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CBO Report: DoD Top Spender on Contracts for Products, Services

money-graphThe Congressional Budget Office has released a report on its analysis of federal contracting activity and spending on the contracted workforce in response to a request by Rep. Chris Van Hollen (D-Md.).

In the report published Wednesday, CBO Director Douglas Elmendorf told Van Hollen, who is the ranking member on the House Budget Committee, that 2012 records show approximately $500 billion spent on contracted products and services.

The findings also point to professional, administrative and management services as the top spending category in contract dollars between 2000 and 2012 and medical services as the top in percentage growth.

According to the report, the Defense Department held the majority of federal spending on contracts in 2000 and 2012 at 62 percent and 70 percent, respectively, with its own spending increasingly allocated to contracts during the period.

Nondefense agencies also spent significantly on contracts, but DoD saw faster growth at 111 percent compared to 48 percent for non-DoD contracts, Elmendorf said.

He added that the rise in DoD dollars allocated for medical services can be attributed to the costs of medical care for veterans, active-duty soldiers and their families.

Elmendorf notes that the numbers in the report are only estimates because the data used in the analysis from the Federal Procurement Data System – Next Generation are incomplete and use a complex coding system for products and services, while DoD’s Inventory of Contracts for Services does not cover other contracts.

The report also stated that it does not include a comparison of spending costs between federal employees and contracted employees due to the information not available on ICS.

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