Surge in outsourcing creates problems in performance, oversight

A 72 percent increase in federal contractor jobs makes oversight difficult, causes performance issues, and decreases competition

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A dramatic increase in the contracting of government services has resulted in a litany of problems, ranging from cost overruns and missed deadlines to a lack of oversight, according to the Government Accountability Office (GAO). From 2001 to 2005, the number of federal contractor jobs surged by 72 percent, increasing from 4.4 million to 7.6 million. Spending on contractors nearly doubled from FY 2001 to FY 2006, jumping from $234.8 billion to $415 billion The GAO has issued a series of reports identifying problems associated with the rise in outsourcing. Among the issues: “separating wants from needs; executing acquisition programs within available funding and established timeframes; using sound contracting arrangements with appropriate incentives and effective oversight; assuring that contractors are used only in appropriate circumstances and play proper roles; and sustaining a capable and accountable acquisition workforce ” GAO auditors found that interagency contracting was a “high-risk area” for outsourcing, as were the Department of Energy, Department of Defense, and the National Aeronautics and Space Administration. The agency also cited concerns about the Centers for Disease Control and Prevention, which now contracts out one-third of its workforce. Lack of competition is another problem. The Department of the Interior’s inspector general found that more than a quarter of the agency’s $380 billion in contracts were awarded without competition.

Follow-up:
The newest GAO High-Risk Areas report, due out in January 2009, will determine whether the government’s contracting problems have improved during the last two years. The GAO reports that in FY 2007, Washington spent $450 billion on contracting goods and services. The Federal Procurement Data System (FPDS), which tracks contract spending for the U.S. government, has not released its own figures for that year. Ironically, FPDS itself began contracting out the handling of its data in 2003.

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