DoD’s approach to collecting data on contract services is inhibiting its ability to make informed decisions on the defense civilian workforce, according to a new report by the General Accountability Office (GAO). “The military departments differ both in their approaches to reviewing the activities performed by contractors and the extent to which they have used the inventories to inform workforce decisions, the report charged. The FY2010 Defense Authorization Act requires GAO to prepare annual reports on DoD’s efforts to inventory the number of contractors and the functions and activities performed under service contracts. The Act also directs (Sec. 803) the military Services to develop information on contract services for annual budget justification material it sends to Congress, including the amounts requested and the number of full-time equivalent (FTE) employees at the component and installation level. In past studies, GAO has reported that contractor support has benefited DoD, especially in terms of flexibility and timing when responding to changing wartime needs. However, GAO has also said that excessive reliance on contractors to perform “core missions” could put the government at increased risk as inherently governmental functions are transferred from defense civilians to contractors. In 2009, Secretary Gates announced that DoD would rebalance its civilian workforce by reducing reliance on private contractors and moving work to federal employees. In his long-term budgetary goals, Secretary Gates proposes to reduce contractor support by 10 percent over the next few years. Developing more accurate information on inherently governmental work and on work currently being performed by contractors is essential to meeting Secretary Gates’ goals. GAO points out that DoD has not yet achieved a consistent and accurate reporting system on contract services. As a result, it is not able to develop an effective workforce plan and to fully identify candidates for shifting work from contractors to DoD employees. DoD and the military Services have tried numerous ways to collect information on contractor support, but the results have been mixed at best. Differing approaches used by the Services from year to year have made it extremely difficult to make accurate comparisons of both the amounts budgeted for contract services and the number of contractor personnel performing those services. For example, contract services associated with research and development activities have not been uniformly reported by services and they have used different methods and sources to collect or estimate data (for labor rates and ratios) in response to DoD guidance. The GAO report recognizes that Services’ reporting on the number of contractor FTEs has been improving and that OSD is striving to develop standard procedures to reduce reporting inconsistencies. But, GAO believes that more must be done because effective analysis of data on contract support services will continue to be hindered until DoD improves and standardizes its reporting system and eliminates data collection gaps and definitional inconsistencies. GAO recommends (and DoD agrees) that the department develop a plan of action to collect better manpower data on contractors performing under service contracts and improve its methods to estimate the amount budgeted for such activities.