Army seeks more information on contractor workforce

The Army is bringing its contractor workforce out of the shadows. A new project is providing unprecedented information on how Army contractors do their business with the department, including how much contractor employees get paid, how many hours they work, and who the actual customer of their services is within the Army. While agencies have long had such information about civil servants, no agency has collected basic labor data from contractors until now. The data will give Army planners a comprehensive picture of the contractor workforce to aid budgeting and workforce planning decisions, according to Army officials. The Army project should also help senior leaders determine if contractors are doing work that, by law, should be performed by federal workers. The project promises to fill a gap in agencies knowledge of the contractor workforce, according to one expert. "The more we know about the contractor workforce, the better," said Brookings Institution scholar Paul Light, who has compiled several estimates of the governmentwide contractor workforce. "We can tell you the shoe size of every federal employee and know nothing about contractors who work side by side with them." The Army project requires contractors to report basic labor costs accrued in fulfilling department contracts, ranging from total hours worked to a breakdown of the pay and benefits received by contractor employees. Army contractors must also report the customer of their services at the installation level and the appropriation source that funds their contract. This reporting requirement bridges a cavernous gap in Pentagon data systems that until now has kept the Army from tracking the actual customer of contractor work, said project officials. When procurement shops issue a contract, they list themselves--not the department customer of contract services--in the Federal Data Procurement System (FDPS), the government's database of contract data. The FDPS also has no information on the appropriation source used to fund a contract, meaning the Pentagon cannot trace how a budgetary earmark is actually spent on contract services. These data limitations cropped up in a March 12 Defense Department report to Congress on the Pentagon's contractor workforce. The Pentagon estimated that about 700,000 service contractor employees do Defense Department work. Congress asked the Pentagon to show the funding source for service contracts, but Defense could not meet that requirement using the FDPS. "To fulfill this requirement, a data source including both contract information and appropriation information is required," the report said. "Because appropriation data is not included in the [FDPS] contract award database, it could not be used." But the Army project finds a way around this problem by requiring contractors to report the information. "This method allows us to compare the stove-pipe [FDPS] procurement database with the department accounting system," said John Anderson, program analyst in the Office of the Army assistant secretary for manpower and reserve affairs. The project cleared the rulemaking process late last year and the Army began collecting data on fiscal year 2000 contracts in January. Contracts worth less than $100,000 are exempt from reporting requirements and prime contractors may report on the behalf of subcontractors. The data will be available to Army planners by July, according to Anderson. When the project is complete, the Army will be able to track work done by service contractors at the installation or sub-installation level. For example, the Army will see how a general budget appropriation is used to pay a contractor to provide base maintenance services at the Rock Island Arsenal in Illinois. This information can be used to aid workforce planning and better inform department budgeteers faced with limited resources, according to the final rule for the project published in the Dec. 26 Federal Register. The project could also shed light on whether contractors are performing "inherently governmental" functions as defined under the 1998 Federal Activities and Inventory Reform (FAIR) Act, according to the rule. "The…data will provide information needed at [Army Headquarters] to assess whether, and to what extent, contractors may be performing functions that the Army senior leadership has determined to be inherently governmental," said the rule. The Army also has moved aggressively to find department jobs that are commercial in nature. The service accounted for nearly half of the Pentagon's FAIR Act positions in 1999, according to an August 2000 General Accounting Office report. The Army project has been endorsed by the House Subcommittee on Military Readiness and senior Army officials. "The Army methodology addresses many of our concerns about the absence of an objective way of tracking the costs of contracted activities over time and the size and functional composition of the contractor workforce," wrote Subcommittee Chairman Curt Weldon, R-Penn., and ranking member Solomon Ortiz, D-Texas, in a Feb. 28 letter to the Army. But the project has detractors as well. Carl Peckinpaugh, counsel for DynCorp, a Virginia-based contractor, said in an April 23 column in Federal Computer Week that the project duplicates the Pentagon's March 12 report and forces contractors to disclose proprietary business information. While the Army does plan public disclosure of some collected information, it will be released without a contractor's name or a contractor number so it cannot be traced, according to the final rule. The Army effort drew kudos from one expert on the history of outsourcing. "We can all see government organization charts. We never see the dimensions of the contractor appendage," said Dan Guttman, a fellow of the National Academy of Public Administration and special counsel to former Sen. David Pryor, D-Ark., during his investigations on contracting-out in 1980 and 1989. "By illustrating [the contractor workforce], you help people raise questions like what is the appropriate role of government oversight [for contractors]."
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