WASHINGTON – Today, the Government Accountability Office (GAO) released a new report on the Department of Defense’s (DOD) use of Intergovernmental Support Agreements (IGSAs) to obtain services from state and local governments and the impact on the workers employed under these contracts.  

Requested by House Committee on Education and Workforce Ranking Member Robert C. “Bobby” Scott (VA-03) and Rep. Lucy McBath (GA-06), the report revealed that the intergovernmental support agreements adopted by DOD are undermining worker protections under the McNamara-O’Hara Service Contract Act and robbing contract workers of fair wages and benefits.

The McNamara-O’Hara Service Contract Act (SCA) has long provided protections to ensure that unionized firms are not disadvantaged in competition for federal contracts and that these contracts provide wages consistent with prevailing local standards.  GAO found that the military services’ use of IGSAs has increased dramatically in recent years.  In 2018, GAO reported that 45 IGSAs had been approved across all DOD installations.  That number increased to 316 in 2025.  

The report examined at the minimum hourly wages for five positions and found that the minimum wages for three of the five positions under IGSAs were lower than the minimum hourly wage required under SCA, raising concerns that IGSAs are being used simply as a loophole to avoid complying with federal law.  The report also found that DOD does not always conduct required cost-benefit analyses for prospective IGSAs.

“The McNamara-O’Hara Service Contract Act (SCA) was adopted by Congress to prevent the exploitation of workers by employers looking to win federal contracts by simply offering the lowest bids.  Today’s GAO report shows that not only is the Department of Defense using intergovernmental support agreements (IGSAs) to bypass the law, but it is also relying on them,” said Ranking Member Scott.  “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.”

“After hearing from workers in Georgia, I partnered with Ranking Member Scott to examine the increasing number of Intergovernmental Support Agreements on military bases across the country. 3 out of the 5 of the jobs examined in the report paid workers less than they would have under the Service Contract Act. The Government Accountability Office also found that there was no way to verify the accuracy of cost savings reported by these agreements,” said Rep. McBath.“Working people deserve to be paid what they are owed. The Department of Defense should not exploit legal loopholes to pay workers less. I look forward to doing more with my colleagues in Congress to raise wages for American families.”

To read the full report, entitled, “DOD Installation Services: Action Needed to Improve Oversight of Intergovernmental Support Agreements,”clickhere.