GAO Raps Army's Contracts For Security Guards Two Alaska Native Corporations have been awarded sole-source contracts worth nearly $500 million to provide security guards at Army installations, although the Army’s own analysis showed that competitive bidding could reduce costs by about 25%, the Government Accountability Office reported. The ANCs are guarding 46 of the 57 installations that use contract guards and have received two-thirds of the dollars the Army has awarded for installation security. They subcontract 49% of the work to large security corporations, GAO said. As 8(a) companies, the ANCs are not permitted to subcontract more than 50% of the work. Since 2003 Congress has permitted the military services to hire contract security guards to free soldiers for duty in the wars in Iraq and Afghanistan. The GAO report documented many problems with the Army’s contract security program, including long delays in conducting criminal background checks on guards and lax oversight of the guards’ training and performance. The auditors found that some guards had criminal records. One had an outstanding warrant and was arrested while on the job. “A contract guard who successfully hid a criminal history during the job application process could be working at an installation gate, using a firearm, until a national agency check determines the truth,” GAO said. The government’s background checks take up to two years. GAO said the Army could supplement the government’s background investigations by consulting its own criminal records database and the FBI’s National Crime Information Center, but the Army’s Installation Management Agency has refused to do that. Investigators found that the Army does not provide standardized training instructions for contractors and does not monitor training. Army officials said they are drafting standards. Several monitors at Army installations said they don’t conduct the required inspections of the guards to see if they are at their posts; one said it was “a waste of time.” Several monitors also said they do not conduct the required blind tests of security by trying to enter an installation using false identification. GAO said SBA’s Alaska district office recommended one ANC contractor, but the Defense Contract Management Agency rated the firm “high risk” because it had no experience in the security industry. The company said it intended to subcontract with an experienced large business. The companies were not identified. Unlike other 8(a) firms, ANCs can receive sole-source contracts in unlimited amounts. Army officials told the investigators they do not monitor the contractors to ensure that they abide by the law requiring them to subcontract no more than 50% of the work. The auditors found that the Army has awarded more than 98% of the available award fees, more than $18 million. Contractors earn the fees if they meet, but do not exceed, the contract’s requirements. The Army submitted a report to Congress on the contract guard program in November, but GAO said that report was overly optimistic. The auditors said they found no adequate basis for the Army’s contention that the contracts were cost-effective or that the performance of contract guards was equivalent to that of military personnel. GAO recommended changes in acquisition strategy and improved oversight of training. In response, DOD said the Army is implementing the recommendations. The report is GAO-06-284.