OMB Circular A-76

Pursuant to a legislative requirement, GAO reviewed the Department of Defense's (DOD) implementation of its Office of Management and Budget (OMB) Circular A-76 program, to determine: (1) the DOD A-76 activity level; (2) how long DOD takes to perform A-76 cost studies; (3) the reasons for long cost-study times and DOD actions to shorten study times; (4) the number and cost of private-sector A-76 studies; and (5) the DOD response to GAO and DOD Inspector General recommendations.

GAO found that: (1) in fiscal year (FY) 1988, DOD A-76 cost studies began to decrease drastically, from over 1,200 studies to about 115; (2) OMB A-76 officials attributed the decline in the military services' A-76 activity level primarily to legislation; (3) as of May 5, 1991, the services cancelled 394 of their ongoing studies since they were not expected to meet the mandated 2-year or 4-year completion time frames; (4) the completion time for A-76 cost studies increased markedly, the 437 cost studies completed from FY 1987 through FY 1990 took an average of 4 years and 3 months to complete, and 133 studies were in process 5 years or more; (5) lengthy cost studies were mainly due to, the lack of sufficiently high priority to ensure that cost studies move expeditiously to completion, the lack of necessary skills to prepare the work statement, and the lack of work-load data needed to define work requirements for the function being studied; (6) because service officials believe the current process is adequate, they do not plan any policy changes and have few new approaches for shortening cost-study completion times; (7) from FY 1987 to FY 1990, only two of the four services used private-sector companies on a total of eight studies; and (8) although DOD has taken corrective action in response to all eight of the recommendations to improve the DOD-wide A-76 program, it is still too early to determine the effectiveness of these actions.