A majority (77 percent) of the competitions were held by the Air Force. We found that the time to complete the competitions in our review has decreased to an average time of 18 months for single function competitions and 30 months for multiple function competitions. Table 3 indicates the average length of time required to complete the recent A-76 competitions. Sixteen of the 53 completed competitions competed between October 1995 and March 1998 used best value criteria. However, the data is too limited at this point to reach any conclusions about trends. Our current work also reinforces previous concerns expressed about the adequacy and reliability of the CAMIS databases used by the services to record savings from A-76 competitions, and their usefulness for tracking changes over time. Initial Savings Estimates From Recent Competitions Are Expected to Be Substantial

Data available from the services and defense agencies for their recently completed competitions suggests that the 53 completed competitions were projected to result in savings of $528 million over the life of the multiyear awards and would average 42 percent; similar savings were projected regardless of whether the competitions were won by the private sector or in-house. Few Implementation Problems Identified

We identified only a few performance problems on contracts awarded as the result of competitions won by the private sector. In one instance involving a storage and warehousing contract at Fort Riley, Kansas, the contract was terminated after the first full performance period (19 months) because of poor contractor performance, according to contract officials. Full implementation of the aircraft maintenance most efficient organization at Altus Air Force Base had to be extended  17 months—from December 1996 to April 1998—due to a delay in being able to recruit enough personnel for the work. The number of personnel assigned to the monitoring of contracts won by the private sector will vary depending upon the size and complexity of the functions being competed. Conclusions

Defense components appear to be conducting competitive sourcing competitions in accordance with OMB Circular A-76 guidelines. Improvements are still needed in DOD’s database to ensure that results from A-76 competitions and savings estimates are tracked over time, with adjustments made as needed for competitions won by the private as well as the public sector. Scope and Methodology

To determine the results of the A-76 competitions and related appeals, we spoke with officials from the Office of the Secretary of Defense, Departments of the Army, the Navy, and the Air Force; the Marine Corps; the Defense Finance and Accounting Service; and the Defense Commissary Agency to obtain listings of competitions completed from October 1995 through March 1998 and the performance and oversight of the winners. The A-76 Process

In general, the A-76 process consists of six key activities—(1) developing a performance work statement and quality assurance surveillance plan; (2) conducting a management study to determine the government’s most efficient organization (MEO); (3) developing an in-house government cost estimate for the MEO; (4) issuing a Request for Proposals or Invitation for Bids; (5) evaluating the proposals or bids and comparing the in-house estimate with a private sector offer or interservice support agreement and selecting the winner of the cost comparison; and (6) addressing any appeals submitted under the administrative appeals process, which is designed to ensure that all costs are fair, accurate, and calculated in the manner prescribed by the A-76 handbook. (continued)
Positions competed (Civ./mil.)
Why GAO Did This Study

Pursuant to a congressional request, GAO provided information on the Department of Defense's (DOD) recent competitive sourcing initiatives, focusing on: (1) determining the number of sourcing competitions completed between October 1995 and March 1998 and whether the competitions had been done in accordance with applicable procedures; (2) comparing characteristics such as outcomes of recent competitions with previous competitions in terms of winners of the competitions, time required to complete the competitions, savings produced, and other relevant metrics; and (3) identifying the extent of any problems in implementing the results of the competitions, and plans for government monitoring of contracts awarded as a result of outsourcing.

What GAO Found

GAO noted that: (1) the Air Force held the vast majority of competitions completed between October 1995 and March 1998--41 of 53; (2) likewise, 85 percent of the positions competed were in the Air Force; (3) while the number of recently completed competitions is small, the agency procedures and GAO's analysis of a sample of completed cases indicate that DOD components are conducting these competitions in accordance with Office of Management and Budget Circular A-76 guidelines; (4) additionally, GAO identified only ten appeals under the A-76 administrative appeal process, with only one being upheld; (5) the private sector won about 60 percent of recent competitions compared to about 50 percent prior to 1995; (6) also, the time to complete single and multiple function competitions was 18 and 30 months, respectively, compared to an average of about 51 months for all prior competitions; (7) further, the competitions show significant potential for savings, largely driven by personnel reductions; (8) however, the data is too limited at this point to reach any conclusions about trends, and questions exist about the precision and consistency of savings estimates; (9) moreover limitations continue to exist in DOD databases used to record savings from A-76 competitions and their usefulness for tracking changes over time; (10) actions are still required to ensure that improvements are made in these databases and savings estimates from completed competitions are tracked over time; (11) the relatively few implementation problems were independent of whether the private or public sector had won the competition; (12) for example, a storage and warehousing contract was terminated for poor performance after a 19-month performance period; (13) in another case, full implementation of a public maintenance operation was delayed 17 months due to a delay in being able to recruit enough personnel to perform the work; and (14) lastly, resources expected to be devoted to monitoring contracts awarded to the private sector varied depending on the size and complexity of the functions being reviewed.