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Summary

In 2011, as part of its “Campaign to Cut Waste,” the Office of Management and Budget (OMB) set a goal for agencies to reduce spending on management support services contracts by 15 percent—from fiscal year 2010 spending levels—by the end of fiscal year 2012. OMB also called for the Chief Financial Officer and Chief Acquisition Officer of each agency to institute controls to monitor fiscal year 2012 obligations for management support services under new contracts.

However, DOT’s spending on management support services contracts, which totals over $1 billion annually, increased from fiscal years 2010 through 2012, and over half of DOT’s management support services contract obligations involve high-risk contract types, such as time-and-materials and cost-reimbursement contracts. Despite this increase, the Department reported that it achieved contract cost savings through an ongoing strategic sourcing initiative. However, DOT delayed implementing the phases of the strategic sourcing initiative that focus in part on management support services spending, and it lacked comprehensive plans and policies for implementing these initiatives. DOT recently initiated actions that could provide a foundation for improving its use of management support services contracts, such as revising its “Acquisition Oversight and Risk Management Policy,” but it has not implemented OMB’s suggested internal controls for managing and monitoring obligations for management support services contracts. Deferring these efforts to focus on management support services contracts has delayed opportunities to reduce spending and better manage these contracts.

We made two recommendations to help DOT control spending and improve management of its management support services contracts. The Department concurred with both recommendations; however, we requested that DOT perform additional actions to ensure it meets the intent of one.