As discussed before here and here, GAO thinks that the DOD's procurement methods are broken. Unsurprisingly, this problem is not limited to the purchase of physical items. In a report titled Defense Acquisitions: Improved Management and Oversight Needed to Better Control DOD's Acquisition of Services, GAO points to poor business practices and disorganization in DOD procurement of services -- and how this presents risks to the military.
In the last decade, DOD has shifted a lot of labor over to contractors. As a consequence, those outside contractors are pulling down a lot more money (over $151 billion in 2006, up from $85.1 billion in 1996) and DOD has less control over outcomes:
Within this environment, our work, as well as that of some agency Inspectors General, have identified numerous instances of weak business practices—poorly defined requirements, inadequate competition, insufficient guidance and leadership, inadequate monitoring of contractor performance, and inappropriate uses of other agencies’ contracts and contracting services. Collectively, these problems expose DOD to unnecessary risk, complicate efforts to hold DOD and contractors accountable for poor acquisition outcomes, and increase the potential for fraud, waste, or abuse of taxpayer dollars.
Perhaps the central problem with this shift over to contractors for services, as identified by GAO, is the lack of a systematic or managed approach to this problem. Rather than a conscious, unified decision to lean more heavily on contractors -- and thus, a developed scheme for doing so -- DOD has "migrated" that way in aggregate. Without a sound policy, and under time pressures, especially in wartime, contracts are often awarded for undefined tasks:
We noted, for example, the statement of work required the contractor to provide water for units within 100 kilometers of designated points but did not indicate how much water needed to be delivered to each unit or how many units needed water
Note that in cases like this, it's not just a cost and waste issue -- it's also a matter of not supplying military forces with needed supplies or services. Nor is this necessarily a matter of contractors trying to take advantage of the situation. Given the job of "supplying water in this area", even the most well-meaning, honest of contractors can't do much without DOD telling them who they're supplying.
What GAO is pointing to here is a culture of haphazard, poor planning that seems far more prevalent these days than it used to be. The unfortunate fact is that is does not require that a lot of people in the armed forces and the rest of DOD to be like this to have this kind of sloppiness ripple down through the organizational structure. Having a Wolfowitz-style declaration that 'privatization will solve all problems' made at the top leaves everyone else in these organizations to do their best to implement that declaration, all in the absence of an actual policy about how to do so.
Right now, the executive culture that accepts a half-assed PowerPoint presentation as if it were a plan is still damaging DOD by throwing down directives without a plan.