a

GAO

United States Government Accountability Office

Report to the Secretary of Defense

March 2005 CONTRACT 

MANAGEMENT

Opportunities to 

Improve Surveillance 

on Department of 

Defense Service 

Contracts

GAO-05-274
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-274.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact David E. 

Cooper at (617) 788-0555 or 

cooperd@gao.gov. 

Highlights of GAO-05-274, a report to the 

Secretary of Defense 

March 2005

CONTRACT MANAGEMENT 

Opportunities to Improve Surveillance on 

Department of Defense Service Contracts 

Surveillance varied on the 90 contracts we reviewed. Surveillance was 

insufficient on 26 of the contracts we reviewed but was sufficient on 

64 contracts. Fifteen had no surveillance because no personnel were 

assigned such responsibilities; the other 11 had assigned personnel but could 

not provide evidence of surveillance due to incomplete documentation. Also, 

some surveillance personnel did not receive required training before 

beginning their assignments. 

According to DOD officials, insufficient surveillance occurred because 

surveillance is not as important to contracting officials as awarding 

contracts and therefore, does not receive the priority needed to ensure that 

surveillance occurs. The Army, unlike the Air Force and Navy organizations 

we visited, does not require surveillance personnel to be assigned 

responsibility prior to contract award. We also found that surveillance 

personnel involved in our review were not evaluated on how well they 

perform their surveillance duties. Further, surveillance was usually a parttime responsibility and some personnel felt that they did not have enough 

time in a normal workday to perform their surveillance duties. 

DOD has taken steps to implement provisions in the National Defense 

Authorization Act for Fiscal Year 2002 intended to improve the general 

management and oversight of service contract procurement and, in 

October 2004, DOD issued a policy that emphasized the proper use of other 

agencies’ contracts. However, these efforts did little to improve service 

contract surveillance. On a more specific item, DOD did issue guidance that 

now requires appointment of surveillance personnel during the early 

planning phases of cost-reimbursable and time and materials service 

contracts. At the military service level, in April 2004, the Army revised its 

acquisition instructions and began requiring surveillance on some 

professional support service contracts; but, the revision did not apply to 

those contracts awarded before the enactment date that were still in effect. 

The Department of Defense (DOD) 

is the federal government’s largest 

purchaser of contractor services, 

spending $118 billion in fiscal year 

2003 alone—an increase of 66 

percent since fiscal year 1999. DOD 

is expected to rely increasingly on 

contractors to carry out its mission. 

 

In recent reports, DOD has 

identified inadequate surveillance 

on service contracts. This report 

examines how DOD manages 

service contract surveillance. It 

looks at the extent of DOD’s 

surveillance on a selection of 

service contracts, reasons why 

insufficient surveillance occurred, 

and efforts to improve surveillance. 

What GAO Recommends

GAO recommends that DOD: 

require properly trained 

surveillance personnel be assigned 

to service contracts by the date of 

contract award; ensure surveillance

personnel are held accountable for 

their duties; ensure DOD’s service 

contract review process and data 

collection requirements provide 

more useful information; and revise 

guidance on surveillance for 

services procured from other 

agencies’ contracts. DOD should 

also direct the Army to conduct 

surveillance, as appropriate, on 

ongoing Contract Advisory and 

Assistance Services contracts 

awarded before April 2004. 

DOD concurred with four of our 

recommendations and partially 

concurred with a fifth and 

identified actions it has taken or 

plans to take to address them. 
Page i GAO-05-274 Surveillance of DOD Service Contracts 

Letter 1

Results in Brief 2 

Background 4 

Sufficiency of Service Contract Surveillance Varied 7 

Contract Surveillance Not Always a High Priority 12 

DOD Initiatives Affecting Surveillance 13 

Conclusions 16 

Recommendations for Executive Action 16 

Agency Comments and Our Evaluation 17 

Appendix I Scope and Methodology 19 

Appendix II Roles of Contracting Officers and Surveillance 

Personnel 21 

Appendix III Contracts Reviewed 22 

Appendix IV Comments from the Department of Defense 30 

Tables 

Table 1: Summary of Surveillance on DOD Service Contracts 8 

Table 2: Surveillance Personnel Training 10 

Figure 

Figure 1: DOD Spending on Services, FY 1999 through FY 2003 5 

Contents 
Page ii GAO-05-274 Surveillance of DOD Service Contracts 

Abbreviations 

ACA-North Army Contracting Agency–North Region 

AFMC Air Force Materiel Command 

DFARS Defense Federal Acquisition Regulation Supplement 

DOD Department of Defense 

FAR Federal Acquisition Regulation 

GSA General Service Administration 

NAVSEA Naval Sea Systems Command 

OSD Office of the Secretary of Defense 

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Page 1 GAO-05-274 Surveillance of DOD Service Contracts 

March 17, 2005 

The Honorable Donald H. Rumsfeld 

Secretary of Defense 

Washington, D.C. 

Dear Secretary Rumsfeld: 

The Department of Defense (DOD) is the federal government’s largest 

purchaser of contractor provided services and its spending on those 

services has increased significantly over the past few years. Spending for 

services has increased about 66 percent since fiscal year 1999 and this 

trend is expected to continue as DOD increasingly relies more on 

contractors to carry out aspects of its mission. In fiscal year 2003, DOD 

spent over $118 billion on services–about 57 percent of its procurement 

dollars. 

Because of the increasing use of contractors and the large expenditures 

involved, quality assurance surveillance—oversight of the services being 

performed by the contractor—is important to provide assurance that 

contractors are providing timely and quality services and to help mitigate 

any contractor performance problems. Surveillance is not a one-step 

process. It begins with properly training personnel for assignment of 

surveillance responsibilities and involves ongoing surveillance actions 

throughout the performance period of the contract to ensure the 

government receives the services it contracted for in a timely manner. 

Surveillance includes creating an official record documenting that the 

contractor’s performance was acceptable or unacceptable. 

Because of past problems with inadequate surveillance identified by DOD,1

GAO reports determining that contract management and oversight has not 

always been adequate,2

 and DOD’s increasing reliance on service 

contracts, our overall review objective was to determine how DOD 

manages service contract surveillance. To address this issue we 

 1

DOD Inspector General, Acquisition: Contracts for Professional, Administrative, and 

Management Support Services, D-2004-015 (Oct. 30, 2003) and D-2000-100 (Mar. 10, 2000). 

2

GAO, Major Management Challenges and Program Risks: Department of Defense, 

GAO-03-98 (Washington, D.C.: January 2003) and GAO, High-Risk Series: An Update, 

Department of Defense Contract Management, GAO-05-207 (Washington D.C.: 

January 2005). 

 

United States Government Accountability Office

Washington, DC 20548 
Page 2 GAO-05-274 Surveillance of DOD Service Contracts 

(1) examined the extent surveillance was performed on a selection of 

service contracts, (2) identified reasons for why insufficient surveillance 

occurred, and (3) identified recent efforts to help improve surveillance. 

To conduct our work, we met with representatives of the Office of the 

Secretary of Defense (OSD) and the military services to discuss how 

contract surveillance is carried out across DOD and what efforts are being 

made to improve surveillance. We also selected and reviewed 90 service 

contracts and their associated surveillance records. The 90 contracts had a 

total value of about $385.7 million at the time of contract award, but that 

value has increased significantly over time. These contracts were awarded 

primarily at three military commands within the military departments: 

(1) the Army Contracting Agency–North Region (ACA-North) at Fort 

Monroe, Virginia; (2) the Naval Sea Systems Command (NAVSEA) at the 

Navy Ship Yard, Washington, D.C.; and (3) the Air Force Materiel 

Command (AFMC) at Wright-Patterson Air Force Base, Ohio.3

 Each of 

these organizations spends significant funding for services within their 

respective military department. Although our results are not projectable 

across all of DOD’s service contracts, they are illustrative of the challenges 

involved in conducting surveillance for services. We contacted 

contracting officers, surveillance personnel, and procurement 

management officials associated with each of the selected contracts to 

obtain information about surveillance. We did not include research and 

development contracts or construction contracts in the contracts selected 

because the surveillance process typically differs for these types of 

contracts. A more detailed discussion of our scope and methodology is in 

appendix I. We conducted our review from January 2004 to February 2005 

in accordance with generally accepted government auditing standards. 

Surveillance varied on the 90 contracts we reviewed. Surveillance was 

insufficient on 26 of the contracts we reviewed but was sufficient on 64 

contracts. Fifteen of the 26 contracts had no surveillance activity because 

no personnel were assigned surveillance responsibilities. The other 

11 contracts had surveillance personnel assigned but could not provide 

evidence that surveillance was being conducted because of incomplete 

documentation. Further, some surveillance personnel did not receive 

required training prior to beginning their surveillance assignments on 

 3

We also reviewed a small number of contracts associated with the Office of the Secretary 

of Defense and other defense agencies. 

Results in Brief 
Page 3 GAO-05-274 Surveillance of DOD Service Contracts 

contracts. In some instances surveillance was very rigorous. For example, 

a Navy contract for critical submarine hull repair involved Navy personnel 

and an independent specialist using live video to observe all the repairs in 

real-time. 

DOD officials attributed insufficient surveillance to a number of factors. 

Contract surveillance is not always a top priority for contracting officers 

and managers who oversee contracting organizations told us that 

surveillance is not given the same importance as getting the contract 

awarded. Also, the Army, unlike the Air Force and Navy organizations we 

visited, does not require that surveillance personnel be assigned to service 

contracts prior to contract award. In addition, no organization we visited 

consistently evaluates surveillance personnel on how well they perform 

their surveillance responsibilities. Finally, some surveillance personnel 

believe they do not have enough time in a normal workday to perform 

surveillance, a factor that may be influenced by declining personnel levels 

in DOD functional offices responsible for conducting surveillance. 

DOD has begun implementing some initiatives that have the potential to 

improve service contract management and oversight practices on a broad 

basis. DOD has taken steps to implement provisions in the National 

Defense Authorization Act for Fiscal Year 20024

 intended to improve the 

management and oversight of service contract procurement and, in 

October 2004, it issued a policy that emphasized the proper use of other 

agencies’ contracts. However, little has been done as part of these efforts 

to specifically improve DOD service contract surveillance practices. For 

specific types of contracts—cost-reimbursement5

 and time and materials6

service contracts—DOD established additional guidance, in September 

2004, that requires surveillance personnel be appointed to these contracts 

during the early planning phase to provide appropriate oversight. Also, in 

April 2004, the Army began requiring surveillance for the first time on 

certain types of professional support service contracts; however, Army 

 4

Section 801, National Defense Authorization Act for Fiscal Year 2002, Public Law 107-107, 

Dec. 28, 2001. 

5

Cost-reimbursement contracts provides for Government’s payment of allowable costs 

incurred by the contractor. Federal Acquisition Regulation 16.301-1, Cost-Reimbursement 

Contracts (hereinafter FAR). 

6

Time-and-materials contracts that provide for acquiring supplies or services on the basis of 

direct contractor labor hours at fixed rates and materials at cost. FAR 16.601, Time-andMaterials Contracts. 
Page 4 GAO-05-274 Surveillance of DOD Service Contracts 

officials told us this requirement did not apply to contracts of this type 

awarded prior to April 2004 that are still in effect. 

We are making four recommendations to help improve DOD service 

contract surveillance and one recommendation to help ensure that the 

Army is conducting surveillance on certain types of service contracts 

awarded and still in use prior to April 2004. DOD concurred with four of 

our recommendations and partially concurred with a fifth and identified 

actions it has taken or plans to take to address them. 

DOD and the federal government classify procurements as either the 

purchase of goods or services. DOD procures many types of services 

ranging from research and development efforts on major weapon systems 

to operating military installations.7

 Service contracts, because they involve 

the contractor providing a service rather than a good, by nature require 

different approaches in describing requirements and overseeing contractor 

performance than the purchases of goods. DOD spends more of its 

procurement funds on services than it does on goods. Moreover, DOD 

spends significantly more than any other federal agency on services. DOD 

spending on services has been increasing significantly over the last several 

years—about 66 percent since fiscal year 1999—to a level of $118 billion in 

fiscal year 2003 (see fig. 1). 

 7

The DOD and the federal government have 24 different categories of service contracts. 

These categories range from contracts for information technology and medical services to 

base operating support. 

Background 
Page 5 GAO-05-274 Surveillance of DOD Service Contracts 

Figure 1: DOD Spending on Services, FY 1999 through FY 2003 

Surveillance and documentation that it occurred are required by the 

Federal Acquisition Regulation (FAR)8

 and the Defense Federal 

Acquisition Regulation Supplement (DFARS).9

 Moreover, documentation is 

necessary to help ensure accountability over the surveillance process. 

Surveillance involves government oversight of contractors with the 

purpose of ensuring that the contractor (the service provider) performs 

the requirements of the contract and the government (the service receiver 

or customer) receives the service as intended. Surveillance begins with 

trained personnel being nominated for and assigned surveillance 

responsibilities, and then conducting surveillance actions throughout the 

performance period of the contract to ensure the government receives the 

services required by the contract. 

While surveillance is required by the DFARS, specific methods are not 

prescribed. DOD organizations use various methods to conduct 

surveillance, ranging from formal written assessments (monthly, semi-

 8

FAR 37.602-2, Quality Assurance and FAR 46.104, Contract Administration Office 

Responsibilities. 

9

 Defense Federal Acquisition Regulations Supplement 246.102. 

0

20

40

60

80

100

120

140

Dollars in millions

1999

71

2000

72

2001

77

2002

93

2003

118

Fiscal year

Source: GAO analysis of DOD data.
Page 6 GAO-05-274 Surveillance of DOD Service Contracts 

annually, or annually) of contractor performance prepared by DOD 

surveillance personnel to more informal observations or inspections of 

contractor performance by surveillance personnel. The methods used 

generally relate to the dollar value of the contract and the risk associated 

with the service being provided. 

Proper documentation of surveillance is required. Proper documentation 

is not only stressed in the DFARS but also in other DOD guidance that 

requires performance-based service contracts,10—which DOD is requiring 

to be used more often in the acquisition of services—to have a surveillance 

plan. Surveillance of contractor performance should be documented as it 

is conducted. DOD guidance maintains that this documentation 

constitutes an official record and the surveillance personnel assessing 

performance are to use a checklist to record their observations of the 

contractor’s performance. The guidance also concludes that all 

performance should be documented whether it is acceptable or not. 

Surveillance personnel11 are usually not considered part of DOD’s 

acquisition workforce. Instead, surveillance personnel represent the DOD 

functional organization receiving the service and are usually assigned 

surveillance as an ancillary responsibility in addition to their primary job. 

For example, if a DOD weapon system program office (a functional 

organization) has a need to contract for professional support services, the 

program office would assist the contracting officer by defining contract 

requirements and methods of contractor performance and by nominating 

an official to serve as the surveillance personnel. Surveillance personnel 

are likely to be full-time employees of the DOD organization needing the 

service and are generally knowledgeable about the aspects of the service 

to be provided by the contractor. This knowledge is useful in assessing 

contractor performance. However, it is the contracting officer’s 

responsibility to assign surveillance personnel and to ensure that 

surveillance is conducted on the contract. The surveillance personnel act 

as a liaison between the contracting officer and the contractor. If less than 

 10Guidebook for Performance-Based Services Acquisition in the Department of Defense, 

December 2000. 

11The military services, including the contracting offices we visited during this review use 

different terms to describe personnel involved in surveillance including: Quality Assurance 

Personnel (QAP), Quality Assurance Evaluator (QAE), Contracting Officer’s Representative 

(COR), Contracting Officer’s Technical Representative (COTR) and Task Order Manager 

(TOM). For purposes of this report, we will refer to all these positions as surveillance 

personnel. 
Page 7 GAO-05-274 Surveillance of DOD Service Contracts 

adequate contractor performance is noted by the surveillance personnel, 

they notify the contracting officer as a first step toward corrective action. 

Appendix II shows in more detail the roles of contracting officers and 

surveillance personnel. 

Congressional concern over the management of DOD’s growing services 

procurement led Congress to include provisions in section 801 of the 

National Defense Authorization Act for Fiscal Year 200212 designed to 

improve management and oversight of services procurement and reinforce 

compliance with all applicable statutes, regulations, directives, and other 

requirements, regardless of whether the services were procured through 

DOD contracts or those of another agency. We have previously reported 

on section 801, but at that time DOD had not completely determined how 

to implement specifics of the legislation.13 In our prior report, we stated 

that DOD and the military departments had a management structure and a 

process in place for reviewing individual acquisitions valued at 

$500 million or more, but the approach did not provide a departmentwide 

assessment of how spending for services could be more effective. 

In October 2004, to help reinforce the requirements of section 801, DOD 

issued a policy designed to emphasize the proper use of other agencies’ 

contracts. DOD spends billions of dollars every year using other agencies’ 

contracts and is the largest purchaser of services from GSA’s multiple 

award schedules program. 

The use of surveillance varied on the 90 contracts we reviewed. While 26 

of the 90 DOD contracts we reviewed had insufficient surveillance, 64 

contracts had sufficient, documented surveillance that in some instances 

was extensive. More specifically, 25 of the 26 contracts with insufficient 

surveillance were contracts for services that DOD obtained by using GSA 

contracts available under its multiple award schedules program. In 

addition, 13 surveillance personnel had not completed required training 

prior to being assigned surveillance responsibilities. Our review also found 

that 64 contracts had sufficient, documented surveillance and in some of 

these instances, surveillance was extensive. 

 12Public Law 107-107, Dec. 28, 2001. 

13GAO, Contract Management: High-Level Attention Needed to Transform DOD Services 

Acquisition, GAO-03-935 (Washington, D.C.: Sep. 10, 2003). 

Sufficiency of Service 

Contract Surveillance 

Varied 
Page 8 GAO-05-274 Surveillance of DOD Service Contracts 

For the 90 DOD service contracts we reviewed, 26 of the contracts 

(29 percent) had insufficient surveillance in that they lacked assigned 

surveillance personnel or complete documentation of surveillance.14 Of 

these 26 contracts, 15 contracts had no surveillance personnel assigned. 

Additionally, 11 of the 26 contracts had insufficient documentation to 

show if surveillance was occurring. Table 1 summarizes our findings for 

the 90 contracts and shows that there were more instances of insufficient 

surveillance related to the Army contracts compared to the Navy. All of 

the Air Force contracts we reviewed had surveillance. (See app. III for a 

more detailed summary of the 90 contracts.) 

Table 1: Summary of Surveillance on DOD Service Contracts 

Dollars in millions 

 Total contracts reviewed 

DOD organization Number of contracts Award amount 

Number of contracts 

with no surveillance 

personnel assigned 

Number of contracts 

with insufficient 

evidence of surveillance

Air Force 

AFMC 20 $39.0 0 0

Other organizations 8 2.4 0 0

Army 

ACA-North 19 86.2 7 2

Other organizations 11 20.7 6 1

Navy 

NAVSEA 20 226.6 0 0

Other organizations 6 8.7 1 4

OSD and other DOD 

agencies 

6 2.1 1 4

Total 90 $385.7 15 11

Source: GAO analysis of DOD data. 

Our further analyses of the 90 contracts found only one common 

characteristic as to whether surveillance was affected by other contractual 

 14The $46.6 million was the total value of the 26 contracts at the time they were awarded. 

Contracts can increase in value for a number of reasons after they are awarded. Contracts 

can increase in value when additional contract options are exercised, the scope of the 

contract changes, etc. For example, one NAVSEA contract increased from $225,000 at 

contract award, but has the potential to increase to $96 million. Many of the contracts we 

reviewed increased in value since they were awarded. 

Surveillance Personnel Not 

Always Assigned and 

Surveillance 

Documentation 

Insufficient 
Page 9 GAO-05-274 Surveillance of DOD Service Contracts 

factors. Specifically, we found that of the 45 interagency contracts we 

reviewed where DOD awarded them using GSA’s multiple award 

schedules program,15 25 had insufficient surveillance. GAO has recently 

identified issues with DOD’s use of interagency contracts in general and 

reported that they were not being effectively managed.16

We also found that the contract award amount was not always a good 

indication of the total value of the services that needed to be surveilled. 

While the award amount of the 90 contracts we reviewed was 

$385.7 million in fiscal year 2003, the amount of funds obligated on about 

one-half of these contracts had grown to about $1.5 billion as of November 

2004.17 We found that for some of the 15 contracts without surveillance 

personnel assigned, the contract amounts have more than tripled over the 

course of the contract. For example, one Army contract for educational 

services was awarded for $271,690 but had increased to $900,125. 

We did not find that the sufficiency of surveillance was related to other 

factors, including type of service contract (fixed price or costreimbursable), type of services being procured, use of performance-based 

contract methods, or dollar value at award. For some of the contracts 

without sufficient documentation of surveillance, we asked the personnel 

how the government’s interests were being protected. They told us they 

were conducting surveillance, but they had not been keeping documented 

records to verify surveillance had taken place. 

 15GSA’s multiple award schedules program provides federal agencies with a simplified 

process of acquiring commonly used supplies and services in varying quantities while 

obtaining volume discounts. In return, agencies utilizing the schedules program provide 

GSA with a user fee to cover GSA’s administrative expenses. 

16GAO, High-Risk Series: An Update, GAO-05-207 (Washington D.C.: January 2005). 

17 We did not obtain the total amount of obligations for about one-half of the contracts. 
Page 10 GAO-05-274 Surveillance of DOD Service Contracts 

Surveillance training, despite DOD regulations requiring such training, was 

not always completed prior to personnel being assigned surveillance 

responsibilities. Such training explains their responsibilities and identifies 

methods of conducting surveillance. On the contracts we reviewed, 

13 surveillance personnel had not received the required training. Without 

timely training, surveillance personnel may not know how to perform their 

duties. We found examples of this late training at each of the commands 

we visited including 10 instances at AFMC, 2 instances at NAVSEA, and 1 

instance at ACA-North. In some cases, surveillance personnel had not 

completed training until several months after assignment to a contract. 

See table 2 for a summary of surveillance personnel training information. 

Table 2: Surveillance Personnel Training 

Military command 

Surveillance personnel 

assigned to contracts 

Surveillance personnel not 

trained before assignment

Air Force Materiel Command 60 10

ACA-North 13 1

NAVSEA 31 2

Total 104 13

Source: GAO analysis of DOD data. 

We found that 64 of the 90 contracts we reviewed had surveillance 

personnel who were assigned their surveillance responsibilities and were 

conducting and documenting surveillance. The 64 contracts included 

20 that were awarded using GSA’s multiple award schedules program. 

The amount of surveillance varied depending on the type of service being 

provided. In some instances, the surveillance was a very detailed, rigorous 

process. For example, one Navy contract we reviewed involved critical 

submarine hull repair. The surveillance on the services was extensive and 

involved Navy personnel and an independent specialist using live video to 

observe all the repairs in real time. For lower risk contracts, such as one 

involving maintenance of an Army recruiting internet site, surveillance 

was significantly less formal because the contractor and surveillance 

personnel actually shared office space and had daily interaction. 

If surveillance is done properly, it has the potential to identify poor 

contractor performance and mitigate problems on a contract. For 

example, on one of the contracts we reviewed, AFMC was having 

problems with a custodial contract worth approximately $3 million. The 

surveillance personnel assigned to the job followed the surveillance plan 

Surveillance Personnel 

Training Not Always 

Completed Prior to 

Surveillance Beginning 

Surveillance Often 

Sufficient and Used to 

Identify Insufficient 

Contractor Performance 
Page 11 GAO-05-274 Surveillance of DOD Service Contracts 

and documented observations and customer complaints that the 

contractor was not meeting some of the contract requirements for a few 

consecutive months. In each instance, the contractor was asked to reperform the tasks that were deemed unacceptable and the surveillance 

personnel informed the contracting officer of the issues. As the problems 

continued, the contracting officer involved the contractor’s corporate 

headquarters and arranged a meeting to resolve the underlying problems. 

Two main problems were identified. Some tasks the government expected 

to be performed were not in the contract, and the contractor was 

providing poor service on other tasks. Both of these problems were 

remedied and surveillance showed the contractor subsequently received 

high ratings. Another example where surveillance caught insufficient 

performance was on a NAVSEA contract worth approximately $14 million. 

The surveillance on this contract was structured so that the government 

would rate each contractor employee’s performance. Two contract 

employees were not performing as required and the corporate 

headquarters subsequently replaced both of them within in a few months. 

NAVSEA and AFMC have policies that help ensure that surveillance begins 

as soon as possible on contracts. Both organizations require surveillance 

personnel to be assigned before or at contract award. Based on the 

contracts reviewed, we found that both organizations complied with their 

respective policies—each contract we reviewed had someone assigned to 

conduct surveillance. In contrast, the Army and ACA-North have no policy 

requiring surveillance personnel be assigned at or before contract award. 

Of the 26 contracts we identified as having insufficient surveillance, 16 

were Army contracts, including 9 ACA-North contracts. The Air Force 

requires a team be created prior to the award of service contracts. This 

team is comprised of at least the contracting officer, a representative from 

the buying entity, and the surveillance personnel who will be assigned to 

the contract. This policy helps assure that surveillance is given a higher 

priority because the contract cannot be awarded until the team has met. 

AFMC and NAVSEA 

Practices Help Provide 

Sufficient Surveillance 
Page 12 GAO-05-274 Surveillance of DOD Service Contracts 

Surveillance was not always given high priority by either the contracting 

or functional organizations, according to officials responsible for the 

contracts we reviewed. These officials told us getting the contracts 

awarded, and thus supporting the customer, takes priority over assuring 

trained surveillance personnel are assigned prior to contract award. The 

Army, unlike the Air Force and Navy organizations we visited, does not 

require surveillance personnel to be assigned to contracts prior to the 

contract award date. Officials also told us almost all surveillance 

personnel are not evaluated on their surveillance responsibilities in their 

performance assessments because surveillance is considered a part-time 

or ancillary activity. Also, some surveillance personnel feel they do not 

have sufficient hours during their normal workday to get the job done. 

Federal and DOD acquisition regulations do not require surveillance 

personnel to be assigned prior to contract award. Contracting officials 

from all three service commands as well as OSD and senior military 

acquisition policy officials stated that, in general, the priority of 

contracting offices is awarding contracts, not assuring that trained 

surveillance personnel are assigned early on so that surveillance can begin 

upon contract award. Contracting officials told us that their primary 

objective is to get the necessary contracts awarded in order to support the 

functional office (the service customer) and that delaying a contract award 

because of delays in the assignment or training of surveillance personnel 

does not normally occur. It is the assignment of surveillance personnel 

that is usually delayed until after contract award because contracting 

officers cannot assign them until they are nominated by the functional 

office. NAVSEA and AFMC, however, have recognized the importance of 

timely assignment and require contracting officers to assign surveillance 

personnel by contract award. The Army and ACA-North have no such 

requirement. For all the NAVSEA contracts we reviewed, surveillance 

personnel were timely assigned. 

A further indication that surveillance is not always given a high priority is 

that almost all personnel involved in our review are not rated on 

performance of their surveillance responsibilities. NAVSEA and Army 

policy indicates that surveillance responsibilities should at least be 

considered in performance ratings, and Army training material indicates 

that surveillance performance should be evaluated; however, in almost all 

cases, personnel were not being assessed on these responsibilities. 

Officials at NAVSEA told us they plan to issue a policy memo encouraging 

the functional organizations to include surveillance duties in performance 

ratings. While these efforts demonstrate a willingness to hold surveillance 

Contract Surveillance 

Not Always a 

High Priority 

Surveillance Secondary 

to Awarding Contracts 

Surveillance Personnel 

Not Rated on Surveillance 

Responsibilities 
Page 13 GAO-05-274 Surveillance of DOD Service Contracts 

personnel accountable through ratings, they provide no plans or processes 

to help accomplish this. OSD and senior acquisition policy officials also 

acknowledge that assessing surveillance personnel on their 

responsibilities could improve accountability but told us this could require 

modifications to job descriptions, which could be a difficult task. 

Several Air Force and Navy personnel told us they do not always have 

sufficient time to focus on surveillance responsibilities; thus, possibly 

contributing to inadequate surveillance or leaving at risk the potential 

for not detecting contractor performance problems. Five NAVSEA 

surveillance personnel out of 17 we talked to told us they felt they did not 

have enough time, in a normal workday, to fully perform their surveillance 

duties. They told us they are usually assigned surveillance as a part-time 

duty to be done in additional to their regular, full-time job responsibilities. 

NAVSEA contract managers agreed that surveillance personnel at times do 

need to work additional hours to ensure surveillance is done. According to 

OSD and senior acquisition policy officials, this situation is occurring, in 

part, due to a reduction in the staffing of functional offices that nominate 

personnel to perform surveillance duties. 

DOD is in the process of implementing some initiatives that may help 

improve contract management and oversight practices. DOD has taken 

some steps to implement provisions in the National Defense Authorization 

Act for Fiscal Year 200218 designed to help improve the general 

management and oversight of service contract procurement and also 

recently issued a policy emphasizing the proper use of other agencies’ 

contracts. DOD also recently established additional guidance on contract 

surveillance for cost-reimbursable and time and materials service 

contracts that states that surveillance personnel should be appointed to 

these types of service contracts during the early contract planning phase 

to help improve oversight. In addition, a recently revised Army acquisition 

instruction clarified surveillance requirements for certain types of service 

contracts for which the Army was not previously requiring surveillance. 

 18Section 801, Public Law 107-107, Dec. 28, 2001. 

Some Air Force and Navy 

Surveillance Personnel 

Feel Not Enough Time to 

Perform Surveillance 

DOD Initiatives 

Affecting Surveillance 
Page 14 GAO-05-274 Surveillance of DOD Service Contracts 

DOD has taken some steps to implement provisions in section 801 of the 

National Defense Authorization Act for Fiscal Year 2002,19 which was 

intended to improve DOD management and oversight of services 

procurement and reinforce compliance with all applicable statutes, 

regulations, directives, and other requirements, regardless of whether the 

services are procured through a DOD contract or other agencies’ 

contracts. DOD also recently issued a policy placing emphasis on the 

proper use of other agencies’ contracts, such as GSA’s schedules program. 

Regarding establishment of a management and review structure for 

service contracts, we reported in September 200320 that DOD and the 

military departments each had a management structure in place for 

reviewing individual service contracts valued at $500 million or more prior 

to contract award, but that approach did not provide a departmentwide 

assessment of how spending for services could be more effective. During 

our current review, we found that DOD and the military departments 

continue to focus their efforts on activities that lead up to contract awards 

and do not track or assess the sufficiency of surveillance on service 

contracts regardless of their dollar value or risk. As a result, little has been 

done as part of implementing section 801 to specifically improve DOD 

surveillance practices. 

Section 801 of the act,21 as well as DOD policy, requires that certain data 

elements on service contracts be collected and analyzed to help support 

management decisions. The requirement applies to contracts for services 

valued at $100,000 or more. While DOD has been collecting data to comply 

with the act, no data related to contract surveillance is being collected 

because neither the act nor DOD guidance requires collection of this type 

of data. As a result, DOD is not tracking whether the assignment of 

surveillance personnel has taken place. Without this data, DOD and the 

military departments will likely continue to have limited visibility over the 

timely assignment of surveillance personnel and the results of 

surveillance. 

 19Section 801, Public Law 107-107, Dec. 28, 2001. 

20GAO, Contract Management: High-Level Attention Needed to Transform DOD Services 

Acquisition, GAO-03-935 (Washington, D.C.: Sept. 10, 2003). 

21Public Law 107-107, Dec. 28, 2001. 

DOD Efforts to 

Improve Service 

Contract Management 

and Oversight 
Page 15 GAO-05-274 Surveillance of DOD Service Contracts 

Further, DOD’s October 2004 policy, which placed emphasis on the proper 

use of other agencies’ contracts, does not specifically address surveillance. 

The policy focuses on ensuring that DOD’s procurement processes and 

procedures are done correctly. As discussed earlier, surveillance on 

contracts awarded using interagency arrangements is an area where we 

found efforts could be improved—25 of the 26 contracts we determined to 

have insufficient surveillance were contracts using GSA’s schedules 

program. 

In September 2004, OSD issued additional guidance to the military services 

on service contracts called cost-reimbursable and time and material 

contracts. The guidance stresses the need for the assignment of 

surveillance personnel for these contracts because they usually require 

significant government surveillance during contract performance to 

ensure the government receives good value. 

The additional DOD guidance was issued in response to a 2003 DOD 

Inspector General report that found surveillance was inadequate for 29 of 

43 cost-reimbursable contract actions.22 The Inspector General found that 

surveillance personnel were designated in writing, as required, on only 

21 of 43 contract actions. Further, for these 21 contracts, 13 had 

insufficient surveillance. DOD’s September 2004 guidance was issued to 

help correct some of these inadequacies. 

Revised Army acquisition instructions, issued in April 2004, now require 

surveillance personnel to be assigned for a certain type of service contract 

called Contract Advisory and Assistance Services.23 Senior Army 

acquisition and other officials at the ACA-North told us that, in the past, 

these contracts required less surveillance because they were generally 

seen as lower risk; in addition, the officials noted that shortages of 

personnel in the functional offices also contributed to conducting less 

surveillance on this type of service contract. The Army was unable to 

provide us information on the quantity and dollar amounts associated with 

 22DOD Inspector General, Acquisition: Contracts for Professional, Administrative, and 

Management Support Services, D-2004-015 (Oct. 30, 2003). 

23Contract Advisory and Assistance Services, CAAS, are contracts where contractors 

provide professional consultation and assistance to government organizations contracting 

for services. 

Additional DOD 

Surveillance Guidance for 

Cost Reimbursable and 

Time and Materials 

Service Contracts 

Revised Army Acquisition 

Instruction 
Page 16 GAO-05-274 Surveillance of DOD Service Contracts 

these contracts that did not have surveillance; as a result, we were unable 

to determine the overall significance of this issue. We are encouraged that 

the Army has now decided to require surveillance for this type of contract. 

However, the new acquisition instructions are not retroactive and 

therefore do not provide a means to require surveillance for Contract 

Advisory and Assistance Services contracts awarded prior to April 2004 

and still in effect. 

If surveillance is not conducted, not sufficient, or not well documented, 

DOD is at risk of being unable to identify and correct poor contractor 

performance in a timely manner. Ultimately, if surveillance is not being 

done, DOD can be at risk of paying contractors more than the value of the 

services they performed. Key to sufficient surveillance are personnel 

trained in how to conduct surveillance, assigned at or prior to contract 

award, held accountable for their surveillance duties, and conducting and 

documenting surveillance throughout the period of the contract. While 

DOD has taken some actions to improve management and oversight of 

service contracts, more can be done to ensure these practices are in place. 

To help improve service contract surveillance and further mitigate risk, we 

recommend that the Secretary of Defense 

• ensure that the proper surveillance training of personnel and their 

assignment to service contracts occurs no later than the date of contract 

award; 

• develop practices to help ensure accountability for personnel carrying out 

surveillance responsibilities; 

• ensure that DOD’s service contract review process and associated data 

collection requirements provide information that will provide more 

management visibility over contract surveillance; and 

• revise the October 2004 policy on proper use of other agencies’ contracts 

to include guidance on conducting surveillance of services procured from 

other agencies’ contracts. 

Further, we recommend that the Secretary of Defense direct the Secretary 

of the Army to assign surveillance personnel to conduct surveillance, as 

appropriate, on ongoing Contract Advisory and Assistance Services 

contracts awarded prior to April 2004. 

Conclusions 

Recommendations for 

Executive Action 
Page 17 GAO-05-274 Surveillance of DOD Service Contracts 

DOD provided us with written comments on a draft of this report. DOD 

concurred with four of our recommendations and partially concurred with 

a fifth recommendation and identified actions it has taken or plans to take 

to address them. The comments appear in appendix IV. 

DOD partially concurred with our recommendation that the Secretary 

develop practices to help ensure accountability for personnel carrying out 

surveillance responsibilities. DOD stated that it will review the feasibility 

of including a performance goal in a contracting officer representative’s 

(surveillance personnel) annual performance evaluation which would 

address the representative’s performance of their surveillance duties. 

We believe DOD’s willingness to review and determine the feasibility of 

this issue is a step in the right direction and we believe it could lead to a 

process that holds surveillance personnel accountable for their 

surveillance responsibilities. Whether this is done using annual 

performance evaluations or by other means, we believe it can only lead to 

more sufficient surveillance on DOD service contracts. 

We are sending copies of this report to the Secretaries of the Air Force, the 

Army, and the Navy; appropriate congressional committees; and other 

interested parties. We will also provide copies to others on request. In 

addition, the report will be available at no charge on the GAO Web site at 

http://www.gao.gov. 

If you or your staff has questions concerning this report, please contact me 

at (202) 512-4841 or by e-mail at cooperd@gao.gov, or James Fuquay at 

Agency Comments 

and Our Evaluation 
Page 18 GAO-05-274 Surveillance of DOD Service Contracts 

(937) 258-7963. Key contributors to this report were R. Elizabeth DeVan, 

Johnetta Gatlin-Brown, Arthur James, Victoria Klepacz, John Krump, 

Jean Lee, Don Springman, and Robert Swierczek. 

Sincerely yours, 

David E. Cooper, Director 

Acquisition and Sourcing Management 
Appendix I: Scope and Methodology 

Page 19 GAO-05-274 Surveillance of DOD Service Contracts 

To conduct our work, we selected and reviewed 90 Department of Defense 

(DOD) service contracts, each with a contract action for an amount over 

$100,000 in fiscal year 2003, and their associated surveillance records. For 

each contract, we reviewed surveillance actions for up to a 1-year period. 

Collectively, these contracts had a value of $385.7 million at the time of 

contract award. The majority of these contracts (59) were awarded 

primarily at three military commands within the military departments: 

(1) the Army Contracting Agency–North Region (ACA-North) at Fort 

Monroe, Virginia; (2) the Naval Sea Systems Command (NAVSEA) at the 

Navy Ship Yard, Washington, D.C.; and (3) the Air Force Materiel 

Command (AFMC) at Wright-Patterson Air Force Base, Ohio. Each of 

these organizations spends significant funding for services within their 

respective military department. An additional 31 primarily Army, Navy and 

Air Force contracts that were selected were awarded using the General 

Service Administration’s schedules program; these contracts had been 

analyzed in a recent GAO review.1

 (See app. III for a listing of the contracts 

we reviewed.) 

Our selection of contracts was not large enough to allow projection of our 

findings across DOD. In addition, it did not include research and 

development service contracts for weapon systems and construction 

contracts as the surveillance process typically differs for these types of 

service contracts. 

We met with procurement management officials at the three military 

commands as well as senior acquisition policy officials for each of the 

military departments and OSD. We also contacted contracting officials or 

surveillance personnel associated with all 90 contracts selected to discuss 

the surveillance on each contract. 

We reviewed the federal and DOD acquisition regulations and policies, as 

well as the instructions and regulations of the military departments and 

the commands we visited, to determine their processes for assigning 

surveillance personnel and performing surveillance on service contracts. 

To assess whether DOD’s service contract management and oversight 

process developed to comply with section 801 of the National Defense 

 1

GAO, Contract Management: Guidance Needed to Promote Competition for Defense Task 

Orders, GAO-04-874 (Washington, D.C.: July 2004). 

Appendix I: Scope and Methodology 
Appendix I: Scope and Methodology 

Page 20 GAO-05-274 Surveillance of DOD Service Contracts 

Authorization Act for Fiscal Year 20022 addressed contract surveillance, 

we reviewed the implementation policies of OSD and the military 

departments along with their associated data collection efforts. We also 

discussed DOD’s efforts with senior OSD acquisition officials. 

We conducted our review from January 2004 to February 2005 in 

accordance with generally accepted government auditing standards. 

 2

 Public Law 107-107, Dec. 28, 2001. 
Appendix II: Roles of Contracting Officers 

and Surveillance Personnel 

Page 21 GAO-05-274 Surveillance of DOD Service Contracts 

Appendix II: Roles of Contracting Officers 

and Surveillance Personnel 

Helps define contract requirements and determine 

methods of surveillance

Ensures training for surveillance personnel

Appoints surveillance personnel for contract (can 

also be done at contract award)

Contractually binds DOD and contractor(s)

Appoints surveillance personnel for contract 

(can also be done during pre-award)

Notified by surveillance personnel of any less 

than adequate contractor performance

Notifies contractor that performance is not 

satisfactory

Uses surveillance methods to conduct/document

contractor performance

Notifies management, contracting officer, and 

contractor of any less than adequate contractor 

performance

Helps define contract requirements and determine 

methods of surveillance

Nominates surveillance personnel for contract

Contracting officer:

Contracting office Organization buying service

Contracting officer:

Contracting officer: Surveillance personnel:

Buying personnel:

Contract Planning 

and Formulation

Pre-Award contract 

activities

Post-Award 

contract activities

End of Contract

Contract Award 

activities

Source: GAO analysis of DOD data.
Appendix III: Contracts Reviewed 

Page 22 GAO-05-274 Surveillance of DOD Service Contracts 

Description of services Award amount 

Total obligations 

as of Nov. 24, 2004

Air Force 

AFMC 

1 Management Support Services $27,369,377 $13,425,866

2 ADP & Telecommunication Services 4,466,003 —

3 ADP & Telecommunication Services 1,300,000 1,300,000

4 Fueling & Other Petroleum Services 1,211,480 5,036,280

5 Administrative Support Services 768,310 —

6 Administrative Support Services 692,042 —

7 Trash/Garbage Collection Services 438,855 999,831

8 ADP & Telecommunication Services 343,481 1,336,647

9 ADP & Telecommunication Services 340,749 39,997,549

10 Custodial/Janitorial Services 294,556 1,817,702

11 Technical Assistance 283,980 —

12 Research & Development Facilities 240,869 —

13 Custodial/Janitorial Services 214,007 1,841,015

14 Architect-Engineering Services 198,009 1,179,395

15 Technical Representative Services/Aircraft 170,040 6,114,699

16 ADP Data Entry Services 154,197 —

17 Architect-Engineering Services 134,555 1,002,798

18 ADP & Telecommunication Services 133,962 202,728

19 Technical Representative Services/Aircraft 117,764 654,266

20 ADP & Telecommunication Services 111,000 27,203,283

Other organizations 

21 ADP System Acquisition Support Services 667,554 —

22 ADP System Acquisition Support Services 376,708 —

23 Systems Engineering Services 323,308 —

24 Management Support Services 320,123 —

25 ADP & Telecommunication Services 254,298 —

26 Other ADP & Telecommunication Services 210,239 —

27 ADP & Telecommunication Services 145,468 —

28 ADP & Telecommunication Services 140,655 —

Appendix III: Contracts Reviewed 
Appendix III: Contracts Reviewed 

Page 23 GAO-05-274 Surveillance of DOD Service Contracts 

Evidence of 

surveillance 

Surveillance personnel 

assigned 

Surveillance personnel 

trained before duty 

Contract/ order 

pricing typea

DOD contract/ order via 

GSA schedules 

 

Yes Yes Yes FFP No 

Yes Yes Yes T&M Yes 

Yes Yes Yes FFP No 

Yes Yes Yes FFP No 

Yes Yes — LH Yes 

Yes Yes Yes LH Yes 

Yes Yes — FFP No 

Yes Yes Yes FFP No 

Yes Yes — T&M No 

Yes Yes No FFP No 

Yes Yes Yes FFP Yes 

Yes Yes Yes LH Yes 

Yes Yes — FFP No 

Yes n/a n/a FFP No 

Yes n/a n/a FFP No 

Yes Yes Yes LH Yes 

Yes n/a n/a FFP No 

Yes Yes Yes COST No 

Yes n/a n/a FFP No 

Yes Yes — T&M No 

 

Yes Yes Yes FFP Yes 

Yes Yes Yes FFP Yes 

Yes Yes No T&M Yes 

Yes Yes Yes FFP Yes 

Yes Yes Yes FFP Yes 

Yes Yes Yes FFP Yes 

Yes Yes Yes FFP Yes 

Yes Yes No FFP Yes 
Appendix III: Contracts Reviewed 

Page 24 GAO-05-274 Surveillance of DOD Service Contracts 

Description of services Award amount 

Total obligations 

as of Nov. 24, 2004

Army 

ACA-North 

29 Logistics Support Services 49,402,900 50,058,493

30 Professional Services 21,717,754 —

31 Engineering Technical Services 5,406,297 10,688,167

32 Guard Services 3,637,858 38,176,593

33 Professional Services 1,746,076 —

34 Program Management/Support Services 1,107,053 64,850,669

35 Trash/Garbage Collection Services 660,735 451,142

36 Professional Services 543,651 —

37 Professional Services 297,961 —

38 Educational Services 271,690 —

39 Professional Services 253,477 —

40 Education & Training Services 175,450 63,576,850

41 Non-nuclear Ship Repair 160,720 1,769,422

42 Systems Engineering Services 159,111 28,038,198

43 ADP & Telecommunication Services 157,015 —

44 Non-nuclear Ship Repair 152,000 3,446,965

45 Conservation & Development Facilities Maintenance 144,718 —

46 Office Buildings Maintenance 129,250 1,175,090

47 Communications Services 110,463 110,463

Other organizations 

48 Engineering Technical Services 6,722,044 —

49 ADP & Telecommunication Services 5,999,724 —

50 Medical Services 3,791,788 —

51 Special Studies & Analyses 1,659,302 —

52 Medical Services 1,146,743 —

53 Programming Services 349,932 —

54 Patent & Trademark Services 288,417 —

55 ADP System Acquisition Support 238,992 —

56 Engineering Technical Services 192,894 —

57 Management Support Services 187,210 —

58 ADP System Acquisition Support 123,648 —
Appendix III: Contracts Reviewed 

Page 25 GAO-05-274 Surveillance of DOD Service Contracts 

Evidence of 

surveillance 

Surveillance personnel 

assigned 

Surveillance personnel 

trained before duty 

Contract/ order 

pricing typea

DOD contract/ order via 

GSA schedules 

 

Yes Yes Yes CPAF No 

No Yes Yes FFP Yes 

Yes No n/a CPAF No 

Yes Yes No FPAF No 

No No n/a FFP Yes 

Yes Yes Yes FFP No 

Yes Yes Yes FFP No 

No No n/a LH Yes 

No No n/a LH Yes 

No No n/a FFP Yes 

No No n/a FFP Yes 

Yes Yes Yes FFP No 

Yes Yes Yes FFP No 

No No n/a FFP No 

No No n/a FFP Yes 

Yes Yes Yes FFP No 

No Yes Yes FFP Yes 

Yes Yes n/a FFP No 

Yes Yes No FFP No 

 

No No n/a FFP Yes 

Yes No n/a FFP Yes 

No Yes — FFP Yes 

Yes No n/a T&M Yes 

Yes Yes — FFP Yes 

Yes Yes — T&M Yes 

No No n/a FFP Yes 

No No n/a FFP Yes 

No No n/a FFP Yes 

No No n/a FFP Yes 

No No n/a FFP Yes 
Appendix III: Contracts Reviewed 

Page 26 GAO-05-274 Surveillance of DOD Service Contracts 

Description of services Award amount 

Total obligations 

as of Nov. 24, 2004

Navy 

NAVSEA 

59 Modification of Equipment/Ships/Docks 196,709,927 575,647,323

60 Systems Engineering Services 5,616,591 23,609,031

61 Maintenance & Repair of Fire Control Equipment 4,791,859 75,750,011

62 Maintenance & Repair of Electrical & Electric 

Equipment 

4,757,680 3,105,727

63 Professional Services 3,180,123 36,978,828

64 Professional Services 2,902,171 74,917,520

65 Program Management/Support Services 2,083,517 21,189,632

66 Equipment & Mats Testing/Fire Control 1,425,096 36,244,138

67 Professional Services 990,787 3,523,667

68 Engineering Technical Services 980,000 68,436,790

69 Professional Services 733,450 7,252,297

70 Professional Services 470,000 6,314,877

71 Professional Services 400,340 12,605,550

72 Program Management/Support Services 329,014 27,694,233

73 Professional Services 274,510 7,146,906

74 Maintenance & Repair of Equipment 250,000 33,101,536

75 Professional Services 225,000 11,272,286

76 Professional Services 195,518 26,758,191

77 Maintenance & Repair of Ship & Marine Equipment 148,320 1,118,694

78 Salvage Services 136,364 38,460,222

Other organizations 

79 ADP Software, Equipment, and Tele-Training 2,794,083 —

80 ADP Software, Equipment, and Tele-Training 2,586,967 —

81 Other ADP & Telecommunication Services 1,177,846 —

82 ADP & Telecommunication Services 841,402 —

83 ADP Facility Operations & Maintenance 830,491 —

84 ADP & Telecommunication Services 492,776 —
Appendix III: Contracts Reviewed 

Page 27 GAO-05-274 Surveillance of DOD Service Contracts 

Evidence of 

surveillance 

Surveillance personnel 

assigned 

Surveillance personnel 

trained before duty 

Contract/ order 

pricing typea

DOD contract/ order via 

GSA schedules 

 

Yes Yes Yes CPFF No 

Yes Yes Yes CPFF No 

Yes Yes Yes CPAF No 

Yes Yes Yes CPFF No 

Yes Yes Yes CPFF No 

Yes Yes Yes CPFF No 

Yes Yes Yes CPFF No 

Yes Yes No CPAF No 

Yes Yes Yes CPFF No 

Yes Yes Yes CPFF No 

Yes Yes No CPFF No 

Yes Yes Yes CPFF No 

Yes Yes No CPFF No 

Yes Yes No CPFF No 

Yes Yes Yes CPFF No 

Yes n/a n/a FFP No 

Yes Yes Yes CPFF No 

Yes Yes No CPFF No 

Yes Yes Yes CPIF No 

Yes n/a n/a CPAF No 

 

No Yes Yes LH Yes 

No Yes Yes LH Yes 

No Yes Yes LH Yes 

No Yes — LH Yes 

Yes No n/a LH Yes 

No No n/a LH Yes 
Appendix III: Contracts Reviewed 

Page 28 GAO-05-274 Surveillance of DOD Service Contracts 

Description of services Award amount 

Total obligations 

as of Nov. 24, 2004

OSD & Other 

Defense Agencies 

85 ADP Facility Operations & Maintenance 132,443 —

86 ADP & Telecommunication Services 1,033,000 —

87 ADP & Telecommunication Services 362,160 —

88 ADP & Telecom Services 237,024 —

89 ADP & Telecommunication Services 185,355 —

90 ADP & Telecommunication Services 156,740 —
Appendix III: Contracts Reviewed 

Page 29 GAO-05-274 Surveillance of DOD Service Contracts 

Evidence of 

surveillance 

Surveillance personnel 

assigned 

Surveillance personnel 

trained before duty 

Contract/ order 

pricing typea

DOD contract/ order via 

GSA schedules 

 

No Yes — FFP Yes 

No No n/a — Yes 

No Yes — FFP Yes 

Yes Yes — FFP Yes 

No Yes — — Yes 

No Yes — — Yes 

Source: GAO. 

a

FFP – Firm Fixed Price 

T&M – Time and Materials 

LH – Labor Hour 

COST – Cost Type 

CPAF – Cost Plus Award Fee 

FPAF – Fixed Price Award Fee 

CPFF – Cost Plus Fixed Fee 

CDIF – Cost Plus Incentive Fee 
Appendix IV: Comments from the Department 

of Defense 

Page 30 GAO-05-274 Surveillance of DOD Service Contracts 

Appendix IV: Comments from the 

Department of Defense 
Appendix IV: Comments from the Department 

of Defense 

Page 31 GAO-05-274 Surveillance of DOD Service Contracts 
Appendix IV: Comments from the Department 

of Defense 

Page 32 GAO-05-274 Surveillance of DOD Service Contracts (120313) 
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