Further Actions Needed to Improve Accountability for U.S. DOD's Inventory of Contracted Services

April 10, 2012

U.S. DOD relies on contractors to perform many functions, which can offer benefits for DOD. GAO's work has shown that reliance on contractors to support core missions, however, can place DOD at risk of contractors performing inherently governmental functions.

In 2008, Congress required DOD to compile and review an annual inventory of contractors working under contracts for services. The 2010 defense authorization act directed GAO to report for 3 years on these inventories. In January 2011, GAO reported on limitations to DOD's inventory approach. For this report, GAO assessed (1) DOD's progress in addressing these limitations and (2) the extent to which the military departments addressed instances of contractors performing functions identified as inherently governmental during reviews of their fiscal year 2009 inventories. GAO reviewed DOD guidance, interviewed acquisition and manpower officials, and assessed 12 instances from a nongeneralizable sample in which the Air Force and Army determined that contractors had performed inherently governmental functions.

GAO recommends that the military departments and components develop guidance that provides for clear lines of authority, responsibility, and accountability for conducting an inventory review and that the Army and Air Force resolve known instances of contractors performing inherently governmental functions. DOD largely agreed with GAO's recommendations. 

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