The Pentagon has embraced agreements with state and local governments as a cheaper, faster way to provide mundane services on military bases, such as grass-cutting, trash collection, road repairs and snow removal.
But as the agreements have multiplied, the military has struggled to keep track of how much it is saving over traditional contracting and whether lower worker pay or benefits are contributing to those savings, according to a new Government Accountability Office report shared with The Washington Sun.
The question was central to why Rep. Bobby Scott of Virginia, the top Democrat on the House Education and Workforce Committee, and Rep. Lucy McBath (D-Georgia) asked the GAO in 2024 to investigate the program. They asked auditors to determine whether Pentagon savings came from avoiding wage and benefit minimums required under federal labor laws, and argued — based on the findings — that they do.
“Today’s GAO report shows that not only is the Department of Defense using intergovernmental support agreements to bypass the law, but it is also relying on them,” Scott said. “While the DOD may argue that IGSAs save the government money, it comes at the cost of shortchanging workers of fair wages and decent benefits.”
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The military had 316 active intergovernmental support agreements, known as IGSAs, at the end of 2025, according to the GAO report. That number was up dramatically from 45 in 2018. The Army accounted for more than half of these and spent about $355 million on them last year.
Congress authorized IGSAs in 2013, allowing bases to obtain routine services through state, local, and tribal governments. The idea was straightforward: A town that already maintains roads or collects trash may be able to do the same work on a neighboring military base more cheaply than the military can.
But the agreements also operate outside of the Service Contract Act, a 60-year-old labor law that sets local wage and benefit minimums for many workers on federal service contracts. And the military collects little or no information about the labor used under IGSAs, the GAO found.
That leaves the military services unable to definitively say they are saving the Pentagon money and how much of that savings comes from avoiding wage and benefit minimums that would otherwise be required under the law
“There is not good data, and they’re not required to have it,” Thomas Costa, a director on the GAO’s Education, Workforce and Income Security team, told The Sun. “They are not required to track that information, and they don’t.”
The Pentagon declined to comment. In the report, the military services generally agreed with the GAO’s recommendations and said they would take steps to improve estimating and verifying savings from IGSAs. The Navy said it would strengthen comparisons of estimated and annual costs, while the Air Force said it would start doing annual reviews comparing actual costs to its estimates.
Auditors tried to determine whether lower labor costs were contributing to Pentagon savings by comparing wages for five public-sector jobs under IGSAs with what similar workers would have been guaranteed if the Service Contract Act applied. But the military collects little information about the workers performing services under IGSAs, making it difficult to draw a definitive conclusion. Of the five jobs examined, three paid minimum rates that were 13% to 19% less, one was about the same and one paid 50% more.
McBath said the findings reinforced her concerns that IGSAs are skirting fair wage laws.
“Working people deserve to be paid what they are owed,” she said. “The Department of Defense should not exploit legal loopholes to pay workers less.”
Costa said lower labor costs than what the Pentagon might have paid under fair wage minimums could account for some savings, but they are not necessarily the only explanation. Military officials told the GAO that IGSAs can reduce administrative work and take advantage of efficiencies that come from buying services at a larger scale.“Some of the people working on doing the work are getting paid less than they would under the SCA,” he said. “But there could be other things, such as economies of scale, that factor into that help realize those cost savings.”
Of 21 single-installation agreements the GAO examined, nine used private contractors hired by the local government and not public employees for some or all of the work. In some cases, those contractors also hired subcontractors, adding another layer between the military and the people actually performing the work.
The GAO also found the Navy, Marine Corps and Air Force lacked procedures to verify whether installations’ estimates of IGSA costs and savings were ultimately accurate. The Army told auditors it does track actual costs and savings.The GAO raised similar concerns in 2018 about whether the services were monitoring the benefits of IGSAs. But the numbers are getting harder to track as the military enters an increasing number of agreements that cover multiple services and bases.
“Once you get to that multi-service or multi-installation, the analyses started to get generally worse,” Costa said.
For example, the GAO also examined 402 Army task orders under a nationwide agreement with Sourcewell, a Minnesota government entity that helps public agencies obtain services. Auditors found that 101 either showed no financial benefit or lacked a documented cost comparison.
That meant auditors could not tell whether the deals were good or bad. “The answer is we don’t know,” Costa said.
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