The Consolidated Appropriations Act of 2010 requires the heads of executive civilian agencies subject to the Federal Activities Inventory Reform (FAIR) Act of 1998 to annually submit to OMB an inventory of service contract actions by December 31 of each year, beginning with fiscal year 2010 contracts. The requirement, according to OMB, applies to 49 executive agencies. Appendix II lists these agencies. The inventories are to include 15 data elements for all contracts awarded or extended in the preceding fiscal year, such as services purchased by the agency, the role the services played in achieving agency objectives, the total dollar amount obligated for services, and the number and work location of contractor and subcontractor personnel compensated under each contract. Agencies are required to make their inventories publicly available no later than 30 days after they submit their inventory to OMB. The act also directs agencies to review their inventories within 180 days of the December 31 deadline to ensure that: each personal service contract is being performed according to laws and regulations;the agency is giving special management attention to functions that are closely associated with inherently governmental functions; the agency is not using contractor personnel to perform inherently governmental functions; the agency has specific safeguards and monitoring systems in place to ensure that work performed by contractors has not changed or expanded during performance to become an inherently governmental function; the agency is not using contractor personnel to perform critical functions that could jeopardize the ability of the agency to maintain control of its mission and operations; and there are sufficient internal agency resources to effectively manage and oversee contracts. Agencies must also identify contracts that (1) have been poorly performed, either because of excessive costs or inferior quality, and (2) should be considered for conversion to performance by federal employees, also known as insourcing, or an alternative acquisition approach to enable the agency to efficiently utilize its resources and achieve its public mission. The law requires that each agency include with its current inventory a report on the actions taken as a result of reviewing their prior year’s inventory and to make the report publicly available. To aid agencies in establishing systems to collect the contract inventory information and to ensure consistency across agencies, the act required the Director of OMB to develop and disseminate guidance to agencies by March 1, 2010. OMB issued the guidance in November 2010. We previously reported on differences between the act and OMB guidance. For example, although the act did not set a minimum dollar threshold for the contracts included in the inventories, OMB directed agencies to report only on contract actions over $25,000. Additionally, OMB directed agencies to only report the data elements included in FPDS-NG. As a result, agencies did not report three data elements required by the statute in their fiscal year 2010 inventories—(1) the role the services played in achieving agency objectives, (2) the total dollar amount invoiced for services under the contract, and (3) the number and work location of contractor and subcontractor personnel. In recent reviews of both DOD and civilian agencies inventories, we also reported that FPDS-NG does not allow agencies to: identify and record more than one type of service purchased for each contracting action entered into the system; capture any services performed under contracts that are predominantly for supplies; and capture service contracts awarded on behalf of an agency by other agencies. OMB also provided guidance to agencies on conducting and reporting their fiscal year 2010 inventory reviews. The guidance states that the reviews shall be informed through appropriate techniques, such as sampling of contract files, interviewing program managers and contracting officer technical representatives, and using other supplemental information-gathering methods as needed. Under OMB’s guidance, agencies should give heightened management consideration to certain “special interest functions” that require increased management attention due to heightened risk of workforce imbalance, such as agencies becoming overreliant on contractor personnel. OMB anticipated that professional and management services and information technology support services posed an increased risk of agencies losing control of their missions and operations. Table 1 provides an illustrative list of the special interest functions identified by OMB. The guidance also stated that as part of agencies’ reviews of professional and management services, agencies should include acquisition support and an appropriate sampling of policy and program management and development services, and additional functions where the agency may be at risk of overreliance on contractors or other challenges, such as inadequate contract management support. In our review of fiscal year 2011 service contract inventories, we found that 48 of the 49 agencies compiled their inventories. However, agencies are continuing to defer collection of three required data elements, per OMB guidance. While most agencies followed OMB’s methodology for compiling inventories, some agencies used different methodologies. As a result, OMB and Congress cannot meaningfully use these service contract inventories to compare service contract obligations among agencies or develop spending trends, and agencies did not have a complete universe of service contracts to consider for review. OMB directed agencies to prepare a fiscal year 2011 service contract inventory, submit the inventory to OMB, and make it publicly available by January 30, 2012. During the course of our review we sought to obtain the inventories from each agency’s website and found that as of July 2012, 14 of the 49 agencies did not make their inventories publicly available. We followed up with OMB and the agencies and eventually obtained inventories from 13 of those 14 agencies. For the remaining agency—the Court Services and Offender Supervision Agency for D.C.— we could not find evidence that it compiled its service contract inventory for fiscal year 2011, and nor did it do so for fiscal year 2010. OMB staff indicated that they reminded the agency of its responsibility to prepare and submit an inventory, but they did not devote resources to compelling a response when the agency was not responsive. OMB staff explained that the agency’s total spending is well under 1 percent of civilian agency spending and attention on this initiative was more effectively devoted to other agencies and issues. OMB continued to direct agencies to defer collection of three statutorily required data elements—the role the services played in achieving agency objectives, total dollar amount invoiced for services under the contracts, and the number and work locations of contractor and subcontractor personnel. The lack of this required information diminished the utility of the inventory because agencies do not have good visibility as to the number of contractor personnel or their role in supporting agency activities. Progress, however, is being made towards collecting this information. For example, OMB directed agencies to start collecting information on the role services play in achieving agency objectives for new contracts awarded on or after March 1, 2012. The guidance states that agencies are to report, in the “description of requirement” field in FPDS-NG, whether the services provided under the contract are predominantly for functions closely associated with inherently governmental ones, critical functions, or other functions. According to OMB guidance, by identifying closely associated and critical functions at the time of award, agencies can prioritize which contracts may require increased management attention and oversight to ensure that mission creep does not result in contractor personnel performing inherently governmental functions, and ensure that the agency does not lose control of its mission and operations. While this information may be helpful in identifying which service contracts may require additional oversight or be appropriate candidates for insourcing, it is not clear that this information will provide a full description of the role contractors played in achieving agency objectives. OMB staff indicated that they will review this issue, along with others, as they consider revisions to the guidance based on initial agency experience. Information on the remaining two data elements—total dollar amount invoiced for services under the contracts and the number and work locations of contractor and subcontractor personnel—will continue to be deferred pending the outcome of a proposed FAR rule on service contract inventories. The proposed rule would create a new FAR subpart to address responsibilities for collection, management, and reporting of the inventory information. The rule would also create a new contract clause to be used in contracts that meet certain dollar thresholds and would require contractors to submit the following information for covered service contracts (1) the contract number and, when applicable, order number; (2) the total dollar amount invoiced for services performed during the previous fiscal year under the contract; (3) the number of contractor direct labor hours expended on the services during the previous fiscal year; and (4) the number of direct-labor hours expended on services performed by first-tier subcontractors. The proposed FAR rule is being reviewed by OMB and OMB staff anticipated that the rule would be finalized later this fall. The proposed rule provides that collection of the information be phased in over the next 4 years. Information will be collected directly from contractors through a web portal and housed in the System for Award Management. No additional hard copy reporting will be required. OMB provided guidance to civilian agencies for compiling their service contract inventories, including the structure and scope of the inventories. To standardize the structure of the service contract inventories, OMB provided a template for agencies to organize contract activities by product and service code. To establish the scope of the service contract inventories, OMB directed agencies to include all service contract actions over $25,000 that were awarded in fiscal year 2011. Agencies were to include contract actions that they have funded, including contract actions made on their behalf by other agencies, and exclude contract actions that they have made on another agency’s behalf with the other agency’s funding. We found the following based on our review of 48 available civilian agency inventories: Forty-five agencies reported on all the data elements in OMB’s standard template. The other three agencies did not include certain data elements, such as the extent to which the contract was competed, the product and service code and description, and the date signed. OMB staff was unaware that these agencies had not reported on all data elements. Forty-three agencies generally followed OMB’s guidance to report on obligations on all contract actions over $25,000. Five agencies, however, did not.