perform
administration functions for other contracts or grants with
performance in Iraq and Afghanistan during fiscal year 2008 and the
first half of fiscal year 2009.[Footnote 3] Specifically, we analyzed
(1) the extent to which DOD, State, and USAID rely on contractors to
perform administration functions for other contracts and grants in
Iraq and Afghanistan; (2) the reasons behind decisions to use
contractors to perform these functions and whether the decisions are
guided by strategic workforce planning; and (3) whether the agencies
have considered and mitigated conflict of interest and oversight risks
related to contractors performing contract or grant administration
functions.[Footnote 4]
To determine the extent to which DOD, State, and USAID relied on
contractors to perform functions within our scope, we requested data
from the agencies on contracts and task orders with at least 1 day of
performance in fiscal year 2008 or the first half of fiscal year 2009
for which duties included administration functions for other contracts
or grants with performance in Iraq or Afghanistan.[Footnote 5] To
assess whether the data provided by the agencies were accurate and
appropriately categorized as within the scope of this engagement, we
reviewed contract documents for 128 of the 186 contracts and task
orders reported by the agencies.[Footnote 6] We also identified
additional contracts and task orders in our scope by reviewing data
from the Federal Procurement Data System - Next Generation (FPDS-NG)
and data provided to GAO by DOD, State, and USAID for a related
engagement. Although we found that the agencies' data were incomplete
based on additional contracts and task orders we identified, we
determined that taken collectively data provided by the agencies and
data on the contracts and task orders we identified and included in
our scope were sufficiently reliable to establish the minimum number
of contracts and task orders active during fiscal year 2008 or the
first half of fiscal year 2009 that were awarded by DOD, State, and
USAID to perform the functions within our scope.
To learn about the reasons behind decisions to use contractors to
perform these functions and the extent to which agencies considered
and mitigated risks related to the use of contractors to perform these
functions, we purposefully selected 32 contracts at DOD, State, and
USAID for case studies to provide a cross section of types of
contracts, locations, and functions performed. We reviewed contract
files and interviewed officials such as contracting officers, program
managers, contracting officers' representatives (COR), and
contractors. For these case studies, we conducted fieldwork in Iraq,
Afghanistan, and the United States. We also reviewed agency workforce
planning documents and guidance and interviewed officials
knowledgeable about workforce planning. Further, we reviewed federal
regulations and agency policy related to conflicts of interest and
oversight and interviewed officials responsible for contracting policy
at each of the agencies. Our review did not assess the effectiveness
of contractors performing contract or grant administration functions
for other contracts or grants.
A detailed description of our scope and methodology is included in
appendix I. We conducted this performance audit from February 2009
through April 2010 in accordance with generally accepted government
auditing standards. 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 the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit objectives.
Background:
Contract and Grant Administration:
Contracts and grants are two instruments the government may use to
achieve its missions, with their selection principally governed by the
nature of the activity. Contracts are procurement instruments and, as
such, are governed by the Federal Acquisition Regulation (FAR) and
agency procurement regulations. Contracts are to be used when the
principal purpose of the project is the acquisition of goods and
services for the direct benefit of the federal government. Grants, on
the other hand, are to be used when the principal purpose of a project
is to accomplish a public purpose of support or stimulation authorized
by federal statute. Contract administration, as defined by the Office
of Federal Procurement Policy, consists of those activities performed
after a contract has been awarded to determine how well the government
and the contractor performed to meet the requirements of the contract.
Contract and grant administration include a number of similar
functions, including monitoring contractor or grantee performance and
reviewing contractor or grantee financial information.
Contract administration functions are carried out under the direction
of contracting officers, who are responsible for ensuring performance
of all necessary actions for effective contracting, ensuring
compliance with the terms of the contract, and safeguarding the
government's interests. Contracting officers have authority to enter
into, administer, or terminate contracts. A contracting officer may
designate another individual to provide oversight on his or her
behalf. For the purposes of this report, we use "COR" to refer to such
individuals, although in some cases agencies or offices use other
terms. The COR functions as the "eyes and ears" of the contracting
officer, monitoring technical performance and reporting any potential
or actual problems to the contracting officer. Functions of the COR
typically include informing the contracting officer of any technical
or contractual difficulties encountered during performance, informing
the contractor of failures to comply with technical requirements of
the contract, performing inspection and acceptance of all final work
required under the contract, and maintaining contract files.
Similarly, grant administration functions are carried out under the
direction of grant or agreement officers, who may be assisted by
grants officers' representatives or agreement officers' technical
representatives.
Risks Related to Reliance on Contractors:
Our prior work has identified risks related to agencies' decisions to
use contractors to support certain types of agency missions, including
potential conflicts of interest.[Footnote 7] An organizational
conflict of interest can occur when a contractor has present or
currently planned interests (including business or relationships with
other contractors) that either directly or indirectly relate to the
work to be performed under a contract and (1) may diminish its
capacity to give impartial, technically sound, objective assistance or
advice or (2) may result in it having an unfair competitive advantage.
For this report, a personal conflict of interest is one that can occur
in a situation in which an individual is employed by a contractor or
is contracted for directly by the government as a personal services
contractor and is in a position to materially influence an agency's
recommendations or decisions and, because of his or her personal
activities, relationships, or financial interests, may lack or appear
to lack objectivity or appear to be unduly influenced by personal
financial interest.
In addition, other risks to the agencies may occur when using
contractors for services that closely support inherently governmental
functions. Inherently governmental functions are so intimately related
to the public interest as to require performance by government
employees, and include functions that require discretion in applying
government authority or value judgments in making decisions for the
government.[Footnote 8] FAR section 7.503(c) provides 20 examples of
functions considered to be inherently governmental, including
determining agency policy or federal program budget request
priorities; directing and controlling federal employees; and awarding,
administering, or terminating federal contracts. Similarly, FAR
section 7.503(d) provides examples of functions that while not
inherently governmental, may approach the category because of the
nature of the function, the manner in which a contractor performs the
contract, or the manner in which the government administers
performance under a contract. These functions closely support the
performance of inherently governmental functions and generally include
professional and management support activities, such as those that
involve or relate to supporting budget preparation, evaluation of
another contractor's performance, acquisition planning, or technical
evaluation of contract proposals. When contractors perform these
functions, there is a risk of inappropriately influencing the
government's control over and accountability for decisions that may be
based, in part, on contractor work.
Nonpersonal and Personal Services Contracts:
DOD, State, and USAID use both nonpersonal and personal services
contractors to perform contract or grant administration functions.
Nonpersonal services contracts are distinguished from personal
services contracts in part by the nature of the government's
relationship with the contractor. Under a nonpersonal services
contract, the personnel rendering the services are not subject either
by the contract's terms or by the manner of its administration to the
relatively continuous supervision and control of government personnel.
On the other hand, personal services contracts are characterized by an
employer-employee relationship created between the government and the
contractor. Personal services contracts involve close and continual
supervision and control of contractor personnel by government
employees rather than general oversight of contractor operations. In
general, personal services contractors perform services that are
comparable in scope and nature to those of civil service employees and
often appear, in effect, to be government employees. Additionally, the
risks of contracting for personal services are not always the same as
the risks of contracting for nonpersonal services. For example,
personal services contractors are not explicitly prohibited in the FAR
from performing inherently governmental functions.[Footnote 9] Also,
the level and type of oversight and management may differ between
personal and nonpersonal services contracts.
The government is normally required to obtain its employees by direct
hire under competitive appointment or other procedures required by the
civil service laws, and contracting for personal services is
prohibited unless authorized by statute. DOD, State, and USAID are
each authorized to hire personal services contractors under certain
circumstances.[Footnote 10] For example, USAID and selected bureaus at
State are permitted to hire personal services contractors to perform
services outside of the United States. Similarly, DOD has specific
authority to enter into personal services contracts to support
operations outside of the United States in certain circumstances.
Personal services contractors may be U.S. citizens, local nationals,
or third-country nationals. State and USAID regulations state that
personal services contractors generally cannot supervise government
employees, serve as contracting officers, or otherwise obligate
government funds. DOD regulations do not specifically address whether
personal services contractors can supervise government employees or
otherwise obligate government funds.
Agencies' Reliance on Contractors to Support the Administration of
Contracts and Grants in Iraq and Afghanistan Is Substantial:
DOD, State, and USAID relied on contractors to perform a wide range of
administration functions for contracts and grants with performance in
Iraq and Afghanistan, but did not know the full extent of their use of
contractors to perform such functions. Our review found 223 contracts
and task orders active during fiscal year 2008 or the first half of
fiscal year 2009 that included the performance of administration
functions for other contracts or grants in Iraq and Afghanistan. DOD,
State, and USAID officials told us that there were no agencywide data
sources that provided detailed information about the functions
performed by contractors and that individual contracting offices would
have to manually review their contracts to identify contracts within
our scope. Of the 186 contracts or task orders reported to us by
individual contracting offices, we determined that 161 were within our
scope. Through our review of FPDS-NG data and agency data compiled for
another purpose, we found an additional 62 contracts or task orders
within our scope. Given limitations we have previously reported with
FPDS-NG and agency contracting data, the 223 contracts and task orders
we identified, including 119 contracts and task orders for personal
services, represent the minimum number of contracts and task orders
within our scope (see appendix II for more information on the
contracts and task orders we identified).
According to FPDS-NG and agency data, the agencies had obligated
approximately $990 million as of March 31, 2009, on the 223 contracts
and task orders we identified, although we were unable to determine
how much of this amount was specifically obligated for the performance
of administration functions for contracts or grants with performance
in Iraq or Afghanistan. For example, some of the contracts or task
orders included the performance of functions besides contract or grant
administration or the performance of administration functions for
contracts or grants with performance outside of Iraq and Afghanistan.
FPDS-NG and agency obligation data were not detailed enough to allow
us to isolate the amount obligated for other functions or locations.
The approximately $990 million obligated by the agencies on the
contracts and task orders we identified also includes more than $116
million reported by USAID for grants that were awarded by USAID
contractors in Iraq on behalf of USAID, as authorized in the terms of
their contracts.[Footnote 11] USAID contractors also awarded grants on
behalf of USAID in Afghanistan, but USAID officials told us that the
Afghanistan mission does not track grants awarded by contractors.
As illustrated in tables 1 through 4, contractors in our case studies
performed a wide variety of services in support of DOD, State, and
USAID's administration and oversight of other contracts and grants
collectively worth billions of dollars. Contract and grant
administration functions performed by contractors included on-site
monitoring of contractor activities, contracting office support,
program office support on contract-related matters, and awarding or
administering grants. For instance, Air Force Center for Engineering
and the Environment officials told us that they used contractors to
perform quality assurance functions for all of the center's
construction projects in Iraq and Afghanistan. Obligations for
construction on these projects totaled over $790 million for
approximately 200 task orders during fiscal year 2008 and the first
half of fiscal year 2009. In another example, State had obligated just
over $700,000 as of March 2009 for a Bureau of International Narcotics
and Law Enforcement personal services contractor to provide oversight,
such as performing inspections and accepting contractor work on behalf
of the U.S. government, for two task orders that included support for
an Iraq criminal justice development program and had combined
obligations of $343 million as of March 2009.
Table 1: Examples of On-site Monitoring of Contractor Activities:
Activities include: On-site quality assurance work to ensure that
construction standards outlined in a contract are being adhered to,
ensuring that safety procedures are being followed, and monitoring of
contractors' technical performance.
Personal services contracts: The U.S. Army Corps of Engineers had
obligated more than $44 million as of March 2009 toward 10 task orders
under two personal services contracts with firms in Iraq and
Afghanistan to provide services such as providing oversight of quality
and safety of construction contractor work products.
Nonpersonal services contracts: State had obligated $3.2 million as of
March 2009 on a contract to provide quality assurance services,
including identifying and reporting contractor performance problems
and assessing contractor compliance with standard operating
procedures, for an aviation support task order in Iraq on which the
department had obligated $144 million as of March 2009.
Nonpersonal services contracts: USAID had obligated approximately $35
million as of March 2009 on a contract to provide continued
performance monitoring and evaluation of the program managed by USAID
in Iraq, including activities carried out by other USAID contractors
and grantees.
Source: GAO analysis of agency contract information and interviews
with agency officials.
[End of table]
Table 2: Examples of Contracting Office Support:
Activities include: Maintaining contract administration files,
reviewing invoices for contractor payment, and administering contract
modifications.
Personal services contracts: As of March 2010, USAID's Office of
Acquisition and Assistance in Iraq comprised 2 U.S. government
employees and 10 personal services contractors. Personal services
contractors supporting the office were responsible for a range of
postaward administration activities, such as preparation of
modifications to acquisition actions, postaward approvals and actions,
terminations, audits, and closeout. According to USAID, 8 of the 10
personal services contractors were third-country nationals. USAID
officials noted that third-country nationals are recruited by USAID
missions in other countries to provide temporary support, training,
and mentoring to local staff and are critical to helping the agency
achieve its development mission. They also noted that third-country
nationals are not considered temporary employees, as many often return
to their countries and continue as local permanent staff with USAID.
Nonpersonal services contracts: The Joint Contracting Command--
Iraq/Afghanistan obligated over $16 million through March 2009 on a
contract in Iraq for the performance of a wide range of contract
administration functions, including inspection and surveillance of
various contractors' care and control over government property valued
at over $500 million.
Nonpersonal services contracts: State's Office of Acquisition
Management had obligated just over $900,000 as of March 2009 toward a
task order for contract specialist support, including support for two
of the State contracts within our scope with combined obligations of
nearly $24 million through March 2009. The task order states that
contractor personnel employed under it perform the full range of pre-
and postaward duties. According to a State contracting official,
specific duties included serving as a liaison between the contracting
and program offices and maintaining contract files.
Source: GAO analysis of agency contract information and interviews
with agency officials.
[End of table]
Table 3: Examples of Program Office Support on Contract-Related
Matters:
Activities include: Evaluation of cost and schedule performance,
support to program offices regarding program performance and actual or
anticipated program problems, and evaluation of contractor proposals.
Personal services contracts: State had obligated just over $200,000 as
of March 2009 for a personal services contractor to serve as a deputy
program manager at the Bureau of Diplomatic Security to provide
management oversight and evaluate the performance of an aviation
support contractor in Iraq performing under a task order with
obligations of approximately $144 million as of March 2009. The
statement of work for the personal services contract stated that the
deputy program manager exercised wide latitude for independent action,
initiating projects and executing approved new programs under general
supervision of the division chief.
Nonpersonal services contracts: The Army had obligated approximately
$62 million as of March 2009 toward seven task orders that included
contract administration support, among other functions, for its
Logistics Civil Augmentation Program (LOGCAP) contracts. The LOGCAP
contracts provide logistical and life support services in contingency
locations worldwide, and had obligations of approximately $7.6 billion
during fiscal year 2008 and the first half of fiscal year 2009 for
task orders with performance in Iraq and Afghanistan. The support
contract includes a wide range of functions, such as evaluating task
order proposals and providing financial and technical analysis of
contractor costs and performance.
Nonpersonal services contracts: State had obligated just over $20
million as of March 2009 toward a contract to provide program and
acquisition support to the Bureau of Diplomatic Security's Office of
Overseas Protective Operations, including for State's Worldwide
Personal Protective Services II contracts. As of March 2009, the
department had obligated approximately $1.2 billion toward task orders
under these contracts with performance in Iraq or Afghanistan.
Contract administration activities performed by the support contractor
included reviewing invoices and evaluating contractor price proposals.
Source: GAO analysis of agency contract information and interviews
with agency officials.
[End of table]
Table 4: Examples of Awarding or Administering Grants:
Activities include: Awarding grants on behalf of a federal agency,
monitoring and evaluating grantee performance, and reviewing grantee
reports.
Personal services contracts: Some USAID personal services contractors
in Iraq and Afghanistan working in contracting offices were also
responsible for assisting with the award and administration of grants,
including preparing award and closeout documents.
Nonpersonal services contracts: USAID had obligated approximately $165
million as of March 2009 toward a contract, including approximately
$76 million in grant funds, for the contractor to award and administer
grants in Iraq to support community-based conflict mitigation and
reconciliation projects.
Nonpersonal services contracts: State had obligated $350,000 as of
March 2009 toward a task order that included the monitoring and
evaluation of grantee performance in Iraq. Functions performed by the
contractor included verifying the performance of work that is reported
by grantees and assisting in other oversight activities.
Source: GAO analysis of agency contract information and interviews
with agency officials.
[End of table]
We found that the way DOD acquired personal services contractors and
the functions performed by these contractors differed when compared to
those of State and USAID. At DOD, we identified two contracts for
personal services awarded by the U.S. Army Corps of Engineers to firms
that would in turn hire individuals, including local nationals, to
provide construction quality assurance. In these cases, contract
personnel (up to an estimated 174 individuals, in one case) work under
the direct supervision and control of agency officials while
administrative aspects of their employment are managed by the
contracted firm. In contrast, State and USAID awarded personal
services contracts directly to individuals for a range of functions,
including on-site monitoring of contractor activities, supporting
contracting and program offices on contract-related matters, and
awarding grants and monitoring grantee performance.
Offices Used Contractors to Address Contingency-Related Challenges,
but Decisions Are Not Guided by Agencywide Strategies:
The decisions to use contractors to support contract or grant
administration functions are largely made by individual contracting or
program offices within the agencies on a case-by-case basis. The
offices cited the lack of a sufficient number of government staff, the
lack of in-house expertise, or frequent rotations among government
personnel as key factors contributing to the decision to use
contractors to support their efforts. These individual decisions,
however, are generally not informed by more strategic, agencywide
workforce plans or guidance on the extent to which contractors should
be used to support these functions.
Offices Largely Used Contractors to Alleviate Workforce Challenges and
Cited Additional Benefits to Using Contractors in a Contingency
Environment:
Individual contracting or program offices generally decided to use
contractors to perform administration functions for other contracts or
grants to address workforce challenges, including a shortage of
government personnel and a lack of expertise among government
personnel to perform specific functions, as well a lack of continuity
because of frequent rotations. While workforce-related challenges were
cited most frequently as a reason for needing to acquire contractor
support, contracting and program officials also noted that using
contractors in contingency environments can be beneficial to meet
unforeseen or changing needs, address safety concerns regarding the
use of U.S. personnel in high-threat areas, and provide a means to
overcome language barriers or help develop the local economy (see
table 5).
Table 5: Reasons Agencies Cited in Case Studies for Using Contractors
to Support Contract and Grant Administration in Iraq and Afghanistan:
Reason: Government personnel shortages;
Personal services (of 13 case studies): 10;
Nonpersonal services (of 19 case studies): 17;
Total (of 32 case studies): 27.
Reason: Special skills/lack of expertise among government personnel;
Personal services (of 13 case studies): 13;
Nonpersonal services (of 19 case studies): 14;
Total (of 32 case studies): 27.
Reason: Flexibility/surge capacity;
Personal services (of 13 case studies): 7;
Nonpersonal services (of 19 case studies): 12;
Total (of 32 case studies): 19.
Reason: Continuity/frequent rotations of government personnel;
Personal services (of 13 case studies): 4;
Nonpersonal services (of 19 case studies): 11;
Total (of 32 case studies): 15.
Reason: Security and logistical concerns;
Personal services (of 13 case studies): 2;
Nonpersonal services (of 19 case studies): 9;
Total (of 32 case studies): 11.
Reason: Cultural familiarity;
Personal services (of 13 case studies): 3;
Nonpersonal services (of 19 case studies): 5;
Total (of 32 case studies): 8.
Reason: Local economy development;
Personal services (of 13 case studies): 2;
Nonpersonal services (of 19 case studies): 5;
Total (of 32 case studies): 7.
Reason: Cost;
Personal services (of 13 case studies): 2;
Nonpersonal services (of 19 case studies): 2;
Total (of 32 case studies): 4.
Source: GAO analysis of agency contract documents and interviews with
agency officials for 32 case studies.
Note: Agencies could cite more than one reason for using contractors.
[End of table]
The examples in table 6 provide illustrations from our case studies of
the reasons cited by the agencies for their reliance on contractors to
perform contract or grant administration functions for other contracts
or grants in Iraq or Afghanistan.
Table 6: Examples of Reasons Agencies Cited for Using Contractors in
Iraq and Afghanistan:
Reason: Government personnel shortages;
Example: The U.S. Army Corps of Engineers cited a shortage of
personnel, among other reasons, as justification for using personal
services contractors in Iraq and Afghanistan. For example, the
determination and findings that supported the use of such contractors
in Iraq stated that it had proven impossible to assemble sufficient
numbers of U.S. quality assurance personnel to adequately monitor
construction progress at thousands of expected work sites. USAID
officials noted that a long-standing staffing shortage has led to the
need for personal services contractors in missions worldwide, and
indicated that these shortages are particularly acute in Iraq and
Afghanistan.
Reason: Special skills/lack of expertise among government personnel;
Example: State program officials noted that the department's
nonpersonal services aviation quality assurance contract required
personnel with specific technical skills and years of experience that
are difficult to find among government employees.
Reason: Flexibility/surge capacity;
Example: State Bureau of International Narcotics and Law Enforcement
Affairs officials told us that personal services contractors are a
good fit for COR positions in contingency environments because State
needs surge capacity to support the increase of State agents and
programs in the conflict region, and the contracts can be terminated
later.
Reason: Continuity/frequent rotations of government personnel;
Example: Under a nonpersonal services contract to support the Joint
Contracting Command-Iraq/Afghanistan (JCC-I/A), contractor personnel
made up about 15 percent of JCC-I/A's contracting workforce in Iraq as
of December 2008. DOD officials noted that contractors were needed to
maintain continuity within the office given that the relatively short
deployments of DOD personnel could otherwise result in loss of
institutional knowledge.
Reason: Security and logistical concerns;
Example: USAID contracting officials for a nonpersonal services
contract in Iraq that included the performance of on-site monitoring
of contractor and grantee activities at remote locations noted that
local national contractor personnel could generally travel more easily
to project sites because of familiarity with local languages and
customs and fewer travel restrictions. The determination and findings
that supported the U.S. Army Corps of Engineers' use of personal
services contractors to perform construction quality assurance in
Afghanistan stated that local nationals are able to travel to remote
job locations and complete work that security concerns prevent U.S.
personnel from performing.
Reason: Cultural familiarity;
Example: JCC-I/A's Regional Contracting Center in Kabul justified
using a nonpersonal services contract to provide contracting
administration support because of the contractor's experience with
local businesses and ability to speak and interpret the language, for
which no reasonable alternative existed.
Reason: Local economy development;
Example: Regarding a construction oversight contract in Afghanistan,
DOD officials indicated that hiring local nationals to perform quality
assurance functions for construction projects helped build local
knowledge about construction standards so local communities could
maintain and continue existing projects once U.S. efforts were
complete. Regarding the issuance of grants under contract in Iraq and
Afghanistan, USAID contracting offices noted that grants under
contract are good for development projects in quickly changing
environments because they are a way to bridge the gap between formal
institutions while engaging local nationals, and contractors are used
to increase the capacity of local grantees.
Reason: Cost;
Example: The determination and findings justifying the use of a DOD
personal services contract to provide construction quality assurance
functions in Afghanistan noted that the average cost of hiring a local
national personal services contractor was approximately 4 percent of
the cost of hiring a U.S. employee for an equivalent position.
Source: GAO analysis of agency contract documents and interviews with
agency officials for 32 case studies.
[End of table]
Agencies Generally Lack Strategies to Determine How Extensively
Contractors Should Perform Contract or Grant Administration Functions:
Individual offices' decisions to use contractors are generally not
informed by more strategic, agencywide workforce plans or guidance on
the extent to which contractors should be used to support contract or
grant administration functions. Agencies' current strategic human
capital plans and guidance generally do not address the extent to
which it is appropriate to use contractors, either in general or more
specifically to perform contract or grant administration functions.
Some DOD, State, and USAID officials noted that they would prefer to
use government employees to perform some of the functions currently
being performed by contractors. Our work indicated, however, that
agencies intend to continue to rely on contractors to perform these
functions in Iraq or Afghanistan on a longer-term basis. For example,
in 15 of the 32 case studies we conducted, contracts or task orders
were awarded in 2007 or earlier, and we found cases in which the
contract or task order had recently been or was in the process of
being recompeted.
Our prior work has noted that to mitigate risks associated with using
contractors, agencies have to understand when, where, and how
contractors should be used given the risk of diminished institutional
capacity, potentially greater costs, and mission risks.[Footnote 12]
We have also reported that decisions regarding the use of contractors
should be based on strategic planning regarding what types of work are
best done by the agency or by contractors.[Footnote 13] DOD and the
Office of Management and Budget have recently issued guidance that
further emphasized the importance of this type of planning.
Specifically, after recognizing in its 2006 update to the Quadrennial
Defense Review that contractors are part of the total force, DOD
issued guidance in May 2009 that encouraged DOD components to consider
when to use contractors as part of a total force approach to workforce
management and strategic human capital planning.[Footnote 14]
Similarly, the Office of Management and Budget's July 2009 Managing
the Multi-Sector Workforce guidance required civilian agencies to take
immediate steps to adopt a framework for planning for and managing the
multisector workforce of federal employees and contractors, including
principles for considering the appropriate mix of contractors and
government employees.
We reported in 2009 that while DOD had made good progress in
developing a civilian workforce plan and had recognized contractors as
a part of its total workforce, the department had yet to develop a
strategy for determining the appropriate mix of contractor and
government personnel.[Footnote 15] DOD Instruction 1100.22, which
provides guidance for determining the appropriate military, civilian,
and contractor mix needed to accomplish the department's mission,
focuses on individual decisions of whether to use contractors to
provide specific capabilities and not the overarching question of what
the appropriate role of contractors should be. For example, the
guidance distinguishes between contract administration functions that
contractors can and cannot perform based on which functions are
considered to be inherently governmental and states that contractors
may be used in certain circumstances to perform contract quality
control and performance evaluation or inspection functions, but does
not address the extent to which contractors should be used to perform
these functions. We recommended in March 2009 that DOD revise its
criteria and guidance to clarify under what circumstances and the
extent to which it is appropriate to use contractors to perform
acquisition-related functions.[Footnote 16] DOD concurred with our
recommendation and, according to DOD officials, is in the process of
finalizing revisions to its guidance as of March 2010.
State's departmentwide workforce plan also generally does not address
the extent to which contractors should be used to perform specific
functions. As part of State's fiscal year 2011 budget process, State
has asked its bureaus to focus on transitioning some activities
performed by contractors to performance by government employees. State
officials told us, however, that departmentwide workforce planning
efforts generally have not addressed the extent to which the
department should use contractors because those decisions are left up
to individual bureaus. Officials at State's Bureaus of Acquisition
Management, Diplomatic Security, and International Narcotics and Law
Enforcement Affairs told us that they do not have workforce plans that
include consideration of the extent to or the circumstances under
which contractors should be used to perform contract or grant
administration functions. These officials indicated that decisions
about the use of contractors are generally made on a case-by-case
basis and often reflect the necessity of using contractors because of
a shortage of direct hire employees.
USAID has taken steps to determine the extent to which personal
services contractors should be used, but has not addressed the extent
to which nonpersonal services contractors outside the United States
should be used, either in general or to perform specific functions.
USAID officials told us that personal services contractors are used
across the agency's overseas missions and that they consider these
contractors to be part of their workforce. As such, personal services
contractors have been included in the agency's workforce planning
model. For example, the model for USAID headquarters includes an
estimate of the extent to which various functions should be performed
by personal services contractors. Officials told us that future
iterations of the model will address the extent to which personal
services contractors should be used to staff contracting offices in
Iraq and Afghanistan. USAID's current workforce planning efforts,
including its human capital and workforce plans, however, do not
address the extent to which nonpersonal services contractors working
outside of the United States should be used as officials do not
consider those contractors to be part of USAID's workforce.
DOD, State, and USAID will be challenged to fully address the
appropriate role for contractors performing specific functions during
workforce planning efforts because of the lack of complete and
reliable data on the functions performed by contractors. We recently
reported that all three agencies continue to struggle in implementing
improvements to track data on contracts and contractor personnel in
Iraq and Afghanistan.[Footnote 17] Our past work has shown that such
data are important to enable agencies to conduct adequate workforce
planning.[Footnote 18]
DOD, State, and USAID took a number of actions to mitigate conflict of:
Agencies Did Not Always Mitigate Risks Related to Contractors
Supporting Contract or Grant Administration Functions:
interest and oversight risks associated with contractors supporting
contract and grant administration functions, but did not always fully
address these risks. For example, the agencies generally complied with
requirements related to organizational conflicts of interest. USAID,
however, did not always include a contract clause generally required
by USAID policy intended to protect the government's interest
regarding potential organizational conflicts of interest.
Additionally, some State officials were uncertain as to whether or how
federal ethics laws regarding personal conflicts of interest applied
to personal services contractors. In almost all cases, the agencies
had designated personnel to provide contract oversight, though they
did not ensure enhanced oversight for contractors that closely
supported inherently governmental functions in accordance with federal
requirements.
Agencies Generally Complied with Requirements Related to
Organizational Conflicts of Interest, Although USAID Did Not Always
Follow Agency Policy:
FAR subpart 9.5 requires contracting officers to identify and evaluate
potential organizational conflicts of interest prior to contract award
and take steps to address potential conflicts that they determine to
be significant. If the contract may involve a significant potential
conflict, before issuing a solicitation, the contracting officer must
submit for approval to the head of the contracting activity a written
analysis with courses of action for avoiding, mitigating, or
neutralizing the conflict. Though not mandatory, the contracting
officer may use solicitation provisions or a contract clause to
restrict the contractor's eligibility for other contract awards or
require agreements about the use of other contractors' proprietary
information obtained during the course of contract performance.
[Footnote 19]
In six of the contracts we reviewed, agencies addressed potential
organizational conflicts of interest by incorporating a clause into
the contract that precluded the contractor from bidding on other
related work that may result in a conflict of interest. For example,
Air Force Center for Engineering and the Environment officials
identified the potential for an organizational conflict of interest in
a contract used in part to support the center's CORs in Iraq and
therefore restricted the contractor from participating in any of the
center's other contracts for the life of the contract plus 1 year.
Similarly, a State contract to support the department's management and
oversight of security operations overseas, including in Iraq and
Afghanistan, had a clause that precluded the contractor and its
subcontractors from participating in directly related department
contracts for 3 years after the completion of the contract. These six
case studies also included a contract clause addressing the protection
or nondisclosure of other contractors' proprietary data.
Agencies have broad discretion in how to address potential
organizational conflicts of interest. Solicitation and contract
clauses are one of many options contracting officers have, though they
are not always used. For example, agency documents in two cases
suggested that there had been consideration of the possible need to
restrict contractors' activities because of potential conflicts of
interest. Clauses related to potential conflicts of interest, however,
were not included in the contracts at the time of award. In one case,
the Commander of the Joint Contracting Command - Iraq/Afghanistan's
(JCC-I/A) letter of justification for contract and property specialist
support stated that the award of the contract may preclude the
contractor from being eligible for or working on other contracts. The
contract itself, though, did not contain any related organizational
conflict of interest clauses. Additionally, the contract file of a
Defense Energy Support Center contract to support the oversight of
fuel delivery in Afghanistan included e-mails indicating that the
oversight support contractor could not provide services to the
companies providing fuel delivery services for the center. Contracting
officials told us that the related discussions had been informal and
therefore had not been documented.
In addition to the FAR, USAID also has specific agency policy that
addresses organizational conflicts of interest for certain
contractors, including contractors that evaluate USAID program
activities or other contractors.[Footnote 20] The policy requires that
an organizational conflict of interest clause be included in the
evaluation contract that precludes the contractor from providing
certain related services within 18 months of USAID receiving an
evaluation report from the contractor unless a waiver is authorized;
restricts the use of information obtained from other parties during
the course of the contract; and requires nondisclosure agreements with
other contractors to protect proprietary data. This clause was not,
however, incorporated in any of the three USAID contracts we reviewed
that included the evaluation of program activities or contractors. In
one of these contracts, the statement of work notes that the
contractor may be precluded from performing work under the current
task order or from award of other contracts if USAID determines the
contractor has a conflict of interest, and that the contractor shall
protect proprietary information. This statement is not, however,
specific as to when those circumstances occur, nor does it
specifically restrict the contractor's use of information obtained
from other parties during the course of the contract in future
proposals. USAID officials told us that when this contract is
recompeted in 2010, the clause required by USAID policy will be
included. In another of these three cases, USAID's response to a
prospective bidder's questions indicated that prior to the award of
the contract, a determination was made that the contractor would be
restricted from bidding for the award of other related contracts, but
the restrictions were not addressed in the solicitation or contract
despite the requirement to do so in FAR section 9.507-2.
One case study illustrated the challenges of identifying potential
organizational conflicts of interest prior to award and the potential
effect if one is identified after award. In this case, JCC-I/A awarded
a $1 million contract to support the Armed Contractor Oversight
Directorate in Afghanistan. The contractor, which itself was a private
security contractor, was assigned a number of responsibilities related
to oversight of private security contractors, including monitoring
private security contractor activity, documenting and analyzing
security incidents, and assisting the government in conducting
incident inspections. The contract files we reviewed did not include
documentation that the contracting officer assessed the potential for
a conflict of interest, though as previously noted, a written analysis
would not be necessary unless the contracting officer decided that
there was a significant potential conflict of interest. In addition,
no clauses were included in the solicitation or contract that
precluded the contractor from bidding on other contracts. After the
support contract had been awarded and performance had begun, the
support contractor competed for and won a separate contract to provide
armed guard services in Afghanistan. Subsequent to the award of the
second contract, however, a JCC-I/A attorney became aware of the two
contracts and, according to JCC-I/A officials, alerted a JCC-I/A
contracting official. JCC-I/A counsel concluded that the contractor's
objectivity in supporting the Armed Contractor Oversight Directorate
could potentially be impaired by its performance of armed guard
services. Ultimately, JCC-I/A counsel determined that no mitigation
plan would adequately mitigate this conflict. Therefore, JCC-I/A
terminated the ongoing Armed Contractor Oversight Directorate support
contract for the convenience of the government and awarded another
support contract to a different contractor.
Agencies are not required to have a formal process for monitoring
potential organizational conflicts of interest after award, but in
some cases, officials told us that they did so informally. For
example, for a State task order to provide contract administration
support, officials noted that it was possible to mitigate potential
conflicts of interest because the small size of the office facilitates
direct government oversight of contractor activities, and contractors
that perform contract administration functions for State do not often
perform other services that could be in conflict with their current
responsibilities. In several other case studies we conducted, agency
officials told us that contractors have responsibility to bring
organizational conflicts of interest to the attention of contracting
officials if they occur.
Under USAID acquisition regulations, contracts that include
restrictions on a contractor's eligibility for future work should also
include a standard clause stating that the contractor should disclose
any postaward conflicts of interest it discovers. In the three
contracts that we previously indicated should have had a clause to
restrict the contractor's eligibility for future work based on USAID
policy because they included evaluation services, one contract had the
clause to disclose postaward conflicts of interest discovered while
the other two did not. USAID officials in these cases, however, told
us that they take steps to mitigate potential organizational conflicts
of interest during the life of the contract. For example, for a USAID
contract for monitoring and evaluation services in Iraq, the personal
services contractor responsible for contract oversight told us that he
addressed potential conflicts of interest by limiting contact between
the contractors responsible for executing mission programs and the
contractor evaluating their services. Although DOD and State
regulations do not require contract clauses related to the disclosure
of conflicts of interest by contractors, changes to governmentwide
requirements on organizational conflicts of interest, including the
establishment of standard contract clauses, are being considered.
[Footnote 21]
Mitigation Efforts for Personal Conflicts of Interest Vary by Agency
and Contract Type:
Most requirements governing personal conflicts of interest that apply
to federal employees are generally not applicable to nonpersonal
services contractors and their employees. Since December 2007, the FAR
has required certain contractors to have a written code of business
ethics and conduct, although this requirement did not apply in most of
the nonpersonal services case studies we conducted.[Footnote 22] We
have previously reported that this requirement will not ensure that
the advice and assistance received from contractor employees is not
tainted by personal conflicts of interest.[Footnote 23] We recommended
in March 2008 that DOD develop and implement policy that requires
personal conflict of interest safeguards for certain defense
contractor employees that are similar to those required of DOD's
federal employees. In November 2009, DOD issued a memorandum providing
additional information on risks related to personal conflicts of
interest and how those risks should be addressed under current federal
regulations, but DOD's response to our recommendation is pending
resolution of a proposed amendment to the FAR to address personal
conflicts of interest by contractor employees performing acquisition
functions.[Footnote 24]
Several contracting officials told us that contractors have
responsibility to bring personal conflicts of interest to the agency's
attention. In our case studies, we found that contractors managed
personal conflicts of interest in a variety of ways. For example, in
two USAID case studies that included the award of grants, the
contractor included in its grant management plan criteria for
identifying contractor personnel with conflicts of interest and the
process for mitigating those conflicts. Representatives from a DOD
contractor providing construction quality assurance services in Iraq
and Afghanistan told us that they screen and interview all employees
they hire to identify personal conflicts of interest and require
employees to sign a form stating that they have no such conflicts. In
this and three other DOD case studies we conducted, agency contracting
and program officials stated that they attempt to identify and
mitigate potential personal conflicts of interest by reviewing the
résumés of proposed contractor employees.
The agencies vary in how they address personal conflicts of interest
among personal services contractors. DOD officials told us that the
department does not have specific policies related to conflicts of
interest among personal services contractors. USAID policy states that
personal services contractors are covered by all federal ethics laws
that apply to direct hire personnel, including requirements to file
financial disclosure forms.[Footnote 25] USAID policy requires the
contracting officer or executive officer who awards a personal
services contract to make a determination at the time of contract
award about the specific financial disclosure filing requirements that
will apply to the personal services contractor and to include that
determination as part of the contract. USAID officials complied with
this requirement in each of the six USAID personal services case
studies we conducted.[Footnote 26]
Unlike USAID, neither State nor its bureaus that hired personal
services contractors within our scope have guidance that specifically
addresses the applicability of federal ethics laws to personal
services contractors. According to the senior ethics counsel at State,
understanding which financial disclosure requirements apply to
personal services contractors is complicated and depends on the
personal services contractor's contract and the bureau's statutory
basis for hiring that personal services contractor. Our work at State
identified some confusion among contracting personnel and supervisors
of personal services contractors as to whether federal ethics laws,
including those related to financial disclosure requirements, were
applicable to personal services contractors. In the five personal
services case studies we conducted at State's Bureaus of Diplomatic
Security and International Narcotics and Law Enforcement Affairs,
contracting personnel and supervisors of personal services contractors
either were uncertain of how requirements to file financial disclosure
forms applied to personal services contractors, told us that the
requirements did not apply, or told us that the requirements had only
recently been applied at all or consistently to personal services
contractors. The five personal services contractors in these case
studies told us, however, that they were generally required to
complete financial disclosure forms or that they had completed
financial disclosure forms in the past year.
Agencies Appointed Oversight Personnel for Contracts but Did Not
Consider Enhanced Oversight for Contractors Closely Supporting
Inherently Governmental Functions:
In most case studies we conducted, the agencies had designated
oversight personnel to monitor contractors performing administration
functions for other contracts or grants in Iraq or Afghanistan. A
primary characteristic of a personal services contract is the
relatively continuous supervision and control of the personal services
contractor by a government employee, and in the case studies we
conducted, we generally found personal services contractors had
designated government supervisors who worked within the same program.
In 18 of 19 nonpersonal services case studies we conducted, agencies
had identified individuals to provide contract oversight, though the
extent of that oversight varied in part based on the functions
performed by the contractor and whether the contractor performed at
remote locations. For example, State officials told us that for a
contract to provide program and acquisition support for the
department's oversight of overseas security operations, including
those in Iraq and Afghanistan, government officials supported by the
contractor are collocated with contractor employees, and government
branch chiefs routinely meet with the contractor's program manager to
discuss contractor employee performance on assigned work. In contrast,
CORs in some quality assurance case studies conducted oversight
primarily of remote locations. For example, U.S. Army Corps of
Engineers officials told us that CORs for a construction quality
assurance contract conduct oversight primarily by reviewing contractor
reports and photos of work sites and conducting meetings with quality
assurance and construction contractor personnel. In several cases,
agency officials indicated that they did not maintain or could not
locate documentation of oversight activities.
Agencies faced challenges providing sufficient oversight of
contractors performing administration functions for other contracts in
Iraq or Afghanistan in several case studies we conducted. For example,
agency officials stated that when they cannot visit contractor work
sites for security reasons--as with some sites for the Defense Energy
Support Center's fuel delivery inspection contract in Afghanistan and
USAID's Monitoring and Evaluation Performance Program contract in
Iraq--their oversight is entirely remote. USAID officials told us that
other U.S. government officials, such as representatives from
provincial reconstruction teams, may be able to provide some insight
into contractor activities during times when those officials are at
contractor work sites. Defense Energy Support Center officials told us
that the inability of government personnel to visit contractor work
sites can make it difficult for them to verify the quality of work of
the contractor that is supporting the oversight of work performed by
other contractors. In addition, the COR for a U.S. Army Corps of
Engineers quality assurance contract told us that some contractor
personnel did not provide high-quality reports and that construction
oversight personnel who reviewed the reports on a daily basis
sometimes lacked the quality assurance expertise to direct the
contractor's quality assurance personnel. The COR told us that
training efforts were under way to address this issue. Further,
according to State officials, they had difficulty filling the
government deputy program manager position for State's aviation
quality assurance contract, which affected the department's plans to
provide continuous oversight of the contractor's technical operations
in Iraq since the deputy program manager was intended to provide in-
country oversight when the program manager was not in Iraq. In another
State case, contracting officials told us that oversight was conducted
entirely by the COR and program office staff but were unaware that
there was not a COR currently designated for the contract. The
officials later told us that staff turnover in Iraq had resulted in
the lack of a COR, and they were taking steps to try to get a new COR
appointed.
In the 19 nonpersonal services case studies we conducted, we found
that the contract or task order statements of work provided for the
contractor to perform functions that closely support inherently
governmental functions. For contractors administering other contracts,
this includes evaluating another contractor's performance, providing
inspection services, and performing tasks that might allow access to
confidential business or other sensitive information, among other
functions; for contractors administering grants, awarding or
recommending the award of grants closely supports the performance of
inherently governmental functions.[Footnote 27] We have previously
reported that when contractors provide services that closely support
inherently governmental functions, there is the potential for loss of
government control and accountability for mission-related policy and
program decisions, and that risk increases the closer the services
come to supporting inherently governmental functions. This loss of
government control may result in decisions that are not in the best
interest of the government and may increase vulnerability to waste,
fraud, and abuse. To address this risk, the FAR and Office of Federal
Procurement Policy guidance require that agencies provide greater
scrutiny and an enhanced degree of management oversight of contractors
performing services that tend to affect government decision making,
support or influence policy development, or affect program management.
[Footnote 28] This enhanced oversight would include assigning a
sufficient number of qualified government employees to provide
oversight and to ensure that agency officials retain control over and
remain accountable for policy decisions that may be based in part on a
contractor's performance and work products. These requirements for
enhanced oversight are not applicable to personal services
contractors, including the 13 personal services case studies we
conducted, because Office of Federal Procurement Policy guidance and
FAR restrictions on contractors performing inherently governmental
functions do not apply to these contractors.[Footnote 29]
Although we found that statements of work for all of the 19
nonpersonal services case studies we conducted provided for the
contractor to perform activities that closely supported inherently
governmental functions, we did not find evidence that the agencies
considered related requirements to provide greater scrutiny and an
enhanced degree of management oversight in these 19 cases. In our
prior work at DOD and the Department of Homeland Security, we found
that program and contracting personnel were unaware of requirements
related to providing enhanced oversight of services that closely
support inherently governmental functions.[Footnote 30] In the case
studies we conducted, we found that many contracting and program
officials were unfamiliar with the concept of contractors closely
supporting inherently governmental functions. Further, DOD, State, and
USAID regulations generally do not require contracting or program
officials to document an assessment of whether contractors closely
support inherently governmental functions or any consideration given
to enhanced oversight.[Footnote 31] According to DOD, State, and USAID
officials, no specific guidance has been developed that defines how
contracting and program officials should conduct enhanced oversight.
In November 2009, we recommended that DOD require program and
contracting officials to document risks and risk mitigation steps when
awarding any contract or issuing any task order for services closely
supporting inherently governmental functions and develop guidance to
identify approaches to enhance management oversight for these
contracts or task orders. DOD concurred with these recommendations and
identified a number of actions that would be taken to address them.
[Footnote 32]
Conclusions:
Contracting in contingency environments such as Iraq and Afghanistan
presents unique security and logistical challenges, including
difficulty traveling to dangerous or remote locations and frequent
rotations among government personnel. Despite such challenges,
effective oversight of contractors and grantees remains critical to
help ensure that contractors are meeting contract requirements and
grant funds are being used for their intended purposes. Using
contractors to support the administration and oversight of other
contracts and grants can facilitate the government's ability to carry
out this critical function. Our prior work and the Office of
Management and Budget's July 2009 guidance, however, have underscored
the importance of strategic planning to guide decisions related to how
contractors should be used to support agency missions. Until DOD,
State, and USAID fully consider in their workforce planning efforts
the extent to which contractors should perform contract and grant
administration functions, the agencies will not be positioned to
consider the potential implications of relying on contractors to
perform these functions, such as a loss of institutional capacity to
perform mission-critical functions or greater costs.
The agencies did not fully address risks related to potential
conflicts of interest and oversight for contractors performing
contract or grant administration functions. For example, USAID did not
always address potential organizational conflicts of interest in its
contracts in accordance with agency policy, though ongoing efforts to
revise federal organizational conflict of interest regulations could
potentially improve USAID's and other agencies' ability to mitigate
this risk in the future. Additionally, without management
understanding of whether federal ethics laws related to personal
conflicts of interest apply to the department's personal services
contractors, State runs the risk of inconsistent application of these
laws, potentially limiting the department's ability to ensure that
contract and grant administration decisions are made in the best
interest of the government. Further, DOD, State, and USAID's lack of
consideration of the need to provide greater scrutiny and an enhanced
degree of management oversight when nonpersonal services contractors
closely support inherently governmental functions may impair the
agencies' ability to ensure the appropriate level of oversight. The
agencies will continue to face this challenge without an effective
process to identify contracts that closely support inherently
governmental functions and guidance to assist program and contracting
officials.
In 2009, we made recommendations to DOD with regard to improving the
department's ability to plan for the use of contractors supporting
acquisition functions and mitigate the risks of contractors closely
supporting the performance of inherently governmental functions. Since
the department concurred with these recommendations and has identified
steps it plans to take to address them, we are not making any
additional recommendations to DOD.
Recommendations for Executive Action:
To improve State and USAID's ability to plan effectively for the use
of contractors to perform contract or grant administration functions
and to improve oversight of contracts that closely support inherently
governmental functions in Iraq, Afghanistan, and future contingency
environments where the agencies rely heavily on contractors, we
recommend that the Secretary of State and Administrator of USAID take
the following three actions:
* Determine the extent to which contractors should perform
administration functions for other contracts and grants in accordance
with strategic human capital planning principles outlined in the
Office of Management and Budget's July 2009 multisector workforce
guidance.
* Develop guidance to identify approaches that contracting and program
officials should take to enhance management oversight when nonpersonal
services contractors provide services that closely support inherently
governmental functions.
* Before the award of any nonpersonal services contract or task order
for services closely supporting inherently governmental functions,
require that program and contracting officials document their
consideration of related risks and the steps that have been taken to
mitigate such risks.
To improve State's ability to mitigate risks related to potential
personal conflicts of interest among personal services contractors, we
recommend that the Secretary of State clarify the department's
policies regarding the application of federal ethics laws to personal
services contractors.
Agency Comments and Our Evaluation:
We provided DOD, State, and USAID with a draft of this report for
their review and comment. DOD provided technical comments, which we
incorporated as appropriate. State agreed with our recommendations and
identified steps that the department plans to take to address each
recommendation. State's comments, along with our response, are
reprinted in appendix III. USAID generally agreed with our
recommendations and identified steps the agency is taking or plans to
take to address them. With regard to our recommendation related to
determining the extent to which contractors should perform contract or
grant administration functions, USAID noted that it is already in the
process of determining the extent to which nonpersonal services
contractors, which USAID refers to as institutional support
contractors, should perform such functions. As we noted in the report,
however, USAID's current efforts do not address the extent to which
nonpersonal services contractors performing such functions outside of
the United States, such as in Iraq or Afghanistan, should be used. We
believe it is important for the agency to make such a determination to
position itself to effectively mitigate the potential risks associated
with reliance on contractors. USAID also provided some points of
clarity related to the recommendations, and we incorporated the
comments in the report as appropriate. USAID's comments, along with
our responses, are reprinted in appendix IV.
We are sending copies of this report to the Secretary of Defense, the
Secretary of State, the Administrator of the U.S. Agency for
International Development, and interested congressional committees.
The report also is available at no charge on GAO's Web site at
[hyperlink, http://www.gao.gov].
If you or your staff have any questions concerning this report, please
contact me at (202) 512-4841 or huttonj@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report. GAO staff who made major
contributions to this report are listed in appendix V.
Signed by:
John P. Hutton:
Director:
Acquisition and Sourcing Management:
List of Committees:
The Honorable Carl Levin:
Chairman:
The Honorable John McCain:
Ranking Member:
Committee on Armed Services:
United States Senate:
The Honorable John F. Kerry:
Chairman:
The Honorable Richard G. Lugar:
Ranking Member:
Committee on Foreign Relations:
United States Senate:
The Honorable Joseph I. Lieberman:
Chairman:
The Honorable Susan M. Collins:
Ranking Member:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable Dianne Feinstein:
Chairman:
The Honorable Christopher S. Bond:
Vice Chairman:
Select Committee on Intelligence:
United States Senate:
The Honorable Ike Skelton:
Chairman:
The Honorable Howard P. McKeon:
Ranking Member:
Committee on Armed Services:
House of Representatives:
The Honorable Howard L. Berman:
Chairman:
The Honorable Ileana Ros-Lehtinen:
Ranking Member:
Committee on Foreign Affairs:
House of Representatives:
The Honorable Edolphus Towns:
Chairman:
The Honorable Darrell Issa:
Ranking Member:
Committee on Oversight and Government Reform:
House of Representatives:
The Honorable Silvestre Reyes:
Chairman:
The Honorable Peter Hoekstra:
Ranking Member:
Permanent Select Committee on Intelligence:
House of Representatives:
[End of section]
Appendix I: Scope and Methodology:
The National Defense Authorization Act for Fiscal Year 2008 directed
us to report annually on Department of Defense (DOD), Department of
State (State), and U.S. Agency for International Development (USAID)
contracts in Iraq and Afghanistan, including information on any
specific contract or class of contracts the Comptroller General
determines raises issues of significant concern. Pursuant to that
mandate, we reviewed DOD, State, and USAID's use of contractors,
including personal services contractors, to perform administration
functions for contracts or grants with performance in Iraq and
Afghanistan for fiscal year 2008 and the first half of fiscal year
2009.[Footnote 33] Specifically, we analyzed (1) the extent to which
DOD, State, and USAID rely on contractors to perform administration
functions for other contracts and grants in Iraq and Afghanistan; (2)
the reasons behind decisions to use contractors to perform these
functions and whether the decisions are guided by strategic workforce
planning; and (3) whether the agencies have considered and mitigated
conflict of interest and oversight risks related to contractors
performing contract or grant administration functions.
To determine the extent to which DOD, State, and USAID rely on
contractors to perform administration functions for other contracts
and grants in Iraq and Afghanistan,[Footnote 34] we obtained data from
the agencies on contracts and task orders with at least 1 day of
performance in fiscal year 2008 or the first half of fiscal year 2009
for which duties included administration functions for other contracts
or grants with performance in Iraq, Afghanistan, or both.[Footnote 35]
The data we obtained from the agencies were intended to include all
contracts with administration functions for other contracts and grants
with performance in Iraq and Afghanistan, regardless of the place of
performance of the contractor performing administration functions. For
example, some contracts or task orders in our scope included
performance in the United States in support of the administration of
contracts or grants with performance in Iraq or Afghanistan.
To assess whether the data obtained from the agencies were accurate
and appropriately categorized as within the scope of this engagement,
we reviewed contract documents for a selection of reported contracts.
We reviewed contract documents for all 49 contracts or task orders
reported for DOD and 37 of the 39 contracts or task orders reported by
State. The 2 contracts we did not review at State were contracts for
which officials could not identify the task orders that were within
our scope. For USAID, we reviewed contract documents for all 17
nonpersonal services contracts or task orders reported by the agency
and selected 25 of 81 personal services contract files for review
during our fieldwork in Iraq and Afghanistan.[Footnote 36] For the
most part, we determined that the contracts or task orders we reviewed
had been appropriately reported by the agencies as being within our
scope. When we noted discrepancies, we gathered additional information
about contracts or task orders reported by the agencies, and if we
determined that a contract or task order was not within our scope, we
removed it from our analysis.
We attempted to identify additional contracts or task orders within
our scope by reviewing data from the Federal Procurement Data System -
Next Generation (FPDS-NG) and data provided to GAO by these agencies
for a related engagement. Specifically, for both sources of data, we
used a list of keywords related to contract and grant administration
to search for contracts or task orders not reported by the agencies
that might be within our scope.[Footnote 37] When we identified such
contracts or task orders, we followed up with the agencies to obtain
contract documents and additional information from knowledgeable
officials as necessary to determine whether the contracts or task
orders were within our scope. If we determined that the contracts or
task orders were within our scope, we added them to our analysis. In
total, we added 62 contracts or task orders as a result of our data
reliability reviews. Although we found that the agencies' data were
incomplete based on these additional contracts and task orders we
identified, we determined that taken collectively, data provided by
the agencies and data on the contracts and task orders we identified
and included in our scope were sufficiently reliable to establish the
minimum number of contracts and task orders active in fiscal year 2008
or the first half of fiscal year 2009 awarded by DOD, State, and USAID
to perform the functions within our scope.
For the contracts and task orders within our scope, we also obtained
data from FPDS-NG or the agencies on the total obligations for the
contracts or task orders through March 31, 2009. To assess the
reliability of the obligation data from FPDS-NG, we compared them with
related data from our contract file reviews for the nonpersonal
services contracts we selected as case studies. In two cases at USAID,
we identified discrepancies. In these cases, we followed up with the
agency to determine the reasons for the discrepancies and made
corrections as necessary. We determined that the data were
sufficiently reliable for the purposes of our review, although
obligations for some USAID contracts in Afghanistan may be
underreported in FPDS-NG because of discrepancies between USAID
information systems and FPDS-NG. State and USAID obligations for
personal services contracts were generally not included in FPDS-NG, so
we obtained obligation data from the agencies for these contracts. We
assessed the reliability of the data provided by the agencies by
comparing them to related data we collected during our file reviews
for the personal services contracts we selected as case studies. Based
on this assessment, we determined that the data were sufficiently
reliable for the purposes of our review. We were unable to determine
how much of the amount obligated by the agencies on the contracts or
task orders within our scope was specifically obligated for the
performance of contract or grant administration functions in Iraq or
Afghanistan. Some of the contracts or task orders included the
performance of functions besides contract or grant administration or
the performance of administration functions for contracts or grants
with performance outside of Iraq and Afghanistan, but FPDS-NG and
agency obligation data were not detailed enough to allow us to isolate
the amount obligated for other functions or locations.
To gather information about the reasons behind decisions to use
contractors to perform functions within our scope, we purposefully
selected 13 personal services contracts and 19 nonpersonal services
contracts at DOD, State, and USAID for case studies to provide a cross
section of types of contracts, locations, and functions performed. For
these case studies, we conducted fieldwork in Iraq, Afghanistan, and
the United States. We reviewed available documentation of agencies'
justifications for using contractors, such as acquisition strategies
and relevant determinations and findings for the contracts we
selected. We also interviewed agency officials, such as contracting
officers, program managers, and contracting officers' representatives
(COR), about the reasons for using contractors to perform contract or
grant administration functions. To determine the extent to which
agencies had developed strategies to inform decisions about the use of
contractors to perform these functions, we reviewed agency workforce
planning documents, such as strategic human capital plans. We also
analyzed relevant guidance, including DOD Instruction 1100.22,
Guidance for Determining Workforce Mix, and Office of Management and
Budget and DOD guidance related to insourcing, and reviewed our prior
work on the inclusion of contractors in workforce planning. Further,
we interviewed knowledgeable agency officials about steps taken to
include contractors in agency workforce planning efforts.
To assess the agencies' consideration and mitigation of conflict of
interest and oversight risks related to contractors performing
contract or grant administration functions, we reviewed relevant
federal regulations and agency policy and analyzed data collected
through the case studies we conducted. Specifically, to determine the
steps taken by the agencies to address risks related to potential
organizational and personal conflicts of interest, we analyzed
contract clauses and other contract documentation relevant to
conflicts of interest. To determine the steps taken by the agencies to
address risks related to oversight, we analyzed relevant contract
documentation, such as COR appointment letters, surveillance or
contract administration plans, and documentation of the consideration
of whether contractors closely supported inherently governmental
functions when available. To gain additional insight into how
potential conflict of interest and oversight risks were addressed by
the agencies, we interviewed agency officials responsible for
contracting policy as well as officials such as contracting officers,
CORs, and program officials responsible for the contracts we selected
as case studies. Our review did not assess the effectiveness of
contractors performing contract or grant administration functions for
other contracts or grants.
We conducted this performance audit from February 2009 through April
2010 in accordance with generally accepted government auditing
standards. 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.
[End of section]
Appendix II: Summary of Agency Contracts and Task Orders:
DOD, State, and USAID relied on contractors to perform a wide range of
administration functions for contracts and grants with performance in
Iraq and Afghanistan. Our review found 223 contracts and task orders
active during fiscal year 2008 or the first half of fiscal year 2009
that included the performance of administration functions for other
contracts or grants in Iraq and Afghanistan. Tables 7, 8, and 9
provide more details about these contracts and task orders.
Table 7: DOD Contracts and Task Orders Active in Fiscal Year 2008 or
the First Half of Fiscal Year 2009 That Include Administration
Functions for Other Contracts or Grants in Iraq and Afghanistan:
Nonpersonal services contracts/task orders:
Supporting Iraq: $23 million;
Supporting Afghanistan: $37 million;
Supporting Iraq and Afghanistan: $8 million;
Total: $68 million.
Personal services contracts/task orders:
Supporting Iraq: $1 million;
Supporting Afghanistan: $9 million;
Supporting Iraq and Afghanistan: 0;
Total: $10 million.
Total:
Supporting Iraq: $24 million;
Supporting Afghanistan: $46 million;
Supporting Iraq and Afghanistan: $8 million;
Total: $78 million.
Obligations as of March 31, 2009[A]:
Supporting Iraq: $170.9 million;
Supporting Afghanistan: $52.5 million;
Supporting Iraq and Afghanistan: $70.4 million;
Total: $293.8 million.
Source: GAO analysis of DOD and FPDS-NG data.
[A] We were unable to determine how much of this amount was
specifically obligated for the performance of contract or grant
administration functions in Iraq or Afghanistan because, while some of
the contracts or task orders within the scope of this engagement
include administration functions for contracts or grants with
performance outside of Iraq and Afghanistan or the performance of
functions besides contract or grant administration, FPDS-NG and agency
obligation data were not detailed enough to allow us to isolate the
amount obligated for other functions or locations.
[End of table]
Table 8: State Contracts and Task Orders Active in Fiscal Year 2008 or
the First Half of Fiscal Year 2009 That Include Administration
Functions for Other Contracts or Grants in Iraq and Afghanistan:
Nonpersonal services contracts/task orders:
Supporting Iraq: $5 million;
Supporting Afghanistan: $1 million;
Supporting Iraq and Afghanistan: $14 million;
Total: $20 million.
Personal services contracts/task orders:
Supporting Iraq: $7 million;
Supporting Afghanistan: $5 million;
Supporting Iraq and Afghanistan: $14 million;
Total: $26 million.
Total:
Supporting Iraq: $12 million;
Supporting Afghanistan: $6 million;
Supporting Iraq and Afghanistan: $28 million;
Total: $46 million.
Obligations as of March 31, 2009[A]:
Supporting Iraq: $12.1 million;
Supporting Afghanistan: $2.9 million;
Supporting Iraq and Afghanistan: $26.0 million;
Total: $40.9 million.
Source: GAO analysis of State and FPDS-NG data.
Note: Numbers may not add to totals because of rounding:
[A] We were unable to determine how much of this amount was
specifically obligated for the performance of contract or grant
administration functions in Iraq or Afghanistan because, while some of
the contracts or task orders within the scope of this engagement
include administration functions for contracts or grants with
performance outside of Iraq and Afghanistan or the performance of
functions besides contract or grant administration, FPDS-NG and agency
obligation data were not detailed enough to allow us to isolate the
amount obligated for other functions or locations.
[End of table]
Table 9: USAID Contracts and Task Orders Active in Fiscal Year 2008 or
the First Half of Fiscal Year 2009 That Include Administration
Functions for Other Contracts or Grants in Iraq and Afghanistan:
Nonpersonal services contracts/task orders:
Supporting Iraq: $5 million;
Supporting Afghanistan: $11 million;
Supporting Iraq and Afghanistan: 0;
Total: $16 million.
Personal services contracts/task orders:
Supporting Iraq: $30 million;
Supporting Afghanistan: $53 million;
Supporting Iraq and Afghanistan: 0;
Total: $83 million.
Total:
Supporting Iraq: $35 million;
Supporting Afghanistan: $64 million;
Supporting Iraq and Afghanistan: 0;
Total: $99 million.
Obligations as of March 31, 2009[A]:
Supporting Iraq: $365.4 million[B];
Supporting Afghanistan: $286.1 million[B,C];
Supporting Iraq and Afghanistan: $0;
Total: $651.6 million[B,C].
Source: GAO analysis of USAID and FPDS-NG data.
Note: Numbers may not add to totals because of rounding:
[A] We were unable to determine how much of this amount was
specifically obligated for the performance of contract or grant
administration functions in Iraq or Afghanistan because, while some of
the contracts or task orders within the scope of this engagement
include administration functions for contracts or grants with
performance outside of Iraq and Afghanistan or the performance of
functions besides contract or grant administration, FPDS-NG and agency
obligation data were not detailed enough to allow us to isolate the
amount obligated for other functions or locations.
[B] These obligations include more than $116 million reported by USAID
for grants that were awarded by contractors in Iraq on behalf of
USAID, as authorized in the terms of their contracts. USAID
contractors also awarded grants on behalf of USAID in Afghanistan, but
USAID officials told us that the Afghanistan mission does not track
grants awarded by contractors.
[C] Obligations for some USAID contracts in Afghanistan may be
underreported in FPDS-NG because of discrepancies between USAID
information systems and FPDS-NG.
[End of table]
[End of section]
Appendix III: Comments from the Department of State:
Note: GAO's comments supplementing those in the report text appear at
the end of this appendix.
United States Department of State:
Chief Financial Officer:
Washington, D.C. 20520:
April 2, 2010:
Ms. Jacquelyn Williams-Bridgers:
Managing Director:
International Affairs and Trade:
Government Accountability Office:
441 G Street, N.W.
Washington, D.C. 20548-0001:
Dear Ms. Williams-Bridgers:
We appreciate the opportunity to review your draft report,
"Contingency Contracting: Improvements Needed in Management of
Contractors Supporting Contract and Grant Administration in Iraq and
Afghanistan," GAO Job Code 120812.
The enclosed Department of State comments are provided for
incorporation with this letter as an appendix to the final report.
If you have any questions concerning this response, please contact
Jason Passaro, Director, Office of Commercial Services Management,
Bureau of Administration at (703) 875-5114.
Sincerely,
Signed by:
James L. Millette:
cc: GAO ” Anthony Moran:
A ” Steven Rodriguez:
State/OIG ” Mark Duda:
[End of letter]
Department of State Comments on GAO Draft Report:
Contingency Contracting: Improvements Needed in Management of
Contractors Supporting Contract and Grant Administration in Iraq and
Afghanistan (GA0-10-357, GAO Code 120812):
The Department of State appreciates the opportunity to comment on
GAO's draft report entitled "Contingency Contracting: Improvements
Needed in Management of Contractors Supporting Contract and Grant
Administration in Iraq and Afghanistan."
The GAO report recommends the following to the Secretary of State:
Recommendation 1: Determine the extent to which contractors should
perform administration functions for other contracts and grants in
accordance with strategic human capital planning principles outlined
in the Office of Management and Budget's July 2009 multi-sector
workforce guidance.
Response: The Department concurs with the GAO's recommendation that
the determination of the extent to which contractors can and should
perform services in the administration of other contracts and grants
should be in accordance with strategic human capital planning
principles and Office of Management and Budget (OMB) guidance.
In accordance with OMB's Multi-Sector Workforce Management (MSWM)
guidance, the Department is conducting a pilot study, which is being
used to examine an organization's workforce mix and determine the
appropriate balance of contractor and government positions. The
process includes a determination as to whether or not the contracted
functions are inherently governmental (or closely associated) or
mission critical. The Department also assesses costs in its
determinations as appropriate and has developed a costing methodology
to perform these comparisons. The Department notes that our MSWM
program has included strategic human capital planning principles at
each step of development, pilot testing, and implementation.
The Acquisitions Management Office (A/LM/AQM), the Office of the
Procurement Executive (A/OPE), the Commercial Services Management
Office (A/CSM), the Human Resources Resource Management Analysis Office
(HR/RMA) and the Office of the Legal Advisor (L/BA) will work together
to identify the general extent to which contractors should perform
administrative functions for contracts and grants. In accordance with
the Acquisition Workforce Human Capital Plan, AQM will significantly
reduce reliance on nonpersonal service contractors to perform
acquisition work.
Recommendation 2: Develop guidance to identify approaches that
contracting and program officials should take to enhance management
oversight when nonpersonal services contractors provide services that
closely support inherently governmental functions.
Response: The Department agrees with the GAO's recommendation that
guidance be developed to aid contracting and program officials in
making vital decisions about the appropriateness of using nonpersonal
service contractors in functions that closely support inherently
governmental operations. Through its Quadrennial Diplomacy and
Development Review (QDDR), the Department is focusing efforts on its
workforce balance and rebuilding core capabilities within the
Department. The MSWM pilots being concluded are resulting in the
development of a rigorous process to examine contracted functions to
determine if it would be more appropriate to perform the work with
government employees. The Department notes that this will result in
balanced workforce guidance and criteria that will be disseminated
Department-wide. The criteria will include the process for examining
contractor duties to determine if it is an inherently governmental
process, or closely associated with inherently governmental. Functions
which are closely associated must be examined using an extensive list
of questions to highlight operational, conflict of interest, or other
issues which present an unacceptable level of risk.
Recommendation 3: Require before the award of any nonpersonal services
contract or task order for services closely supporting inherently
governmental functions that program and contracting officials document
their consideration of related risks and the steps that have been
taken to mitigate such risks.
Response: The Department agrees and the Acquisitions Management Office
(A/LM/AQM), the Office of the Procurement Executive (A/OPE), the
Commercial Services Management Office (A/CSM), and the Office of the
Legal Advisor (L/BA) will work together to identify the types of
services closely supporting inherently governmental functions that
occur on our contracts. Acquisition planning documentation will
address the decision to use nonpersonal services contractors instead
of federal personnel. Additional considerations will include avoiding
conflicts of interest, correct identification of affiliation, and
appropriate reservation of decision-making authority to federal
personnel.
Recommendation 4: To improve State's ability to mitigate risks related
to potential personal conflicts of interest among personal services
contractors, we recommend that the Secretary of State clarify the
Department's policies regarding the application of federal ethics laws
to personal services contractors.
Response: The Department of State agrees that federal ethics rules
applicable to personal services contractors should be clarified. The
Office of Ethics (L/Ethics) is working with the Office of the
Procurement Executive (A/OPE) and the Commercial Services Management
Office (A/CSM) to standardize and clarify the application of federal
ethics laws to personal service contractors. A/OPE will issue guidance
to require the use of a standard clause in all Personal Services
Contracts regardless of bureau that will advise personal services
contractors of their ethics responsibilities. We would note, however,
that a number of federal agencies and departments also have authority
to employ personal service contractors. The Office of Government
Ethics (OGE) is responsible for providing standards of conduct
guidance to employees of the Executive Branch. GAO should consider
requesting OGE to provide regulatory guidance on the scope of ethics
obligations to all personal services contractors so that there is
consistency in the Executive Branch. While the Department of State
intends on developing a standard clause applicable to all State
personal services contractors, the more systemic approach is one
standard applicable to all Executive Branch personal services
contractors. [See comment 1]
The following are GAO's supplemental comments on the Department of
State's letter dated April 2, 2010.
GAO Comments:
1. State's comments raised an issue about whether there was a need for
additional regulatory guidance to help determine the scope of ethics
obligations applicable to all executive branch personal services
contractors. As we focused on DOD, State, and USAID, whether there is
a need for consistent guidance across the executive branch was beyond
the scope of this work.
[End of section]
Appendix IV: Comments from the U.S. Agency for International
Development:
Note: GAO's comments supplementing those in the report text appear at
the end of this appendix.
USAID:
From The American People:
April 8, 2010:
John P. Hutton:
Director, Acquisition and Sourcing Management:
U.S. Government Accountability Office:
Washington, DC 20548:
Dear Mr. Hutton,
I am pleased to provide the U.S. Agency for International
Development's (USAID) formal response to the GAO draft report
entitled: "Contingency Contracting: Improvements Needed in Management
of Contractors Supporting Contract and Grant Administration in Iraq
and Afghanistan" (GA0-10-357).
We appreciate the time and attention the GAO team paid to this issue
and the intricacies involved in understanding the various contracting
mechanisms and the appropriate risk mitigation. After review of the
draft comments within the report, we appreciate GAO's overall
findings. We do offer some points of clarity. however, in relation to
the recommendations posed in the draft report.
The enclosed USAID comments are provided for incorporation with this
letter as an appendix to the final report.
Thank you for the opportunity to respond to the GAO draft report and
for the courtesies extended by your staff in the conduct of this audit
review.
Sincerely,
Signed by:
Drew W. Luten:
Acting Assistant Administrator:
Bureau for Management:
Enclosure: a/s:
[End of letter]
USAID Comments On GAO Draft Report No. GAO-10-357:
GAO Recommendation 1: "Determine the extent to which contractors
should perform administration functions for other contracts and grants
in accordance with strategic human capital planning principles
outlined in the Office of Management and Budget's July 2009 multi-
sector workforce guidance."
USAID Response: USAID is already in the process of determining to what
extent institutional and other contractors should perform
administration functions. The USAID Multi-Sector Work Force Pilot,
which will be complete by April 30, 2010. will function to inform the
integration of institutional support contractors into USAID's
Consolidated Workforce Planning Model (CWWPM).
As part of the Agency plan to rebuild, USAID will be doubling the size
of its Foreign Service personnel. The Foreign Service personnel system
is a rank-in-person model (similar to that of the military). Most new
employees will enter at the junior officer rank. As these new
employees progress up the ranks, they will move into jobs currently
occupied by non-U.S. Direct Hires, excluding our Foreign Service
Nationals (FSNs).
The USAID FSN staff represent our permanent local staff and are
critical to helping the Agency achieve its development mission in each
host country where we work. While their roles and responsibilities
differ from those of U.S. Personal Service Contractors, who are U.S.
citizens hired as temporary employees. FSNs' work is closely monitored
in a similar fashion as any U.S. government employee.
Third Country Nationals (TCNs) are recruited by USAID missions in other
countries to provide temporary support, training and mentoring to
local FSNs. In recent years, most of USAID/Iraq's local FSNs and their
families have been targeted and intimidated by violent groups for
their association with the USG. As a result, the vast majority of
USAID/Iraq FSNs have qualified for asylum in the US, making it
difficult to recruit and retain them. TCNs have proven to be a
valuable temporary resource to make up for the current difficulties in
recruiting local FSNs. For this reason, please note on page 12 [now on
p. 10] of the draft report that 8 oldie 10 "personal services
contractors" who were responsible for contracting office support are
TCNs. TCNs are not considered temporary employees, like U.S. PSCs, as
many often return to their country and continue as local permanent
staff with USAID. These staff from third countries are on temporary
duty (TDY) and are critical to helping the Agency achieve its
development mission during a shortage of local permanent FSN staff.
[See comment 1]
In regards to institutional support contractors. it is important to
note that those institutional contractors who implement USAID
projects. including grants under contracts, are considered under
USAIDs program policy and planning guidance, not under the Agency
workforce planning.
GAO Recommendation 2: "Develop guidance to identify approaches that
contracting and program officials should take to enhance management
oversight when non-personal services contractors provide services that
closely support inherently government functions.
USAID Response: USAID ensures within institutional support contracts
that the appropriate oversight functions are involved throughout the
life of an award. Many of our institutional contractors are closely
monitored on a daily basis by the cognizant Contracting Officer's
Technical Representative. We do agree with the GAO, however, that up-
to-date guidance for enhancing management oversight of institutional
support contractors and their employees would be beneficial to the
Agency as a whole.
GAO Recommendation 3: "Require before the award of any non-personal
services contract or task order for services closely supporting
inherently governmental functions that program and contracting
officials document their consideration of related risks and the steps
that have been taken to mitigate such risks."
USAID Response: USAID will consider how to best address this
recommendation through its current pre-award procedures and based upon
guidance, per recommendation 2.
We do wish to address one point raised by the GAO draft in Table 6 on
page 16.[now on p. 13] "Local Economy Development." USAID does issue
contracts in Iraq and Afghanistan that do authorize specific
institutional contractors to issue grants under contracts. The primary
purpose of such grants is to build local capacity; these grants are an
integral part of the project itself rather than a reflection of an
implementing partner performing an inherently governmental function.
We mitigate the risks associated with these mechanisms through our
Agency policy, which requires that for each of the contracts where
grants may be let, the Head of the Contracting Activity---only after
legal officer clearance--make the final affirmative determination as
to whether specific criteria are satisfied. If a contractor is
authorized to issue grants. the Agency requires substantial
involvement with the development of the selection criteria and the
selection of the grantee. Contractor-executed grants must follow the
same requirements as Agency-issued grants, but as a final risk
management tool, USAID may terminate the grants made under the
contract at any time. [See comment 2]
USAID recognizes the increased risks in using a contractor to perform
grant-making and administration functions but believes that we
mitigate these risks through: I) the approvals required by the Agency
before authorization; 2) the Agency's authority over the grant pre-
award and during administration; and 3) the requirements imposed on
the contractor to comply with Agency policy. USA ID also believes
building local capacity, through the use of small grants, is an
important development best practice that needs to be carefully
maintained.
The following are GAO's supplemental comments on the U.S. Agency for
International Development's letter dated April 8, 2010.
GAO Comments:
1. We have revised table 2 to reflect USAID's comments.
2. As noted in the report, we consider contractors responsible for
assisting in the award of grants as closely supporting an inherently
governmental function. USAID's Automated Directives System provides
guidance on the use of contractors to award grants on behalf of USAID.
We have reflected this guidance in the final report.
[End of section]
Appendix V: GAO Contact and Staff Acknowledgments:
GAO Contact:
John P. Hutton, (202) 512-4841 or huttonj@gao.gov.
Acknowledgments:
In addition to the contact named above, Timothy DiNapoli, Assistant
Director; Johana R. Ayers; Shea Bader; Noah Bleicher; John C.
Bumgarner; Morgan Delaney Ramaker; Kathryn M. Edelman; Walker
Fullerton; Katherine Hamer; Art James, Jr.; Justin M. Jaynes; Julia
Kennon; Anne McDonough-Hughes; Christopher J. Mulkins; Jason Pogacnik;
Thomas P. Twambly; and Gwyneth B. Woolwine made key contributions to
this report.
[End of section]
Footnotes:
[1] See, for example, GAO, Rebuilding Iraq: DOD and State Department
Have Improved Oversight and Coordination of Private Security
Contractors in Iraq, but Further Actions Are Needed to Sustain
Improvements, [hyperlink, http://www.gao.gov/products/GAO-08-966]
(Washington, D.C.: July 31, 2008), and Afghanistan Reconstruction:
Despite Some Progress, Deteriorating Security and Other Obstacles
Continue to Threaten Achievement of U.S. Goals, [hyperlink,
http://www.gao.gov/products/GAO-05-742] (Washington, D.C.: July 28,
2005).
[2] Pub. L. No. 110-181, § 863. For earlier reports issued pursuant to
this mandate, see GAO, Contingency Contracting: DOD, State, and USAID
Contracts and Contractor Personnel in Iraq and Afghanistan,
[hyperlink, http://www.gao.gov/products/GAO-09-19] (Washington, D.C.:
Oct. 1, 2008), and Contingency Contracting: DOD, State, and USAID
Continue to Face Challenges in Tracking Contractor Personnel and
Contracts in Iraq and Afghanistan, [hyperlink,
http://www.gao.gov/products/GAO-10-1] (Washington, D.C.: Oct. 1, 2009).
[3] The Federal Acquisition Regulation (FAR) defines "personal
services contracts" as contracts that, by their express terms or as
administered, make the contractor personnel appear to be, in effect,
government employees. FAR § 2.101.
[4] For the purposes of this report, we use "contractor" to include
both personal and nonpersonal services contractors. When it is
necessary to distinguish between the two types of contractors, we use
"personal services contractor" and "nonpersonal services contractor."
[5] The FAR defines a task order as an order for services placed
against an established contract or with government sources. FAR §
2.101. The data we collected from the agencies were intended to
include information on all contracts with administration functions for
other contracts and grants with performance in Iraq and Afghanistan,
regardless of the place of performance of the contractor performing
administration functions. For example, the data we received included
information on contracts with performance in the United States in
support of contracts or grants with performance in Iraq or Afghanistan.
[6] We reviewed contract documents for all but two nonpersonal
services contracts or task orders reported by the agencies. The two
contracts we did not review were State contracts for which officials
could not identify the task orders that were within our scope. We also
reviewed contract documents for all personal services contracts
reported by DOD and State, and selected 25 of 81 personal services
contracts reported by USAID for review during our fieldwork in Iraq
and Afghanistan.
[7] See, for example, GAO, Defense Contracting: Army Case Study
Delineates Concerns with Use of Contractors as Contract Specialists,
[hyperlink, http://www.gao.gov/products/GAO-08-360] (Washington, D.C.:
Mar. 26, 2008), and Defense Contracting: Additional Personal Conflict
of Interest Safeguards Needed for Certain DOD Contractor Employees,
[hyperlink, http://www.gao.gov/products/GAO-08-169] (Washington, D.C.:
Mar. 7, 2008).
[8] On March 31, 2010, the Office of Federal Procurement Policy issued
a proposed policy letter that would, among other things, clarify what
functions are inherently governmental and strengthen guidance related
to functions closely associated with the performance of inherently
governmental functions. Public comments on the proposed policy letter
are due by June 1, 2010.
[9] FAR § 7.502.
[10] State is authorized under section 2 of the State Department Basic
Authorities Act of 1956, as amended, to contract for personal
services. 22 U.S.C. § 2669(c) and (n). USAID is authorized under
section 636 of the Foreign Assistance Act of 1961, as amended, to
contract for personal services. 22 U.S.C. § 2396(a)(3). DOD has
authority under 10 U.S.C. § 129b to contract for personal services.
[11] USAID's Automated Directives System, Section 302.3.4.8, defines
"grants under contract" as a contract that provides for a USAID
contractor to execute grants with both nonprofit and for-profit
nongovernmental organizations.
[12] GAO, DOD's High-Risk Areas: Actions Needed to Reduce
Vulnerabilities and Improve Business Outcomes, [hyperlink,
http://www.gao.gov/products/GAO-09-460T] (Washington, D.C.: Mar. 12,
2009).
[13] GAO, A Model of Strategic Human Capital Management, [hyperlink,
http://www.gao.gov/products/GAO-02-373SP] (Washington, D.C.: Mar. 15,
2002).
[14] Deputy Secretary of Defense, Insourcing Contracted Services -
Implementation Guidance (May 28, 2009). The Quadrennial Defense Review
defines "total force" as comprising active and reserve military,
civilian, and contractor personnel.
[15] GAO, Human Capital: Opportunities Exist to Build on Recent
Progress to Strengthen DOD's Civilian Human Capital Strategic Plan,
[hyperlink, http://www.gao.gov/products/GAO-09-235] (Washington, D.C.:
Feb. 10, 2009), and Department of Defense: Additional Actions and Data
Are Needed to Effectively Manage and Oversee DOD's Acquisition
Workforce, GAO-09-342 (Washington, D.C.: Mar. 25, 2009).
[16] [hyperlink, http://www.gao.gov/products/GAO-09-342].
[17] GAO, Contingency Contracting: Further Improvements Needed in
Agency Tracking of Contractor Personnel and Contracts in Iraq and
Afghanistan, [hyperlink, http://www.gao.gov/products/GAO-10-187]
(Washington, D.C.: Nov. 2, 2009).
[18] See, for example, [hyperlink,
http://www.gao.gov/products/GAO-02-373SP], [hyperlink,
http://www.gao.gov/products/GAO-10-187], and GAO, Department of
Homeland Security: A Strategic Approach Is Needed to Better Ensure the
Acquisition Workforce Can Meet Mission Needs, [hyperlink,
http://www.gao.gov/products/GAO-09-30] (Washington, D.C.: Nov. 19,
2008).
[19] If, as a condition of award, the contractor's eligibility for
future prime contract or subcontract awards will be restricted or the
contractor must agree to some other restraint, the solicitation must
contain a proposed clause that specifies both the nature and duration
of the proposed restraint. FAR § 9.507-2.
[20] USAID Contract Information Bulletin 99-17, Organizational
Conflict of Interest.
[21] The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council are currently considering revising FAR
policies for addressing organizational conflict of interest issues.
(FAR Case 2007-018)
[22] FAR § 3.1002. Although this requirement now applies more broadly,
it did not apply to most of our nonpersonal services case studies
because the contract was either awarded prior to December 2007, valued
at less than $5 million, or issued before December 2008 and was
considered to be for commercial items or performed entirely outside of
the United States.
[23] [hyperlink, http://www.gao.gov/products/GAO-08-169].
[24] Under Secretary of Defense (Acquisition, Technology and
Logistics), Personal Conflicts of Interest (PCIs) of Contractors'
Employees (Nov. 24, 2009). A proposed amendment to the FAR addresses
personal conflicts of interest by employees of government contractors,
as required by section 841 of the Duncan Hunter National Defense
Authorization Act for Fiscal Year 2009, Pub. L. No. 110-417 (2008).
The proposed rule was published on November 13, 2009. (FAR Case 2008-
025)
[25] USAID Contract Information Bulletin 93-17, Financial Disclosure
Requirements Under a Personal Services Contract.
[26] For the case studies we conducted at USAID, it was determined
that none of the personal services contractors were required to
complete a financial disclosure form. However, two of these
contractors had completed forms that were on file with the USAID
Office of the General Counsel.
[27] FAR § 7.503(d) lists examples of functions that are closely
associated with or closely support the performance of inherently
governmental functions. Although not specifically identified as such
in the FAR, for purposes of this report, we considered contractors
responsible for assisting in the awarding of grants as closely
supporting an inherently governmental function. USAID's Automated
Directives System, Section 302.3.4.8, provides guidance that governs
the use of contractors to award grants on USAID's behalf.
[28] FAR § 37.114, and Office of Federal Procurement Policy,
Management Oversight of Service Contracting, Policy Letter 93-1 (May
18, 1994).
[29] FAR § 7.502.
[30] GAO, Department of Homeland Security: Improved Assessment and
Oversight Needed to Manage Risk of Contracting for Selected Services,
[hyperlink, http://www.gao.gov/products/GAO-07-990] (Washington, D.C.:
Sept. 17, 2007), and Defense Acquisitions: Further Actions Needed to
Address Weaknesses in DOD's Management of Professional and Management
Support Contracts, [hyperlink, http://www.gao.gov/products/GAO-10-39]
(Washington, D.C.: Nov. 20, 2009).
[31] Section 207.503 of the Defense FAR Supplement requires that
before a contract for the performance of acquisition functions closely
associated with inherently governmental functions (those listed at FAR
§ 7.503(d)) is entered into, the contracting officer has to make
certain determinations related to the availability of DOD personnel to
perform the functions and the oversight of the contract after award.
However, the Defense FAR Supplement does not require documentation of
this assessment, and DOD officials confirmed that the requirement
could be considered fulfilled without documentation of the
determination. In July 2009, the Army began requiring that an official
for the requiring activity complete a form that included a
determination of whether contractors will be closely supporting
inherently governmental functions.
[32] [hyperlink, http://www.gao.gov/products/GAO-10-39].
[33] The Federal Acquisition Regulation (FAR) defines "personal
services contracts" as contracts under which, by their express terms
or as administered, contractor personnel are subject to relatively
continuous supervision and control of a government officer or
employee. FAR § 37.104. State is authorized under section 2 of the
State Department Basic Authorities Act of 1956, as amended, to
contract for personal services. 22 U.S.C. § 2669(c) and (n). USAID is
authorized under section 636 of the Foreign Assistance Act of 1961, as
amended, to contract for personal services. 22 U.S.C. § 2396(a)(3).
DOD has authority under 10 U.S.C. § 129b to contract for personal
services.
[34] For the purposes of our data request to the agencies, we defined
administration functions for other contracts as including, but not
limited to (1) surveillance, monitoring, evaluation of contractor
performance, or a combination of these; (2) support of program,
product, and project offices regarding program reviews, program
status, program performance, and actual or anticipated program
problems; (3) performing property administration; (4) reviewing
contractor financial information or vouchers/invoices; (5) maintaining
contract administration files; and (6) performing administrative
closeout procedures. We defined administration functions for grants as
including, but not limited to (1) surveillance, monitoring, evaluation
of grant recipients' performance, or a combination of these; (2)
receipt, analysis, or both of technical, financial, or performance
reports from grantees; (3) making site visits to grantee performance
locations; and (4) awarding grants on behalf of a federal agency.
[35] For DOD, we requested data from the Joint Contracting Command -
Iraq/Afghanistan; the U.S. Army Corps of Engineers; all Air Force
major commands, Navy systems acquisition commands, and Marine
contracting activities; the Army Contracting Command; the Defense
Logistics Agency; and the Defense Contract Management Agency.
Together, these contracting activities accounted for more than 95
percent of DOD contract obligations in Iraq and Afghanistan in fiscal
year 2008 and the first half of fiscal year 2009 according to Federal
Procurement Data System - Next Generation data. For State and USAID,
we requested agencywide data.
[36] In Afghanistan, we randomly selected personal services contract
files for review. In Iraq, we purposefully selected personal services
contract files to provide a cross section of functions performed and
contract types.
[37] From FPDS-NG, we obtained data on all DOD, State, and USAID
contract actions during fiscal year 2008 or the first half of fiscal
year 2009 with performance in Iraq or Afghanistan. The data we used
from the other GAO engagement included all contracts and task orders
reported by the agencies as having performance in Iraq or Afghanistan
during fiscal year 2008 or the first half of fiscal year 2009.
[End of section]
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