GAO: OMB misses key areas needing oversight

Office of Management and Budget officials overlooked two important types of support services contractors perform in recent oversight initiatives, according to the Government Accountability Office. The omission may pull agencies’ attention away from where a lot of money is going, according to a new report.

OMB asked agencies to focus on a detailed list of professional and management support service codes as they balance the ratio of contractors to federal employees and also keep contractors away from sensitive work. However, officials left out the codes in the Federal Procurement Data System known as “Other Professional Services" and "Other Management Support Services.” Together the codes made up 30 percent of spending on professional and management support service contracts in fiscal 2010, according to a GAO report released Jan. 6.

“OMB may have missed opportunities to address risks associated with two specific codes,” the report states.

While the inventory analysis list may not be exhaustive as OMB officials say, “the significant amount of obligations spent in the two excluded codes also warrants attention, particularly for efforts aimed at reducing spending for such services,” GAO also wrote.

At a White House forum in July, OMB announced an effort to reduce agencies’ spending on management support service contracts by 15 percent by the end of fiscal 2012. In guidance, OMB later listed 12 service codes to define management support service functions, such as program management support and intelligence services.

In addition, OMB didn’t include the two codes in a similar list of service codes provided in its guidance for conducting service contract inventories and analysis. The guidance was released in November 2010.

GAO recommended OMB include two FPDS codes in guidance for agencies’ use of service contracts and in the cost savings initiative. OMB generally agreed with the recommendation.

However, officials at the Office of Federal Procurement Policy, within OMB, told GAO that they would consider including the two FPDS codes in future guidance they are planning. Still, they expressed concerns to GAO that adding them now might confuse agencies. It would change what the management support services initiative is measuring several months into the fiscal year.

GAO said though that including the two FPDS codes would be a good step in expanding the agencies’ focus on their use of contractors.