Defense Management: DOD Needs to Assess Effectiveness and Determine Future Direction for Its High Performing Organizations Initiative
Highlights
The Department of Defense (DOD) has sought improved efficiencies and cost reductions in its delivery of services that could be provided by the private sector, using both competitions with private companies and processes to create high performing organizations (HPO). The Office of Management and Budget's (OMB) Circular A-76 establishes federal policy for the competition of commercial activities. According to the circular, the longstanding policy of the federal government has been to rely on the private sector for needed commercial services. To ensure that the American people receive maximum value for their tax dollars, it is the federal government's policy that commercial activities should be subject to the forces of competition. As the largest federal agency, DOD has conducted more A-76 competitions than any other federal agency. However, the A-76 process has drawn criticism from both the public and private sectors. These criticisms largely center on the costs and length of time required to conduct competitions and the manner in which long-term savings are calculated. In light of these concerns, a panel of public and private sector experts convened in 2001 to identify ways in which the federal government could improve the A-76 process and included an option that focused on improving efficiencies in-house through the creation of HPOs rather than seeking improved efficiencies through public-private competitions. Although the A-76 process has been DOD's preferred method for ensuring the most efficient operation of a function, it is currently subject to a number of recently enacted statutory limitations. Given these relatively new developments and the potential for HPOs to serve as an alternative to the A-76 process, you asked us to examine the extent to which the Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics (OSD) has made progress in implementing and evaluating DOD's HPO initiative.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | To determine the effectiveness of the HPO initiative and provide future direction for the programs, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition, Technology and Logistics to assess the reliability of the data provided by the HPOs and take steps to ensure reporting and collection of reliable data. |
Closed – Not Implemented
The DOD components are accountable for the collection and reporting of data on their own high-performing organizations (HPOs). The components are responsible for managing its own resources and budgeting for its own organization. As part of these broader responsibilities, the components are also responsible for assessing whether the HPOs will receive continued exemption from public/private competition as authorized by the statute. However, according to a DOD official, there is a current moratorium on public/private competition, which may obviate the need for assessment for purposes of exemption.
|
| Department of Defense | To determine the effectiveness of the HPO initiative and provide future direction for the programs, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition, Technology and Logistics to use the performance data to fully evaluate the effectiveness of the DOD's HPO initiative using all performance measures set out in the National Defense Authorization Act for Fiscal Year 2004. |
Closed – Not Implemented
GAO contacted an official from the Office of Acquisition, Technology, and Logistics (AT&L) via email and by phone to ask if the evaluation of HPO performance data as submitted by the components will be performed and, if so, when. However, GAO never received a response from AT&L.
|