GSA's Watchdog: 40% of 'Reclassified' Contracts Still Wrong
Summary
The Federal Acquisition Service's Office of Assisted Acquisition Services (AAS) moved more than $16 billion in Fiscal Year 2023 -- 48% of GSA's total revenue -- through contracts it is supposed to sort by how classified their work is. GSA's own inspector general found 92% of a sample misclassified in 2024 and ordered a fix. Its July 2026 recheck, 22 months later, found 4 of 10 resampled contracts still wrong -- more than ten times the error rate AAS had reported to the OIG itself.
Why a wrong grade matters
Some AAS work touches classified information, so AAS grades every contract on a four-level scale, from fully unclassified to fully classified⧉. A contract graded "Level 2" is supposed to mean secure-facility access is required but nothing classified changes hands; "Level 3" means some post-award documents or deliverables are classified, and some or all contractor personnel must hold security clearances⧉ to work on it. Getting that grade wrong is not paperwork trivia: AAS built "portfolio reviews"⧉ -- its own extra layer of scrutiny for its riskiest work -- and a contract classified as Level 2 when it should be Level 3 simply never enters that layer.
The 's original audit sampled 60 Level 2 contracts active in August 2023 and found 55 of them -- 92%⧉ -- should have been Level 3. Separately, the audit found AAS policy did not require Level 3 contracting officers⧉ -- the officials with sole legal authority to modify a contract or order corrective action -- to hold adequate security clearances, meaning the one person who could act on a classified problem might be the one person barred from seeing it.
View data as table
| 2024 original audit (60 contracts sampled) | 91.7% | 55 of 60 sampled Level 2 contracts misclassified -- all should have been Level 3 |
|---|---|---|
| 2026 OIG independent recheck (10 contracts sampled) | 40% | 4 of 10 resampled contracts still misclassified, 22 months later |
AAS's own numbers said the fix was working
The Acting FAS Commissioner agreed to all six of the OIG's recommendations⧉ in September 2024 -- that is the standard the agency itself set. As evidence it had reviewed every active Level 2 contract, AAS reported to the that its Business Units and a governance office, OSO A&G, had reviewed 479 Level 2 contracts and reclassified 321 of them -- 67% -- to Level 3⧉.
AAS's own compliance check went further: a Fiscal Year 2025 Bi-Annual Full File review⧉ of 80 contracts found just 3 misclassified -- a 3.75% error rate, down from 92% two years earlier. By AAS's own accounting, the problem was nearly solved.
The watchdog checked for itself, and got a different number
The did not take AAS's compliance figure on faith. It drew its own sample -- 10 Level 2 contracts active in March 2026⧉ -- and checked each one against AAS's current classification definitions. Four of the ten, 40%, were still wrong⧉; AAS agreed all four should have been Level 3 and updated them only after the flagged them. That is more than ten times the 3.75% error rate AAS's own review had reported for essentially the same population, in the same window.
Asked why, an OSO A&G Sector Director told the OIG⧉ that staffing shortages and personnel turnover during the rollout of updated guidance had delayed the office from updating its contract-tracking system to reflect the correct classification levels -- an explanation about the office's capacity, not about any individual's conduct. The 's conclusion was narrow but pointed: of the six recommendations from 2024, two are still not fully implemented⧉ -- the review of active Level 2 contracts, and the internal-review step meant to catch misclassifications going forward.
View data as table
| AAS's own FY2025 Bi-Annual Full File review | 3.8% | 80 contracts reviewed, 3 (3.75%) found misclassified -- AAS's self-reported compliance check |
|---|---|---|
| OIG's independent March 2026 resample | 40% | 10 contracts sampled, 4 (40%) found misclassified -- more than 10 times AAS's self-reported rate |
- AAS runs more than $16 billion a year in contracts -- 48% of 's total revenue -- through a security classification system its own watchdog still can't verify. In 2024, a sample of Level 2 contracts came back 92% misclassified; in the 's own March 2026 resample, 40% still were.
- AAS's self-reported compliance check and the 's independent recheck do not agree. AAS's FY2025 Bi-Annual review reported a 3.75% error rate; the 's own resample of a separate contract group, in the same window, found an error rate more than ten times higher.
- Misclassification isn't a filing error -- it determines which contracts get AAS's extra risk-management scrutiny. A contract wrongly graded Level 2 instead of Level 3 skips the portfolio review AAS built specifically for its highest-risk work.
- Two of the six recommendations from the 2024 audit remain open, and AAS owes the a revised Corrective Action Plan by August 19, 2026⧉. That plan -- not this report -- is the next checkpoint for whether the classification gap actually closes.
Figures are drawn from two U.S. General Services Administration Office of Inspector General reports, both read in full via direct PDF fetch from gsaig.gov: the original audit, FAS's Office of Assisted Acquisition Services Should Improve Its Oversight and Administration of Classified Contracts (Report A230065/Q/3/P24001, issued September 16, 2024), and the follow-up, Implementation Review of Corrective Action Plan (Assignment A260034, issued July 20, 2026). A blind adversarial verifier, working from the primary documents alone with no access to this draft, independently checked every itemized fact; see verification.json.
The 91.7%/40% before-and-after framing, the 67.0% reclassification share, the 3.75% self-reported error rate, the 40% independent error rate, the roughly-11x self-report/independent ratio, and the 33.3% open-recommendation share are this outlet's own arithmetic on the 's own itemized counts (methods and caveats in analysis.json); the 's own reports separately round several of these to '92 percent,' '67 percent,' and '40 percent' in prose.
Sources(2) ▾
- U.S. General Services Administration, Office of Inspector General, Implementation Review of Corrective Action Plan: FAS's Office of Assisted Acquisition Services Should Improve Its Oversight and Administration of Classified Contracts (Assignment A260034) (2026-07-20) — 's own follow-up check on whether the Federal Acquisition Service's Office of Assisted Acquisition Services (AAS) actually did what it promised after the 's September 2024 audit. Sole source for: the two-of-six recommendations still not fully implemented, the 479-contract Business Unit/OSO A&G review and its 321-contract (67%) reclassification, the FY2025 Bi-Annual Full File review's 80-contract/3-misclassified result, the 's own independent resample of 10 contracts (4 still misclassified), the staffing-shortage explanation attributed to an OSO A&G Sector Director, and the August 19, 2026 deadline for a revised Corrective Action Plan. gsaig.gov · original document
- U.S. General Services Administration, Office of Inspector General, FAS's Office of Assisted Acquisition Services Should Improve Its Oversight and Administration of Classified Contracts (Report A230065/Q/3/P24001) (2024-09-16) — The original 2024 performance audit that started the corrective-action clock. Sole source for: AAS's $16 billion-plus FY2023 revenue (48% of 's total), the four-level contract security classification scheme, the original 60-contract sample that found 55 (92%) misclassified, the Level 3 contracting-officer security-clearance gap, and the six recommendations the Acting FAS Commissioner agreed to. gsaig.gov · original document
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The General Services Administration's Federal Acquisition Service runs a division called the Office of Assisted Acquisition Services (AAS) that manages large, complex contracts for other federal agencies -- more than $16 billion⧉ of business in Fiscal Year 2023 alone, nearly half of everything takes in. 's own Office of Inspector General⧉ -- the agency's statutory internal watchdog -- checked whether AAS grades its own contracts correctly for how classified their work is. In 2024, it found the grading was wrong almost across the board. Its July 20, 2026 follow-up finds it still is, just less often.