Washington (CNN) – It may seem like putting the rooster in charge of the hen house, but the U.S. Departments of Defense and State spend hundreds of millions of dollars a year on contracts for work in the United States and oversees, and then spend some more to have contractors - not government employees - oversee those contracts.
The United States Agency for International Development - the federal agency responsible for administering international aid to civilians through State Department guidelines - also hires contractors to oversee its other contracts.
A new report from the Government Accountability Office points out that such arrangements need improved rules.
"The agencies did not fully address risks related to potential conflicts of interest and oversight for contractors performing contract or grant administration functions," the GAO report concluded.
The agencies didn't even know exactly the extent to which they themselves rely on contractors to oversee contracts, GAO investigators concluded.
"DoD, State, and USAID's use of contractors to help administer contracts and grants was substantial," according to the GAO.
The report, which updates a similar study from last year, noted that USAID overlooked problems of conflict of interest defined in its own policies.
"USAID did not always address potential organizational conflicts of interest in its contracts in accordance with agency policy, though ongoing
efforts to revise federal organizational conflict of interest regulations could potentially improve USAID's and other agencies' ability to mitigate this risk in the future."
Because last year's report made recommendations to the DoD about contractors overseeing contractors, this year's report did not make any new recommendations to the DoD. But the authors did make three suggestions to the State Department and USAID:
– Determine the extent to which contractors should perform administration functions for other contracts and grants in accordance with
previously issued guidance.
– Develop guidance to identify approaches that contracting and program officials should take to enhance management oversight when contractors provide services that closely support government functions.
– Before the award contract for such services, require that program and contracting officials document their consideration of related risks
and the steps that have been taken to mitigate such risks.