CABINET COUNCIL ON MANAGEMENT AND ADMINISTRATION CONSULTING SERVICES CONTROLS ISSUE PAPER

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85B01152R001201450013-3
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 3
• Document Creation Date: December 21, 2016
• Document Release Date: July 9, 2008
• Sequence Number: 13
• Publication Date: September 21, 1983
• Content Type: REPORT

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9/21/83
CABINET COUNCIL-ON MANAGEMENT AND ADMINISTRATION
CONSULTING SERVICES CONTROLS
Issue Paper
What steps should be taken to reduce and control the cost of
consulting and related services?
The Federal government spends about $1.5 billion annually on
consulting and related services, nearly two-thirds (or $1
billion) of it by the Department of Defense. (See table below.)
These services are often advisory in character and provide agency
leadership with views and opinions on problems or issues relating
to agency operations; or they might be special studies and
analyses of management and support services for R&D activities.
They are usually of a specialized professional or technical
nature. OMB Circular A-120 and a subsequent memorandum from the
Director of OMB provide agencies with basic guidelines and policy
on the use of consulting services, and identify certain controls
the agencies can use.
Consulting and Related Services
(Obligations, in Millions of Dollars)
FY 1982
FY 1983
FY 1984
Total . . . . . . . . . . . . .
1,404.4
1,481.5
1,518.2
Department of Defense . . . . . .
902.4
933.1
980.8
(Defense as percent of total) . .
(66.4%)
(63.0%)
(64.6%)
While legitimate agency need exists for these services, abuses
have been referenced from time to time in congressional hearings,
GAO reports, news articles, and by some executive branch
managers. These offenses are said to include use of consultants
to perform policy-making or management work, sole source
selection when competitive procurement should have been used,
year-end "rush spending" on questionable consulting contracts,
"revolving-door" personnel arrangements, and conflict of interest
situations.
Senators DeConcini, Abdnor, and Mattingly have asked OMB Director
Stockman to devise stronger controls in this area. Senator
Mattingly has also asked Loren Smith, Chairman, Administrative
Conference of the United States (ACUS),.to review the problem.
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OMB ACTIONS
In January, 1982, OMB developed a "Model Control System for
Consulting and, Related Services." The system defined model
methods that agencies could adopt for controlling the use and
quality of consultant services. In an August, 1983 survey, OMB
found that of 13 agencies, 11 had not applied the model, one
(Veterans Administration) had adopted it satisfactorily, and
another (Commerce) had found mixed results. Most of the agencies
not using the model expressed an intent to do so over the next
year.
ACUS PROPOSAL
In a letter to Edwin Meese, dated July 26, 1983, Loren Smith
suggested two basic controls, which can be used singly or in
combination:
1. Require agencies to obtain OMB approval for each contract in
excess of a specified level, e.g., $100,000; and, publish a
brief synopsis in the Commerce Business Daily along with the
names and phone numbers of the OMB approving officer and the
agency contracting officer.
-Z.- -Require - agency program employees to prepare-an -internal
evaluation of the impact of each completed contract on
program efficiency and effectiveness.
OMB opposes the ACUS proposals on the grounds that OMB approval
and additional agency evaluation would be administratively
impractical and burdensome, both for OMB and for the agencies.
OMB does not and should not have a staff sufficiently large to
control such a process in the detail implied.
OMB PROPOSAL
OMB believes that primary responsibility and accountability for
managing agencies must stay with the agency heads. It prefers
that agencies adopt a set of controls baed on the Model Control
System. The model system provides for an agency post-evaluation
of each consulting contract, as well as several other control
features. Alternatively or simultaneously, reviews of the use of
consultant services can be made (or required) as part of the
Financial Integrity Act internal control reviews.
CCMA INTEREST
Opportunities exist for cutting waste and abuse in this area.
Savings could be very substantial, a chronically difficult
management problem could be corrected, and the Administration
could take credit for eliminating another abuse of appropriated
funds.
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CCMA OPTIONS
1. Develop further the ACUS concepts of OMB approval and/or
agency program evaluation of contracts.
2. Proceed with the OMB approach of urging adoption of the Model
Control. System, or its equivalent. Request larger agencies
to adopt a consultant services control system based on the
OMB model and/or require review of the use of consultant
services as part of the mandatory annual internal control
reviews.
3. Further examine these and additional alternatives in a quick
60-day study, conducted by a small CCMA working group.
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