§ 2330, enacted in 2001 and  amended in 2006, Congress required USD(AT&L) and the military  departments to establish a management structure for the acquisition of  services. DOD Has Taken Actions to Address Legislative Requirements to Improve Service Acquisition

Over the last decade, DOD has taken actions to address legislative  requirements to improve the acquisition and management of services. With this management structure and  review process in place, USD(AT&L) is focusing on efforts to improve the  process for how requirements for individual service acquisitions are  developed and training to respond to legislative direction. USD(AT&L) Did Not Develop a Plan to Meet the Requirement of Section 807 but Has Taken Actions to Address Each Element in the Law

Section 807 of the NDAA for Fiscal Year 2012 required USD(AT&L) to  develop a plan by June 28, 2012, for implementing the recommendations  of the DSB to include, to the extent USD(AT&L) deemed appropriate, the  following eight elements:  1.  incentives to services contractors for high performance at low cost,  2.  communication between the government and the services contracting  industry while developing requirements for services contracts,  3.  guidance for defense acquisition personnel on the use of appropriate  4.  formal certification and training requirements for services acquisition  5.  recruiting and training of services acquisition personnel,  6.  policies and guidance on career development for services acquisition  7.  ensuring the military departments dedicate portfolio-specific  8.  ensuring DOD conducts realistic exercises and training that account  for services contracting during contingency operations. DOD Has Not Fully Addressed Key Factors to Determine Whether Actions Are Improving Service Acquisition

While DOD has taken a number of actions to address legislative  requirements, DOD is not yet positioned to determine what effects its  actions have had on improving service acquisition. Specifically,  USD(AT&L) has not yet fully addressed two key factors—a desired end  state for the future with specific goals and associated metrics that would  enable it to assess progress toward achieving those goals and determine  whether service acquisition is improving. USD(AT&L) is challenged in  addressing these key factors, in part, because it has limited insight into  the current status of service acquisition in terms of the volume, type,  location, and trends. USD(AT&L) Has Not Established Metrics to Determine its Progress in Improving Service Acquisition

USD(AT&L) has not established departmentwide metrics to assess the  effects of its actions to improve service acquisition. While developing goals and metrics is challenging, it is not impossible. To address  this shortfall, DOD expects to obtain better service acquisition data by  improving and linking data within its contract and financial systems, but  this effort will not be complete until at least 2014. For example, DOD concurred with the  need to set goals for the amount of spending managed through  strategically sourced acquisitions, link strategic sourcing to its Better  Buying Power Initiative, and establish metrics, such as utilization rates, to  track progress toward these goals. However, DOD is currently missing  opportunities to fully leverage its command-level assessments, feedback  from the military departments, and other ongoing efforts it relies on to  gauge the effects of its actions to improve service acquisition. Nevertheless, until  DOD utilizes them to develop baseline data, goals, and associated  metrics, similar to what it has committed to do for its strategic sourcing  efforts, DOD will continue to be in a position where it does not know  whether its actions are sufficient to achieve desired outcomes. Recommendations for Executive Action

To better position DOD to determine whether its actions have improved  service acquisition, we recommend that the Principal Deputy Under  Secretary of Defense for Acquisition, Technology, and Logistics, in  consultation with the military departments’ senior services managers, take  the following three actions:  identify baseline data on the status of service acquisition, in part,  by using budget and spending data and leveraging its ongoing  efforts to gauge the effects of its actions to improve service  acquisition, develop specific goals associated with their actions to improve establish metrics to assess progress in meeting these goals. DOD also stated that as it improves its  management of service acquisition, it should be able to measure  performance, track productivity trends, and establish consistent best  practices across the department. USD(AT&L) also identified  23 different actions it has taken or plans to take that officials regard as  addressing all of the elements the plan was to include, a number which  pre-date the April 2013 Better Buying Power Initiative memorandum.
Why GAO Did This Study

In fiscal year 2012, DOD obligated more than $186 billion for contracted services, making it the federal governments largest buyer of services. GAOs prior work found that DODs use of contracted services has been the result of thousands of individual decisions, not strategic planning across the department.
Over the years, Congress has legislated a number of requirements to improve DODs service acquisitions. For example, Congress required DOD to implement a service acquisition management structure, approval process, and policies. Congress also directed DOD to develop a plan to implement the Defense Science Boards recommendations for improving service acquisition.
The National Defense Authorization Act for Fiscal Year 2012 mandated that GAO report on DODs actions to improve service acquisition and management. GAO examined (1) the actions DOD has taken to respond to legislative requirements and (2) how DOD determines the effects of its actions to improve service acquisition. GAO reviewed documentation and interviewed DOD officials on the actions taken in response to the legislative requirements. GAO also assessed whether DOD addressed key factors, including establishing goals and metrics, to help it determine if it has improved service acquisition.

What GAO Found

Over the last decade, the Department of Defense (DOD) has taken several actions to address legislative requirements to improve the acquisition and management of services. In 2001, as amended in 2006, Congress required DOD to implement a management structure for the acquisition of services. In response, DOD implemented such a structure and service acquisition review and approval process. Recently, DOD also established new positions within its management structure, including senior managers within the office of the Under Secretary of Defense for Acquisition, Technology, and Logistics (USD(AT&L)) and the military departments, to oversee and coordinate service acquisition. With a management structure and review process in place, USD(AT&L) is focusing on efforts to improve the process for how requirements for individual service acquisitions are developed and enhancing training to respond to several legislative directives. USD(AT&L) also created its Acquisition of Services Functional Integrated Product Team, in part, to determine how to address legislative requirements to provide training for personnel acquiring services. USD(AT&L) did not develop a plan to implement the Defense Science Board recommendations to improve service acquisition but identified 23 different actions, including its Better Buying Power Initiative, it has planned or taken that officials regard as addressing what the plan was to include. For example, USD(AT&L) is updating its guidance on using incentives to improve contractor performance, which addresses one of the elements that was to be in the plan.
While DOD has taken a number of actions that address legislative requirements, DOD is not yet positioned to determine what effects these actions have had on improving service acquisition. Specifically, USD(AT&L) has not identified specific goals and associated metrics that would enable it to assess progress toward achieving those goals. USD(AT&L) has identified improving service acquisition as a priority but has not defined a desired end state for its actions or the measurable characteristics that would embody achieving such a goal. It is challenged in defining a desired end state for its actions, in part, because it has not determined the current status of service acquisition in terms of the volume, type, location, and trends. DOD is taking steps to improve its contract and financial systems to obtain such data, but these efforts will not be complete until at least 2014. Further, DOD has not established departmentwide metrics to assess its progress in improving service acquisition but has acknowledged the need to do so, which officials described as challenging. Nevertheless, despite the challenges in doing so, it is not impossible. For example, DOD has agreed to set goals for the amount of spending managed through strategically sourced acquisitions, link strategic sourcing to its Better Buying Power Initiative, and establish metrics, such as utilization rates, to track progress toward these goals. However, DOD is not fully leveraging the command-level assessments, feedback from the military departments, and other ongoing efforts it relies on to gauge the effects of its actions to improve service acquisition. By using its budget and spending data and leveraging these efforts, DOD could develop baseline data and identify trends over time, enabling it to develop measurable goals and gain more insight into whether its actions are improving service acquisition. Until then, DOD will continue to be in a position where it does not know whether its actions are sufficient to achieve desired outcomes.

What GAO Recommends

GAO recommends that DOD establish baseline data, specific goals for improving service acquisition, and associated metrics to assess its progress. DOD concurred with the three recommendations.