GAO: DOD has to get a handle on future services spending

As the Defense Department looks to buy more services, it's going to need to come up with action plans to better account for spending in future years, according to a recent Government Accountability Office report.

Timothy DiNapoli, GAO's director for contracting and national security acquisitions, wrote in a report to Congress that while DOD has identified areas to improve, it has yet to develop clear plans that manage spending services acquisitions over future fiscal years.

"DOD's October 2020 report discusses the actions DOD has taken, or intends to take, to improve its management of service acquisitions, including actions to address many of the issues we have identified in our past work," the Feb. 22 report states. "However, DOD's report does not address our open 2016 recommendations intended to better position DOD to make informed decisions regarding the volume and type of services that should be acquired over the [Future Years Defense Program]."

GAO, which has flagged service contract spending as a high-risk issue since 2001, evaluated the Defense Department's October report to Congress and found that DOD made strides but failed to lay out a full plan to incorporate spending on services in the future.

"DOD was assessing ways to include its projected spending on services in the future years defense program, and had taken initial steps to align the department's service acquisition management activities with the Office of Management and Budget's government-wide category management initiative, but did not have an action plan," the GAO wrote.

A lack of action plans has been an issue with DOD oversight in the past. GAO cited multiple reports from 2011 to 2018 for the use of "annual inventory of contracted services to help inform workforce and budget decisions" that are mandated by statute.

GAO also previously found that DOD had limited visibility into its spending on service acquisitions because such data isn't required beyond the current fiscal year, but doing so would help identify capability needs.

DOD's comptroller and Cost Assessment and Program Evaluation are currently "reviewing systems that may allow DOD components to collect and report data on funding requirements for service acquisitions," according to the report.

The report comes after a year of the Defense Department leaning heavily on buying services due to COVID-19. The inspector general released audit findings Feb. 17, eyeing how the DOD handled $849 billion in procurement of IT products and services in the early response to the pandemic last year. The IG sampled just 35 of 367 IT contract actions, totaling approximately $82 million, between February and May 2020.

The IG offered no recommendations, and found that the Army, Navy, Air Force, Defense Health Agency, and Defense Information Systems Agency helped control costs and cyber vulnerabilities by leaning on commercial services and approved contractors.