Concerned about the increasing number of Defense Department projects being managed by contractors, Congress has earmarked $48 million to increase Pentagon staffing to better oversee projects. "The department clearly lacks accountability and management of its contracted services," according to the conference report accompanying the fiscal 2008 Defense Appropriations Bill (H.R. 3222), which President Bush signed Tuesday. The report calls for Defense to provide "more robust staffing of contractor management and oversight personnel." In the appropriations bill, Congress designated $48 million for the department to divide among the Defense Contract Audit Agency, the Defense Contract Management Agency and the Defense Inspector General. "There have been a lot of shortfalls in the quality and quantity of oversight," said Ray Bjorklund, chief knowledge officer at FedSources, a research and consulting firm in McLean, Va. "Program managers are in the middle of this. Walk into any large program office -- it's not unusual to see half or two-thirds are contract workers." But the additional funding is unlikely to correct the problems, said Stan Soloway, president of the Professional Services Council, which represents contractors, and former deputy undersecretary of defense for acquisition reform. "The funding goes towards more audits and after-the-fact review," he said. "When you talk about the acquisition process, the focus needs to be on the front end. Most of their problems can be traced to poor statements of work, poor requirements, problems and mistakes at the front end that can be traced to insufficient resources for the acquisition professionals. Acquisitions need to be recognized as a core responsibility, and I'm not sure it has been." Bjorklund said the poor oversight has been caused by a shortage in the number of properly trained program managers in Defense. "In the mid-90s, there was a big thrust to downsize [Defense]," he said. "It included a lot of slashing of acquisition people." The time-consuming process of training a good program manager has been the biggest barrier to attracting more applicants. "It's a long process, and you have to attract people with the interest to be acquisition professionals, despite a starting salary that is not that attractive," he said.Soloway agreed. "They clearly have struggled with finding the right people with the training and resources to manage as effectively as they can manage," he said. "It's not just getting more people, but getting people with the right skills and training. No question that the department needs more resources."Congress directed Defense to rely more on the General Services Administration for contracting and procurement activities and chided the agency for using contractors in "inherently governmental" roles. But Defense remains resistant to outsourcing acquisitions to GSA or any other contracting service operated by another federal agency. The Defense inspector general, in a report released in October, chided Defense for "wasting" $607,000 by allowing the GSA to place 91 task orders for Defense customers on an Air Force contract.Soloway said it is in Defense's best interest to consider using interagency contracts when appropriate. "There is too often a focus on the fees that were paid to other agencies," he said, "instead of looking at what the cost would be to perform the acquisitions themselves."
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