U.S Department of Defense Trends in Overseas Contract Obligations

Posted by- Neelam Mathews

Sept 11, 2011

The U.S Department of Defense (DOD) has long relied on contractors to support military operations, says a Congressional Research Service Report.

Summary-

Contractors provide the U.S. military with weapons, food, uniforms, and logistic services, and without contractor support, the U.S. would currently be unable to arm and field an effective fighting force. DOD spends more on federal contracts than all other federal agencies combined.

Understanding the costs associated with contractor support of overseas military operations could provide Congress more data upon which to weigh the relative costs and benefits of different military operations, including contingency operations and maintaining bases around the world.

The federal government tracks contract obligations through the Federal Procurement Data System. Obligations occur when agencies enter into contracts, employ personnel, or otherwise commit to spending money. The report examines DOD overseas contract obligations within the context of U.S. government and DOD contract spending.

Total DOD Contract Obligations

From FY1999 to FY2008, DOD contract obligations increased from $165 billion (in FY2010 dollars) to $414 billion (in FY2010 dollars). Contract obligations also consumed an increasing share of total DOD obligations, increasing from 50% of total obligations in FY2003 to 60% in FY2008. In FY2009 and FY2010, DOD contract obligations decreased. In FY2010, DOD obligated $366 billion to contracts (54% of total DOD obligations).

DOD Contract Obligations Performed Overseas

DOD obligated $45 billion for contracts performed overseas in FY2010. Although much of these funds were to support operations in Afghanistan and Iraq, a significant portion—$18 billion, or 40%-was spent to support DOD operations in other parts of the world.

DOD contract obligations for work performed overseas occurred primarily in the area under the jurisdiction of U.S. Central Command (61% of total), which includes the Iraq and Afghanistan areas of operation.

DOD contractors working abroad performed their remaining work in the geographic regions that fall under U.S. European Command (21%), U.S. Pacific Command (7%), U.S. Northern Command (7%), U.S. Southern Command (1%), and U.S. African Command (1%).

DOD says it is aware of concerns relating to overseas contract obligations and is working to correct the data.

Comparison of DOD, State, and USAID Overseas Contract Obligations

Some analysts argue that in order to achieve its foreign policy objectives, the United States must bring together the resources of, among others, DOD, the Department of State, USAID-and government contractors. DOD’s share of federal government obligations for contracts performed abroad has declined from a high of 87% in FY1999 to 73% in FY2010. Over the same period, combined Department of State and U.S. AID contract obligations increased from 5% to 16% of all overseas obligations.