Government Use of Consulting Service and Management Support Contracts

Gao ID: 115920 June 25, 1981

GAO is concerned about government use of consulting services and management suppport contracts. This concern is evidenced by the sheer volume of audit reports issued on the subject over the past 20 years, which identified the need for practically every major federal agency to better manage consulting services. Recent GAO reports show that serious problems continue to exist in the government use of consultants, particularly in the Department of Defense (DOD). GAO reviewed several randomly selected DOD contract awards, which ranged from relatively simple studies designed to aid in management decisions to contracts involving complex engineering support for major weapons systems. Many DOD contracts for management support services are sole source and from unsolicited proposals. DOD believes that actions already underway will correct the problems, but GAO feels that these problems are bigger and more pervasive than DOD believes. In the past, GAO has found that many agencies use contractors to do work involving basic management decisions. Although contractors may not have made final decisions, GAO was concerned about the extent to which contractors have influenced agencies' control of federal programs and policies. For example, DOD contractors play a significant role in identifying defense needs and, in effect, articulating and performing DOD management functions. GAO found that DOD contractors are performing functions that are the responsibility of the Secretary of Defense and that should be delegated only to other federal officials. DOD program officials in each of the services told GAO that the expertise to perform these government functions simply was not available. Agency officials contend that contractors do not perform government functions, but only advise on such functions since a federal official approves any resultant policy directive or report before it is issued. It is the GAO opinion that extensive contractor involvement in basic management functions can limit an agency's ability to develop options other than those proposed by the contractor. Normally, GAO does not support legislative remedies for problems that should be solved administratively. However, since executive branch agencies have not acted administratively, congressional action is necessary in the areas discussed.

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