United States General Accounting Office

GAO Report to the Chairman, Subcommittee

on Military Readiness, Committee on

Armed Services, House of

Representatives

February 1999 DOD COMPETITIVE

SOURCING

Questions About Goals,

Pace, and Risks of Key

Reform Initiative

GAO/NSIAD-99-46

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-279771 

February 22, 1999

The Honorable Herbert H. Bateman

Chairman, Subcommittee on Military Readiness

Committee on Armed Services

House of Representatives

Dear Mr. Chairman:

The Department of Defense (DOD) is using competitive sourcing1

 through

the Office of Management and Budget (OMB) Circular A-76 process as a

means of realizing an estimated $6 billion savings in support costs

between fiscal year 1997 and 2003, with over $2 billion savings expected

annually thereafter. You asked that we review the program’s progress with

an emphasis on the likelihood that it will achieve the estimated savings.

Specifically, we (1) identified the competition and savings goals,

(2) assessed the accuracy of the savings estimates provided to Congress,

and (3) evaluated the adequacy of planning to support the overall program.

Our scope and methodology are included in appendix I.

Under A-76, agencies conduct public/private competitions to determine

whether the public or private sector will perform selected activities and

functions. In conducting competitions for functions being performed

in-house, agencies carry out studies to review the current organizational

structures, staffing, and operating procedures and to determine the most

cost-efficient and cost-effective way of performing the functions.

Results in Brief DOD has underway an unprecedented program to use competitions to gain

economies and efficiencies in its operations and to reduce support costs.

While the numbers have evolved over time, as of now, DOD is planning to

open over 229,000 government positions to competition within the public

and private sectors over the next several years. It estimates $6 billion

cumulative savings between fiscal year 1997 and 2003, and $2.3 billion in

recurring savings each year thereafter, as a result of these efforts.

However, estimates of competitive savings provided to Congress in fiscal

year 1998 are overstated, and several issues are likely to reduce the

estimated savings, at least in the short term. DOD has not fully calculated

either the investment costs associated with undertaking these

1

Throughout this report, we use the term competitions when referring to competitive sourcing

governed by the A-76 process.

Page 1 GAO/NSIAD-99-46 DOD Competitive Sourcing
B-279771 

competitions or the personnel separation costs likely to be associated with

implementing them. For example, the Navy is the only service that has

included some of these costs to arrive at a net savings figure. Further,

there are numerous indications that DOD components have already begun

to experience difficulties in launching and completing the competitions

within the time frames they initially projected. As a result, the

achievement of savings may be delayed. For example, Army headquarters

estimated that a study of 4,001 positions at its Training and Doctrine

Command would take only 24 months to complete, but the command

expects to complete the study in 39 months. As a result, net short-term

savings are unlikely to be achieved in the amounts or as quickly as DOD

projected. Various officials have expressed concern about the effects of

not achieving the expected savings because reductions in future operating

budgets have already been planned in anticipation of these savings.

Comprehensive planning to identify specific functions and locations for

competition among the services has been limited. Within individual

military services, it has largely been up to individual installations or major

commands to identify and prioritize specific activities and functions for

study and to conduct competitions. The one service that has carried out a

comprehensive assessment, the Air Force, has identified a potential

shortfall in viable candidates for competition.

Background Since 1955, the executive branch has encouraged federal agencies to

obtain commercially available goods and services from the private sector

through competitions when the agencies determined that such action was

cost-effective. OMB formalized the policy in OMB Circular A-76, issued in

1966. As part of this process, the government identifies the work to be

performed—described in the performance work statement—and prepares

an in-house cost estimate, based on its most efficient organization (MEO),

and compares it with the best offer from the private sector. Between 1978

and 1994, competition winners were split between the private and public

sectors. Appendix II contains a more detailed description of the A-76

process.

Because of lengthy time frames previously required to perform

competitive sourcing studies, a provision was included in the DOD

Appropriations Act for Fiscal Year 1991 (P.L. 101-511), and in subsequent

DOD appropriation acts requiring that single function competitions (under

Page 2 GAO/NSIAD-99-46 DOD Competitive Sourcing
B-279771 

Circular A-76) be completed within 24 months and multifunction

competitions within 48 months.2

Because of administrative and legislative constraints from the late 1980s

through 1995, there was a lull—and for some time even a moratorium—on

competitions. In 1995, congressional and administration initiatives placed

more emphasis on competitive sourcing as a means of achieving greater

economies and efficiencies in operations. The Deputy Secretary of

Defense in 1995 directed the services to make outsourcing of support

activities a priority. Subsequently, DOD placed emphasis on competitions

involving both the public and private sectors, known as competitive

sourcing.

DOD components identify functions eligible for competitive sourcing

studies from a list of commercial activities. Under OMB and DOD guidance,

the components must maintain and periodically update their lists of

commercial functions, but until fiscal year 1997, they were only required to

consider commercial positions that were not inherently governmental in

nature.3

 In 1997, DOD directed its components to include inherently

governmental functions on their lists.

Because of concern over inconsistencies within and among the services in

identifying positions eligible for competition, the House National Security

Committee in report number 105-132 on H.R. 1119, the Defense

Authorization Act for Fiscal Year 1998, directed DOD to develop a uniform

set of criteria. DOD’s components are currently reviewing which functions

performed by DOD personnel are (1) inherently governmental,

(2) exempted from competition for national defense reasons, (3) exempted

from competition for other reasons, or (4) subject to competitive sourcing

competitions. DOD expected to report the results of this reassessment in

January 1999.

As we and others have reported, A-76 competitions can be cost-effective.4

Data indicates that savings can occur, regardless of whether the

2

A single function competition could, for example, involve studying the custodial services at an

installation, while a multifunction competition could involve studying both custodial services and

refuse collection and disposal services.

3

Under the newly enacted Federal Activities Inventory Reform Act of 1998, P.L. 105-270, executive

agencies, including DOD, will be required to publish a yearly list of its activities that are not inherently

governmental and are performed by a government source. As defined by section 5 of the act,

inherently governmental positions generally require the exercise of discretion in applying government

authority or the use of value judgments in making decisions for the government.

4

A complete list of recent GAO reports and testimonies dealing with DOD competitive sourcing is

included at the end of this report.

Page 3 GAO/NSIAD-99-46 DOD Competitive Sourcing
B-279771 

competitions are won by the public or the private sector. Savings may

increase if, in accordance with applicable legal standards, multiple

functions can be grouped together under a single contract rather than

under multiple contracts. Because the average military positions are more

costly than their civilian equivalents, greater savings may occur if DOD

converts military support positions to government civilian or contractor

positions.

While competitions can produce significant savings, caution is needed

when estimating the overall magnitude of potential savings. Estimates of

savings in the 20- to 30-percent range or higher have been cited in some

assessments of previous competitive sourcing studies but often have been

based on initial savings estimates from previous competitions, rather than

on actual savings over time. DOD has not systematically tracked or updated

the savings estimates from competitions. Further, the savings from current

competitions may not necessarily match those achieved in competitions

completed before defense downsizing—because personnel cuts carried

out during downsizing helped streamline organizations and eliminate

unneeded positions.

DOD’s Competition

Study and Savings

Goals

DOD has established far greater and more aggressive goals for competitions

than in the past. DOD also estimates that the competitions will bring

significant cost savings. OMB has recognized DOD as the pacesetter among

government agencies in the use of competitions to gain economies and

efficiencies in operations and to reduce support costs. However, achieving

the goals of an initiative of this magnitude is a significant management

challenge.

Study Goals According to DOD, between 1979 and 1996, it studied over 90,000 positions

using the A-76 process. In early 1998, DOD components outlined plans to

compete over 225,000 positions between fiscal year 1997 and 2003. The

number of positions planned for competition during this period is more

than twice the number of positions studied in the previous 17 years.

Table 1 summarizes the plans by individual components as of early 1998.

Page 4 GAO/NSIAD-99-46 DOD Competitive Sourcing
B-279771 

Table 1: Positions Planned for A-76 Competition Announcement

Fiscal year

Component 1997 1998 1999 2000 2001 2002 2003 Total

Army 13,173 13,484 13,477 8,146 8,138 0 0 56,418

Navy 10,500 15,000 20,000 20,000 15,000 0 0 80,500

Air Force 13,367a 21,195 18,494 10,107 0 0 0 63,163

Marine Corps 0 800 1,700 1,700 800 0 0 5,000

Defense agenciesb 0 2,151 6,442 3,002 2,288 6,542 0 20,425

Total 37,040 52,630 60,113 42,955 26,226 6,542 0 225,506

aIncludes some positions announced in previous years.

bFigures shown represent data obtained from the Defense Finance and Accounting Service,

Defense Logistics Agency, and Defense Commissary Agency.

Source: Services as of February 1998 and agencies as of May 1998.

According to our analysis, DOD’s data indicates that about 79 percent of the

positions identified in table 1 are civilian positions, while 21 percent are

military positions. Over half of all the military positions to be competed

are in the Air Force. The greatest number of positions competed would

occur during fiscal years 1999 and 2000. As indicated in figure 1, if DOD

components launch the competitions projected for fiscal years 1999 and

2000, and if each competition lasts 24 months, DOD could be competing

over 100,000 positions each year during 1999 and 2000.5

5

The DOD budget guidance planning factor for the duration of its A-76 studies is 24 months.

Page 5 GAO/NSIAD-99-46 DOD Competitive Sourcing
B-279771 

Figure 1: Positions Potentially Under

A-76 Competition Between Fiscal Year

1997 and 2003

1997 1998 1999 2000 2001 2002 2003

0

20,000

40,000

60,000

80,000

100,000

120,000

Fiscal year

Number of positions

FY

97

FY

97

FY

98

FY

98

FY

99

FY

00

FY

00

FY

01

FY

01

FY 02 FY 02

FY

99

Note: The dark grey areas in the bars indicate competitions begun in the previous year.

Source: Our calculations based on information from DOD.

Between March 1997 and early 1998, DOD increased the number of

positions it plans to compete over the next several years by about

30 percent—from 171,000 to over 225,000. In October 1998, DOD again

increased the number of positions expected to be competed to over

237,000 and stretched out the time frame to 2005. However, that figure was

recently adjusted to 229,000 by 2005. We were unable to obtain details of

how the new numbers would be allocated among the services.

Page 6 GAO/NSIAD-99-46 DOD Competitive Sourcing
B-279771 

Prior to establishing the competition goal of 229,000 positions, DOD aimed

for cumulative savings of about $6 billion between fiscal years 1997 and

2003. That goal still existed at the time we completed our review and DOD

has already begun to reduce future years operating budgets of components

in anticipation of these savings and to transfer the expected savings to

their research and development and procurement accounts to increase

funding for weapon system modernization.

Office of the Secretary of Defense (OSD) guidance projects that

components will complete competitions within 2 years and begin

transferring funds to higher resource priority budget objectives. According

to OSD officials, if the savings do not occur as quickly as planned, the

components will have to absorb the shortfalls in their operations and

maintenance accounts or shift money back from planned modernization.

The Army’s competitive sourcing strategic plan, for example, states that if

major commands do not achieve programmed savings, they will have to

achieve the savings through other efficiencies.

The savings estimates could change. A DOD official told us that, after

receiving more detailed information from its components, DOD reduced its

projected annual recurring savings as of fiscal year 2004 from $2.5 billion

to $2.3 billion. This savings figure was still under review when we

completed our fieldwork and OSD had not yet decided whether to revise its

savings goals or its timetables for achieving them when we completed our

review.

Initial Savings Are

Likely to Be Less

Than Estimated

The projections of competition savings that DOD provided to Congress in

fiscal year 1998 appear overstated.6

 The projections did not adequately

consider investment costs related to performing A-76 cost studies. In

addition, the competitions will likely take longer to complete than

estimated. Both of these factors will affect how quickly DOD components

will begin to realize net savings from the competitions. DOD components

have expressed concerns about their ability to meet the savings goals. DOD

is working to improve these estimates for its fiscal year 2000 budget

request.

6

Our prior reports and testimonies have raised concerns about the services’ estimated savings rates

from individual competitions; however, for the purposes of this analysis, we accepted DOD’s

estimates.

Page 7 GAO/NSIAD-99-46 DOD Competitive Sourcing
B-279771 

Investment Costs

Understated

Much like base realignment and closure actions, competitions have

up-front investment costs that need to be considered when estimating net

savings. In competitions, these investments involve study costs, personnel

separation costs, and, in the case of the Army, the costs of substituting

civilians for military personnel. Once these investment costs have been

offset by program savings, net savings can begin to accrue on an annual

recurring basis. However, available information indicates that OSD and its

components have not fully and consistently accounted for and deducted

these investment costs from their savings projections. This means that DOD

will not accrue the estimated initial savings as quickly as projected.

However, recurring long-term net savings are potentially significant.

Both OSD and its components made initial assumptions about competition

study costs that are understated. While the components are registering

concern about these costs, they have not yet developed comprehensive

assessments of them.

DOD reported to Congress in April 1998 that the services expected savings

of about $5.8 billion from their competitions and investment costs of

$277 million to conduct the competitions.7

 Table 2 indicates the savings

projected by each service and the identified costs to implement the

program.

Table 2: Projected Competition

Savings and Investment Costs (fiscal

year 1997 to 2003)

Dollars in millions

Army Air Force Navy

Marine

Corps Total

Investment Costsa $48 $0b $195 $34 $277

Savings $1,272 $1,825c $2,533 $215 $5,845d

aPrimarily for centrally funded contractor support of the competitions.

bSubsequent to DOD’s report, costs of $53 million were identified by the Air Force.

cIncludes $378 million from competitive sourcing efforts at its maintenance depots, which are not

governed by OMB Circular A-76.

dThis report to Congress excluded projected savings from defense agencies that could amount to

several hundred million dollars.

Source: Oversight of Outsourced Functions, DOD report to Congress.

7

The House Committee on Armed Services (formerly known as the National Security Committee), in

report number 105-132, cited earlier, requested that DOD report on its oversight of outsourced

functions. The savings and investment costs contained in this report, which were based on the fiscal

year 1999-2003 Program Objective Memorandum, did not include A-76 initiatives at DOD agencies.

Page 8 GAO/NSIAD-99-46 DOD Competitive Sourcing
B-279771 

DOD’s savings projections provided an inconsistent and incomplete picture

of A-76 competitive sourcing costs and savings for the period ending in

fiscal year 2003. Only the Navy deducted identified investment costs from

its net savings estimate. Additionally, available information indicates that

DOD and its components understated or later changed their initial

estimates of investment costs.

Resource Requirements Appear

Much Greater Than Initially

Projected and Are Not Fully

Identified

Although the magnitude of the competition program greatly eclipses

previous efforts, DOD components have not yet fully identified the

resources needed to carry out the competitions. Many components are

now projecting that the competitions will likely take much longer and

hence require a greater investment of resources than they originally

expected and reported to Congress. Many components have noted that

this situation is occurring when they have significantly fewer in-house

personnel trained to deal with A-76 programs than they had prior to

downsizing.

Conducting the competitions may require the use of contractors in

addition to existing in-house staff from contracting, personnel, legal,

manpower, accounting, internal audit, and the function being studied. To

the extent existing in-house resources are limited, if resources need to be

shifted to meet new missions, such as performing competitions, other

tasks or activities may be delayed or not performed.

DOD initially established a benchmark estimate for competition costs of

$2,000 per position. The benchmark was based on an Air Force analysis of

the costs it incurred in performing A-76 studies with in-house personnel.

However, that analysis did not include an estimate of costs for developing

in-house most efficient organizations, raising concerns that it may have

understated the magnitude of the needed resources. In DOD’s April 1998

report, the military services estimated different investment costs, some of

which were higher than the DOD benchmark. The Air Force did not identify

costs because it planned to use only existing in-house staff to perform the

work, but will now augment some studies with contractor support. The

Navy, however, only identified estimated contractor support costs for

conducting the competitions of over $2,400 per position. The Army based

its investment cost estimate only on contractor support costs of $1,000 for

each civilian position, but it did not include funding for competing military

positions.8

 The Marine Corps estimated that its competitions would cost

$6,700 per position and that at least 80 percent of this would fund

contractor support.

8

The Army subsequently revised its cost estimate to $1,500 per civilian position studied.

Page 9 GAO/NSIAD-99-46 DOD Competitive Sourcing
B-279771 

Various officials told us that the resource requirements for the studies are

much greater than both DOD’s $2,000 benchmark and their service’s own

initial estimates. For example, officials at one Army major command

estimated that they would employ about $28 million in resources for their

competitions—$4 million for centrally funded contractor support costs

and $24 million for existing in-house staff—to compete 4,000 positions in a

multifunction, multilocation study, at least $7,000 per position. One Navy

command estimated that it would incur about $15 million in

costs—$2.8 million for contractor support and $12.2 million for existing

in-house staff—to compete close to 1,930 positions at various locations, or

about $7,800 per position. A second Navy command estimated that it was

spending between $7,000 and $9,000 per position—about $2,000 for

centrally funded contractor support and between $5,000 and $7,000 for

existing in-house staff to conduct competitions. Command officials stated

that the command had not received any additional funding for the

competitions and that the command would therefore have to provide the

additional resources. The large number of competitions planned for the

future could necessitate a change in the mix of in-house and contractor

personnel required to support the planned competitions. Such changes

would affect the extent to which additional funding outlays could be

required in addition to those already associated with in-house personnel.

While none of the services has yet fully determined the staff resources

necessary to implement its competition program, some service officials

have expressed concern about their ability to provide sufficient existing

in-house staff as the number of ongoing studies increases and the potential

effect on other mission requirements of devoting available resources to

meet competition needs. Some officials have already begun to express

concern about the adequacy of their resources to initiate and complete

ongoing competitions and to deal with other ongoing mission

responsibilities. Officials at one Army command stated that they have

finite resources to accomplish their overall missions and tasks. If one

mission, such as performing competitions, is given command priority,

resources are shifted to meet that priority, and other tasks or activities

may be delayed or not performed. The large increase in the number of

competitions expected to be ongoing in fiscal years 1999 and 2000 is likely

to greatly increase resource requirements.

Without allocating sufficient resources to complete the competitions, DOD

components may be unable to initiate or complete previously announced

competitions within reasonable time frames. The pressure to complete

such a large volume of competitions at one time increases the risk of

Page 10 GAO/NSIAD-99-46 DOD Competitive Sourcing
B-279771 

poorly developed performance work statements, which have historically

been cited as a problem area in the competitions. Poor performance work

statements require subsequent revisions, reducing the levels of savings

from that initially expected.

In July 1998, DOD issued guidance directing the components, when

preparing operation and maintenance budget justification material for the

fiscal year 2000 defense budget, to (1) report actual and projected

competition costs, (2) explain the methodology used to develop the costs,

and (3) justify deviations from the average cost of $2,000 per position. This

information should become available when DOD releases its fiscal

year 2000 budget request.

Employee Separation Costs

Were Not Fully Identified

Except for the Navy, the services understated investment costs because

they did not include separation costs for civilian and military DOD

employees who lose their jobs as a result of competitions won by the

private sector. Implementation costs may also be incurred when in-house

organizations win the competitions and the most efficient organizations

require a smaller workforce.

Assuming that the private sector continues to win competitions at the

historic rate of 50 percent as determined by the Center for Naval Analyses,

DOD could transfer work involving more than 100,000 positions to the

private sector over the next several years—if it meets its goal of competing

over 225,000 positions. Many of the affected civilian government workers

could receive some form of separation pay. The Army, for example,

estimated an average cost of $21,000 per person separated. This average

covers the costs of voluntary early retirement, voluntary separation

incentives, and involuntary separations through reduction-in-force

procedures. The Navy estimated an average of $25,000 per person and the

Air Force an average of $33,000, of which $25,000 would be funded by

headquarters and $8,000 would be funded by individual commands.

Even if some affected employees fill other positions through DOD’s priority

placement program, significant numbers of government personnel could

still be separated. On the basis of its average separation cost of $21,000 per

employee, the Army’s Program Analysis and Evaluation office

conservatively programmed separation costs of about $200 million for only

9,600 employees. The office recognized, however, that the Army would

likely separate more personnel. The Air Force programmed $10 million in

civilian separation costs for fiscal year 1999 and programs only 1 year in

advance. The Navy did not program any separation costs and will not have

Page 11 GAO/NSIAD-99-46 DOD Competitive Sourcing
B-279771 

a programming estimate until January 1999 for inclusion in the fiscal

year 2000 budget. However, the Navy’s competitive sourcing office

projected civilian separation costs of $819 million for 68,250 civilian

positions and deducted these costs to reach the savings estimate of

$2.5 billion through fiscal year 2003, that was reported to Congress in 1998.

In July 1998, DOD issued budget guidance directing defense organizations,

when preparing their operation and maintenance justification materials for

the fiscal year 2000 defense budget, to report transition costs (such as

separation pay and voluntary separation incentive pay) they plan to incur

and to disclose the methodology and cost categories used to determine

those costs.

Replacing Army Military

Personnel Will Increase

Support Costs

We have previously reported that, on average, the cost of civilian

personnel is less than the cost of military personnel. In addition, we have

also reported that the conversion of positions from military to civilian

(either government or contractor) as part of the competitive sourcing

process could save money, assuming that the elimination of the military

positions results in corresponding reductions in the authorized end

strengths. Such reductions are not expected to be the case for the Army

where competitive sourcing eliminates requirements for military positions,

without corresponding reductions in authorized end strength.

The Army’s 1998 plan called for competing 8,414 military positions.9

However, while the Army plans to convert all military positions competed

to civilian or contractor positions, it does not expect to take equivalent

reductions in military end-strength. Rather, it expects to use military

personnel released as a result of the competitions to fill other priorities.

Thus, the Army’s overall costs will increase by the cost of civilian or

contractor personnel selected to replace these military personnel.10 At the

same time, the Army will have to absorb some increases in operations and

maintenance costs without additional funding for increased civilian

government or contractor costs.

9

The Army’s proposed plan for the fiscal year 2000 defense budget changed the number of military

positions to be competed to 6,420.

10The costs of military positions are funded through military personnel appropriation accounts,

whereas funding for costs associated with government civilian or contractor personnel are funded

through operation and maintenance appropriation accounts.

Page 12 GAO/NSIAD-99-46 DOD Competitive Sourcing
B-279771 

Studies May Take Longer

Than Planned and Will

Likely Delay Savings

As mentioned previously, planned competitions will probably take longer

than initially projected. In addition to increasing the study costs, this will

also delay net savings. Meanwhile, the services are voicing concerns about

their ability to meet the savings targets needed to offset operating budget

reductions taken in advance and in anticipation of the savings.

In launching the competition program, DOD and its components made

assumptions about the amount of time needed to complete these

competitions. DOD’s guidance for preparation of the fiscal year 2000

defense budget indicates that competitions should typically take about 

24 months to complete. The Army and the Navy initially set more

optimistic goals, but many service officials later came to believe that many

studies would take longer than 24 months.

The Army’s Office of the Assistant Chief of Staff for Installation

Management has served as the primary lead for Headquarters, Department

of the Army, on issues affecting the implementation of the competitions.

This office set competition goals of 13 months for up to 100 positions, 

18 months for 101 to 600 positions, and 21 months for over 600 positions.

However, Army officials recently expressed some concern about their

ability to meet this schedule. For example, the Army’s Training and

Doctrine Command is conducting a command-wide study of 4,001

positions at 12 installations. This was announced to Congress in November

1996, and Army headquarters projected completion within 24 months.

However, because the start of the study was delayed by 6 months and

because the competitions cover multiple functions at 12 locations, with

phased implementation, the command currently projects completing the

last installation by February 2000, or 39 months after it was announced.

Initially, the Navy projected completing its competitions in 12 months, but

it revised its assumptions when preparing its 1998 plan because some

competitions were taking longer. The 1998 plan estimates that

competitions will take between 12 and 36 months, depending on their

complexity and including whether they are based on competitions of

single or multiple functions.

An Air Force official responsible for program oversight told us that the Air

Force currently projects completing competitions within 24 to 48 months

and that it expects to meet these time limits.

Page 13 GAO/NSIAD-99-46 DOD Competitive Sourcing
B-279771 

Components Are

Concerned About Meeting

Competition and Savings

Goals

Since DOD began to emphasize competitions, the goals for the competitions

have evolved and grown, even though some DOD components have had

difficulties in meeting recent goals for announcing competitions. Some

components have expressed concerns about these goals.

OSD officials responsible for monitoring the program consider execution

the biggest risk factor. DOD did not have under study all of the positions it

planned to study in fiscal years 1997 and 1998 because some competitions

that were announced were later canceled, and not all of the remainder

were under study. DOD’s components planned to announce competitions

involving 37,040 positions in fiscal year 1997, but, after cancellations and

delayed starts of competitions, they had at most 34,997 positions under

study.11 In fiscal year 1998, DOD’s components expected to announce

competitions involving 52,630 positions, but due to shortfalls by the Navy,

the Marine Corps, and the Air Force, they announced plans for competing

only 35,710 positions and, after cancellations and delayed starts of

competitions, had at most 32,229 positions under study.

According to a Navy official, the Navy was unable to meet its fiscal

year 1998 announcement goals because implementing concurrent

initiatives such as competitions, regionalization, and consolidation, and

meeting mission and mission support requirements stretched available

personnel and financial resources. While it did not change the total

number of positions it planned to compete between 1997 and 1998, the

Navy did change the mix of military and civilian positions and some of its

other planning assumptions to meet readiness needs and maintain its

projected level of savings. In its fiscal year 1997 plan, the Navy projected

competing 30,000 military positions. However, in response to growing

concerns about the effect of competitions on the military positions needed

to meet sea-shore rotation requirements and other concerns, the Navy in

1998 reduced the number of military positions it would compete by 20,000

and increased the number of civilian positions it planned to compete by

the same number. Such a change could mean the potential for significantly

less savings since military positions are recognized as relatively more

costly to the government.

Officials in the Air Force’s competitive sourcing and privatization office

said that the Air Force, in developing its fiscal year 2000 budget request,

reduced the total number of positions it planned to compete between

fiscal year 1998 and 2003 by 23,976 (48 percent). The Air Force did so after

11The Army’s and the Air Force’s tracking systems are unable to provide the number of positions under

study, but Army officials said that revisions to that system should permit that data to be tracked in the

future and Air Force officials said that their competitions typically start right after announcement.

Page 14 GAO/NSIAD-99-46 DOD Competitive Sourcing
B-279771 

completing an analysis and determining that some positions were not

viable candidates because some positions were being double counted with

ongoing base closure reductions and other positions were not practical to

package for competition. However, the officials also said that OSD only

agreed to a reduction of about 10,600 positions. Additionally, the Air Force

proposed reengineering various functions to achieve additional savings of

about $700 million, about $116 million more than was planned to have

been saved with the competitions.

As previously noted, Marine Corps officials have indicated that they do not

believe they can meet their savings goals with the number of positions

currently planned for competition. The officials said that the Marine Corps

plans to increase the number of positions to be competed from 5,000 to

about 6,200.

One difficulty the services are likely to face as they try to identify more

competition candidates is the continuing reduction in personnel caused by

other ongoing defense reform efforts, cuts mandated by the Quadrennial

Defense Review, or other initiatives. Reductions are also planned as a

result of legislative requirements. These other ongoing defense reforms

could limit the number of positions ultimately available for competition

under the competitive sourcing program.

Concerns About the Effects of

Failing to Meet Study and

Savings Goals

Various service officials pointed to extensive reductions in base operating

support budgets in recent years and expressed concern about the

additional reductions that are expected in addition to cuts associated with

competitions.12 They expressed concern about their ability to absorb

further reductions “out of hide” should they miss their competition savings

goals.

Recently, officials in all of the services have voiced concerns about their

ability to meet the savings goals established by OSD and the resulting

effects, especially considering that the savings have already been taken

out of future years’ operating budget estimates. For example, an Air Force

official told us that the Air Force’s major commands will fall short of A-76

savings by about $141 million in fiscal years 1998 and 1999 and that they

will have to absorb these shortfalls. Another Air Force official said that

12We previously reported that during fiscal years 1987-1996, total operation and maintenance budget

authority declined by 25 percent in real terms, reflecting the overall decline in defense spending.

However, annual operation and maintenance obligations for facilities maintenance and repair,

excluding family housing, declined by 38 percent on average in real terms during the period. The Army

had the steepest decline of all, about 48 percent. See Defense Infrastructure: Demolition of Unneeded

Buildings Can Help Avoid Operating Costs (GAO/NSIAD-97-125, May 13, 1997).

Page 15 GAO/NSIAD-99-46 DOD Competitive Sourcing
B-279771 

most major commands are concerned about the effects of funding A-76

competitions and of personnel separation costs on their installations.

Army officials, based on work by the Army Audit Agency, have expressed

concern that delayed competition starts could reduce the Army’s proposed

fiscal year 2000 budgeted gross savings of $1.6 billion for fiscal years 1999

to 2003 by nearly $219 million—assuming the competitions are completed

within the time frames initially projected, something which the officials

consider unlikely. Another Army official indicated that even if the Army

can complete all of its targeted competitions by 2003, it may take another 

1 to 2 years to implement the results, reduce the workforce, and begin

achieving the targeted savings. Additionally, the Army Audit Agency

recently stated that the Army’s installations and major commands estimate

that it will take about 50 percent longer than the time established by the

Assistant Chief of Staff for Installation Management to complete the

competitions and achieve the expected savings.13

Further, an official at the Army’s Training and Doctrine Command stated

that the command would not meet its $62-million savings goal in fiscal

year 1999 and most of fiscal year 2000. The official stated that the

competitions are taking longer than Army headquarters officials projected

and that could result in an operations and maintenance funding shortfall.

Officials at the Naval Sea Systems Command stated that they do not

believe A-76 competitions alone will be enough for the command to meet

its savings goals because there are not enough positions to compete. While

the command has a goal to compete 16,415 civilian positions, it had only

7,179 positions categorized as suitable for competition as of October 1998,

after its commercial activities inventory review. Since the commercial

activities inventory review was still ongoing when we completed our

review, we were not able to obtain information on its overall results.

In addition, the Navy’s acquisition executive stated in April 1998 that while

the Navy would do everything possible to absorb the savings goals, he did

not see any way to do this. He established a Process Action Team to

review the competitive sourcing program because he believed that the

savings were considerably overstated and would result in even more

instability in the procurement account.

13Observations and Lessons Learned on A-76 Cost Competition Studies, U.S. Army Audit Agency

(AA 98-340 Sept. 22, 1998).

Page 16 GAO/NSIAD-99-46 DOD Competitive Sourcing
B-279771 

Although Marine Corps officials told us that they expected to increase the

number of positions to be competed, they also said, at another point, that

they could not meet their savings target through A-76 competitions alone.

They said they would attempt to make up the shortfall through alternative

reform initiatives such as consolidation, regionalization of existing

functions, and greater use of technology.

Most Defense

Components Lack

Detailed

Implementation Plans

DOD has provided the needed high-level emphasis, momentum, and

sponsorship to energize its competition program and has identified what

some have referred to as “stretch goals” in characterizing the larger

number of positions to be competed. However, comprehensive planning

among the services to identify specific functions and locations for

competition has been limited. Detailed planning to implement the program

has been largely delegated to components and field activities. These

activities are responsible for determining the specific functions that are

suitable candidates for competition and whether there are sufficient

positions to meet overall competition goals. Such planning is needed to

better identify long-term resource needs, especially considering the

volume of studies likely to be under way in the future.

To date, the Air Force appears to have performed the most detailed

multiyear implementation analysis of its ability to attain its competition

goals. The Army, the Navy, and the Marine Corps have not performed a

multiyear implementation analysis by function and location, and the Navy

and the Marine Corps were unable to provide us with plans of the numbers

of positions for competition and projected savings for each major

command through fiscal year 2003. The Navy and the Marine Corps are

currently developing multiyear competitive sourcing implementation

analysis by function and location. The Navy analysis for fiscal years 1999

to 2001 is scheduled to be completed by June 1999 and the Marine Corps

plan for fiscal years 2000 to 2002 is expected to be completed by

April 1999. According to service officials, some or all of the major

commands were given numbers of positions to compete and savings goals,

and it is up to them to determine how best to meet the goals.

The Navy started developing a strategic plan for competitions in

September 1997, about 2 years after the Chief of Naval Operations

revitalized the Navy’s competition program. In response to a prior GAO

recommendation, the Navy expects to develop a detailed 5-year plan as

part of its overall strategy and expects the major commands to develop an

execution plan. The Navy expects to have a reasonable and achievable

Page 17 GAO/NSIAD-99-46 DOD Competitive Sourcing
B-279771 

strategic plan for competitions by early fiscal year 1999. The extent to

which this strategic plan will be based on a detailed implementation

analysis is unknown at this time.

The Army published a competition strategy in September 1998 but has not

conducted a detailed implementation analysis of the program to assess its

executability. The strategy lays out a number of high-level goals and

identifies ways to meet them. In implementing its strategy, the Army is

placing primary responsibility for selecting and prioritizing functions and

conducting competitions on the installation commanders. Army officials

told us that each year, the major commands develop a plan that identifies

the functions the commands will study at their installations that fiscal

year. If the major commands do not achieve the programmed savings from

competitions, they must achieve the savings through other efficiencies or

local personnel management actions. The Army has also established a

competitive sourcing and privatization Integrated Process Team and made

it responsible for recommending a new management structure to oversee

the program and changes to streamline processes. Team officials

recommended that the Army develop competition plans for the fiscal

year 2001 to 2005 time frame by April 1999. The recommendations were

made on November 19, 1998, and are currently awaiting approval from the

Army Vice Chief of Staff. The extent to which the competition plans will

be based on a detailed implementation analysis is unknown at this time.

OSD, on December 9, 1998, directed each component to develop multiyear

competition plans consistent with and presented at the same time as their

fiscal year 2001 to 2005 Program Objective Memorandum. OSD directed

that these plans should include, by fiscal year, the functions and numbers

of positions to be competed.

Conclusions DOD has established an ambitious competition program as a means of

reducing its infrastructure support costs and increasing funding available

for modernization and procurement. Establishing realistic competition and

savings goals are key to achieving the program’s desired results. However,

DOD’s savings projections have not adequately accounted for the costs of

conducting the competitions. These costs could significantly reduce DOD’s

expected level of savings in the short term. In addition, the planned

competitions are likely to take longer than initially projected, further

reducing the annual savings that will be realized. Consequently, the

estimated savings between fiscal year 1997 and 2003 are overstated. The

effects of failing to realize these annual savings could be significant, since

Page 18 GAO/NSIAD-99-46 DOD Competitive Sourcing
B-279771 

DOD has already reduced future operating budget estimates to take into

account the estimated savings.

Also, the number of competitions DOD expects to complete over the next

several years continues to increase, even as difficulties in meeting

previous goals grow. Service officials are increasingly expressing concern

about their ability to meet these targets, especially considering the

unprecedented number of competitions that are planned to be ongoing

simultaneously in the near future. Finally, we believe there is merit to this

concern because most components lack detailed plans and analyses to

help determine whether the numbers of positions to be competed would

be practical.

Recommendations We recommend that the Secretary of Defense require the DOD components

to assess to what extent available resources are sufficient to execute the

numbers of planned competitions within the time frames envisioned and

make such adjustments as needed to ensure adequate program execution.

In doing so, we also recommend that the Secretary require the

components to reexamine and adjust as necessary the competitive

sourcing study targets, milestones, expected net short-term savings, and

the planned operating budget reductions.

Agency Comments

and Our Evaluation

In commenting on a draft of this report, DOD concurred with our

conclusions and recommendations (see appendix III). However, the

response also indicated that DOD does not believe that its components have

completed enough studies since fiscal year 1997 to establish a baseline

that would necessitate the reevaluation of competitive sourcing milestones

and objectives at this time, as our report recommends. DOD noted that the

Deputy Secretary of Defense had proposed a number of initiatives in a

December 9, 1998, memorandum to the Defense components that will

make better use of existing resources devoted to competitive sourcing

studies. However, DOD did not indicate at what point it would establish a

new baseline.

We continue to believe that DOD has sufficient reason to reassess the

competitive sourcing study targets, milestones, expected short-term

savings and planned operating budget reductions now. The issues at hand

involve more than the number of competitions completed, they also

involve to what extent the planned announcements of competitions have

occurred and whether there are sufficient resources to complete them.

Page 19 GAO/NSIAD-99-46 DOD Competitive Sourcing
B-279771 

This is of concern especially given the large number of studies planned for

announcement in fiscal years 1998 and 1999 and the delays encountered in

getting the fiscal year 1998 studies underway. If similar delays are

encountered in fiscal year 1999, they could seriously affect future program

execution and DOD’s ability to achieve results in a timely manner.

Accordingly, an important part of any reassessment should also include

examining the components’ progress in developing detailed

implementation plans; such plans will have a direct bearing on resource

requirements.

DOD also provided technical comments to the draft, which we have

incorporated as appropriate.

We are sending copies of this report to the Chairmen of the Senate

Committees on Armed Services and on Appropriations and of the House

Committees on Armed Services and on Appropriations; the Secretaries of

Defense, the Army, the Air Force, and the Navy; the Commandant of the

Marine Corps; and the Director, Office of Management and Budget.

Please contact me at (202) 512-8412 if you or your staff have any questions

concerning this report. Major contributors to this report are in

appendix IV.

Sincerely yours,

David R. Warren, Director

Defense Management Issues

Page 20 GAO/NSIAD-99-46 DOD Competitive Sourcing
Page 21 GAO/NSIAD-99-46 DOD Competitive Sourcing
Contents

Letter 1

Appendix I 

Scope and

Methodology

24

Appendix II 

The A-76 Process

26

Appendix III 

Comments From the

Department of

Defense

30

Appendix IV 

Major Contributors to

This Report

31

Related GAO Products 35

Tables Table 1: Positions Planned for A-76 Competition Announcement 5

Table 2: Projected Competition Savings and Investment Costs 8

Figures Figure 1: Positions Potentially Under A-76 Competition Between

Fiscal Year 1997 and 2003

6

Figure II.1: Overview of the A-76 Process 27

Abbreviations

CAMIS Commercial Activities Management Information System

DOD Department of Defense

FYDP Future Years Defense Plan

IFB Invitation for Bid

MEO most efficient organization

OMB Office of Management and Budget

OSD Office of the Secretary of Defense

Page 22 GAO/NSIAD-99-46 DOD Competitive Sourcing
Page 23 GAO/NSIAD-99-46 DOD Competitive Sourcing
Appendix I 

Scope and Methodology

For this report, we (1) identified the Department of Defense’s (DOD)

competitive sourcing study and savings goals, (2) assessed the accuracy of

the savings estimates provided to Congress, and (3) evaluated the

adequacy of program planning to support the overall program.

To determine the Office of the Secretary of Defense’s (OSD) process for

managing the A-76 savings targets, we met with representatives of the

Defense Management Council, including OSD’s Office of Program Analysis

and Evaluation and the A-76 Task Force in the Office of the Deputy Under

Secretary of Defense for Industrial Affairs and Installations.

To identify DOD’s competitive sourcing study and savings goals and assess

how well investment costs are reflected in the savings estimates, we

obtained and analyzed the planning assumptions each military service and

OSD used. We did not use the budget justification material on competitive

sourcing contained in the 1999 to 2003 Future Years Defense Plan (FYDP)

because of certain limitations in the data. Instead, we obtained

comprehensive information from each service on the numbers of positions

planned for study that served as the basis for projected savings between

1997 and 2003, which included studies in one service that began as early as

1993. Therefore, while the 1999 FYDP material lists studies of

approximately 214,000 positions, our discussions with DOD components

identified over 225,000 positions either already competed, under study, or

planned for competition. We also obtained information on unrecognized

costs, such as separation costs, from the Air Force’s and the Navy’s

comptroller’s offices, as well as the Army’s Office of Program Analysis and

Evaluation. We did not determine the reliability of the cost information

provided by these offices. We met with officials from the Center for Naval

Analyses to discuss their work on competitive sourcing within DOD, and

obtained copies of their reports. We also spoke with responsible OSD,

service, and installation officials, including manpower, contracting, and

financial management officials to obtain information on the personnel

resources required to conduct the studies and their ongoing efforts to

reform their commercial activities databases.

To determine the extent to which uncertainties exist about meeting study

goals and savings targets in the projected time frames, we met with

responsible officials from OSD, the Army, the Air Force, the Navy, and the

Marine Corps and contacted officials from defense agencies and

installations. We obtained documentation on past, ongoing, and planned

A-76 studies.

Page 24 GAO/NSIAD-99-46 DOD Competitive Sourcing
Appendix I 

Scope and Methodology

To evaluate the adequacy of the advance planning to support the effort

underway, we met with representatives of the Defense Management

Council and the A-76 Task Force, as well as cognizant service officials, to

discuss their oversight role and the program implementation risks. We also

researched relevant laws cited by officials.

We performed much of our work in Washington, D.C. However, we also

conducted work at the Air Force Air Education and Training Command,

San Antonio, Texas; the U.S. Army Training and Doctrine Command, Fort

Monroe, Virginia; and the Naval Air Systems Command, Patuxet River,

Maryland.

We conducted our review from September 1997 to December 1998 in

accordance with generally accepted government auditing standards.

Page 25 GAO/NSIAD-99-46 DOD Competitive Sourcing
Appendix II 

The A-76 Process

In general, the A-76 process consists of six key activities—(1) developing a

performance work statement and quality assurance surveillance plan;

(2) conducting a management study to determine the government’s most

efficient organization (MEO); (3) developing an in-house government cost

estimate for MEO; (4) issuing a Request for Proposals or Invitation for Bid;

(5) evaluating the proposals or bids and comparing the in-house estimate

with a private sector offer or interservice support agreement and selecting

the winner of the cost comparison; and (6) addressing any appeals

submitted under the administrative appeals process, which is designed to

ensure that all costs are fair, accurate, and calculated in the manner

prescribed by the A-76 handbook.

Figure II.1 shows an overview of the process. The solid lines indicate the

process used when the government issues an Invitation for Bids,

requesting firm bids on the cost of performing a commercial activity. This

type of process is normally used for more routine commercial activities,

such as grass-cutting or cafeteria operations, where the work process and

requirements are well defined. The dotted lines indicate the additional

steps that take place when the government wants to pursue a negotiated,

“best value” procurement. While it may not be appropriate for use in all

cases, this type of process is often used when the commercial activity

involves high levels of complexity, expertise, and risk.

Page 26 GAO/NSIAD-99-46 DOD Competitive Sourcing
Appendix II 

The A-76 Process

Figure II.1: Overview of the A-76 Process

Issue performance 

work statement 

and RFP or IFB

Compare selected 

Best Value and MEO

technical proposals

Prepare in-house 

cost estimate

Revise

MEO 

Revise 

in-house 

cost estimate 

Compare 

costs/select 

contractor

Most Efficient Organization (MEO) activities

 Government technical evaluation activities

MEO

management study

Select lowest

cost alternative

Additional steps required for request for 

proposals (RFP)

Process for invitation for bid (IFB)

Prepare technical

proposal

Conduct technical 

evaluation of MEO

Conduct technical

evaluation of 

bids/proposals

Accept 

contractor

bids/proposals

Source: Air Force Air Education and Training Command documents.

The circular requires the government to develop a performance work

statement. This statement, which is incorporated into either the Invitation

Page 27 GAO/NSIAD-99-46 DOD Competitive Sourcing
Appendix II 

The A-76 Process

for Bids or Request for Proposals, serves as the basis for both government

estimates and private sector offers. If the Invitation for Bids process is

used, each private sector company develops and submits a bid, giving its

firm price for performing the commercial activity. While this process is

taking place, the government activity performs a management study to

determine the most efficient and effective way of performing the activity

with in-house staff. Based on this “most efficient organization,” the

government develops a cost estimate and submits it to the selecting

authority. The selecting authority concurrently opens the government’s

estimate along with the bids of all private sector firms.

According to OMB’s A-76 guidance, the government’s in-house estimate

wins the competition unless the private sector’s offer meets a threshold of

savings that is at least 10 percent of direct personnel costs or $10 million

over the performance period. This minimum cost differential was

established by the Office of Management and Budget (OMB) to ensure that

the government would not contract out for marginal estimated savings.

If the Request for Proposals—best value process—is used, the Federal

Procurement Regulation and the A-76 supplemental handbook require

several additional steps. The private sector offerors submit proposals that

often include a technical performance proposal and a price. The

government prepares an in-house management plan and cost estimate

based strictly on the performance work statement. On the other hand,

private sector proposals can offer a higher level of performance or service.

The government’s selection authority reviews the private sector proposals

to determine which one represents the best overall value to the

government based on such considerations as (1) higher performance

levels, (2) lower proposal risk, (3) better past performance, and (4) cost to

do the work. After the completion of this analysis, the selection authority

prepares a written justification supporting its decision. This includes the

basis for selecting a contractor other than the one that offered the lowest

price to the government. Next, the authority evaluates the government’s

offer and determines whether it can achieve the same level of performance

and quality as the selected private sector proposal. If not, the government

must then make changes to meet the performance standards accepted by

the authority. This ensures that the in-house cost estimate is based upon

the same scope of work and performance levels as the best value private

sector offer. After determining that the offers are based on the same level

of performance, the cost estimates are compared. As with the Invitation

for Bids process, the work will remain in-house unless the private offer is

Page 28 GAO/NSIAD-99-46 DOD Competitive Sourcing
Appendix II 

The A-76 Process

(1) 10 percent less in direct personnel costs or (2) $10 million less over the

performance period.

Participants in the process—for either the Invitation for Bids or Request

for Proposals process—may appeal the selection authority’s decision if

they believe the costs submitted by one or more of the participants were

not fair, accurate, or calculated in the manner prescribed by the A-76

handbook.

Page 29 GAO/NSIAD-99-46 DOD Competitive Sourcing
Appendix III 

Comments From the Department of Defense

Page 30 GAO/NSIAD-99-46 DOD Competitive Sourcing
Appendix IV 

Major Contributors to This Report

National Security and

International Affairs

Division, Washington,

D.C.

Barry W. Holman, Associate Director

Marilyn K. Wasleski, Assistant Director

David B. Best, Evaluator-in-Charge

Daniel B. Mezger, Evaluator

David W. Rowan, Senior Evaluator

Chicago Field Office Neil H. Gottlieb, Senior Evaluator

James E. Fuquay, Senior Evaluator

Cheryl K. Andrew, Senior Evaluator

Page 31 GAO/NSIAD-99-46 DOD Competitive Sourcing
Appendix IV 

Major Contributors to This Report

Page 32 GAO/NSIAD-99-46 DOD Competitive Sourcing
Appendix IV 

Major Contributors to This Report

Page 33 GAO/NSIAD-99-46 DOD Competitive Sourcing
Appendix IV 

Major Contributors to This Report

Page 34 GAO/NSIAD-99-46 DOD Competitive Sourcing
Related GAO Products

OMB Circular A-76: Oversight and Implementation Issues (GAO/T-GGD-98-146,

June 4, 1998).

Quadrennial Defense Review: Some Personnel Cuts and Associated

Savings May Not Be Achieved (GAO/NSIAD-98-100, Apr. 30, 1998).

Competitive Contracting: Information Related to the Redrafts of the

Freedom From Government Competition Act (GAO/GGD/NSIAD-98-167R,

Apr. 27, 1998).

Defense Outsourcing: Impact on Navy Sea-Shore Rotations

(GAO/NSIAD-98-107, Apr. 21, 1998).

Defense Infrastructure: Challenges Facing DOD in Implementing Defense

Reform Initiatives (GAO/T-NSIAD-98-115, Mar. 18, 1998).

Defense Management: Challenges Facing DOD in Implementing Defense

Reform Initiatives (GAO/T-NSIAD/AIMD-98-122, Mar. 13, 1998).

Base Operations: DOD’s Use of Single Contracts for Multiple Support

Services (GAO/NSIAD-98-82, Feb. 27, 1998).

Defence Outsourcing: Better Data Needed to Support Overhead Rates for

A-76 Studies (GAO/NSIAD-98-62, Feb. 27, 1998).

Outsourcing DOD Logistics: Savings Achievable But Defense Science

Board’s Projections Are Overstated (GAO/NSIAD-98-48, Dec. 8, 1997).

Financial Management: Outsourcing of Finance and Accounting Functions

(GAO/AIMD/NSIAD-98-43, Oct. 17, 1997).

Base Operations: Contracting for Firefighters and Security Guards

(GAO/NSIAD-97-200BR, Sept. 12, 1997).

Terms Related to Privatization Activities and Processes (GAO/GGD-97-121,

July 1997).

Defense Outsourcing: Challenges Facing DOD as It Attempts to Save

Billions in Infrastructure Costs (GAO/T-NSIAD-97-110, Mar. 12, 1997).

Base Operations: Challenges Confronting DOD as It Renews Emphasis on

Outsourcing (GAO/NSIAD-97-86, Mar. 11, 1997).

Page 35 GAO/NSIAD-99-46 DOD Competitive Sourcing
Related GAO Products

Public-Private Mix: Effectiveness and Performance of GSA’s In-House and

Contracted Services (GAO/GGD-95-204, Sept. 29, 1995).

Government Contractors: An Overview of the Federal Contracting-Out

Program (GAO/T-GGD-95-131, Mar. 29, 1995).

Government Contractors: Are Service Contractors Performing Inherently

Governmental Functions (GAO/GGD-92-11, Nov. 18, 1991).

OMB Circular A-76: Legislation Has Curbed Many Cost Studies in Military

Services (GAO/GGD-91-100, July 30, 1991).

OMB Circular A-76: DOD’s Reported Savings Figures Are Incomplete and

Inaccurate (GAO/GGD-90-58, Mar. 15, 1990).

(709300) Page 36 GAO/NSIAD-99-46 DOD Competitive Sourcing
Ordering Information

The first copy of each GAO report and testimony is free.

Additional copies are $2 each. Orders should be sent to the

following address, accompanied by a check or money order

made out to the Superintendent of Documents, when

necessary. VISA and MasterCard credit cards are accepted, also.

Orders for 100 or more copies to be mailed to a single address

are discounted 25 percent.

Orders by mail:

U.S. General Accounting Office

P.O. Box 37050

Washington, DC 20013

or visit:

Room 1100

700 4th St. NW (corner of 4th and G Sts. NW)

U.S. General Accounting Office

Washington, DC

Orders may also be placed by calling (202) 512-6000 

or by using fax number (202) 512-6061, or TDD (202) 512-2537.

Each day, GAO issues a list of newly available reports and

testimony. To receive facsimile copies of the daily list or any

list from the past 30 days, please call (202) 512-6000 using a

touchtone phone. A recorded menu will provide information on

how to obtain these lists.

For information on how to access GAO reports on the INTERNET,

send an e-mail message with "info" in the body to:

info@www.gao.gov

or visit GAO’s World Wide Web Home Page at:

http://www.gao.gov

PRINTED ON RECYCLED PAPER
United States

General Accounting Office

Washington, D.C. 20548-0001

Official Business

Penalty for Private Use $300

Address Correction Requested

Bulk Rate

Postage & Fees Paid

GAO

Permit No. G100