The Federal Procurement Data System – Next Generation (FPDS-NG) uses more than 300 codes, organized in 23 categories, to describe the services purchased by federal agencies. Among these categories—which capture services ranging from utilities and housekeeping services to medical services—are professional and management support services. Examples of service categories and codes are listed in table 1. For almost 20 years, OMB procurement policy has indicated that agencies should provide a greater degree of scrutiny when contracting for professional and management support services, which include acquisition support, program evaluation, and other services that can affect the government’s decision-making authority. Without proper management and oversight, such services risk inappropriately influencing the government’s control over and accountability for decisions that may be supported by contractors’ work. Thus, the policy directs agencies to ensure that they maintain sufficient government expertise to manage the contracted work. The FAR also addresses the greater need for management oversight associated with contractors providing services that have the potential to influence the authority, accountability, and responsibilities of government employees. Contractors are prohibited from performing inherently governmental functions, such as determining agency policy, directing federal employees, and approving contractual documents, which require such discretion in applying government authority or value judgments in making decisions that they can only be performed by government employees. The FAR also identifies services that can approach being inherently governmental, based on the nature of the function or the manner in which the work is performed or administered. Contractors can provide services that closely support inherently governmental functions, but agencies must provide greater scrutiny and enhanced management oversight to ensure that the contractors’ work does not limit the authority, accountability, and responsibilities of government employees. The FAR includes an illustrative list of 19 services that closely support inherently governmental functions, many of which—such as supporting policy development and providing legal advice—are captured in FPDS-NG codes in the professional and management support services category. See appendix II for examples of inherently governmental and closely supporting inherently governmental functions outlined in the FAR. Figure 1 illustrates how the risk of contractors influencing government decision making is increased as professional and management support services move closer toward supporting inherently governmental functions. Long-standing FAR and OMB guidance addresses the need for enhanced oversight, but in prior work we found that DOD and DHS officials were often unaware of this policy. The guidance states that having a sufficient number of trained and experienced government employees is necessary when contracting for professional and management support services, but does not describe how agencies should provide enhanced management oversight for such contracts. Federal civilian agencies have increasingly relied on contractors to provide professional and management support services—such as program management and evaluation, engineering and technical services, and acquisition support—with a growth rate of obligations in this category that is more than twice the growth rate of all other service contract obligations over a 5-year period. From fiscal year 2005 through fiscal year 2010, civilian agency obligations for professional and management support service contracts increased $9.9 billion dollars, or 44 percent, to $32 billion (adjusted for inflation to 2010 dollars). (See fig. 2.) This was more than double the 19 percent increase experienced by all other service contracts, which increased from $87.8 billion to $104 billion in inflation-adjusted dollars during the same time period. The five agencies selected for review—DHS, USAID, DOT, HUD, and NSF—obligated a larger percentage of their fiscal year 2010 service contract dollars on professional and management support services compared to all civilian agencies, including the five reviewed. (See table 2.) For the five agencies we reviewed, the activities contractors provided through agencies’ professional and management support service contracts often appeared to closely support the performance of inherently governmental functions. Use of these services can result in the loss of government accountability and control if proper oversight is not provided. Of the 230 professional and management support service contract statements of work (SOW) we reviewed from the five agencies, at least 120 contracts—or more than half—requested services that the FAR identifies as closely supporting inherently governmental functions, including services related to budget preparation, reorganization and planning activities, evaluation of another contractor’s performance, and acquisition support. For example, a DOT contract requested support for acquisition functions, including the creation of independent government cost estimates and analysis and recommendations related to new acquisitions. In another contract, HUD requested that contractors assist management and staff in developing a new strategic plan for the agency. The SOW called for contractors to work with stakeholders inside and outside the agency by conducting interviews, documentation reviews and surveys to understand the agency’s current operational environment and associated challenges, risks, and opportunities. Tasks also included assisting in the identification of agency priorities and transformation initiatives. The remaining SOWs we reviewed included services that did not closely support inherently governmental functions, such as a contract for records management and processing at DHS. A significant portion of the growth in civilian agency contracts for professional and management support services was driven by an increase in obligations for contracts coded in FPDS-NG as Other Professional Services. This category accounted for $3.4 billion of the $9.9 billion increase in contract obligations for professional and management support services from fiscal year 2005 to fiscal year 2010. Overall, 5 of the 56 codes for professional and management support services accounted for 70 percent of civilian agency obligations for these services in fiscal year 2010, representing over $22 billion in overall obligations. (See fig. 3.) Of the 230 contract SOWs we reviewed, 171 contracts were in the top five codes and covered a wide range of services. For example: Other Professional Services. SOWs requested support including risk management and analysis, records management, assistance to a foreign government, physical and administrative security, budget and program management support, financial and information technology audits, strategic planning, program administration, acquisition support, project management, technical assistance and training, workforce analysis, and website development and content management. Engineering and Technical Services. SOWs requested services including architectural planning and construction, testing and evaluation of radar and weather systems, ship inspection services, and information technology systems support. Technical Assistance. SOWs requested services including support to foreign governments, such as support for security and governance in Nepal and local government capacity building in unstable areas of Afghanistan, as well as contracts to update information technology systems and manuals and provide technical and administrative support to meet information technology security requirements. Program Management/Support Services. SOWs requested services including support to evaluate internal controls, manage audit compliance and the tracking of audit recommendations, and provide project management oversight to ensure grantee compliance in administering federally funded programs. Other Management Support Services. SOWs requested services including technical and program expertise related to technologies’ compliance with federal laws and guidelines; support to develop a program management plan for project monitoring and oversight; information systems, hardware, and software support; technical expertise to improve data collection and program evaluation; and loan servicing activities including payment collection, risk management, and customer service. We conducted a more in-depth review of 12 contracts or task orders for professional and management support services. On the basis of our review, at least 9 of the 12 contracts or task orders involved services that closely support inherently governmental functions, including acquisition support, reorganization and planning support, and support for policy development. The selected contracts or task orders originated from 2005 through 2009 and included a mix of both long-standing and new contract requirements. For example, the DOT project management oversight contracts at the Federal Transit Administration include services that have been performed by contractors for more than 20 years. Contracting and program officials identified several reasons why their agencies chose to award contracts for these professional and management support services. Six of the 12 contracts or task orders were issued or expanded in response to new requirements or workload increases, such as the watch officer positions created to provide surge capacity at DHS’ Transportation Security Administration, an expanded Sudan mission support contract at USAID, and short-term need for procurement office support at HUD. The 12 case-study contracts and task orders are described in table 3. Agency officials noted that the temporary nature of some work or the need for surge capacities made contracting preferable to using federal employees because of the flexibility it offers, such as the ability to increase or decrease scope in response to program needs. Often, agency officials pointed to constraints on the use of federal employees such as limitations for hiring federal staff or budget restrictions as a factor that led to contracting for services. For example, NSF provides support to two interagency offices established by memorandums of understanding, which program officials told us have the effect of limiting the number of government personnel who can work in the offices, so the majority of the work is performed by contractors. Similarly, a senior Federal Transit Administration official said that while Congress has authorized a portion of annual program funds to be used for oversight services, the administration is constrained from using these funds to hire federal employees for this purpose. In another case, officials from HUD’s Government National Mortgage Association said that the agency increasingly used contractors for data analysis related to mortgage- backed securities, in part because their hiring authority had not increased in several years, so they did not have enough government staff to meet their increased workload. Agency officials generally did not consider the risks of acquiring professional and management support services before awarding the 12 contracts we reviewed. In some cases, however, officials later became concerned and took steps to mitigate potential risks that contractors might perform inherently governmental functions, or that government employees might lack sufficient expertise to oversee the contractors’ work. Four of the five agencies did not have guidance to help identify risks prior to award and ensure enhanced oversight is provided when services closely support inherently governmental functions. For the contracts we reviewed, few of the contracting or program officials said they considered whether the services they were contracting for closely supported inherently governmental functions or took steps to address the related risks before award.