Defense spending on contracted-out services fell substantially after Pentagon officials implemented basic guidance on how to keep such expenses under control, a watchdog report said.
But the true amount the Department of Defense spent on service contracts — and whether it put that money toward services federal employees could be doing — is difficult to determine due to conflicting methods of computing such costs, the Government Accountability Office report found.
The Defense Department spent $1.72 billion more than it was allowed on service contractors in 2012 and $500 million less in 2013, according to GAO’s calculations.
However, the agency’s comptroller reported spending $1.81 billion less than the limit in 2013 and only $1.34 billion more in 2012 because of “inconsistent” calculations, the report said.
Miscalculations also led the Defense Department to overstate the amount of money it was authorized to spend in 2012 by $400 million and again in 2013, this time by more than $1 billion.
The confusion occurred because defense officials were unsure of whether to include the cost of certain types of contracts in their budget numbers, such as contracts that the Defense Department shared with other agencies, the report found.
Defense officials also did not calculate the cost of its civilian workforce correctly, which further obscured the agency’s contract spending, GAO said.
Branches of the military took “limited steps” to stay below budget on contract spending in 2012, with the Army, Air Force and Navy all racking up costs beyond the limit, the report said.
Army officials missed their target by the most amount of money that year, which some attributed to “poor budget estimates” that didn’t use actual contracting service data to inform how much it should allow for contracting services, GAO found.
While the entire department managed to spend less than the limit on contracts in 2013, the Army still missed its mark by more than $2 billion.
Other branches that came up under budget did so by planning with more accurate estimates and by monitoring their contractors throughout the year, the report said.
The Army budget office did not take stock of the branch’s plans to set its spending targets, so it was unable to prioritize projects to determine which should be cut or scaled back, GAO said.
Most branches of the Defense Department have not consistently tracked contractor costs for services similar to what a federal employee should perform, the report found.
Even data from those that have tracked such costs may not be useful thanks to the agency’s shifting guidelines on how to calculate those costs, GAO said.
According to the nonpartisan watchdog group Project on Government Oversight, Congress removed language in the Pentagon’s 2015 budget that would have required GAO to oversee defense reports on service contract spending.
Go here to read the full GAO report.
