Circular A-76 requires agencies to maintain annual inventories of commercial activities performed in house. In 1999, DOD began to augment its A-76 program with what it terms strategic sourcing. Strategic sourcing initially does not involve A-76 competitions between the public and the private sectors, and the Office of the Secretary of Defense and service officials have stressed that strategic sourcing may provide smarter decisions because it determines whether an activity should be performed before deciding who should perform it. DOD’s A-76 Program Has Evolved Over Time

DOD has been the leader among federal agencies in emphasizing A-76 studies. The number of positions planned for study and the time frames for accomplishing those studies have changed over time in response to difficulties in identifying activities to be studied. More recent savings estimates have not yet been made available. Others suggested higher savings than initially identified. Some Issues We Have Raised About DOD’s A-76 Program

In monitoring DOD’s progress in implementing the A-76 program, we have reported on a number of issues that should be considered when expanding emphasis on the A-76 process, either in DOD or at other government agencies. These issues include (1) the time required to complete studies, (2) the costs and other resources needed to conduct and implement studies, (3) the difficulties involved in selecting functions to compete, and (4) the timing of budget reductions in anticipation of projected savings. Studies Have Taken Longer to Complete Than Expected

Individual A-76 studies have taken longer than initially projected. Selecting and Grouping Functions to Compete Can Be Difficult

Selecting and grouping functions and positions to compete can be difficult. The following year it planned to announce 20,000 positions but announced 10,807 (about 54 percent). Among other issues, the Panel will be reviewing the A-76 process and implementation of the FAIR Act.
Why GAO Did This Study

This testimony discusses the Department of Defense's (DOD) use of the Office of Management and Budget's Circular A-76, which establishes federal policy for the performance of recurring commercial activities.

What GAO Found

DOD has been a leader among federal agencies in the use of the A-76 process and at one point planned to use the process to study more than 200,000 positions over several years. However, the number of positions planned for study has changed over time and the Department recently augmented its A-76 program with what it terms strategic sourcing. DOD has saved money through the A-76 process primarily by reducing the number of in-house positions. Yet, GAO has repeatedly found that it is extremely difficult to measure the precise amount of savings because available data has been limited and inconsistent. The lessons learned from DOD's A-76 program include the following: (1) studies have generally taken longer than initially expected, (2) studies have generally required higher costs and resources than initially projected, (3) finding and selecting functions to compete can be difficult, and (4) making premature budget cuts on the assumption of projected savings can be risky. Both government groups and the private sector have expressed concerns about the fairness, adequacy, costs, and timeliness of the A-76 process.