"A Matter of Grave Concern:" Contractors Acting as Contract Specialists The Defense Department’s procurement chief says he intends to stop the use of contractor personnel as contract specialists after the Government Accountability Office raised questions about the practice. “I view this to be a matter of grave concern,” Shay Assad, director of defense procurement, acquisition policy and strategic sourcing, wrote to GAO. GAO found that contractors filled 42% of the contract specialist positions at the Army Contracting Agency’s Contracting Center of Excellence last year. The center handled nearly $1.8 billion in contracts for 125 DOD customers in the National Capitol Region, including the Joint Chiefs of Staff. Auditors said contractor personnel were used interchangeably with government employees, working side-by-side, taking orders from contracting officers, and performing identical functions. “The only apparent distinction is their different badge color,” GAO said. The Army hired most of the private-sector contract specialists through a blanket purchase agreement with CACI, under GSA’s MOBIS schedule. GAO said those positions were outside the scope of the MOBIS contract. Auditors expressed concern that the specialists’ duties are very close to “inherently governmental” functions. “Among other things, contract specialists perform market research, assist in preparing statements of work, develop and manage acquisition plans, and prepare the documents the contracting officer signs, such as contracts, solicitations, and contract modifications,” GAO said. Although only warranted contracting officers can award contracts, GAO said the C.O.’s often take recommendations from the contract specialists. “The closer contractor services come to supporting inherently governmental functions, the greater the risk of their influencing the government’s control over and accountability for decisions that may be based, in part, on contractor work,” the report said. “Decisions may be made that are not in the best interest of the government and may increase vulnerability to waste, fraud, or abuse.” GAO said there is a risk of conflict of interest, since contractor personnel are not bound by the same rules as federal employees. Both the Army and CACI said they have taken steps to avoid personal and organizational conflicts of interest. They cited several instances in which contractor personnel were barred from working on a procurement because of possible conflicts. Officials at the Army Contracting Agency said they would prefer to have government employees fill the jobs, but they face chronic problems with recruiting and retention. GAO found that the contractor personnel cost 27% more, on average, than federal workers. In response to the GAO findings, DOD’s Assad wrote that he would move to “take contractors out of the contract specialist role.” If that cannot be accomplished within 180 days, he said, he would instruct the Army to transfer the center’s workload to other contracting shops that are staffed by federal employees. The Contracting Center of Excellence was recently absorbed into the new Army Contracting Command. Army officials have said the command will be hiring additional personnel. The report is GAO 08-360, available at www.gao.gov.