Tool ensures contracting dollars efficiently spent
April 3, 2012
WASHINGTON (Army News Service, April 3, 2012) -- The Senate wanted to hear how the Army maintains oversight over contractors vs. DOD civilian employees and an Army senior leader explained a tool that was developed seven years ago to monitor the contract workforce.
Deputy Assistant Secretary of the Army for Force Management, Manpower and Resources Jay Aronowitz testified March 29 before the Senate Committee on Homeland Security and Governmental Affairs' subcommittee on Contracting Oversight.
CMRA DEVELOPED TO MANAGE COSTS
"To serve as effective stewards of public funds, the Army must ensure that we are managing our workforce in the most effective and cost-efficient manner possible," Aronowitz said. "To that end, we developed our Contract and Manpower Reporting Application tool, or CMRA in January 2005, to increase the visibility of the Army's contract workforce, in terms of labor, hours and costs."
As part of the development process, he said, the Army worked with more than 50 corporations to design a system that would minimize the reporting burden on them and the cost to the government.
"The reporting process is so streamlined that most contractors cannot even separately bill the government for reporting this data," Aronowitz said.
The Army, he said, uses CMRA to collect direct labor hours and labor dollars associated with each service contract as well as the function, location of performance, requiring activity, funding source, and type of contract vehicle.
"The DOD comptroller recently issued guidance that the service's inventory of contract services would be used to inform the budget process, and we have started to work with the Army comptroller to ensure Congress would have the most accurate data on contract services in the future," Aronowitz said.
CMRA has helped the Army, Aronowitz said, to improve management of its total force by identifying inappropriately contracted functions and by collecting cost information to help the Army make informed decisions on the most appropriate workforce mix.
"In addition to service contract data, CMRA allows us the ability to ensure adequate oversight of service contracts by our organic workforce, a statutory requirement, and ensure there are no dependencies between the contracted functions and the organic government workforce."
The Army's contractor inventory process has potential benefits, he said, not only for the rest of the Department of Defense, but also for government-wide application.
"I can tell you some of the challenges and how we can address those, going forward."
For instance, he said, civilian pay for fiscal year 2009 was $20 billion, compared to $32 billion spent on service contracts; in fiscal year 2010, it was $22 billion in relation to $36 billion spent on service contracts; and in fiscal year 2011, $24 billion on civilian pay, compared to $40 billion on service contracts.
Three years ago, though, service contract dollars went down significantly, from $51 billion in 2008 to $32 billion in 2009. Aronowitz said this resulted from the Army not programming and budgeting for the service contracts.
"And so the Army's intent, going forward, is to ensure that we integrate these service contracts in our program and budget," he said, adding that this period of 2008 to 2009 was a voluntary in-sourcing program that had no undue outside controls or influence pressurizing another component of the total force.
This was the first time, he said, that the department seriously began looking at ensuring that the Army integrates service contracts in program and budget.
"In DOD, there's a directive-type memorandum (DTM), which is titled, 'Estimating the Cost of Military and Civilian Manpower and Service Contracts.' So within DOD, we basically have a cost-benefit analysis tool to ensure we've got the fully burdened cost of our workforce."
"I would say that before I signed up to a one-size-fits-all for the government, that there are some nuances to DOD that would have to be considered going forward," Aronowitz said.
This directive, DTM 09-007, set to expire Oct. 1, 2012, established business rules for use in estimating and comparing the full costs of military and DOD civilian manpower and contract support. The full costs of manpower include current and deferred compensation costs paid in cash and in-kind, as well as, non-compensation costs.
Defense Department business rules will also be used to decide whether DOD civilians can perform functions that are currently being performed by contractors.
When the Army did insourcing in 2008 to 2009, Aronowitz said it achieved about a 30 percent cost savings.
"When DOD directed and took $400 million out of our budget, their assumption was that there'd be a 40 percent savings and this was in about the FY 2010 time frame," he said.
The senators asked about the legislation before the Senate committee and the implementation of the many recommendations from the Commission on Wartime Contracting, and cited that $60 billion was lost to waste, fraud and abuse in Iraq.
When asked by the senators if the recommendations from this commission will have a positive effect on the way that the Army and the Defense Department do business with contractors, or if it would hurt their ability to achieve a savings, Aronowitz responded.
"I know that the legislation is now being reviewed back in the Pentagon, and we will get a response back through DOD on that. The secretary of the Army takes this very seriously, and he has directed the Army staff to basically expedite the hiring initiative we had to grow the acquisition workforce and also to increase the military by about a thousand Soldiers in the acquisition field to build an expeditionary acquisition capability. And again, I know this is a reaction to the Commission on Wartime Contracting, but again, we take it very serious in the department," Aronowitz said.