Defense Services Acquisition: Questions for the Record Page: 3 of 11
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Appendix I: GAO Responses to Questions for the Record
Question: What is the potential effectiveness of two corrective actions
DOD has recently taken to improve oversight of interagency contracting-
a December 2006 memorandum from the Director of Defense Procurement
and an October 2006 memorandum from the Defense Comptroller's office?
The October 2006 memorandum from the Comptroller, which was sent to DOD
components, established policies and procedures for ordering goods and services
that are not subject to the Economy Act that are purchased from non-DOD
agencies. For example, it requires officials to provide evidence of market research
and acquisition planning, and a statement of work that is specific, definite, and
certain for non-Economy Act orders above the simplified acquisition threshold.
The memorandum also included a checklist and responsibilities for DOD officials
to use as guidance when placing orders through interagency contracts. These
actions should help to address prior GAO recommendations for better defining
contract requirements and outcomes, and the need for guidance on the use of
The December 2006 Memorandum of Agreement between DOD and the General
Services Administration (GSA) serves to establish expectations for the parties
involved in an interagency contracting transaction. For example, the
memorandum proscribes that statements of work are complete, interagency
agreements describe the work to be performed, and surveillance and oversight
requirements are defined and implemented. The planned quarterly meetings for
DOD and GSA to evaluate the effectiveness of the Memorandum of Agreement are
a positive step.
However, as the Acting Inspector General, DOD, pointed out during the January
2007 hearing, the risks associated with interagency contracting are not new and
require sustained attention. The use of these types of contracts continues to
increase governmentwide, and our work and the work of the Inspector General
have found that users and administrators lack expertise about how to use these
contracts. In addition, adequate oversight is lacking. For example, DOD issued
guidance that was signed in October 2004 (effective January 1, 2005) that outlines
procedures to be developed and general factors to consider in making the
decision to use another agency's contract. However, recent Inspector General
audits have found that the guidance is not always followed. In March 2006, the
DOD Comptroller issued a memorandum to the military departments, defense
agencies, and other components stating that DOD purchases made through non-
DOD entities continue to violate policies, existing regulations, and practices
regarding the use and control of DOD funds under interagency agreements; the
memorandum also stated that this situation needed improvement. Therefore,
although recent DOD actions are welcome, DOD will need to continue to monitor
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United States. Government Accountability Office. Defense Services Acquisition: Questions for the Record, text, March 26, 2007; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc298602/m1/3/: accessed November 16, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.