Acquisition Workforce: DOD Can Improve Its Management and Oversight by Tracking Data on Contractor Personnel and Taking Additional Actions
Published: 2009-04-28T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Since 2001, Department of Defense's (DOD) spending on goods and services has more than doubled to $388 billion in 2008, while the number of civilian and military acquisition personnel has remained relatively stable. To supplement its in-house workforce, DOD relies heavily on contractor personnel. If it does not maintain an adequate workforce, DOD places its billion-dollar acquisitions at an increased risk of poor outcomes and vulnerability to fraud, waste, and abuse. This testimony is based on GAO's March 2009 report and addresses DOD's efforts to assess the sufficiency of the total acquisition workforce and to improve its management and oversight of that workforce. It also discusses selected practices of leading organizations that may provide DOD with insights for its efforts.
section_title: What GAO Found
paragraphs: Although contractor personnel are a key segment of its total acquisition workforce, DOD lacks critical departmentwide information on the use and skill sets of these personnel. DOD also lacks information on why contractor personnel are used, which limits its ability to determine whether decisions to use contractors to supplement the in-house acquisition workforce are appropriate. GAO found that program office decisions to use contractor personnel are often driven by factors such as quicker hiring time frames and civilian staffing limits, rather than by the nature or criticality of the work. In comparison with DOD's practices, leading organizations maintain and analyze data on their contractor personnel and take a business-oriented approach to determining when to use contractor support. DOD also lacks key pieces of information that limit its ability to determine gaps in the acquisition workforce it needs to meet its missions. In addition to lacking information on contractor personnel, DOD lacks complete information on the skill sets of its in-house personnel. DOD also lacks information on the acquisition workforce it needs to meet its mission. Not having this information not only skews analyses of workforce gaps, but also limits DOD's ability to make informed workforce allocation decisions and determine whether the total acquisition workforce--in-house and contractor personnel--is sufficient to accomplish its mission. In comparison with DOD's practices, leading organizations identify gaps in the workforce by assessing the competencies of their workforces and comparing those with the overall competencies the organization needs to achieve its objectives. DOD recently initiated several efforts aimed at improving the management and oversight of its acquisition workforce, such as plans for overseeing additional hiring, recruiting, and retention activities. DOD is also planning to increase its in-house acquisition workforce by converting 11,000 contractor personnel to government positions and hiring an additional 9,000 government personnel by 2015. The success of DOD's efforts to improve the management and oversight of its acquisition workforce, however, may be limited without comprehensive information on the acquisition workforce it has and needs.

section_title: Letter
paragraphs: I am pleased to be here today to discuss the Department of Defense’s  (DOD) acquisition workforce, which is responsible for planning,  executing, and supporting DOD’s acquisitions. Over the past several years,  changes in the federal acquisition environment have created significant  challenges to building and sustaining a capable acquisition workforce.  From fiscal years 2001 to 2008, DOD’s spending on goods and services  more than doubled to $388 billion, and the number of weapon system  programs has also grown. Despite this substantial increase, the number of  civilian and military personnel in DOD’s acquisition workforce has  remained relatively stable. To supplement its in-house acquisition  workforce, DOD relies heavily on contractor personnel.
Both GAO and DOD have noted that without an adequate workforce to  manage the department’s billion-dollar acquisitions, there is an increased  risk of poor acquisition outcomes and vulnerability to fraud, waste, and  abuse. Today I will discuss the limitations of DOD’s assessment of the  sufficiency of its total acquisition workforce and highlight some recent  DOD efforts to improve the management and oversight of that workforce. I  will also discuss selected practices of leading organizations that may  provide DOD with insights for its efforts. I will conclude with some  observations on what further actions the department should take to  address these challenges.
This testimony is based primarily on our recent report Department of  Defense: Additional Actions and Data Are Needed to Effectively Manage  and Oversee DOD’s Acquisition Workforce, as well as other prior GAO  products. We also conducted additional analyses on data we obtained  during our recent review of DOD’s acquisition workforce management and  on updated data we obtained from DOD. This work was conducted in  accordance with generally accepted government auditing standards. Those  standards require that we plan and perform the audit to obtain sufficient,  appropriate evidence to provide a reasonable basis for our findings and  conclusions based on our audit objectives. We believe that the evidence  obtained provides a reasonable basis for our findings and conclusions  based on our audit objectives.
subsections: section_title: Background
paragraphs: At the end of fiscal year 2008, the number of civilian and military  personnel in DOD’s acquisition workforce totaled nearly 126,000—of  which civilian personnel comprised 88 percent. DOD defines its  acquisition workforce to include 13 career fields, based on the Defense  Acquisition Workforce Improvement Act of 1990. From fiscal years 2001  to 2008, the number of civilian and military acquisition personnel in these  13 fields declined overall by 2.6 percent; however, some career fields have  increased substantially—test and evaluation—while others have shown  dramatic declines—business, cost estimating and financial management..  See appendix I for the number of military and civilian personnel in each of  the acquisition career fields in fiscal years 2001 and 2008, and the  percentage change between those years.
Our prior work has shown that DOD has relied heavily on contractor  personnel to augment its in-house workforce. In March 2008, we reported  that in 15 of the 21 offices we reviewed, contractor personnel  outnumbered DOD personnel and comprised as much as 88 percent of the  workforce. In the other 6 offices, contractor personnel comprised  between 19 and 46 percent of the workforce.  Although this review did not  focus on the acquisition workforce, many of the 21 offices had acquisition  responsibilities.
While use of contractors provides the government certain benefits, such as  increased flexibility in fulfilling immediate needs, we and others have  raised concerns about the federal government’s services contracting, in  particular for professional and management support services, including  acquisition support services. In March 2008, we noted concern about one  DOD component’s hiring contractor personnel in reaction to a shortfall in  the government workforce rather than as a planned strategy to help  achieve its mission. In our case study, we found that one Army  component was paying between 17 and 27 percent more on average for  contractor personnel working as contract specialists than for its  government employees who were doing equivalent work.
In addition to the risk of paying more than necessary for the work that it  needs, is the risk of loss of government control over and accountability for  mission-related policy and program decisions when contractors provide  services that closely support inherently governmental functions, which  require discretion in applying government authority or value judgments in  making decisions for the government. The closer contractor services come  to supporting inherently governmental functions, the greater the risk of  their influencing the government’s control over and accountability for  decisions that may be based, in part, on contractor work. Other concerns  about using contractor personnel include improper use of personal  services contracts and the increased potential for conflicts of interest,  both organizational and personal.
Numerous components in DOD share policy and guidance responsibility  for the workforce. Among the components, the Office of the Under  Secretary for Acquisition, Technology and Logistics (AT&L), is responsible  for managing DOD’s acquisition workforce, including tailoring policies and  guidance specific to the acquisition workforce and managing the training  and certification of that workforce. In addition, each military service has  its own corresponding acquisition offices that develop additional service- specific guidance, and provide management and oversight of its  workforce. Within each service, the program offices identify acquisition  workforce needs, make decisions regarding the composition of the  workforce (the mix of civilian, military, and contractor personnel), and  provide the day-to-day management of the workforce.
section_title: AT&L Lacks Comprehensive Information on the Use of Contractor Personnel in Its Acquisition Workforce
paragraphs: DOD lacks critical departmentwide information on the use and skill sets of  contractor personnel performing acquisition-related functions. While DOD  planning documents state that the workforce should be managed from a  “total force” perspective—which calls for contractor personnel to be  managed along with civilian and military personnel —DOD has only  recently collected departmentwide data on contractor personnel  performing acquisition-related functions. According to an AT&L official,  DOD’s baseline count shows that 52,000 contractor personnel are  supporting the acquisition workforce. As such, contractor personnel  comprise about 29 percent of DOD’s total acquisition workforce. The  AT&L official noted that the contractor personnel tracking system is still  under development.
Data we obtained from 66 program offices show that contractor personnel  comprised more than a third of those programs’ acquisition-related  positions. Table 1 shows the data on contractor personnel reported by  the 66 program offices (see appendix II for more detailed information).
DOD also lacks information on factors driving program offices’ decisions  to use contractor personnel rather than hire in-house personnel. DOD  guidance for determining the workforce mix outlines the basis on which  officials should make decisions regarding what type of personnel— military, civilian, or contractor—should fill a given position. The  guidance’s primary emphasis is on whether the work is considered to be  an inherently governmental function, not on whether it is a function that is  needed to ensure institutional capacity.
The guidance also states that using the least costly alternative should be  an important factor when determining the workforce mix. However,  when we asked program offices about their reasons for using contractor  rather than civilian personnel, we found that cost was cited by only 1  program office. The 30 program offices, which provided reasons for using  contractor personnel, cited the following key factors:  22 cited a shortage of civilian personnel with a particular expertise,  18 cited staffing limits on civilian personnel,  17 cited that the particular expertise sought is generally not hired by  the government,  15 cited the ease or speed of bringing on contractor personnel,  9 cited having a short-term requirement,  8 cited funding not being available for civilian personnel, and  1 cited the cost of contractor personnel being less than civilian  personnel  (See appendix III for information on the number of program offices  reporting the reasons for using contractor personnel by component.)
In comparison with DOD’s practices, we found that leading organizations  maintain and analyze data on their contractor personnel in order to  mitigate risks, ensure compliance with in-house regulations and security  requirements, and ensure that reliance on contractor personnel creates  value for the company. We also found that leading organizations take a  business-oriented approach to determining when to use contractor  support. For example, some companies generally use contractor personnel  to facilitate flexibility and meet peak work demands without hiring  additional, permanent, full-time employees. Some also place limits on their  use of contractor personnel, such as limiting the use of contractor  personnel to temporary support, to 1 year of operations, or to functions  that are not considered as core pieces of the company’s main business.
section_title: AT&L Lacks Key Pieces of Information Necessary to Conduct Workforce Gap Analyses
paragraphs: AT&L lacks key pieces of information that hinder its ability to determine  gaps in the number and skill sets of acquisition personnel needed to meet  DOD’s current and future missions. At a fundamental level, workforce  gaps are determined by comparing the number and skill sets of the  personnel that an organization has with what it needs. However, AT&L  lacks information on both what it has and what it needs. Not having this  information in its assessments not only skews analyses of workforce gaps,  but also limits DOD’s ability to make informed workforce allocation  decisions.
With regard to information on the personnel it has, AT&L lacks complete  information on the skill sets of the current acquisition workforce— including contractor personnel—and whether these skill sets are sufficient  to accomplish its missions. AT&L is currently conducting a competency  assessment to identify the skill sets of its current in-house acquisition  workforce. While this assessment will provide useful information  regarding the skill sets of the current in-house acquisition workforce, it is  not designed to determine the size, composition, and skill sets of an  acquisition workforce needed to meet the department’s missions.
AT&L also lacks complete information on the acquisition workforce  needed to meet DOD’s mission. The personnel numbers that AT&L uses to  reflect needs are derived from the budget. Because these personnel  numbers are constrained by the size of the budget, they likely do not  reflect the full needs of acquisition programs. Of the 66 program offices  that provided data to us, 13 reported that their authorized personnel levels  were lower than those they requested.
In comparison with DOD’s practices, we found that leading organizations  identify gaps in the workforce by assessing the competencies of its  workforce and comparing those with the overall competencies the  organization needs to achieve its objectives. An official from one company  noted that such an assessment indicated that the company needed skill  sets different from those it needed in the past, because the work in one of  its lines of service had increased.
section_title: Recent Workforce Initiatives May Not Yield the Additional Information DOD Needs
paragraphs: AT&L has begun to respond to recent legislative requirements aimed at  improving DOD’s management and oversight of its acquisition workforce,  including developing data, tools, and processes to more fully assess and  monitor its acquisition workforce. Some of AT&L’s recent initiatives  include:    Drafting an addendum to the Implementation Report for the DOD  Civilian Human Capital Strategic Plan 2006-2010 that will lay out  AT&L’s vision and key initiatives for managing and overseeing the  acquisition workforce and an analysis of the status of the acquisition  workforce.
Implementing the Acquisition Workforce Development Fund, with  efforts focused in three key areas: (1) recruiting and hiring, (2) training  and development, and (3) retention and recognition. The largest  proportion of the fund is currently slated for recruiting and hiring.
Developing a competency assessment for the acquisition workforce,  which is scheduled to be completed in March 2010.
Establishing the Defense Acquisition Workforce Joint Assessment  Team. According to an AT&L official, the team will now focus its  efforts on identifying, tracking, and reporting information on  contractor personnel supporting the acquisition workforce—including  developing a common definition to be used across the department.
The Secretary of Defense recently announced that efforts will begin in  fiscal year 2010 to increase the size of the acquisition workforce by  converting 11,000 contractor personnel to government positions and hiring  an additional 9,000 government personnel by 2015. According to an AT&L  official, AT&L is working with the components to develop the plans for  these efforts.
In addition to these acquisition workforce initiatives, another DOD  initiatives aimed at improving the broader workforce may have the  potential to enhance AT&L’s efforts to obtain information on the skill sets  of contractor personnel supporting the acquisition workforce. Specifically,  DOD, through its components, is developing an annual inventory of  contracts for services. The inventory is required to include, among other  things, information identifying the missions and functions performed by  contractors, the number of full-time contractor personnel equivalents, and  the funding source for the contracted work. The Army issued its first  inventory for fiscal year 2007. This initial inventory, however, does not  include information on the skill sets of contractor personnel and the  functions they perform. Inventories for all DOD components are not  scheduled to be completed before June 2011.
Although these efforts are promising, it is too early to determine the extent  to which these efforts will improve the department’s management and  oversight. Moreover, these efforts may not provide the comprehensive  information DOD needs to manage and oversee its acquisition workforce.
section_title: Concluding Observations
paragraphs: DOD faces significant challenges in assessing and overseeing its  acquisition workforce to ensure that it has the capacity to acquire needed  goods and services and monitor the work of contractors. While DOD’s  recent and planned actions could help address many of these challenges,  the department has yet to determine the acquisition workforce that it  needs or develop comprehensive information about contractor  personnel—including the skill sets, functions performed, or length of time  for which they are used. In addition, without guidance on the appropriate  circumstances under which contractor personnel may perform acquisition  work, DOD runs the risk of not maintaining sufficient institutional  capacity to perform its missions, paying more than necessary for the work  that it needs, or losing control over and accountability for mission-related  policy and program decisions. Until DOD maintains more comprehensive  information on its contractor personnel, it will continue to have  insufficient information regarding the range of skills and the functions  performed by this key component of the acquisition workforce. Without  having this information on a departmentwide basis, DOD runs the risk of  not having the right number and appropriate mix of civilian, military, and  contractor personnel it needs to accomplish its missions.
In our report released March 25, 2009, we made several recommendations  to the Secretary of Defense to better ensure that DOD’s acquisition  workforce is the right size with the right skills and that the department is  making the best use of its resources. We recommended that the Secretary:      Collect and track data on contractor personnel who supplement the  acquisition workforce—including their functions performed, skill sets,  and length of service—and conduct analyses using these data to  inform acquisition workforce decisions.  Identify and update on an ongoing basis the number and skill sets of  the total acquisition workforce that the department needs to fulfill its  mission.
Review and revise the criteria and guidance for using contractor  personnel to clarify under what circumstances and the extent to which  it is appropriate to use contractor personnel to perform acquisition- related functions.
Develop a tracking mechanism to collect information on the reasons  contractor personnel are being used so that DOD can determine  whether the guidance has been appropriately implemented across the  department.
We are pleased that DOD has implemented part of the first  recommendation by collecting departmentwide data on the number of  contractor personnel that support the acquisition workforce. We are  encouraged by DOD generally concurring with the rest of our  recommendations, although the department noted that collecting  information on the skill sets and length of service of contractor personnel  needed to be carefully considered. We agree that the manner in which data  on contractor personnel are to be collected should continue to be carefully  considered. Nevertheless, we continue to believe that comprehensive data  on contractor personnel are needed to accurately identify the  department’s acquisition workforce gaps and inform its decisions on the  appropriate mix of in-house or contractor personnel. As DOD moves  forward with it’s recently announced plans to increase the size of the  acquisition workforce over the next few years, having comprehensive  information about the acquisition workforce it both has and needs will  become even more vital to ensure the department makes the most  effective workforce decisions.
Mister Chairman, this concludes my prepared remarks. I would be happy  to answer any questions you or other Members of the Subcommittee may  have at this time.
section_title: Appendix I: Department of Defense In-house Acquisition Workforce by Career Fields
section_title: Appendix II: Department of Defense Personnel by Type and Function for Selected Program Offices
paragraphs: Military, Civilian, and Contractor Personnel in Acquisition-Related Functions by Service as Reported by Selected Program  Offices in 2008  Air Force  (19 program  offices) offices) offices)
Joint services  (9 program  offices) offices) offices)
Business (includes auditing, business, cost estimating, financial management, property management, and purchasing)
Engineering and Technical (includes systems planning, research, development and engineering; lifecycle logistics; test and  evaluation; production, quality and manufacturing; and facilities engineering)
FFRDC personnel work in Federally Funded Research and Development Centers.
section_title: Appendix III: Department of Defense Reasons for Using Contractor Personnel in Selected Program Offices
paragraphs: Number of Program Offices Reporting Reason for Using Contracor Personnel as Reported by Selected Program Offices in  2008  Navy and  Marine  Corps  (5 program  offices) offices) offices)
Joint  services  (4 program  offices) offices)
subsections: section_title: GAO Contact and Staff Acknowledgments
paragraphs: John K. Needham, (202) 512-5274 or needhamjk1@gao.gov  In addition to the contact named above, Carol Dawn Petersen, Assistant  Director, and Ruth “Eli” DeVan, Analyst-in-Charge, made key contributions  to this report.
section_title: Related GAO Products
paragraphs: Department of Defense: Additional Actions and Data Are Needed to  Effectively Manage and Oversee DOD’s Acquisition Workforce.  GAO-09-342. Washington, D.C.: March 25, 2009.
Human Capital: Opportunities Exist to Build on Recent Progress to  Strengthen DOD’s Civilian Human Capital Strategic Plan. GAO-09-235.  Washington, D.C.: February 10, 2009.
High Risk Series: An Update. GAO-09-271. Washington, D.C.: January  2009.
Department of Homeland Security: A Strategic Approach Is Needed to  Better Ensure the Acquisition Workforce Can Meet Mission Needs.   GAO-09-30. Washington, D.C.: November 19, 2008.
Human Capital: Transforming Federal Recruiting and Hiring Efforts.  GAO-08-762T. Washington, D.C.: May 8, 2008.
Defense Contracting: Army Case Study Delineates Concerns with Use of  Contractors as Contract Specialists. GAO-08-360. Washington, D.C.:  March 26, 2008.
Defense Management: DOD Needs to Reexamine Its Extensive Reliance  on Contractors and Continue to Improve Management and Oversight.  GAO-08-572T. Washington, D.C.: March 11, 2008.
Defense Contracting: Additional Personal Conflict of Interest Safeguards  Needed for Certain DOD Contractor Employees. GAO-08-169. Washington,  D.C.: March 7, 2008.
Federal Acquisition: Oversight Plan Needed to Help Implement  Acquisition Advisory Panel’s Recommendations. GAO-08-515T.  Washington, D.C.: February 27, 2008.
The Department of Defense’s Civilian Human Capital Strategic Plan  Does Not Meet Most Statutory Requirements. GAO-08-439R. Washington,  D.C.: February 6, 2008.
Defense Acquisitions: DOD’s Increased Reliance on Service Contractors  Exacerbates Long-standing Challenges. GAO-08-621T. Washington, D.C.:  January 23, 2008.
Department of Homeland Security: Improved Assessment and Oversight  Needed to Manage Risk of Contracting for Selected Services. GAO-07-990.  Washington, D.C.: September 17, 2007.
Federal Acquisitions and Contracting: Systemic Challenges Need  Attention. GAO-07-1098T. Washington, D.C.: July 17, 2007.
Defense Acquisitions: Improved Management and Oversight Needed to  Better Control DOD’s Acquisition of Services. GAO-07-832T. Washington,  D.C.: May 10, 2007.
Highlights of a GAO Forum: Federal Acquisition Challenges and  Opportunities in the 21st Century. GAO-07-45SP. Washington, D.C.:  October 2006.
Framework for Assessing the Acquisition Function At Federal Agencies.  GAO-05-218G. Washington, D.C.: September 2005.
A Model of Strategic Human Capital Management. GAO-02-373SP.  Washington, D.C.: March 15, 2002.
This is a work of the U.S. government and is not subject to copyright protection in the  United States. The published product may be reproduced and distributed in its entirety  without further permission from GAO. However, because this work may contain  copyrighted images or other material, permission from the copyright holder may be  necessary if you wish to reproduce this material separately.