	DOD Has Implemented Guidance That Generally Addresses Legislative Requirements

To meet the legislative requirements regarding independent management  reviews, DOD issued guidance and instructions providing for a peer review  process for services acquisitions. DOD’s guidance generally addresses  requirements prescribed in the Act to develop a process to evaluate the  specified contracting issues, but according to DOD officials, DOD has not  yet determined how the department plans to disseminate lessons learned  or track recommendations that result from the newly instituted reviews. DOD officials expect to further refine their processes, including  developing a more formal means for disseminating lessons learned and  tracking recommendations as DOD assesses its initial experiences with  peer reviews. Further, as peer review processes evolve, the military  departments are considering ways to disseminate lessons learned and  track recommendations. 1). Further, the  guidance established review criteria for post-award reviews that address  each of the contracting issues identified in the Act. Officials said that  the teams are generally chaired by a deputy director within DPAP and  include participation from senior contracting officials from the military  departments and defense agencies as well as legal advisors from the Office  of the Secretary of Defense’s General Counsel. The February 2009 guidance indicated that DPAP is to review services  acquisitions with an expected value of over $1 billion. As of   September 30, 2009, DPAP had conducted 29 peer reviews for 18 services  acquisitions. DPAP has not yet  determined if it will establish a policy for conducting peer reviews for all  individual task orders over this amount in the future. In addition to providing recommendations to address potential issues in  proposed acquisitions, the peer review teams have also identified some  best practices. Military Departments’ Peer Review Processes Are Evolving

The September 2008 DPAP guidance required the military departments to  establish their own procedures for conducting pre- and post-award peer  reviews on acquisitions under $1 billion, but provided the flexibility to the  services to tailor the process to best meet their needs. 3). As of September 2009, the military departments reported conducting  hundreds of peer reviews for services acquisitions, but the departments do  not have comprehensive processes for determining the exact number of  reviews conducted. DOD indicated that it will continue to refine its  peer review process to better disseminate trends, lessons learned, and best  practices that are identified during peer reviews. Appendix I: Scope and Methodology

Section 808 of the National Defense Authorization Act for Fiscal Year 2008  (the Act) directs GAO to report on the Department of Defense’s (DOD)  implementation of its guidance and implementing instructions providing  for periodic management reviews of contracts for services. In response to  this mandate, we (1) assessed the extent to which DOD’s guidance  addressed the Act’s requirements at the department level and how the  guidance was implemented and (2) determined the status of actions taken  by the military departments pursuant to DOD’s guidance. To do so, we reviewed DOD’s September 2008 and February 2009 guidance  issued by the Under Secretary of Defense for Acquisition, Technology and  Logistics’ Office of Defense Procurement and Acquisition Policy (DPAP). The Navy provided information on the number of  reviews it had conducted but could not specify how many had been  conducted as of September 30, 2009.
Why GAO Did This Study

The Department of Defense (DOD) is the federal government's largest purchaser of contractor-provided services, obligating more than $207 billion on services contracts in fiscal year 2009. DOD contract management has been on GAO's high-risk list since 1992, in part because of continued weaknesses in DOD's management and oversight of contracts for services. The National Defense Authorization Act for Fiscal Year 2008 directed DOD to issue guidance providing for independent management reviews for services acquisitions. The Act required that the guidance provide a means to evaluate specific contracting issues and to address other issues, including identifying procedures for tracking recommendations and disseminating lessons learned. The Act also directed GAO to report on DOD's implementation of its guidance. GAO (1) assessed the extent to which DOD's guidance addressed the Act's requirements and how the guidance was implemented and (2) determined the status of actions taken by the military departments pursuant to DOD's guidance. GAO compared DOD's guidance with the Act's requirements; obtained data on the number of reviews conducted as of September 2009; and analyzed memoranda of 29 acquisitions valued at over $1 billion. In its written comments, DOD noted it planned to refine its processes to better share the lessons learned and best practices identified during peer reviews.

What GAO Found

To meet the legislative requirement regarding independent management reviews, DOD issued guidance in September 2008 and February 2009 providing for a peer review process for services acquisitions. DOD's guidance generally addresses requirements in the Act to issue guidance designed to evaluate specified contracting issues, but according to officials, DOD has not yet determined how it plans to disseminate lessons learned or track recommendations that result from the newly instituted reviews. Under this guidance, the Office of Defense Procurement and Acquisition Policy (DPAP) is responsible for conducting pre- and post-award peer reviews for services acquisitions with an estimated value of over $1 billion. Peer review teams include senior contracting officials from the military departments and defense agencies as well as legal advisors. As of September 30, 2009, DPAP had conducted 29 reviews of 18 services acquisitions, including 3 post-award reviews. DOD has also conducted peer reviews on two task orders but has not yet determined if it will do so on individual task orders in the future. The peer review teams made a number of recommendations and identified some best practices. DOD officials expect to refine their processes, including developing a more formal means for disseminating lessons learned and tracking recommendations, as DOD assesses its initial experiences with peer reviews. Each of the military departments has issued guidance establishing peer review processes for services acquisitions valued at less than $1 billion although the guidance is still evolving. The departments' guidance identifies the offices or commands tasked with conducting peer reviews based on various dollar thresholds. The military departments reported conducting hundreds of peer reviews for services acquisitions as of September 30, 2009, but could not provide exact numbers because of the lack of comprehensive reporting processes. Further, as peer review processes evolve, the military departments are considering ways to disseminate lessons learned and track recommendations.