GAO: Savings on Defense O&M Contracts Uncertain Defense Department spending on operations and maintenance contracts has grown dramatically over the past six years, but General Accounting Office auditors say it is impossible to tell whether contracting out the work has increased or decreased costs. From 2000 to 2005 DOD’s O&M costs increased by 57% to $209.5 billion, GAO said. That covers spending on training, supply and equipment maintenance of military units as well as the infrastructure of military bases. The auditors said the increase was driven primarily by the global war on terrorism and other contingencies. DOD officials said they are following a longstanding policy of using contractors to free up military personnel for combat operations and to provide expertise that is lacking in the armed services. The House Appropriations Committee has expressed concern that contracting for O&M services drives up costs, but the auditors said they cannot determine from available data whether that is true. They suggested the use of contractors could improve cost efficiency “as long as DOD uses competition in its contract solicitations” and provides adequate contract oversight. GAO investigators visited Fort Hood, TX; Naval Air Station Pensacola, FL; and Langley Air Force Base, VA, to review their spending on O&M-related work. “Officials at each installation stated that their outsourcing efforts had resulted in reduced costs for performing the work and that they were satisfied with contractor performance,” the report says. The secretaries of the Army and the Air Force have issued orders to cut back the use of contractor personnel. The Defense Department, as required by Congress, is preparing guidelines to determine when military personnel should be used instead of contractors. The report is GAO-07-631, available at www.gsa.gov.