By Marina Malenic
The Defense Department remains the main procurer of professional services, accounting for nearly 60 percent of total federal dollars spent on such services, according to a new study.
The Center for Strategic and International Studies, a nonpartisan Washington, D.C., think tank, says in a report released last week that the Pentagon, the Energy Department and NASA have remained the top three government agencies in terms of value of professional services contracts awarded.
“They continue to account for just under three-quarters of the federal professional services market,” David Berteau, director of the think tank, said during a May 6 presentation.
Outgoing Defense Secretary Robert Gates earlier this year proposed cutting over 1,000 contractor jobs from the Pentagon’s rosters, with the bulk of those coming from the Missile Defense agency and the military’s health care management organization (Defense Daily, March 18).
Spending $162 billion on professional services in 2009–the most recent year for which complete data is available–the Defense Department is such a dominant customer that overall government trends tend to reflect Pentagon spending habits for statistical reasons, according to the report. And these services deals tend to go to large contractors “more often than not,” the study finds.
Further, the U.S. government as a whole has a “growing reliance” on contracts with the private sector for a wide range of these professional and support services. Since 2007, professional services contracting increased by about $30 billion, or some 12.5 percent, and it now stands just shy of $280 billion.
“Most of that rise occurred between 2008 and 2009,” Berteau said.
Looking the past 15 years, the professional services industry expanded at a compound annual growth rate of 5.2 percent per year, from $137 billion in 1995 to $280 billion in 2009, the reports states.