The Federal Acquisition Regulation (FAR) requires federal service contractors to report their direct labor hours and amounts invoiced to the government. This mandate is intended to help federal agencies fulfill their annual requirement to submit to the Office of Management and Budget (OMB) an inventory of activities performed by service contractors, in order to help determine whether agencies have the right balance of contractor and in-house resources to accomplish their missions. However, since contractors are required only to report dollar amounts and the number of full time equivalents (FTEs) employed, agencies lack sufficient context to adequately make such determinations. The government also significantly underestimates the time and cost burden for companies to comply with these requirements—costs ultimately borne by the government.
Based on ineffective outcomes to date and the lack of any perceptible value for the agencies or the public, PSC recommends that Congress repeal the mandate for service contract inventories for both DoD and the civilian agencies and that the FAR Council subsequently repeal the FAR contract clauses at FAR 52.204-14 and FAR 52.204-15. Since detailed information is already reported by the federal government through various other means, the federal agencies are capable of conducting analyses and making total workforce management decisions using already available information. Doing so should results in savings in the millions of dollars and liberate additional contractor and government resources to focus on what matters most–achieving the missions of the federal government and serving the taxpayer.
More detailed information on PSC’s recommendation is included in the attached white paper.