GOVERNMENT 

PROCUREMENT

United States 

Reported Opening 

More Opportunities to 

Foreign Firms Than 

Other Countries, but 

Better Data Are 

Needed

Report to Congressional Requesters

December 2016

GAO-17-166

February 2017

GAO-17-168

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-17-168, a report to 

congressional requesters

February 2017

GOVERNMENT PROCUREMENT

United States Reported Opening More Opportunities 

to Foreign Firms Than Other Countries, but Better 

Data Are Needed

What GAO Found

Under the World Trade Organization (WTO) Agreement on Government 

Procurement (GPA), the United States has reported opening more procurement 

covered by the agreement to foreign firms than have other parties to the 

agreement. For example, U.S. data for 2010—the most recent available—show 

that the United States reported $837 billion in GPA-covered procurement. This 

amount is about twice as large as the approximately $381 billion reported by the 

next five largest GPA parties—the European Union, Japan, South Korea, 

Norway, and Canada—combined, even though total U.S. procurement is less 

than that of the other five parties combined. (See figure.)

Government Procurement Opened to Foreign Competition under the WTO GPA as Reported 

by the United States and Next Five Largest GPA Parties, 2010

Deficiencies in the statistical reporting of government procurement by GPA and 

U.S. free trade agreement (FTA) parties, including the United States, limit

detailed comparisons as well as transparency—one of the GPA’s stated goals.

For example, the GPA parties’ reports that GAO reviewed were not always 

submitted on time and often lacked certain required data. Also, a lack of common 

understanding of key terms’ definitions led to inconsistencies in GPA parties’ 

reporting. Moreover, while parties to the North American Free Trade Agreement 

(NAFTA) are required to exchange government procurement data annually, 

NAFTA’s parties have not done so since 2005; other U.S. FTAs GAO reviewed 

do not require reporting of government procurement data. As a result, 

policymakers and others have limited information with which to monitor the 

agreements or assess their financial benefits. 

The U.S. approach to statistical reporting of GPA-covered government 

procurement to the WTO does not ensure the data’s timeliness, accuracy, and 

comparability. For instance, while a recent revision of the methodology for 

calculating covered U.S. federal procurement improves accuracy, it creates a 6-

year reporting delay. In contrast, the GPA requires the reporting of annual 

procurement statistics within 2 years. In addition, U.S. agencies have not 

developed a methodology for reporting states’ covered government procurement,

as the GPA requires. Instead, the United States reports total state-level 

procurement, which GAO estimated may exceed covered procurement by about 

10 percent. Further, the expertise needed to report government procurement 

data to the WTO is fragmented among the four agencies involved, leading to 

inconsistencies, errors, and deficiencies. Federal standards for internal control 

call for U.S. agencies to issue relevant, accurate, and reliable information within 

a time frame that enables entities to carry out their responsibilities. 

View GAO-17-168. For more information, 

contact Kimberly M. Gianopoulos at (202) 512-

8612 or gianopoulosk@gao.gov.

Why GAO Did This Study

Globally, government procurement, 

estimated at $4.4 trillion annually, 

constitutes a significant market for 

international business. However, 

according to officials from the Office of 

the U.S. Trade Representative

(USTR), which is responsible for 

reporting to the WTO, government 

procurement markets are often closed 

to foreign competition. GAO was asked 

to review U.S. participation in 

international procurement agreements, 

which seek to ensure fair and open 

competition on a reciprocal basis. This 

report (1) broadly compares GPAcovered government procurement 

reported to the WTO by the United 

States and other parties; (2) assesses 

the usefulness of statistical reporting of 

government procurement data by GPA 

and U.S. FTA parties for more detailed 

comparisons; and (3) examines the 

extent to which the U.S. approach to 

reporting such data ensures timeliness, 

accuracy, and comparability. GAO 

analyzed WTO and U.S. documents 

and data pertaining to the GPA and 

U.S. FTAs and interviewed officials in 

Washington, D.C., and Geneva,

Switzerland.

What GAO Recommends

GAO is making six recommendations 

to USTR to improve statistical reporting 

of government procurement under the 

GPA and U.S. FTAs, including working

with GPA parties to enhance their 

reporting, resuming the required data 

exchange with NAFTA parties, 

improving U.S. federal and state 

procurement data reported to the 

WTO, and ensuring that U.S. statistical 

notifications to the WTO are well 

documented and reviewed for 

accuracy. USTR did not provide official 

comments.
Page i GAO-17-168 Government Procurement

Letter 1

Background 4

The United States Has Reported a Larger Amount of Covered 

Government Procurement Than Other GPA and U.S. FTA 

Parties 8

Deficiencies in Statistical Reporting of Government Procurement 

Limit Detailed Comparisons and Transparency 18

U.S. Agencies’ Approach to Reporting GPA-Covered Procurement 

Does Not Ensure Timeliness, Accuracy, and Comparability 29

Conclusions 46

Recommendations for Executive Action 47

Agency Comments 48

Appendix I Objectives, Scope, and Methodology 49

General Analysis of Procurement by the United States and Other 

GPA and U.S. FTA Parties 49

Detailed Analysis of Covered Procurement by U.S. Federal and 

State Governments and Other Government Entities and by 

Other Selected GPA Parties 51

Data Limitations 54

Appendix II Limited Tendering 56

Appendix III Alternative Method for Reporting U.S. Covered Federal 

Procurement to the WTO 58

Appendix IV GAO Contact and Staff Acknowledgments 60

Tables

Table 1: Covered Government Procurement Reported to the WTO 

and Estimated Total Government Procurement by the 

United States and Next Five Largest GPA Parties, 2010 14

Table 2: Advantages and Disadvantages of the Original and 

Revised Methodologies for Calculating U.S. Federal 

Procurement 35

Contents
Page ii GAO-17-168 Government Procurement

Table 3: Cumulative Obligations against U.S. Federal 

Procurement Contracts Awarded in Fiscal Year 2009 and 

Covered by the World Trade Organization’s (WTO) 

Agreement on Government Procurement (GPA) by Fiscal 

Year, as of July 2016 37

Figures

Figure 1: Estimated Average Annual Government Expenditures, 

Total Government Procurement, and Government 

Procurement Covered by the WTO GPA and U.S. FTAs, 

2008—2012 10

Figure 2: Covered Government Procurement Reported to the 

WTO and Estimated Total Government Procurement by 

the United States and Next Five Largest GPA Parties, 

2010 12

Figure 3: United States’, Japan’s, and South Korea’s Covered 

Central Government Procurement as a Percentage of 

Total Central Government Procurement Reported to the 

WTO, 2010 16

Figure 4: Annual Reporting of Government Procurement Statistics 

for 2008-2013 to the WTO by the United States and Next 

Five Largest 1994 GPA Parties 23

Figure 5: Timing of WTO GPA Threshold Values’ Publication in 

U.S. Federal Acquisition Regulation and Application in 

U.S. Trade Agreements Report and WTO GPA 

Notification 41

Figure 6: Percentages of Covered Central Government 

Procurement Reported as Conducted through Limited 

Tendering by the United States and Next Five Largest 

GPA Parties, 2010 57
Page iii GAO-17-168 Government Procurement

Abbreviations

EU European Union

FAR Federal Acquisition Regulation

FPDS-NG Federal Procurement Data System–Next Generation

FTA Free Trade Agreement

GPA Agreement on Government Procurement

GSA General Services Administration

NAFTA North American Free Trade Agreement

SDR Special Drawing Rights 

TAR Trade Agreements Report 

UN United Nations

USTR Office of the United States Trade Representative

WTO World Trade Organization

This is a work of the U.S. government and is not subject to copyright protection in the 

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Page 1 GAO-17-168 Government Procurement

441 G St. N.W.

Washington, DC 20548

February 9, 2017

The Honorable Jeff Merkley

United States Senate

The Honorable Tammy Baldwin

United States Senate

Globally, government procurement—the purchase of goods or services 

on behalf of a government—constitutes a significant potential market for 

international trade, with an estimated annual size of $4.4 trillion.1

However, some procurement markets may be closed to foreign 

competition because of national laws, regulations, and executive policy 

directives, according to officials from the Office of the United States Trade 

Representative (USTR). Over the past four decades, the United States 

has played a key role in developing trade agreements—the World Trade 

Organization’s (WTO) Agreement on Government Procurement (GPA)2

as well as numerous U.S. free trade agreements (FTA)—that open 

government procurement to international competition, ensure that the 

procurement process is conducted transparently and without bias, and 

provide foreign suppliers with the same rights as domestic ones. In 

addition, the GPA and the North American Free Trade Agreement 

(NAFTA) require that parties to these agreements submit annual 

statistical notifications of government procurements covered by these 

provisions (covered government procurement).3 These data are important 

for providing transparency about the extent to which GPA and NAFTA 

parties have opened government procurement covered by the 

 1

In this report, “government procurement” refers to procurement by central and subcentral 

governments as well as utilities and other government entities.

2

World Trade Organization Agreement on Government Procurement, 1868 UNTS 194 

(1994), available at https://www.wto.org/english/docs_e/legal_e/gpr-94_01_e.ht (accessed 

June 13, 2016) [hereinafter “the 1994 GPA”]; Revised Agreement on Government 

Procurement, Annex to the Protocol Amending the Agreement on Government 

Procurement (Mar. 30, 2012), available at https://www.wto.org/english/docs_e/legal_e/revgpr-94_01_e.htm (accessed June 13, 2016) [hereinafter “the 2014 GPA”]. In this report, 

“the GPA” refers to elements common to both the 1994 GPA and the 2014 GPA unless 

otherwise specified.

3

GPA countries are required to provide annual statistics of covered government 

procurement under the agreement. See 1994 GPA, Art. XIX.5, and 2014 GPA, Art. XVI.4. 

With the exception of NAFTA, U.S. FTAs that we reviewed do not contain such a 

requirement.

Letter
Page 2 GAO-17-168 Government Procurement

agreements to foreign suppliers and for demonstrating the agreements’

financial benefits.

In response to your request for information on U.S. participation in 

international procurement agreements, we reviewed statistical reporting 

by the United States and trading partners in selected international 

procurement agreements.4 Specifically, in this report, we

1. broadly compare covered government procurement reported by the 

United States and other parties to the GPA and U.S. FTAs;

2. assess the usefulness of GPA and U.S. FTA parties’ statistical 

reporting for more detailed comparisons of—and transparency 

regarding—their covered government procurement; and

3. examine the extent to which U.S. agencies’ approach to reporting 

statistical data on covered government procurement to the WTO 

ensures timeliness, accuracy, and comparability.

To address our first objective and aspects of our second and third 

objectives, we estimated total government expenditures and total

government procurement covered by the GPA and U.S. FTAs for the 

United States and the other 57 countries that are parties to these 

agreements. We used macroeconomic data for 2008 through 2012 from 

the United Nations’ (UN) National Accounts Official Country Data system 

and the International Monetary Fund’s Financial Statistics and World 

Economic Outlook to make these estimates. In addition, we analyzed 

data on covered government procurement reported to the WTO for the 

same period by the United States and other selected parties to the 

GPA—the European Union (EU), Japan, Canada, South Korea, and 

Norway, which represent, after the United States, the next five largest 

GPA procurement markets. Together these parties represent over 90 

percent of GPA countries’ total government procurement.

 4

In addition, in a related report issued in July 2015, we examined the size of government 

procurement markets for 60 countries with which the United States had signed trade 

agreements containing procurement provisions or with which the United States was 

currently negotiating agreements. See GAO, International Trade: The United States and 

European Union Are the Two Largest Markets Covered by Key Procurement-Related 

Agreements, GAO-15-717 (Washington, D.C.: July 29, 2015). In a report issued in 

September 2016, we examined selected trading partners in selected international 

procurement agreements. See GAO, International Trade: Government Procurement 

Agreements Contain Similar Provisions, but Market Access Commitments Vary, 

GAO-16-727 (Washington, D.C.: Sept. 27, 2016). 
Page 3 GAO-17-168 Government Procurement

To analyze GPA-covered government procurement by level of 

government and by other covered entities, we used the latest available 

data for the United States, which were reported to the WTO in September 

2016 for fiscal year 2010, and compared them with other selected parties’

statistical submissions for 2010. (We first analyzed all available data for 

2008 through 2013 and determined that data for 2010 provided a 

reasonable basis for noting general patterns and making broad 

comparisons between the latest U.S. data reported and data reported by 

other parties.) We used information from the Federal Procurement Data 

System–Next Generation (FPDS-NG) as part of our assessment of U.S. 

federal covered government procurement. Because over 70 percent of 

procurement reported by the five selected GPA parties other than the 

United States was from the EU, we focused our analysis of other parties’

data on the EU data after determining that they were sufficiently reliable 

for comparing U.S. and EU covered government procurement in orders of 

magnitude. Although we conducted consistency checks across time 

periods, we were not able to otherwise assess the comprehensiveness 

and accuracy of the data that other parties reported to the WTO under the 

GPA; alternative data sources were not available for these parties. In 

addressing our second and third objectives, we considered the effects of 

a number of data limitations that we identified on precise measurement 

and analysis of differences in the parties’ covered government 

procurement under trade agreements as well as on analysis of covered 

government procurement over time. We determined that although these 

limitations affected our ability to perform certain detailed analyses, such 

as disaggregation of covered government procurement by type and trend 

analysis over a period of time, they were not an impediment to using the 

data for broad comparisons of orders of magnitude of covered 

government procurement.

To address all three objectives, we interviewed U.S. agency officials in 

Washington, D.C., from the Office of Management and Budget (OMB), 

the General Services Administration (GSA), USTR, and the Department 

of Commerce (Commerce). In addition, we discussed the availability of 

U.S. states’ data with state officials, reviewed public documents, and 

contacted state audit organizations to assure ourselves there were no 

significant deficiencies that would affect the data we used. Moreover, we 

interviewed WTO and EU, Japanese, Canadian, and other officials in 

Geneva, Switzerland, and reviewed related documents issued by their 

offices as well as relevant studies.

We conducted this performance audit from August 2015 to February 2017 

in accordance with generally accepted government auditing standards. 
Page 4 GAO-17-168 Government Procurement

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives. (See app. I for more 

information on our scope and methodology.)

U.S. international trade agreements that cover U.S. government 

procurement include the GPA and bilateral and regional FTAs. Two 

versions of the GPA currently coexist: the prior GPA, which was signed 

on April 15, 1994 (in this report, “the 1994 GPA”), and a revision of the 

agreement, which entered into force on April 6, 2014 (in this report, “the 

2014 GPA”).5 According to the WTO, the 2014 GPA reflects refinements 

to the 1994 GPA, including updates to the agreement’s text and 

expansion of market access commitments. The 2014 GPA has 19 parties 

(including the EU) covering 47 WTO member countries (including the 28 

EU member countries). Another 29 WTO members are observers; of 

these, 9 are in the process of acceding to the agreement. In addition to 

the GPA, the United States has 14 FTAs with 20 countries, 4 of which 

(Canada, Israel, Singapore, and South Korea) are also parties to the 

GPA. Almost all of the FTAs include provisions covering government 

procurement.6

The GPA aims to mutually open government procurement markets for 

goods, services, and construction services among its parties, according to 

the WTO.7 Under the GPA, foreign suppliers are able to compete 

alongside U.S. suppliers for U.S. government contracts covered by the 

 5

The 1994 and 2014 GPAs currently coexist because Switzerland, a party to the 1994 

GPA, is still in the process of adopting the revised GPA. According to Commerce officials, 

Switzerland anticipated ratifying the 2014 GPA by the end of 2017. 

6

Of the 15 other countries that are parties to U.S. FTAs with procurement chapters—

Australia, Bahrain, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, 

Guatemala, Honduras, Mexico, Morocco, Nicaragua, Oman, Panama, and Peru—none 

are parties to the GPA. The U.S.–Jordan FTA includes an article on government 

procurement. This article states that the parties to the FTA “shall enter into negotiations 

with regard to Jordan’s accession” to the GPA. Commerce officials noted that the U.S.–

Jordan commitment regarding government procurement does not include any specific 

procedural or market access commitments.

7

According to the WTO, the GPA is a plurilateral agreement—that is, it has a narrower 

group of signatories than most WTO agreements, which have all WTO members as 

signatories.

Background

GPA Framework for 

Government Procurement
Page 5 GAO-17-168 Government Procurement

agreement, and U.S. suppliers are able to compete for covered foreign 

government contracts in accordance with the framework established by 

the GPA. Under this framework, parties to the GPA are obligated to follow 

the processes for carrying out government procurement listed below:

• Parties to the agreement must treat other parties’ goods, services, 

and suppliers no less favorably than those of domestic sources or any 

other party and may not discriminate against locally based suppliers 

on the basis of foreign affiliation or ownership.

• The agreement prohibits the use of offsets in covered government 

procurement—that is, any condition or undertaking that encourages 

local development by means of local content or investment 

requirements, countertrade, or similar requirement.

• The agreement generally requires that the covered government 

procurement be conducted in a transparent, fair, and 

nondiscriminatory manner.

• The agreement specifies three methods of procurement that may be 

specified in a contract, provided that the procuring entity meets the 

conditions set out in the agreement:

8

1. open tendering, in which all interested suppliers may submit a 

tender;

2. selective tendering, in which only qualified suppliers are invited to 

submit a tender; and

3. limited tendering, in which the procuring entity may contact a 

particular supplier (or more than one supplier) of choice.

According to USTR, to implement U.S. obligations under the international 

agreements that cover government procurement, the United States 

waives preferential purchasing requirements—such as the requirement to 

purchase U.S.-made products—that would otherwise be inconsistent with 

the agreements.9 For example, USTR has waived the Buy American Act10

and other preferential provisions for eligible products in acquisitions 

covered by various trade agreements.11

 8

For more information on international procurement agreements, see GAO-16-727.
Page 6 GAO-17-168 Government Procurement

Under the agreements we reviewed, each party’s covered government 

procurement is defined in part through coverage schedules in annexes to 

the agreement. These annexes identify the procuring entities covered by 

the agreements at the central and subcentral government levels as well

as, in some agreements, procuring entities at an additional level (in this 

report, “other government entities”).12 These annexes further identify the 

goods and services and construction services whose procurement by the 

specified entities is covered by the agreement.

In addition, each agreement delineates threshold values for coverage of 

government procurement. Below these thresholds, procurement activities 

are not covered by the agreement, and foreign access in accordance with 

the procedure in the agreement is not guaranteed. In the GPA, these 

threshold values are expressed as special drawing rights (SDR) in 

 9

The Trade Agreement Act of 1979, as amended, authorizes the President to waive any 

law, regulation, procedure, or practice for eligible products from certain countries that 

results in less favorable treatment than that accorded to domestic products and suppliers 

or than that accorded to eligible products or suppliers of a party to the GPA. 19 U.S.C. § 

2511. Such countries include those that have signed an international trade agreement with 

the United States or that meet certain other criteria such as being a least-developed 

country. 19 U.S.C. § 2511. The act also defines a least-developed country to be any 

country on the UN General Assembly list of least-developed countries. 19 U.S.C. § 2518. 

According to the UN, least-developed countries are defined as low-income countries 

suffering from structural impediments to sustainable development. For identifying leastdeveloped countries, three criteria are used by the UN’s Committee for Development 

Policy: gross national income per capita, the Human Assets Index, and the Economic 

Vulnerability Index.

1048 C.F.R. § 25.402(a)(1). The Buy American Act is an example of domestic preference 

legislation that places conditions on federal government purchases to require that federal 

agencies procure unmanufactured articles, materials, and supplies that have been 

domestically produced or mined, and manufactured articles, supplies, and materials that 

have been manufactured in the United States substantially all from articles, materials , or 

supplies mined, produced, or manufactured in the United States for use in the United 

States, subject to a number of exceptions. 41 U.S.C. §§ 8301–8305. The Buy American 

Act was enacted in 1933 and applies to direct purchases by the federal government of 

more than a statutorily established level (currently $3,000). Congress has enacted other 

forms of domestic preference legislation in the years following that can impose a higher 

domestic content requirement or apply to indirect purchases.

11Federal Acquisition Regulation (FAR) Part 25.

12The annexes and sections we reviewed used different terms to refer to this level of 

coverage. Specifically, the GPA annex is titled “Other Entities,” the relevant sections in 

NAFTA and the Australia-FTA are titled “Government Enterprises,” and the relevant 

section in the Colombia-FTA is titled “Other Covered Entities.” For convenience, we refer 

to all of these coverage schedules as concerning other government entities.

Covered Government 

Procurement
Page 7 GAO-17-168 Government Procurement

coverage schedules delineating covered entities.13 The United States 

converts the threshold values set in the GPA to official dollar amounts, 

which USTR reviews, and may revise, every 2 years and publishes in the 

Federal Register.

14 For calendar years 2016 and 2017, the United States 

converted the GPA threshold values to $191,000 for procurement of 

goods and services and to $7.4 million for procurement of construction 

services for covered central government entities.15 These amounts help 

define the opportunities available to U.S. and foreign firms seeking to 

compete for government procurement contracts in the countries that are 

parties to the agreements.

Moreover, parties to these agreements identify, by general category or 

entity, exclusions or exceptions to the coverage schedules. According to 

USTR officials, all international parties to the agreements we reviewed 

have certain procurements not open to foreign suppliers, including those 

not open for social, economic, or national security reasons. For example, 

the United States specifies exclusions that include set-asides for small 

businesses and for women-owned and veteran-owned businesses.

According to USTR officials, OMB, USTR, Commerce, and GSA 

participate in overseeing the U.S. commitments related to government 

procurement under the trade agreements in a number of ways, including 

the following:

• OMB’s Office of Federal Procurement Policy sets the overall direction 

for federal procurement policies and regulations, which are driven by 

federal laws.

• USTR negotiates the agreements and submits data to the WTO.

 13An SDR is an international reserve asset created by the International Monetary Fund 

based on four international currencies, each given a weight in the total composition 

reviewed and determined by the International Monetary Fund’s Executive Board every 5 

years. The rate used by the United States for the calendar years 2016 and 2017 is 1 USD 

= 0.68 SDR.

14FAR § 25.402. Also, see, e.g., Procurement Thresholds for Implementation of the Trade 

Agreements Act of 1979. 80 Fed. Reg. 77,694 (Dec. 15, 2015).

1580 Fed. Reg. 77,694 (USTR publication of U.S. dollar procurement thresholds for 

relevant trade agreements for calendar years 2016 and 2017).

U.S. Agencies Involved in 

Oversight of U.S. 

Government Procurement 

Commitments
Page 8 GAO-17-168 Government Procurement

• Commerce’s International Trade Administration monitors compliance 

with the agreements, supports USTR’s activities, and provides 

services to promote U.S. exports.

• GSA provides technical support to USTR in preparing the data for 

statistical notifications required by the GPA.

While recent and complete data on covered government procurement are 

not available, we estimated, using data available for 2008 through 2012, 

that GPA and U.S. FTA parties’ annual average government procurement 

covered by these agreements totaled about $1.6 trillion—approximately 

one-third of their average total annual government procurement in those 

years. Overall, the amount of GPA-covered government procurement that 

the United States reported for 2010—the most recent year for which U.S. 

data are available—was more than double the combined amount reported 

by the five GPA parties with the next largest procurement markets (in this 

report, “the next five largest GPA parties”).16 At the central government 

(federal) level, U.S. covered government procurement reported for 2010 

was also higher than the combined total reported by the next five largest 

GPA parties.

Using available macroeconomic data, we estimated that average annual 

covered government procurement reported by the United States and the 

57 other countries that are parties to the GPA and U.S. FTAs totaled 

about $1.6 trillion per year from 2008 through 2012—about one-third of 

the average annual $4.4 trillion total government procurement that we 

estimated for these countries for this period.17 This amount estimated for 

covered government procurement

 16We identified, and discuss elsewhere in this report, a number of limitations that affect 

the usefulness of these data for detailed comparisons. However, we determined that these 

data are useful for broad comparisons of covered procurement by parties to the GPA and 

U.S. FTAs.

17To estimate total government expenditures and total government procurement for the 

United States and the 57 other countries that are parties to the WTO GPA and U.S. FTAs, 

we analyzed macroeconomic data from 2008 through 2012 from the UN’s National 

Accounts Official Country Data database and the International Monetary Fund’s Financial 

Statistics and World Economic Outlook. We used the 2008–2012 time period for these 

estimates in order to base them on the most reliable, consistent, and comparable sets of 

data available.

The United States 

Has Reported a 

Larger Amount of 

Covered Government 

Procurement Than 

Other GPA and U.S. 

FTA Parties

About a Third of All 

Estimated Government 

Procurement by GPA and 

U.S. FTA Parties Is 

Covered by the 

Agreements
Page 9 GAO-17-168 Government Procurement

• comprises covered government procurement of goods and services 

by specified government entities at the central and subcentral levels, 

above certain predetermined thresholds, and not excluded by the 

agreements;

• is largely a measure of the opportunities available to domestic and 

foreign firms seeking to openly compete for government procurement 

contracts in the countries that are parties to the agreements; and

• includes procurements conducted through limited tendering 

procedures.

In a larger context, covered government procurement under the GPA and 

U.S. FTAs represents less than one-tenth of the 58 countries’ estimated 

$18.7 trillion in average annual government expenditures. Figure 1 shows 

our estimates of GPA and U.S. FTA parties’ average annual government 

procurement covered by the agreements, relative to their estimated 

government expenditures and total government procurement, in 2008 

through 2012.18

 18These estimates of government procurement do not include data on utilities and other 

government entities because, although the GPA covers government procurement by these 

entities, international macroeconomic statistics for government procurement do not 

include such data. See GAO-15-717.
Page 10 GAO-17-168 Government Procurement

Figure 1: Estimated Average Annual Government Expenditures, Total Government Procurement, and Government 

Procurement Covered by the WTO GPA and U.S. FTAs, 2008—2012

Notes: Data shown for government procurement do not include procurement by utilities and other 

government entities because, although the GPA covers procurement by these entities, international 

macroeconomic statistics for government procurement do not include such data.

Data shown for “Government expenditures” and “Government procurement” update a previous 

analysis, which we published in 2015, of estimated average annual total government expenditures 

and procurement for the United States and 57 countries that are parties to the WTO GPA and U.S. 

free trade agreements FTAs in 2008 through 2012. See GAO, International Trade: The United States 

and European Union Are the Two Largest Markets Covered by Key Procurement-Related 

Agreements, GAO-15-717 (Washington, D.C.: July 29, 2015). Data shown for “Government 

procurement covered by the GPA and U.S. FTAs” include $1.168 trillion in average annual covered 

government procurement reported by the United States and parties with the next five largest 

procurement markets for 2008 through 2012. We assumed that the remaining countries’ government 

procurement, totaling about $373 billion, was covered by the agreements. Not all countries reported 

data for all years.
Page 11 GAO-17-168 Government Procurement

Data available from the WTO for 2010 show that the United States 

reported more than twice as much GPA-covered government 

procurement as the next five largest GPA parties combined, although 

total U.S. government procurement is less than the combined total for the 

other five parties. In its statistical notification for 2010—the most recent 

U.S. submission to the WTO to meet the 1994 GPA statistical 

requirements, providing the most complete data for all selected 

countries—the United States reported covered government procurement 

totaling about $837 billion. In contrast, the combined covered government 

procurement reported by the next five largest GPA parties—the EU, 

Japan, South Korea, Norway, and Canada—for 2010 was about $381 

billion. Using macroeconomic statistics, we estimated that total 

government procurement by the United States and the next five largest 

GPA parties in 2010 was about $1.7 trillion versus $2.4 trillion, 

respectively.19 (See fig. 2.)

 19Government procurement includes procurement by central and subcentral governments 

as well as other government entities, such as utilities, that are covered by the GPA.

Available 2010 Data Show 

Covered Procurement 

Reported by the United 

States Was Twice the 

Combined Amount 

Reported by the Next Five 

Largest GPA Parties
Page 12 GAO-17-168 Government Procurement

Figure 2: Covered Government Procurement Reported to the WTO and Estimated 

Total Government Procurement by the United States and Next Five Largest GPA 

Parties, 2010

Notes: Data shown are for procurement by central and subcentral governments as well as utilities and 

other government entities.

The “next five largest GPA parties” are the parties to the GPA with, after the United States, the next 

five largest procurement markets—Canada, the European Union, Japan, South Korea, and Norway.

Data shown for covered government procurement are based on data for 2010 submitted to the WTO 

by the United States and the next five largest GPA parties.

Data shown for total government procurement are based on macroeconomic data from the United 

Nations’ National Accounts Official Country Data and the International Monetary Fund’s Financial 

Statistics and World Economic Outlook.

According to the available data, the EU’s reported covered government 

procurement ranked second to the United States’ in 2010, at about $331 

billion. For the same year, Japan reported about $25 billion in covered 

government procurement; South Korea reported about $18 billion; 

Norway reported about $5 billion; and Canada reported about $2 billion, 

although the data available for Canada represent only central government 
Page 13 GAO-17-168 Government Procurement

procurement. 20 Table 1 shows these GPA parties’ reported covered 

government procurement by central governments, subcentral 

governments, and utilities and other government entities as well as our 

estimates of the value of each party’s total government procurement. The 

U.S. and EU total government procurement markets are comparable in 

size, with estimated annual procurement of about $1.7 trillion and $1.6 

trillion, respectively, in 2010; however, the United States reported more 

than twice as much covered government procurement as the EU—$837 

billion versus $331 billion, respectively. (Elsewhere in this report we 

discuss limitations in the data that affected our ability to perform certain 

analyses and precluded more precise comparisons.)

 20Norway has the third largest government procurement among GPA parties, in part 

because its sovereign wealth fund–estimated by the Sovereign Wealth Fund Institute at 

more than $800 billion–ranks first in the worldby the 
Page 14 GAO-17-168 Government Procurement

Table 1: Covered Government Procurement Reported to the WTO and Estimated Total Government Procurement by the 

United States and Next Five Largest GPA Parties, 2010 

Dollars in millions

Covered government procurement

Total government 

procurement

(5)

Central 

government

(1) 

Subcentral 

government

(2) 

Utilities and other 

government entities

(3) 

Total

(4)=(1)+(2)+(3)

United States 198,024 627,818 11,619 837,462 1,735,219

European Union 111,444 174,254 42,891 330,589 1,627,615

Norway 1,846 2,821 351 5,018 41,955

South Korea 1,385 3,279 13,709 18,372 105,299 

Japan 13,300 11,681 Not reported 24,981 406,500

Canada 2,250 Not reported Not reported 2,250 223,608

Total 328,249 819,853 70,570 1,218,672 4,140,196

Source: GAO analysis of data from statistics submitted by parties to the World Trade Organization (WTO) Agreement on Government Procurement (GPA) and macroeconomic data from the United 

Nations’ National Accounts Official Country Data and the International Monetary Fund’s Financial Statistics and World Economic Outlook. | GAO-17-168.

Notes: Data shown for GPA-covered government procurement for the United States, European 

Union, Norway, South Korea, and Canada are based on statistics reported to the WTO for 2010. 

Canada does not report procurement data for subcentral government or for utilities and other 

government entities, and Japan does not report procurement data for utilities and other government 

entities. The data reported by the United States reflect total rather than covered procurement at the 

subcentral government level. In general, we found that limitations in the data reported by the United 

States and other five parties, examined elsewhere in this report, affected our ability to perform certain 

analyses and precluded more precise comparisons. Because of rounding, covered procurement 

amounts shown may not sum to totals.

Data shown for total government procurement are based on macroeconomic data from the United 

Nations’ National Accounts Official Country Data and the International Monetary Fund’s Financial 

Statistics and World Economic Outlook.

We found that the United States and the other five largest GPA parties 

reported for 2010 that an average of about 27 percent of all covered 

government procurement was at the central government level and 67 

percent was at the subcentral level; however, there is large variation 

among the parties’ reported procurement. For the United States, the EU, 

and Norway, subcentral government procurement constitutes over half of 

the covered government procurement reported by each party. For South 

Korea, procurement by utilities and other government entities constitutes 
Page 15 GAO-17-168 Government Procurement

close to 75 percent of reported covered government procurement. For 

Japan, central government procurement constitutes over half of reported 

covered government procurement. Overall, covered government 

procurement by government entities such as utilities represents about 6 

percent of the combined covered government procurement reported by 

the United States and the next five largest GPA parties; however, some 

GPA parties, such as Canada and Japan, do not report procurement by 

these entities.

We calculated the percentages of covered central government 

procurement relative to total central government procurement for GPA 

parties, based on data reported to the WTO.21 Total central (federal) 

government procurement includes above-threshold and below-threshold 

procurement by covered entities reported to the WTO as well as 

procurement excluded from GPA coverage but reported to the WTO.22

Our analysis of detailed data on central government procurement, which 

were available only for the United States, Japan, and South Korea, shows 

that the United States reported opening its central (i.e., federal) 

government procurement market to foreign competitors to a greater 

extent than Japan and South Korea.23 The $198 billion in U.S. covered 

federal procurement reported for 2010 (see table 1) represents about 80 

percent of the $247 billion in total reported U.S. federal procurement that 

 21We sought to more precisely calculate covered government procurement for individual 

entities or levels of government than in our estimates of covered government procurement 

of all entities or levels of government to the GPA and U.S. FTAs earlier in our report. We 

did not examine subcentral procurement or procurement by utilities and other entities, 

because data on noncovered government procurement for such entities are not available. 

The 1994 GPA includes a provision that requires countries to report statistics on the 

estimated value of contracts awarded by central government entities covered by the 

agreement, both above and below the threshold value, on a global basis and broken down 

by entities. For procurement by subcentral governments or by utilities and other entities, 

the provision requires statistics on the estimated value of contracts awarded above the 

threshold value on a global basis and broken down by categories of entities.

22Examples of procurement excluded from GPA coverage but reported to the WTO 

include, in U.S. federal contracting, small business and minority enterprise set-asides 

contained in the small business, small disadvantaged business, women-owned small 

business, service-disabled veteran-owned small business, Hubzone, and 8(a) programs. 

23We focused this analysis on the United States, Japan, and South Korea because only 

these countries reported detailed data on noncovered central government procurement to 

the WTO.

The United States Has 

Reported Opening More 

Central Government 

Procurement to Foreign 

Suppliers Than Have 

Other GPA Parties
Page 16 GAO-17-168 Government Procurement

year.24 In contrast, Japan’s and South Korea’s reported covered central 

government procurement for 2010 constituted about 30 percent and 13 

percent, respectively, of their reported total central government 

procurement. (See fig. 3.)

Figure 3: United States’, Japan’s, and South Korea’s Covered Central Government Procurement as a Percentage of Total 

Central Government Procurement Reported to the WTO, 2010

These amounts of covered central government procurement are the value 

of contracts largely open to all domestic and foreign competitors. 

However, covered government procurement also includes procurement 

made under limited tendering provisions. According to USTR officials, 

limited tendering is considered to be covered procurement under the 

GPA.25 GPA parties are to report the use of these provisions. (See app. II 

for more information about limited tendering.)

 24In addition to competitively open covered government procurement, total reported 

federal procurement includes above-threshold limited tendering of about $47 billion, 

below-threshold limited tendering of about $3 billion, above-threshold exclusions or smallbusiness set-asides of about $35 billion, and below-threshold exclusions of about $10 

billion.

25Limited tendering provisions allow procuring entities to contact one or more suppliers 

directly.
Page 17 GAO-17-168 Government Procurement

The EU reported covered central government procurement of about $111 

billion for 2010. However, we were unable to estimate the percentage of 

the EU’s total central government procurement that this amount 

represented because, unlike the United States, Japan, and South Korea, 

the EU does not separately report below-threshold procurement by 

covered entities. For 2010, the EU reported a macroeconomic estimate of 

about $676 billion in total central government procurement that does not

distinguish procurement not covered by the GPA, including belowthreshold amounts. According to EU officials, these data are not available 

because the EU does not require member states to report data on belowthreshold procurement in the EU procurement database.26 According to 

the EU notification to the WTO, below-threshold procurement can be 

estimated by deducting above-threshold procurement from the reported 

total central government procurement; using this calculation, we 

estimated that the EU’s covered central government procurement 

represented 16 percent of its total central government procurement in 

2010.27 We did not estimate this percentage for Canada and Norway, 

because Canada does not report below-threshold central government 

procurement or procurement excluded from the agreement and Norway 

does not disaggregate limited tendering or exclusions by level of 

government.

There are several possible explanations for the large differences between 

the United States and the next five largest GPA parties’ covered 

government procurement relative to their total government procurement. 

For example, because parties negotiate coverage, the percentage value 

depends on (1) the value of actual individual procurements vis-à-vis the 

set threshold levels, (2) the list of covered entities and covered types of 

government procurement in parties’ GPA commitments, and (3) 

exclusions from coverage.28 Many EU member states, as well as Japan 

 26The EU relies on member reporting and a centralized database of contract award data 

to prepare its WTO statistical notifications. Only 18 percent of total government 

procurement is reported to the centralized database; disaggregated data on noncovered 

government procurement by central and subcentral governments are not in the database 

and are not otherwise available.

27As table 1 shows, reported U.S. and EU covered central government procurement were 

about $198 billion and $111 billion, respectively, in 2010. These data suggest that the 

United States has opened its central government (federal) procurement market to foreign 

competitors to a larger extent than the EU.

28See GAO-16-727 for a description of GPA parties’ market access commitments and 

exclusions.

Several Factors Could 

Explain Large Differences 

in GPA Parties’ Covered 

Procurement as Share of 

Total Procurement
Page 18 GAO-17-168 Government Procurement

and South Korea, have actual government expenditures smaller than the 

United States’ and are therefore likely to have more smaller-value 

individual procurement contracts that fall below the GPA threshold levels. 

There is also variance in parties’ commitments in terms of covered 

entities. For example, Canada, the EU, Japan, Norway, and South Korea 

use a positive list approach for designating covered services—that is, 

listing only the services covered by the GPA—while the United States

uses a negative list approach—that is, listing only services by a covered 

entity meeting the procurement threshold that are not covered by the 

agreement. According to Commerce officials, a negative list approach 

provides more liberal coverage than a positive list approach because it is 

not an exhaustive list and allows for coverage of new services. Moreover, 

our analysis of EU-reported data found that over 80 percent of EU total 

government procurement is not covered by the EU commitments. 

Procurements can fall outside EU commitments if they are below 

threshold or for other reasons, such as when they are specifically 

excluded. For example, EU procurement for hotel and accommodation 

services, water, defense equipment, and fuels for the production of 

energy are excluded from the agreement.29

Government procurement statistics reported by the GPA and U.S. FTA 

parties that we reviewed have deficiencies and inconsistencies that limit 

detailed comparisons of, and transparency regarding, the parties’ covered 

procurement. These statistics provide transparency—one of the GPA’s 

main goals, according to the WTO—about parties’ implementation of the 

GPA as well as the agreement’s benefits. However, our review of data 

that the United States and next five largest GPA parties submitted to the 

WTO for 2008 through 2013 found that a number of parties did not submit 

the reports annually, the submitted reports did not include all required 

data, and each party’s reports included inconsistencies that limit the 

data’s comparability. Further, a lack of common understanding on 

definitions of key terms has led to inconsistent reporting practices among 

the GPA parties, and a GPA statistical working group has made little 

progress in addressing such challenges. Of the U.S. FTAs we reviewed, 

only NAFTA requires its parties to report annual statistics on government 

procurement; however, the last data exchange between the three NAFTA 

 29As part of the calculations, we used the methodology laid out in the EU GPA 

notifications to the WTO. Specifically, the 2011 EU notifications stated that “the value of 

contracts below thresholds can be estimated by deducting above threshold procurement 

from the total expenditures on goods and services.”

Deficiencies in 

Statistical Reporting 

of Government 

Procurement Limit 

Detailed 

Comparisons and 

Transparency
Page 19 GAO-17-168 Government Procurement

parties took place in 2005. As a result, information about the extent to 

which U.S. FTA partner governments open procurement to U.S. suppliers 

is not available. The UN’s Principles Governing International Statistical 

Activities states that high-quality international statistics are a fundamental 

element of global information systems and that sources and methods 

should be chosen to ensure timeliness and other aspects of quality. 

Moreover, related good practices encourage countries to continually 

improve the quality and transparency of their statistics and systematically 

establish common concepts, classifications, standards, and methods.30

Under the 1994 GPA, which entered into force in 1996, countries are 

required to provide detailed statistics on their procurement, though the 

requirements will change with submissions of 2014 procurement data 

under the 2014 GPA.31 Under the 1994 GPA, each party is to collect and 

provide to the committee, on an annual basis, the following statistics for 

central government entities’ procurement:

• the estimated value of contracts awarded, both above and below the 

threshold values, on a global basis and broken down by entity;

• the number and total value of contracts awarded above the threshold 

values, broken down by entity and by category of products and 

services according to uniform classification systems;

• the number and total value of contracts awarded through limited 

tendering, broken down by entity and by categories of products and 

services; and

• the number and total value of contracts awarded under exceptions to 

the GPA, broken down by entities.

The statistical reporting requirements on procurement by subcentral 

government and by utilities and other government entities are generally 

similar to the requirements for procurement by central government 

 30United Nations, Principles Governing International Statistical Activities, accessed 

December 2, 2016, http://unstats.un.org/unsd/accsub-public/principles_stat_activities.htm.

31Submissions of procurement data for 2014 and subsequent years are subject to the 

2014 GPA’s requirements. For statistical reporting requirements under the 1994 GPA, see 

Article XIX Information and Review as Regards Obligations of Parties, 

https://www.wto.org/english/docs_e/legal_e/gpr-94_02_e.htm#articleXIX. For statistical 

reporting requirements under the 2014 GPA, see Article XVI Transparency of 

Procurement Information, https://www.wto.org/english/docs_e/legal_e/rev-gpr94_01_e.htm#articleXVI.

Statistical Reporting 

Requirements in 1994 and 

2014 GPA Differ in Some 

Respects
Page 20 GAO-17-168 Government Procurement

entities. However, under the 1994 GPA, parties are not required to report 

the value of contracts awarded by subcentral government and other 

entities below the threshold values or the number of contracts awarded. 

In addition, under the 1994 GPA, each party is required to provide 

statistics on the country of origin of products and services purchased by 

its entities to the extent that such information is available.

The 2014 GPA’s statistical reporting requirements differ in some respects 

from the 1994 GPA’s. For example:

• The 2014 GPA requires countries to provide their annual statistical 

notifications within 2 years of the end of the reporting period, whereas 

the 1994 GPA does not specify a reporting deadline.

• While the 1994 GPA requires parties to report the estimated value of 

below-threshold contracts awarded for central government 

procurement and procurement excluded from the agreement, the 

2014 GPA does not require these data. As a result, policymakers will 

not have available data to calculate GPA parties’ total central 

government procurement in 2014 and subsequent years, unless 

parties voluntarily report such data. Further, it will not be possible to 

determine the extent of covered government procurement as a 

percentage of total central government procurement.

• Whereas the 1994 GPA requires data on the country of origin of 

purchased goods and services, the 2014 GPA does not require such 

data. As a result, policymakers will not be able to use government 

procurement data that GPA parties submit to the WTO for 2014 and 

subsequent years to assess the degree to which procuring entities 

award contracts to foreign sources.32

• The 2014 GPA allows a party, instead of submitting data in its 

notification to the WTO, to notify the WTO of the website address 

where the party publishes its statistics, with any instructions 

necessary to access and use such statistics, as long as the statistics 

are published in a manner that is consistent with the GPA statistical 

reporting requirements. As a result, the format of data that parties 

report to meet their GPA annual statistical reporting requirements may 

vary from the format of data they reported for previous years.

 32Under the 1994 GPA, to the extent that such information is available, parties are to 

provide statistics on the country of origin of products and services purchased by their 

entities. 
Page 21 GAO-17-168 Government Procurement

Although the data the United States and next five largest GPA parties 

reported for 2010 enable broad comparisons, deficiencies in their 

reporting prevent more detailed comparisons of their covered 

procurement. A lack of timely, complete, and consistent statistical 

reporting by the parties limits transparency, one of the GPA’s main goals 

stated by the WTO. As a result, trade officials are limited in their ability to 

identify anomalies in, and monitor, other parties’ compliance with their 

GPA commitments. These reporting deficiencies also reduce 

policymakers’ ability to obtain an accurate understanding of the relative 

benefits of the GPA—that is, the extent to which they and other parties 

have opened procurement to one another’s suppliers.

We identified the following deficiencies in the GPA statistical notifications 

we reviewed.

• Incomplete reporting. Parties have not provided data for all entities 

covered by the agreement, as required. For example, although 

Canada submitted annual notifications with central government 

procurement data for 2008 through 2013, the notifications did not 

include data on procurement by subcentral governments or by other

government entities.33 According to Canadian officials we spoke with, 

only 10 to 15 percent of Canada’s government procurement occurs at 

the central government level. These officials said that Canada is 

working to devise a methodology to report on subcentral government 

procurement. Similarly, Japan’s annual notifications have not included 

procurement by entities such as utilities and state-owned enterprises 

that are covered by the GPA. Moreover, Norway reports total limited 

tendering for all levels of government and other covered entities rather 

than disaggregating these data by level of government. In addition, 

while the GPA requires parties to provide data on the value and 

number of covered contracts, EU member countries report only the 

contracts’ value.

• Lack of timely reporting. A number of parties have not provided their 

annual statistical notifications for 2008 through 2013 to the WTO in a 

timely manner. For example, the United States submitted its most 

recent notification, for fiscal year 2010, in September 2016 and has 

not submitted notifications for fiscal years 2011 through 2013. South 

Korea has not submitted notifications for any year except 2010, and 

 33According to USTR officials, Canada was not required to submit statistics on subcentral 

procurement until 2010, when coverage of subcentral procurement was added to the WTO 

GPA through a U.S.-Canada bilateral agreement.

Deficiencies in GPA 

Parties’ Reporting Limit 

Transparency and 

Comparisons of Parties’

Procurement
Page 22 GAO-17-168 Government Procurement

Japan has not submitted a notification for 2012 although it did so for 

other years through 2013.

• Inconsistencies in reporting. Our review of the statistical 

notifications submitted by the United States and next five largest GPA 

parties found a number of inconsistencies. For example, Canada 

switched its reporting from fiscal to calendar year in 2010, making it 

more difficult to compare Canada’s data over time. Japan 

denominates central government procurement in SDR and subcentral 

government procurement in yen, but its statistical notifications do not 

provide a conversion rate. Norway reports three estimates of covered 

government procurement, which are disaggregated by different 

characteristics, but none of the estimated totals match the others. The 

United States provided data on federal procurement for 2008, 2009, 

and 2010, but the U.S. data on overall and covered federal 

procurement in 2008 and 2009 are inconsistent because of a change 

in the reporting methodology that began with the 2009 notification.34

Figure 4 shows the deficiencies and other issues that we identified in the 

United States and next five largest GPA parties’ statistical reporting.

 34We discuss the reasons for the change in the U.S. methodology elsewhere in this report.
Page 23 GAO-17-168 Government Procurement

Figure 4: Annual Reporting of Government Procurement Statistics for 2008-2013 to the WTO by the United States and Next 

Five Largest 1994 GPA Parties

a

Under the 1994 GPA, parties are required to report, on an annual basis, statistics on procurements 

covered by the agreement. Under the 2014 GPA, parties are required to report annual statistics on 

covered procurements within 2 years of the end of the reporting period; as of December 2016, none 

of the six parties shown had reported these statistics for 2014 through 2016.
Page 24 GAO-17-168 Government Procurement

We found several areas where there was a lack of common 

understanding about the definition of key terms for reporting procurement 

data required by the GPA. This led to inconsistency in the reporting 

practices of the GPA parties we reviewed, which affects the usefulness of 

the reported data for detailed comparisons of the parties’ covered 

government procurement, diminishing transparency.

• Government procurement. According to WTO officials, there is no 

official definition of government procurement; as a result, GPA parties 

lack a clear, common understanding or practice for computing its 

value. Our review of statistical data submitted by the United States 

and the next five largest GPA parties for 2010 found that they 

generally measured procurement by the total value of contracts 

awarded or by actual expenditures on goods and services in a given 

time frame. However, we found that the reported contract values 

represented different measures of procurement at different points in 

time, which resulted in inconsistent reporting. For example, Canada 

and Japan report data on government procurement based on the full 

value of awarded contracts, the EU reports data on government 

procurement based on total contract values at the time of award, 

Norway reports the agreed full value of contracts when they are 

signed, and the United States reports the total dollars obligated 

against GPA-covered contracts in the year they are signed and any 

subsequent obligations on those contracts during the following 5 

years. In addition, while the GPA outlines the scope of covered 

government procurement, our analysis found that GPA parties 

interpreted standard statistical terms differently, leading to 

inconsistencies in their reporting. For example, the degree to which 

the GPA parties’ notifications include data on procurement by stateowned enterprises is unclear. As a result, the parties’ notifications 

may provide different measures of covered government procurement.

• Below-threshold central government procurement. While the 1994 

GPA requires that parties report the estimated value of belowthreshold contracts awarded at the central government level, GPA 

parties interpreted this requirement differently, leading to 

inconsistencies in their reporting.35 We found that GPA parties 

reported different types of data for below-threshold central 

government procurement—some parties reported data for all central 

government entities, while other parties reported data only for entities 

 35Because the 2014 GPA does not include this requirement, this information will not be 

reported for contracts signed in or after 2014 unless parties voluntarily submit it.

Common Understanding 

of Definitions of Key Terms 

Is Lacking among GPA 

Parties
Page 25 GAO-17-168 Government Procurement

covered by the GPA. For example, the EU does not report the value 

of contracts below the GPA thresholds. Instead, according to the EU 

notification, these values can be estimated by deducting the reported 

above-threshold procurement from the estimated total government 

procurement of goods and services, which also includes procurement 

below GPA thresholds and other noncovered government 

procurement. In contrast, the United States reports below-threshold 

central government procurement only for GPA-covered entities. As a 

result, estimates of GPA parties’ below-threshold central government 

procurement are not comparable.

• Uniform classification system. There is no single classification 

system for reporting procurement by economic sector, which has led 

to the use of different systems to categorize reported procurement by 

GPA parties. For example, the United States uses the U.S. product 

and service codes to classify federal government contracts in product 

groups, categorizing reported procurement as either goods and 

services or construction services. The EU uses its common 

procurement vocabulary to classify EU contracts, categorizing 

reported procurement as supplies, services, works, or 

“miscellaneous.” Canada codes reported procurement by its goods 

and services identification numbers and groups it into goods, services, 

and construction, but plans to replace the current classification with 

the UN standard products and services codes in 2017. Without 

consistent categorization, it is difficult to compare parties’ covered 

government procurement by product group.36

• Country of origin. According to the 1994 GPA, parties are to apply 

the same rules of origin to products or services supplied for covered 

government procurements as they apply in the normal course of 

trade.37 In addition, parties are to provide statistics on the country of 

origin for products and services purchased by its entities, to the extent 

that such information is available.38 Japan reports suppliers’ 

nationality, using it as the basis for determining country of origin for its 

 36The Committee on Government Procurement adopted a classification system for 

statistical reporting of goods and services under the GPA in 1996. However, most parties 

do not use this system in reporting their annual government procurement statistics.

37Rules of origin are the subject of the WTO Agreement on Rules of Origin and according 

to the WTO, are the criteria used to define where a product was made. According to the 

WTO, “determining where a product comes from is not easy when raw materials and parts 

crisscross the globe to be used as inputs in scattered manufacturing plants.” 

38The 2014 GPA does not require parties to report available information on purchased 

products’ or services’ country of origin.
Page 26 GAO-17-168 Government Procurement

imported goods and services, but a supplier’s nationality may differ 

from the origin of the product or service. The EU, Canada, South 

Korea, and the United States do not report this information, although 

the United States collects it in its Trade Agreements Report (TAR), 

which USTR uses to generate the WTO notifications at the federal 

level.39 Until 2008, in its TAR reporting, the United States defined 

country of origin for goods as the place where the product was 

manufactured, which, according to OMB officials, aligns with data on 

place of manufacture, as defined in the FAR, for purposes of U.S. 

government contracting. However, since 2009, U.S. statistical data—

the source of U.S. procurement information reported to the WTO—

have defined country of origin for goods as the place of performance 

of the contract and have defined country of origin for services as the 

country of the supplier (vendor). Without consistent reporting of 

suppliers’ country of origin, it is difficult to estimate the extent to which 

GPA parties award covered government procurement contracts to 

foreign suppliers.

In March 2012, GPA parties convened a working group—the Committee 

on Government Procurement’s Work Programme on the Collection and 

Reporting of Statistical Data—to review the collection and reporting of 

procurement statistics. According to WTO officials, GPA parties 

recognized that they faced challenges in collecting data related to 

government procurement to meet the GPA reporting requirements and 

that different methodologies were used to collect these data, including 

data for central government entities and subcentral government entities. 

WTO officials noted that the work group was created because GPA 

parties could not agree on how to address statistical reporting challenges 

in the 2014 GPA and is part of parties’ GPA obligations.40

In forming the working group, the United States and other GPA parties 

agreed to submit relevant information and review the submissions in 

order to make recommendations on whether the parties should adopt a 

common method for collecting statistics, standardize the classifications of 

statistical data, facilitate the collection of country of origin of goods and 

 39The TAR is a publicly available, standard report generated in real time from GSA’s 

FPDS-NG (http://www.fpds.gov). 

40The need for improvement in this area was recognized by GPA parties as early as 1994, 

when the Interim Committee on Government Procurement established a working group on 

statistical reporting. 

GPA Statistical Work 

Group Has Made Little 

Progress in Addressing 

Factors That Affect 

Reporting of Required 

Procurement Data
Page 27 GAO-17-168 Government Procurement

services data, and address other technical issues in government 

procurement data reporting raised by any party. According to a WTO 

document, the working group was also to consider the “potential 

harmonization” of parties’ statistical data to provide transparency 

regarding procurement covered under the GPA and consider how these 

data may be used for further analyses to facilitate greater understanding 

of the agreement’s economic importance.41 The WTO document states 

that statistical data illustrating the extent to which the parties procure 

goods and services covered by the agreement from other GPA parties 

could be an important tool in encouraging other WTO members to accede 

to the agreement.

As of December 2016, nine parties had provided submissions to the 

working group.42 According to USTR, the parties’ submissions show 

variance in the methods used to measure government procurement 

above and below agreement thresholds as well as variance in data 

sources, classifications, and availability of country-of-origin statistics. 

According to WTO officials, the working group is still taking stock of this 

information. As a result, it has made limited progress in addressing its 

goals.

 41World Trade Organization, “Annex D: Decision of the Committee on Government 

Procurement on a Work Programme on the Collection and Reporting of Statistical Data, 

Decision of 30 March 2012,” accessed Jan. 19, 2017, https://ustr.gov/sites/default/files

/GPA%20113%20Decision%20on%20the%20outcomes%20of%20the%20negotiations%2

0under%20Article%20XXIV%207.pdf.

42The nine parties that have made submissions to the working group are Hong Kong, 

Canada, Taiwan, Singapore, Japan, Switzerland, the EU, Norway, and the United States.
Page 28 GAO-17-168 Government Procurement

Although NAFTA requires its parties—the United States, Canada, and 

Mexico—to exchange annual statistics on government procurement, they 

have not exchanged this information since 2005.43 As a result, the parties 

are unable to compare their covered government procurement with that of 

the other parties, reducing transparency and hindering their ability to 

monitor activity under the agreement. NAFTA requires the reporting of 

annual data on the estimated value of government procurement contracts 

awarded, both above and below threshold values. According to a USTR 

official, NAFTA parties are not required to publish any statistical data but 

are required to exchange such data among themselves. According to 

USTR officials, NAFTA data have not been exchanged since 2005 

because NAFTA partners have been focused on negotiations for the 

Trans-Pacific Partnership. U.S. statistical data related to NAFTA can be 

accessed electronically via the FPDS-NG through the TAR, but the most 

recent complete report is for fiscal year 2010. Moreover, Commerce 

officials noted that all three NAFTA members have had difficulty in 

providing accurate statistics.

Other U.S. FTAs that we reviewed do not require reporting of such data, 

and information about the extent to which FTA partner governments open 

procurement to U.S. suppliers is not readily available. Although other U.S. 

FTAs contain provisions concerning government procurement, NAFTA is 

the only U.S. FTA with a statistical reporting requirement among the FTAs 

we reviewed. According to Commerce officials, procurement statistics can 

be used to convince prospective members to join a bilateral or multilateral 

procurement agreement by empirically demonstrating the financial 

 43NAFTA includes a provision requiring each party to collect statistics and provide to the 

other parties an annual report in accordance with the following reporting requirements, 

unless the parties otherwise agree: (a) statistics on the estimated value of all contracts 

awarded, both above and below the applicable threshold values, broken down by entities; 

(b) statistics on the number and total value of contracts above the applicable threshold 

values, broken down by entities, by categories of goods and services established in 

accordance with classification systems developed under the government procurement 

chapter and by the country of origin of the goods and services procured; (c) statistics on 

the number and total value of contracts awarded under limited tendering procedures,

broken down by entities, by categories of goods and services, and by country of origin of 

the goods and services procured; and (d) statistics on the number and total value of 

contracts awarded under specified exclusions to the agreement, broken down by entities. 

Each party may organize by state or province certain elements of the data. NAFTA, Article 

1019.7-8. 

Lack of Procurement Data 

from U.S. FTA Parties 

Reduces Transparency
Page 29 GAO-17-168 Government Procurement

benefits other member states have achieved.44 While some FTA partner 

countries—that is, Canada, Israel, South Korea, and Singapore—are 

parties to the GPA, most other U.S. FTA partners are not parties to the 

GPA or NAFTA and therefore are not required to provide any statistics on 

their government procurement, according to USTR officials. As a result, 

data that could be used to make detailed comparisons of, and provide 

transparency regarding, FTA parties’ covered government procurement 

and to demonstrate the agreements’ economic benefits are not available.

U.S. agencies’ approach to statistical reporting of covered government 

procurement to the WTO does not ensure the timeliness, accuracy, or 

comparability of the reported data. The methodology that agencies used 

to report covered federal (central government) procurement until 2009 

produced timely data but overstated the value of procurement 

opportunities. An interagency revision of the methodology improved these 

data’s accuracy, but it has significant disadvantages. For example, the 

revised methodology introduces a 6-year delay in reporting to the WTO, 

whereas the 2014 GPA requires reporting within 2 years of the end of the 

reporting period. Also, the interagency decision to revise the methodology 

was based on a misinterpretation of reported federal procurement data, 

and the agencies involved in the decision were unable to provide 

documentation supporting the decision. Further, U.S. statistical 

notifications submitted to the WTO, as well as the TAR on which the 

reports are based, contain inconsistencies and errors. In addition, USTR 

lacks a methodology for reporting states’ and other government entities’

GPA-covered procurement, as the GPA requires, and instead reports 

estimated total government procurement, which exceeds covered 

procurement. Finally, no U.S. agency has taken responsibility for ensuring 

the accuracy, timeliness, or comparability of the procurement data 

submitted to the WTO. Federal standards for internal control call for U.S. 

agencies to issue relevant, accurate, and reliable information, recording 

and communicating it within a time frame that enables entities to carry out 

their responsibilities. Without timely, accurate, and comparable data on 

GPA-covered U.S. procurement, U.S. agencies and Congress, as well as 

 44Commerce officials noted that statistical reporting requirements were not included in, for 

example, the Australia FTA, likely because it was intended to remain a bilateral agreement 

and thus had no need to attract new members. In addition, a USTR official told us that 

FTAs other than NAFTA do not include statistical requirements because the partner 

governments may not have been willing to agree to such a requirement or because the 

governments’ procurement statistics were seen as already being sufficiently transparent. 

U.S. Agencies’

Approach to 

Reporting GPACovered Procurement 

Does Not Ensure

Timeliness, Accuracy, 

and Comparability
Page 30 GAO-17-168 Government Procurement

other GPA parties, lack information necessary for assessing the 

economic benefits of participating in the agreement.

The U.S. methodology used from 1996 through 2008 to report federal 

procurement to the WTO produced timely data but inflated procurement 

values. In 2009, U.S. agencies began a revision of this methodology, 

resulting in a more accurate measure of federal procurement based on 

actual cumulative obligations rather than award values. Applying the 

revised methodology caused the reported value of covered U.S. federal 

contracts to drop by more than 75 percent from fiscal year 2008 to fiscal 

year 2009. However, the revised methodology introduces a 6-year delay 

in reporting to the WTO, whereas the 2014 GPA requires reporting within 

2 years of the end of the reporting period. Also, the revised methodology 

provides data on the value of U.S. federal procurement obligations that 

are only broadly comparable to the value of central government 

procurement that some other GPA parties report.

Although the 1996-2008 methodology for reporting U.S. federal 

procurement provided timely annual data on award values, it overstated 

procurement opportunities. This methodology, which calculated the total 

potential value of GPA-covered federal government contracts at the time 

of award, provided a simple and direct measure of covered federal 

procurement, since the method used to determine the number of covered 

contracts and determine the contracts comprising the aggregate contract 

values is based on information reported in in FPDS-NG. The methodology 

also provided timely annual data based on the bidding opportunities for 

prospective domestic and foreign suppliers in that year. (After a contract 

is awarded, contract changes may occur, and additional funds may be 

obligated to the contract, which would change the contract value.) In 

addition, the methodology provided data that were consistent with 

Revised U.S. Methodology 

for Reporting Federal 

Procurement Increases 

Accuracy but Has 

Significant Disadvantages

Original “Award Value”

Methodology Produced Timely 

Statistics but Inflated Federal 

Procurement Values
Page 31 GAO-17-168 Government Procurement

information posted on the official U.S. government website of federal 

procurement opportunities for GPA purposes.45

However, the original methodology overstated the value of U.S. central 

government procurement, primarily because of the way data is reported in 

FPDS-NG and by aggregating multiple-year, multiple-award federal 

contracts, which resulted in the counting of some award values more than 

once. Multiple-award contracts result from a single solicitation and are 

awarded to multiple suppliers. The government then selects among the 

multiple suppliers to issue individual orders for supplies, services, or both 

as needed. Federal contracts, including, multiple-award contracts, can 

include options that the government may, or may not, exercise; contracts 

with options are often referred to as multiple-year contracts and, 

according to OMB staff, generally include a base year with four 1-year 

option periods. In FPDS-NG, data on each supplier’s multiple-year, 

multiple-award contract reflects the base and all option value, since each 

supplier could receive up to the full value of the contract if all options are 

exercised.

For example, a contract for which FPDS-NG shows an award value of

$10 billion, comprising a base value of $5 billion and a $5 billion option,

might result in only $5 billion in obligations if the option is not exercised. 

In addition, the contract’s $10 billion award value might be entered in 

FPDS-NG for each supplier that is awarded a multiple-award contract, 

since each supplier could receive up to the full value of the contract, and 

could be entered for each year of the contract’s duration. The original 

methodology reported a multiple-year contract’s potential award value—

that is, the contract value including all possible options that could be 

exercised against the contract—and aggregated across multiple-award 

contracts, even though the options may not be exercised on each 

supplier’s contract. Commerce officials explained that contract options 

allow for additional purchases under the same contract at the discretion of 

 45U.S. federal procurement opportunities are posted on the Federal Business 

Opportunities database at https://www.fedbizopps.gov, and procurement contract award 

numbers and values are available at https://www.fpds.gov. OMB officials we spoke with 

confirmed that data on actual contract award notices from the Federal Business 

Opportunities database can be used in, or otherwise incorporated into, FPDS-NG, and 

therefore can be used in the TAR. While the United States does not do so, countries can 

provide a link to a website with contract award data in lieu of providing a statistical 

notification, as outlined in the 2014 GPA. However, Federal Business Opportunities 

database is not yet fully integrated with FPDS-NG. The upcoming releases of the federal 

government System for Award Management will incorporate the Federal Business 

Opportunities database and FPDS-NG.
Page 32 GAO-17-168 Government Procurement

the U.S. government entity. For example, Commerce officials told us that 

because multiple-year, multiple-award contracts are intended to be used 

as needed, contracting officials may set a high total award value for a 

group of contracts to allow the contracts to be used repeatedly and to 

ensure that there are sufficient funds to pay any awardee for each 

contract option.

According to Commerce officials, they sought to improve the accuracy of 

WTO notifications based on the award-value methodology. These officials 

said they recognized that the data anomalies in FPDS-NG related to 

multiple-year, multiple-award federal contracts materially skewed the 

overall statistics and, as a result, cumulatively misrepresented the total 

value of U.S. federal procurement for 2008. Because FPDS-NG records 

hundreds of thousands of contracts across many agencies, Commerce 

did not identify all multiple-year, multiple-award federal contracts. Instead, 

Commerce identified three Department of Defense entities that frequently 

used this type of contract and two blanket purchasing agreements 

reported by the Department of Interior Bureau of Land Management and 

deleted these contracts from the FPDS-NG TAR data they used to draft 

U.S. notification. However, this approach resulted in inconsistent 

treatment of multiple-award contracts with other agencies and also 

needlessly excluded all other contracts.

Using the TAR, we searched FPDS-NG for, and identified, all GPAcovered multiple-year, multiple-award federal contracts awarded in fiscal 

year 2009. Our analysis shows that these contracts—which were the 

main cause of the original methodology’s inflated estimates of covered 

federal procurement—accounted for 12 percent of all covered federal 

contracts awarded in fiscal year 2009 (3,637 of 30,243 contracts). We 

found that these contracts represented 95 percent of the total dollar value 

of all awards ($18.666 trillion of $19.625 trillion), based on the old 

methodology and the way these contracts are reported in the FPDS-NG 

system.46

 46The value of multiple-year, multiple-award contracts awarded in 2009 includes funding 

for covered and noncovered procurement with dollar amounts that (1) can be obligated 

over multiple years during the contracts’ life and (2) can be recorded multiple times for 

each awardee. Using the revised U.S. methodology for reporting federal procurement, 

we calculated that obligations for such contracts represented 12 percent of the number 

of contracts awarded in 2009 and 29 percent of total obligations for these contracts ($61 

billion of $2,295 billion).
Page 33 GAO-17-168 Government Procurement

In 2009, USTR officials informed EU officials that OMB, in consultation 

with USTR and Commerce, was planning to change the U.S. 

methodology for preparing U.S. statistical reports as part of an OMB effort 

to improve the quality of federal procurement data, and that U.S. statistics 

reported to the GPA in the future would measure federal procurement 

based on actual cumulative obligations against awarded contracts over a 

5-year period, which is consistent with what OMB considers the standard 

life of such contracts.47 In October 2015, USTR notified the WTO that the 

United States had revised its methodology for preparing GPA statistical 

reports on federal procurement. To more precisely reflect the value of the 

federal procurement market at the time of each report, the revised 

methodology would reflect total amounts obligated under GPA-covered 

contracts over a 6-year period–that is, the year the contract was awarded 

plus 5 years after the award. As a result, the United States did not report 

procurement data to the WTO for 5 years, despite the 1994 GPA 

requirement to report annual statistics. In December 2015, the United 

States submitted its statistical notification of U.S. federal procurement in 

fiscal year 2009, based on the revised methodology.48

Our analysis shows that compared with the original methodology, the 

revised methodology has both advantages and disadvantages. The 

revised methodology provides a more accurate estimate of federal 

procurement value than the original methodology, as it uses data for 

actual obligations for procurement contracts rather than potential award 

values and avoids the inflated values resulting from the aggregation of 

multiple-year, multiple-award federal contracts. Because of the change in 

methodology, the estimated value of covered central government 

contracts in the United States decreased by more than 70 percent from 

fiscal year 2008 to fiscal year 2009, dropping from about $712 billion in 

fiscal year 2008 to $204 billion in fiscal year 2009.

 47Commerce officials stated that the decision to revise the methodology for reporting 

covered federal procurement—using an obligations-based approach instead of the original 

methodology’s awards-based approach—stemmed from early interagency discussions 

with OMB, USTR, GSA, and the Department of Defense about how to identify and process 

the anomalies in multiple-year, multiple-award contracts in FPDS-NG.

48The U.S. reports for fiscal years 2008 and 2009 identify the same data source, and the 

2009 report does not mention the change in methodology. USTR notified the WTO of the 

new methodology in an October 2015 nonpublic communication to the GPA statistical 

working group.

Revised “Cumulative 

Obligations” Methodology 

Produces More Accurate Data 

but Delays Reporting
Page 34 GAO-17-168 Government Procurement

However, the revised methodology’s use of cumulative obligations data 

leads to a more than 6-year lag in reporting annual data to the WTO. If 

this methodology is used to report data for fiscal year 2014 and 

subsequent years, the resulting delay would appear to be inconsistent 

with the 2014 GPA’s requirement that parties provide their statistical 

notifications within 2 years of the end of the reporting period. The delay 

would also reduce the transparency of U.S. covered government 

procurement for U.S. policymakers and GPA parties. In addition, it is 

inconsistent with federal standards for internal control that call for U.S. 

agencies to issue relevant, accurate, and reliable information and to 

record and communicate the information within a time frame that enables 

entities to carry out their responsibilities.49 Finally, in measuring actual 

obligations for procurement contracts rather than the value at the time of 

award, the new methodology is inconsistent with the methodology used 

by other large GPA members, such as the EU and Norway, which report 

contract values at the time of award rather than actual obligations (or 

expenditures). As a result, the revised methodology makes comparisons 

of the United States’ and other GPA parties’ central government 

procurement less consistent. In addition, the United States continues to 

report the number of covered contracts to the WTO based on their award 

value, which leads to an inconsistency between the reported numbers 

and values of reported U.S. government procurement contracts. The 

contracts comprising the reported value of covered (above-threshold) 

procurement are determined at a later time under the new methodology 

and can result in a different set of contracts. Table 2 shows advantages 

and disadvantages of the original and revised methodologies.

 49GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1 

(Washington, D.C.: November 1999).
Page 35 GAO-17-168 Government Procurement

Table 2: Advantages and Disadvantages of the Original and Revised Methodologies for Calculating U.S. Federal Procurement 

Source: GAO analysis of Office of Management and Budget and General Service Administration documents. | GAO-17-168

Our analysis also found that, despite using 6 years of data, the revised 

methodology does not produce final obligated contract values, because it 

does not capture obligations that can occur after the 6-year period.50

Since the 2014 GPA requires parties to provide their annual statistical 

notifications within 2 years of the end of the reporting period, we analyzed 

the distribution of cumulative obligations. As table 3 shows, a preliminary 

estimate of 3 years of cumulative obligations for contracts awarded in 

fiscal year 2009, consistent with the 2014 GPA’s requirement to report 

annual statistics within 2 years of the end of the reporting period—that is, 

obligations in fiscal years 2009 through 2011—covered about 67 percent 

of cumulative obligations through July 2016. Updating this estimate with 

obligations made for these contracts in fiscal year 2012 would raise the 

amount covered to about 78 percent. Using the revised U.S. methodology 

to analyze 6 years of cumulative obligations against the 2009 awards—

that is, obligations in fiscal years 2009 through 2014—we found that the 

amount USTR reported to the WTO in December 2015 equaled about 96 

percent of total obligations for these contracts over the 6-year period. In 

 50USTR, OMB, and Commerce staff told us that they did not compare the results of using 

the original and revised methodologies. However, we conducted a comparative analysis of 

FPDS-NG data to test the difference between the two methodologies.

Advantages Disadvantages

Original 

methodology

Timely: The methodology provided data for a 

particular year based on procurement 

opportunities available to foreign suppliers at 

the time of award.

Data were consistent with information available 

on the official public website of contract 

awards.

Number and value of covered contracts 

reported to the World Trade Organization 

(WTO) were consistent.

Overstated procurement opportunities: The methodology counted 

contract award values more than once by reporting the full award 

value for (1) multiple contract suppliers and (2) contract options that 

might not be exercised.

Revised 

methodology

More accurate: The methodology uses 

historical data on actual obligations and the 

opportunities available to foreign suppliers at 

the time of the report.

It eliminates the double counting of multipleyear, multiple-award contracts.

Delay reporting: The methodology’s use of 6-year cumulative 

obligations data leads to a more than 6-year lag in reporting of 

annual procurement data to the WTO.

Number and value of contracts reported to the WTO are based on 

threshold determinations at different points in time.

Its use of cumulative obligations causes complexity in tracking and 

reporting of federal contracts by award date. 
Page 36 GAO-17-168 Government Procurement

other words, using 6 years of cumulative obligations, in accordance with 

the revised methodology, produced about 30 percent higher procurement 

value than using 2 years of obligations consistent with the 2014 GPA 

requirement to report within 2 years of the end of the reporting period. 

However, the revised methodology did not account for 100 percent of the 

contracts’ value after 6 years. The methodology assumes that cumulative 

obligations against awarded contracts over a 6-year period—a year 

longer than a contract’s typical duration, according to OMB—will capture 

the full value of those contracts. Our analysis of federal contracts 

awarded in fiscal year 2009 shows that the U.S. estimate of covered 

government procurement based on the revised methodology is $200 

billion for fiscal years 2009 through 2014. However, cumulative 

obligations for these contracts from fiscal year 2009 through July 2016 

amounted to $209 billion—about $9 billion more than the amount 

obligated for these contracts by the end of the revised methodology’s 6-

year period.51

 51This estimate is based on cumulative obligations data as of July 2016. We analyzed 

data on contracts awarded in 2009 rather than 2010, the latest U.S. submission to the 

WTO, to illustrate the amount of cumulative obligations over the longest time period for 

which relevant data on awarded contracts are available—that is, cumulative obligations 

over 7.5 years of data (fiscal year 2009–July 2016).
Page 37 GAO-17-168 Government Procurement

Table 3: Cumulative Obligations against U.S. Federal Procurement Contracts Awarded in Fiscal Year 2009 and Covered by the 

World Trade Organization’s (WTO) Agreement on Government Procurement (GPA) by Fiscal Year, as of July 2016

Source: GAO analysis of Federal Procurement Data System-–Next Generation (FPDS-NG) Trade Agreements Report for fiscal year 2009 contracts as of July 2016. | GAO-17-168

a

Three-year period consistent with the time period specified by the 2014 GPA requirement to report 

within 2 years of the end of the reporting period.

b

Six-year period consistent with the revised U.S. methodology for reporting GPA-covered central 

government (federal) procurement to the WTO, which uses 6 years of cumulative obligations data to 

calculate federal procurement contract award value.

c

The U.S. statistical submission to the WTO reported about $204 billion in cumulative obligations for 

fiscal year 2009 covered federal procurement awards as of June 2015, or 6.5 years after the 

contracts were awarded. Our analysis of data in FPDS-NG available as of July 2016 estimated that 

total obligations for these awards amounted to about $209 billion. The reason for the difference 

between the two values is the addition of obligations data for June 2015 through July 2016. According 

to Office of Management and Budget staff, the methodology for the fiscal year 2009 report was 

finalized on May 29, 2014, about a year before the official U.S. notification to the WTO.

Further, in compiling the fiscal year 2009 U.S. statistical notification 

submitted to the WTO in December 2015, USTR did not use the revised 

methodology as it was described to the WTO in August 2011. Whereas 

that methodology was to use 6 years of obligations data (i.e., fiscal years 

2009 through 2014), the fiscal year 2009 statistical notification used 6 

years and 6 months of obligations data. While the notification reported 

that $204 billion was obligated in fiscal years 2009 through 2014 for fiscal 

year 2009 contracts, the reported data were extracted from FPDS-NG in 

June 2015.52

 52The United States also reported more than 6 years of cumulative obligations in its 

statistical notification of fiscal year 2010 procurement, which it submitted to the WTO in 

September 2016.

Dollars in billions

Fiscal year

Cumulative 

obligations for fiscal 

year 2009 awards 

(dollars)

Percentage against total 

cumulative obligations for 

fiscal year 2009 awards as of 

July 2016

2009 71 34.2

2009–2010 109 52.2

2009–2011a 139 66.7

2009–2012 163 78.0

2009–2013 184 88.2

2009–2014b 200 95.8

2009–2015/2016c 209 100.0
Page 38 GAO-17-168 Government Procurement

While analyzing the original and revised U.S. methodologies, we 

identified an alternative methodology that uses annual obligations for 

covered contracts as a measure of covered government procurement.53

(See app. III.)

The rationale on which U.S. agencies based their decision to change the 

U.S. methodology for reporting covered federal procurement to the WTO 

suggest that the agencies had an incomplete understanding of U.S. 

procurement data reported to the WTO in response to the GPA 

requirements. In 2011, OMB determined, in consultation with USTR 

and Commerce, that U.S. statistical reports to the WTO on federal 

procurement were misleading and that the methodology should be 

revised. At the same time, USTR and Commerce were receiving 

questions from other parties about the U.S. statistics, according to a 

USTR document. According to OMB documents, the TAR, which is used 

as a basis for the U.S. statistical reports to the WTO, overstated available 

bidding opportunities as a result of the original U.S. methodology. 

However, our review of agency documents and interviews with agency 

officials found that this conclusion was based on a misinterpretation of the 

reported data. The United States’ statistical notification for fiscal year 

2008 stated that $700 billion worth of procurement was available to GPA 

trading partners, while the Office of Federal Procurement Policy reported 

obligations of only $527 billion. Agency documents show that this 

identified gap of $173 billion was the basis for the decision to remove the 

2008 TAR from the standard FPDS-NG statistical reports and to develop 

the new methodology. However, the two amounts, which capture different 

measures of federal procurement, are not comparable. The $700 billion 

reported to the WTO was a measure of all contracts awarded in a 

particular year—that is, all newly awarded contracts in fiscal year 2008, 

which could be obligated any time over a 5-year period. In contrast, the 

$527 billion reported by the Office of Federal Procurement Policy 

reflected all obligations made within a 1-year period—that is, obligations 

in fiscal year 2008 against any contract, regardless of the year of the 

initial contract award.

 53While we used this alternative methodology to determine the type of data that would be 

produced, we make no comment regarding the legal consistency of this method with GPA 

statistical reporting requirements. 

Agencies’ Decision to 

Change U.S. Methodology 

Showed Incomplete 

Understanding of 

Reported Procurement 

Data
Page 39 GAO-17-168 Government Procurement

The agencies involved in the decision to revise the U.S. methodology for 

reporting federal procurement to the WTO were unable to provide 

documentation supporting the decision. Federal standards for internal 

control call for U.S. agencies to carry out internal control activities to help 

ensure that management’s directives, such as changing the U.S. 

methodology, are carried out. These activities include the need for 

appropriate review of data (and software) used in information processing 

as well as properly recording and documenting significant events.54 We 

requested, but could not obtain, documentation of the original 

methodology, any comparison of the original and revised methodologies, 

and any analysis of the revision’s effects on U.S. reported awarded 

contract values. According to OMB staff, the agency reviewed data in the 

TAR that Commerce shared with them via e-mail, but no documentation 

of these reports was available from OMB, Commerce, GSA, or USTR. In 

addition, we were unable to obtain copies of the TAR that were the basis 

of statistical notifications submitted to the WTO. As a result, we had to 

rely on interviews with current and former USTR, GSA, and Commerce 

officials to reconstruct the original methodology from GSA computer 

programs. OMB staff stated that staff turnover prevented them from 

providing complete information about how and why the TAR was initially 

developed and revised.

In addition, although OMB and GSA provided us with documentation of 

the TAR requirements that were approved by OMB, USTR, Commerce, 

and GSA, we found no documentation of any steps to validate that the 

requirements for applying the revised methodology were correct and 

implemented successfully to produce the intended results. According to

OMB officials, OMB established the requirement for the new TAR after 

consultation with USTR and trade agencies. The agencies concluded that 

it was appropriate to determine the total value of obligations for a contract 

5 years after it was awarded because they considered federal contracts to 

generally include a base year and four 1-year option periods that the 

federal government may or may not exercise. OMB officials said that the 

Federal Acquisition Regulation (FAR) provides that the base and option 

periods shall not exceed 5 years for services and the total of the basic 

and option quantities shall not exceed requirements for 5 years in the 

case of supplies, unless otherwise approved.55 OMB officials stated that 

 54GAO/AIMD-00-21.3.1. 

55As our analysis showed (see table 3), about 88 percent of total cumulative obligations 

for federal procurement contracts awarded in fiscal year 2009 had been obligated after 5 

years.

Agencies Lacked 

Documentation to Support 

Revision of Methodology 

for Reporting Federal 

Procurement Data to the 

WTO
Page 40 GAO-17-168 Government Procurement

the TAR was established using this reporting methodology. However, 

according to an unpublished October 2015 communication to the WTO 

GPA statistical working group, the U.S. methodology is based on the 

amount spent during the base year and five 1-year option periods (i.e., 

the 6 years after the award date).

We found several reporting inconsistencies and errors in the FPDS-NG 

TAR and in U.S. GPA notifications submitted to the WTO.

• USTR reviews the GPA thresholds, which are developed by 

Commerce, and publishes them in the FAR every 2 years on a 

calendar-year basis.56 However, the GSA-run program that generates 

the TAR begins applying those thresholds every other fiscal year. 

(See fig. 5.) As a result, the U.S. procurement statistics that USTR 

reports to the WTO, based on the TAR, for contracts awarded in the 

first quarter of each 2-fiscal-year period’s initial year reflect the new 

biennial thresholds instead of the thresholds that U.S. procurement 

officers used in determining the applicability of trade agreements for 

those contracts. This discrepancy may affect the accuracy of data on 

covered procurement reported to the WTO. When the new thresholds 

are higher than the old ones, the reported data may exclude contracts 

with values lower than the new thresholds; when the new thresholds 

are lower, the data may include contracts that were not covered by 

the GPA at the time they were signed.

 56FAR Part 25. The FAR is jointly issued by the Department of Defense, GSA, and 

National Aeronautics and Space Administration.

Trade Agreements Report 

and Statistical 

Notifications Contain 

Inconsistencies and Errors
Page 41 GAO-17-168 Government Procurement

Figure 5: Timing of WTO GPA Threshold Values’ Publication in U.S. Federal Acquisition Regulation and Application in U.S. 

Trade Agreements Report and WTO GPA Notification

Note: To determine whether a contract is covered by the GPA, U.S. procurement officers consider, 

among other things, the GPA thresholds published in the Federal Acquisition Regulation.

• The TAR, which is used as a basis for the WTO notifications, applies 

a methodology to capture covered government procurements under 

the GPA that does not reflect the process U.S. procurement officers 

use to determine whether contracts are covered by the GPA. 

Consequently, some contracts considered to be covered when 

awarded may not be reported to the WTO. To determine whether a 

contract is covered by the GPA, procurement officials calculate the 

estimated acquisition value using a methodology set out in the 

FAR.57 However, the new GSA-run statistical program used to 

generate the TAR considers a contract to be covered by the GPA only 

when cumulative obligations against that contract exceed the GPA 

thresholds, which can happen at any time during the contract’s 

duration. As a result, contracts that were determined to be covered by 

trade agreements at the time of contract award but for which 

cumulative obligations never exceed the GPA thresholds are not 

included in the TAR and WTO notifications until a later and uncertain 

point in time, if at all.58

 57See FAR § 25.403. The applicable methodology to be used varies depending on factors 

such as contract type and the term of the contract.

58If obligations never reach the threshold amount, the procurement would have been 

treated as “covered” in making a decision, but never reported as such.
Page 42 GAO-17-168 Government Procurement

• The fiscal year 2009 U.S. notification of state procurement reports 

inaccurate data for Florida’s total government procurement. USTR 

calculated that amount as $45 billion. However, using the U.S. 

methodology for estimating total state procurement, we calculated that 

Florida’s total government procurement in fiscal year 2009 was $37 

billion.

Although the GPA requires that parties provide annual statistics on 

covered procurement by subcentral governments, USTR and Commerce 

have not developed a methodology for using available state data to report 

these data. Under the 1994 and 2014 GPA, notifications for states’ and 

other government entities’ procurement are required to include statistics 

on the value of contracts awarded by covered entities above the threshold 

value. However, for fiscal years 2009 and 2010, the United States 

reported total instead of covered government procurement for the 37 

states that make up U.S. subcentral level commitments under the GPA. 

As a result, the reported U.S. data are only broadly comparable with other 

GPA parties’ data on covered subcentral government procurement. 

Further, USTR’s reporting does not meet federal standards requiring 

relevant, timely, and accurate reporting by U.S. agencies.59

To estimate states’ total procurement, USTR uses the U.S. Census 

Bureau’s state government financial data, which include below-threshold 

procurement by noncovered entities.60 Also, these data do not account for 

any restrictions that the federal government or a state government may 

place on procurements for specific goods or services that are excluded 

from U.S. GPA commitments.61 There is no central repository for statistics 

on GPA-covered state procurement. An unpublished U.S. submission to 

the GPA working group on the collection and reporting of statistical data 

 59GAO/AIMD-00-21.3.1.

60According to the Census Bureau, its financial data for the 50 states cover each state’s 

executive, legislative, and judicial branches. The data also cover agencies, institutions, 

commissions, and public authorities that operate separately or somewhat autonomously 

from the state government, but the state government maintains administrative or fiscal 

control over their activities. The Census Bureau data do not include local government (city 

or county) data.

61A study of state procurement practices by the National Association of State Procurement 

Officials included 32 of the 37 states covered by the GPA. In the study, 12 states reported 

that they did not have any set-asides for small business, small disadvantaged business, 

women-owned small business, service-disabled veteran-owned small business, Hubzone, 

or Buy America requirements.

U.S. Agencies Lack a 

Methodology for Reporting 

States’ and Other 

Government Entities’ GPACovered Procurement as 

Required
Page 43 GAO-17-168 Government Procurement

acknowledges that reported U.S. subcentral-level procurement data do 

not distinguish between covered and noncovered government 

procurement or reflect the amount or percentage of procurement 

below or above the GPA threshold.

Although data on states’ GPA-covered procurement are not centrally 

available, we estimated—using data that we obtained from 3 of the 

largest states covered by U.S. GPA commitments—that the total state 

government procurement reported to the WTO exceeds covered state 

government procurement by about 10 percent.62 We calculated that in 

2010, about 40 percent of estimated total government procurement by the 

37 states covered by the GPA took place in California, New York, Texas, 

and Pennsylvania. Three of these states—California, New York, and 

Pennsylvania—collect electronic data on their contract awards and have 

databases that contain information on the amount spent on state 

procurement contracts (Texas does not). We calculated that contracts 

representing over 90 percent of total government procurement in these 3 

states were awarded in 2014 and 2015 by covered entities, had values 

higher than the GPA thresholds, and therefore could be considered 

covered government procurement.

For example, we estimated that on average contracts representing 99 

percent of the value of New York’s goods and services contracts and 64 

percent of the value of its construction services contracts were awarded 

to covered entities and exceeded the U.S. GPA thresholds for 2014 and 

2015. Goods and services contracts represent 92 percent of the value of 

all state contracts in New York.63 Therefore, we estimated that 96 percent 

of total government procurement by covered New York state entities was 

above GPA thresholds and was therefore covered by the GPA. For 

California, which is the largest state among the 37 covered states and 

accounts for about 14 percent of their total government procurement, we 

estimated that 92 percent of the value of goods, services, and 

 62Because the structure of the data systems in those states did not allow us to extract 

data as far back as fiscal year 2009, we were unable to compare total government 

procurement estimated in the 2009 U.S. statistical notification with covered government 

procurement on the basis of contract data in those states. Instead, our estimate is based 

on an analysis of 2014 and 2015 state data.

63We analyzed contract data from New York State’s Open Book database 

at http://www.openbooknewyork.com/. The database contains all active state agency 

contracts, which includes contracts approved by the Office of the State Comptroller (OSC) 

and those that do not require OSC approval.
Page 44 GAO-17-168 Government Procurement

construction contracts awarded to covered entities fell above GPA 

thresholds and therefore were covered by the GPA. For Pennsylvania, we 

estimated that 95 percent of such contracts were covered by the GPA. In 

estimating covered procurement for New York, California, and 

Pennsylvania, we did not correct for procurements that are excluded by 

the U.S. GPA commitments; therefore, our estimates may overstate these 

states’ covered government procurement.

With regard to other government entities, including utilities, the United 

States reported estimates of covered government procurement for 9 of 

the 11 entities covered by the U.S.GPA commitments in 2009 and 2010.64

These estimates are based on the entities’ financial statements. While the 

methodology for these estimates varies on the basis of the data that the 

statements provide, the general methodology adopted by the United 

States calls for the estimate to include operating expenses other than 

wages and salaries and newly acquired capital expenditures. Commerce 

calculates the estimates using data on operations and maintenance 

expenses; however, for certain entities, the available data aggregate 

wages with other operating expenses. As a result, estimates based on 

these data overstate these entities’ covered government procurement. 

Conversely, covered government procurement reported for some entities, 

such as the Port Authority of New York and New Jersey, includes capital 

expenditures, while for other entities, such as the Port of Baltimore, 

covered government procurement does not include these expenditures. 

Since capital expenditures under the methodology adopted by the United 

States should be included in the estimate of covered government 

procurement, the data reported for entities that exclude capital 

expenditures understate covered government procurement.

We found that gaps in collaboration among the four agencies involved in 

preparing, using, and submitting the required procurement data to the 

WTO—USTR, OMB, Commerce, and GSA—contributed to deficiencies in 

the reporting of these data. The preparation of GPA statistical 

notifications requires expertise in procurement data, procurement policy 

and regulations, and WTO agreements. However, none of the agencies 

has all of the expertise needed to prepare and submit the U.S. 

notifications, and statements made by agency officials to us indicated 

 64Data on the Power Marketing Administration of the Department of Energy and the Rural 

Utilities Service Financing are not provided.

Gaps in Collaboration 

among U.S. Agencies 

Contributed to Reporting 

Deficiencies
Page 45 GAO-17-168 Government Procurement

gaps in their collaboration in leveraging each other’s expertise. For 

example:

• An official from USTR stated that he was the “consumer” of 

procurement data received from OMB and GSA but that USTR 

currently has no technical expertise in federal procurement data 

collection.

• OMB staff noted that USTR relies on OMB’s interpretation of 

procurement data during trade negotiations. They also stated that 

USTR is the report owner and the program officer for trade agreement 

data and reporting, since it negotiates all trade agreements.

• Officials from Commerce told us that they provide “technical 

assistance” to USTR in developing and finalizing the trade agreement 

and reviewing procurement data in the TAR but that they were not 

responsible for U.S. notifications or for submitting those notifications 

to the WTO.

• Officials from GSA told us that GSA is the “technical executor” of data 

requests received from agencies, including Commerce and USTR, 

with regard to report design and provided technical assistance on 

reporting requirements, but the GSA officials were not involved in any 

policy decisions.

• USTR, Commerce, and GSA officials stated that OMB’s Office of 

Federal Procurement Policy is responsible for setting procurement 

policy and therefore is responsible for the methodology used in U.S. 

reporting of procurement data. However, an OMB Office of Federal 

Procurement Policy official stated that although her office employed 

procurement data specialists, the TAR was prepared according to 

USTR specifications. OMB staff stated that they worked with USTR, 

Commerce, and GSA to establish and finalize the reporting 

requirements and methodology for the TAR to meet the GPA and 

NAFTA reporting requirements.

Moreover, no U.S. agency has taken responsibility for ensuring the 

accuracy, timeliness, or comparability of the procurement data submitted 

to the WTO or for recording related decisions and activities. This resulted 

in an incomplete understanding among the agencies of the U.S. 

methodology for reporting procurement statistics to the WTO, a number of 

technical deficiencies, a lack of documentation, and some errors in U.S.

statistical reporting to the WTO. Our prior work has shown that in such 

cases, agencies can improve their activities through enhanced 

interagency collaboration—for example, by agreeing on roles and 

responsibilities, including leadership; by leveraging resources, including 
Page 46 GAO-17-168 Government Procurement

expertise; and by developing mechanisms for effective collection, 

analysis, and use of data.65

Government procurement constitutes a significant potential market for 

international trade that the U.S. government has sought to open through 

the GPA and FTAs. Reporting of government procurement statistics 

required by trade agreements provides transparency about the extent to 

which the parties have opened government procurements covered by 

their commitments under the agreements to foreign competitors. This 

transparency, in turn, allows policymakers to gain an understanding of the 

agreements’ relative benefits and helps other countries judge the 

potential benefits of undertaking similar agreements.

While the data that the United States and next five largest GPA parties 

reported to the WTO for 2010 allow for broad comparisons of their 

covered government procurement, we found that deficiencies in the data 

prevent more detailed comparisons, limiting transparency. In some cases, 

the parties’ statistical reporting in response to GPA requirements was not 

timely, complete, or consistent. In other cases, a lack of common 

understanding of the definitions of key terms as fundamental as 

“government procurement” led to inconsistency in the parties’ reporting 

practices. In forming the working group for the GPA statistical work 

program, the United States and other GPA parties committed to submit 

relevant information, make recommendations, and consider the “potential 

harmonization” of parties’ statistical data in order to provide transparency 

regarding procurement covered under the GPA and improve 

understanding of the agreement’s economic importance. However, the 

GPA working group charged with recommending actions to address 

technical issues, such as those we identified, that impede transparency 

regarding covered procurement has made little progress. Moreover, 

recent data on procurement covered by U.S. FTAs are not available—

NAFTA parties last exchanged such data in 2005, and the government 

procurement chapters of the U.S. FTAs we reviewed do not require 

statistical reporting of covered government procurement.

We found that the introduction of the revised methodology for reporting 

covered federal procurement affected the timeliness, accuracy, and 

 65GAO, Results-Oriented Government: Practices That Can Help Enhance and Sustain 

Collaboration among Federal Agencies, GAO-06-15 (Washington, D.C.: Oct. 21, 2005).

Conclusions
Page 47 GAO-17-168 Government Procurement

comparability of U.S. reporting of procurement statistics to the WTO. 

While the methodology enables more accurate reporting, its use of 6 

years of cumulative obligations data does not appear to be compatible 

with the 2-year timeframe allowed by the 2014 GPA. In addition, gaps in 

collaboration among USTR and the other agencies involved in collecting 

and reporting U.S. government procurement data contributed to other 

deficiencies we identified, such as the absence of documentation of the 

methodology’s revision and inaccuracy in the U.S. statistical notifications. 

Finally, the lack of a methodology for reporting state-level covered 

procurement consistent with GPA requirements has led USTR and 

Commerce to report only total procurement, limiting the comparability of 

the United States’ and other parties’ covered subcentral government 

procurement.

To improve the quality and transparency of statistical reporting of 

international government procurement by GPA and U.S. FTA parties to 

fulfill their commitments under these agreements, we recommend that the 

U.S. Trade Representative take the following two actions:

• Prepare and submit a proposal to the WTO GPA working group on 

statistical reporting established by the Committee on Government

Procurement that aims to improve the quality of statistical reporting by 

WTO parties to address the weaknesses we identified.

• Resume the annual exchange of statistical data on covered 

government procurement with the other NAFTA parties as NAFTA 

requires.

We also recommend that the U.S. Trade Representative take the 

following four actions in consultation with appropriate experts in 

Commerce, OMB, and GSA:

• Improve the U.S. methodology for providing federal government 

procurement statistics to the WTO to ensure both accurate and more 

timely reporting, consistent with GPA requirements—for example, by 

providing preliminary estimates and updated values of covered federal 

procurement or by using an alternative methodology that bases 

measures of covered government procurement on actual annual 

obligations, if USTR determines that such an approach is consistent 

with WTO obligations.

• Develop a methodology for reporting statistics on state governments’

covered procurement to the WTO consistent with GPA requirements.

Recommendations for 

Executive Action
Page 48 GAO-17-168 Government Procurement

• Ensure that methodologies and data sources used to prepare GPA 

statistical notifications are documented.

• Ensure that calculations using U.S. procurement statistics and other 

data are reviewed for accuracy before reporting them to the WTO.

We provided a draft of this product to USTR, Commerce, OMB, and GSA 

for comment. USTR, Commerce, and OMB officials did not comment on 

our findings and recommendations but provided technical comments, 

which we incorporated as appropriate. For example, in response to 

Commerce officials’ comments, we clarified our description of their efforts 

to address data anomalies created by multiple-year, multiple-award 

federal contracts. GSA concurred with our findings and recommendations 

and also provided technical comments that we incorporated as 

appropriate.

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan to no further distribution until 30 days from the 

report date. At that time, we will send copies of this report to the 

appropriate congressional committees, the U.S. Trade Representative, 

the Secretary of Commerce, the Director of the Office of Management 

and Budget, the Administrator of the General Services Administration, 

and other interested parties. In addition, the report is available at no 

charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact 

me at (202) 512-8612 or gianopoulosk@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. GAO staff who made key contributions to this 

report are listed in appendix IV.

Kimberly M. Gianopoulos

Director, International Affairs and Trade

Agency Comments
Appendix I: Objectives, Scope, and 

Methodology

Page 49 GAO-17-168 Government Procurement

For this report, we (1) broadly compared covered government 

procurement reported by the United States and other parties to the World 

Trade Organization’s (WTO) Agreement on Government Procurement 

(GPA) and U.S. free trade agreements (FTA); (2) assessed the 

usefulness of GPA and U.S. FTA parties’ statistical reporting for more 

detailed comparisons of—and transparency regarding—their covered 

government procurement; and (3) examined the extent to which U.S. 

agencies’ approach to reporting statistical data on covered government 

procurement to the WTO ensures timeliness, accuracy, and 

comparability.

The following describes our general analysis of data on procurement by 

the United States and other GPA and U.S. FTA parties. To estimate total 

government expenditures and total government procurement for the 

United States and the 57 other countries that are parties to the WTO GPA 

and U.S. FTAs, we analyzed macroeconomic data from 2008 through 

2012 from the United Nations’ (UN) National Accounts Official Country 

Data database and the International Monetary Fund’s Financial Statistics 

and World Economic Outlook.1 We used the 2008-2012 time period for 

these estimates in order to base them on the most reliable, consistent, 

and comparable sets of data available. Government procurement 

includes a government’s current purchases of goods and services, such 

as machinery and equipment; purchases of accounting or information 

technology services; and investment expenditures. The amount of 

covered government procurement is a subset of total government 

 1

This estimate of total government expenditures and procurement is based on our 

previous work reported in GAO, International Trade: The United States and European 

Union Are the Two Largest Markets Covered by Key Procurement-Related Agreements, 

GAO-15-717 (Washington, D.C.: July 29, 2015). In our prior report, we estimated 

government procurement for the 57 GPA parties as well as 3 additional countries—Brunei, 

Malaysia and Vietnam—that were parties to negotiations for the Trans-Pacific Partnership 

but were not parties to the GPA. In our current report, we focus on covered government 

procurement reported by countries that are parties to the GPA or U.S. FTAs. In addition, 

the current report provides estimates of covered government procurement, which includes 

all government procurement as well as procurement by other entities, such as covered 

state-owned enterprises. State-owned enterprises were not included in our prior report 

because countries do not provide data on intermediate consumption and gross fixed 

capital formation of these entities in the UN macroeconomic statistics used to estimate 

government expenditures and government procurement. However, because WTO GPA 

countries’ notifications include data on procurement by certain covered state-owned 

enterprises, data shown in all graphics in our current report include procurement by these 

enterprises, except in fig. 1, which compares the current estimates with those from our 

prior report.

Appendix I: Objectives, Scope, and 

Methodology

General Analysis of 

Procurement by the 

United States and 

Other GPA and U.S. 

FTA Parties
Appendix I: Objectives, Scope, and 

Methodology

Page 50 GAO-17-168 Government Procurement

procurement. We defined covered government procurement under the 

GPA and U.S. FTAs as procurement by covered government entities at 

the central and subcentral levels that falls above certain predetermined 

thresholds and outside certain exclusions stipulated in the agreements. 

This amount is largely a measure of the opportunities available to 

domestic and foreign firms seeking to compete under open tendering 

procedures for government procurement contracts in the countries that 

are parties to the agreements. Covered government procurement also 

includes procurement conducted through limited tendering that is covered 

under the agreements but is not open to all interested suppliers. (GPA 

parties report data on the use of limited tendering procedures; we 

analyzed these data and present our findings in app. II.)

We compared data on government procurement reported by the United 

States with data reported by five other selected parties to the GPA—the 

European Union (EU), comprising 28 member countries; Japan; Canada; 

South Korea; and Norway. We selected these parties because they 

represent, after the United States, the next five largest GPA procurement 

markets. The combined total government procurement reported by these 

six parties (33 countries) accounts for 92 percent ($4.0 trillion of $4.4 

trillion) of average annual total government procurement for the United 

States and the other 57 countries that are parties to the WTO GPA and 

U.S. FTAs from 2008 through 2012. For the remaining 25 countries in the 

dataset, total government procurement during this period amounted to 

about $370 billion; we assumed that all of their estimated procurement is 

covered by the agreements.

In addition, we interviewed federal agency officials from the Office of 

Management and Budget’s Office of Federal Procurement Policy, the 

General Services Administration’s Integrated Award Environment 

Business Operations Division, the Office of the U.S. Trade 

Representative’s (USTR) Office of WTO and Multilateral Affairs, and the 

Department of Commerce’s International Trade Administration in 

Washington, D.C. We also discussed the availability of U.S. state 

procurement data with state officials, reviewed state government 

documents, and contacted state audit organizations to determine whether 

the data we used had any significant deficiencies. We interviewed WTO

secretariat, EU governmen, Japanese government, Canadian 

government, and other officials in Geneva, Switzerland, and reviewed 

related documents issued by their offices. In addition, we interviewed a 

former USTR procurement trade negotiator and reviewed relevant 

studies, papers, and articles.
Appendix I: Objectives, Scope, and 

Methodology

Page 51 GAO-17-168 Government Procurement

The following describes our detailed analysis of covered government 

procurement by the U.S. central (federal) government and subcentral 

(state) governments and other entities and by the other selected GPA 

parties.

To analyze covered government procurement by the U.S. federal 

government, we used data that the United States reported to the WTO in 

September 2016 covering procurements in fiscal year 2010—the most 

recent data available—after determining that these data provided a 

reasonable basis for noting general patterns and making broad 

comparisons with other parties’ central government procurement. We 

used data from annex 1 of the U.S. WTO statistical notifications for fiscal 

years 2009 and 2010. We did not use data from before fiscal year 2009 

because the 2009 revision of the U.S. methodology for estimating federal 

procurement rendered earlier data incomparable with data produced with 

the revised methodology.

To assess the reasonableness of using the 2010 data for our reporting 

purposes, we also analyzed U.S. data on federal procurement that were 

not reported to the WTO but that allowed us to estimate likely covered 

government procurement in more recent years. Specifically, we examined 

data from the Federal Procurement Data System–Next Generation 

(FPDS-NG)2 for fiscal years 2010 to 2014 and estimated the amount of 

actual obligations in a given fiscal year regardless of the year of the 

original contract award (see app. III for a discussion of this alternative to 

the two methodologies used by the United States to report federal 

covered government procurement). Our analysis found that there is little 

 2

FPDS-NG is the official U.S. federal government procurement database that includes all 

obligations made by federal agencies and therefore can be used to estimate federal 

government procurement that was covered by the international trade agreements. FPDSNG contains standard reports, including trade agreements reports, that contain data on 

the number and value of contracts covered by the WTO GPA and NAFTA. 

Detailed Analysis of 

Covered Procurement 

by U.S. Federal and 

State Governments 

and Other 

Government Entities 

and by Other 

Selected GPA Parties

U.S. Federal Government 

Procurement
Appendix I: Objectives, Scope, and 

Methodology

Page 52 GAO-17-168 Government Procurement

variation in U.S. covered government procurement measured using actual 

obligations as a share of total federal procurement from year to year. We 

also found that the percentage of covered federal procurement as 

reported by the United States in 2009 and 2010 was consistent with 

FPDS-NG obligations data. As a result, we determined that using the 

2010 data was reasonable.

To analyze covered government procurement by U.S. state governments 

and other entities, we used data from annexes 2 and 3, respectively, of 

the U.S. WTO statistical notifications for fiscal years 2009 and 2010. We 

found that the United States reported total instead of covered government 

procurement for the 37 states that comprise U.S. subcentral-level 

commitments under the GPA. We estimated covered procurement by the 

U.S. states by collecting data for 2014 and 2015 from three of the states 

that have the largest amounts of procurement—California, New York, and 

Pennsylvania—and calculating the percentage of their total government 

procurement that was covered by the trade agreements. We calculated 

state covered government procurement as the cumulative dollar value of 

contracts by covered entities that were higher than the thresholds set in 

the GPA; we did not otherwise correct for other specific exclusions, if 

applicable. We were unable to obtain any data from another of the largest 

states, Texas, as it does not collect such data in a central database. We 

determined that the degree of overstatement of states’ covered 

government procurement was likely relatively minor and would therefore 

not affect our analysis of differences in orders of magnitude in subcentral 

government procurement by the United States and the five selected GPA 

parties.

To analyze covered government procurement by utilities and other 

government entities, we examined the U.S. methodology for reporting 

procurement by the 11 entities covered by the GPA. We examined the 

disaggregated data from the financial statements of 9 of the 11 entities; 

data for the remaining 2 were not available. We identified the components 

used to estimate covered government procurement and the relative 

effects of the inclusion of certain elements that should have been 

excluded from the estimate and of the exclusion of certain elements that 

should have been included in the estimate. We determined that these 

effects were likely small and would not affect our overall conclusions.

U.S. States’ and Other 

Government Entities’

Covered Procurement
Appendix I: Objectives, Scope, and 

Methodology

Page 53 GAO-17-168 Government Procurement

We analyzed all available data reported to the WTO by the five selected 

GPA parties for 2008 to 2013 as well as estimates of their total covered 

government procurement during this period. We assessed the internal 

consistency of their WTO notifications and determined that despite some 

annual variations, the 2010 data provided a reasonable basis for 

comparing these parties’ and the United States’ covered government 

procurement. For example, we sequentially expanded the analysis to 

include data from 2008 through 2009, 2008 through 2010, 2008 through 

2011, and 2008 through 2012, and we excluded years to match the last 

two U.S. submissions for 2009 and 2010. We found that procurement by 

central and subcentral governments and other entities appeared to be 

stable at levels and as shares of covered and total covered government 

procurement for the various time periods.

Because EU member governments’ procurement in 2010 accounts for 

more than 85 percent of procurement reported by the five selected GPA 

parties other than the United States, we focused our analysis and 

assessment of the selected parties’ data quality on EU data. We took the 

following steps to assess the reliability of EU procurement data, from the 

EU’s Tenders Electronic Database. We spoke with EU officials and 

reviewed publicly available data and analysis of EU covered government 

procurement. We performed a detailed comparison of data from two 

sources—the 2011 EU WTO GPA notification and the 2012 EU Public 

Procurement Indicators.3 We used several measures related to EU 

general government procurement, such as above- and below-threshold 

procurement from the Official Journal of the European Union and from 

member states reporting, and GPA covered government procurement. 

After EU officials clarified certain relevant differences in the data, we 

found the results from the two sources to be largely consistent. Therefore, 

we determined the data we used were sufficiently reliable to discuss 

differences in the United States’ and EU’s reported covered government 

procurement in terms of orders of magnitude.

 3

World Trade Organization, Committee on Government Procurement, Statistics for 2011 

Reported under Article XIX:5 of the Agreement: Report by the European Union, GPA/

114/Add.5 (Oct. 22, 2014), accessed January 4, 2016, https://www.wto.org/english 

/tratop_e/gproc_e/notnat_e.htm; Public Procurement Indicators 2012, DG Markt C4—

Economic Analysis and e-Procurement, 12 November 2014, accessed January 4, 2016, 

http://ec.europa.eu/internal_market/publicprocurement/docs/modernising_rules/publicprocurement-indicators-2011_en.pdf.

Other Selected GPA 

Parties’ Reported 

Procurement
Appendix I: Objectives, Scope, and 

Methodology

Page 54 GAO-17-168 Government Procurement

Because alternative data sources were not publicly available for GPA 

parties other than the United States and the EU (i.e., for Canada, South 

Korea, Norway, and Japan), we were able only to check for consistency 

across time periods and were not able to otherwise assess the 

comprehensiveness and accuracy of the procurement data reported to 

the WTO by these parties. In addition, other than noting that the amounts 

reported are relatively consistent, we were unable to determine the 

reliability of the data reported by parties other than the EU or the extent to 

which the reported data represent the actual amounts of covered 

government procurement for each party. Because the fact that some GPA 

parties reported far less covered government procurement than the 

United States is relevant to our report, we present these data for the 

purpose of a broad comparison with data on U.S. covered government 

procurement. We also present a table of what these nations reported in 

2010 to indicate what was and was not reported. We performed a similar 

analysis of 2009 and had consistent results.

In our report, we discuss the effects of a number of other data limitations 

on the precise measurement and analysis of differences in the parties’

covered government procurement under trade agreements as well as on

analysis of covered government procurement over time. These limitations 

include the absence of U.S. statistical notifications to the WTO for years 

after fiscal year 2010; the lack of timeliness, completeness, and 

consistency in GPA parties’ reporting; the lack of common understanding 

and practice among GPA parties regarding reporting of procurement data; 

the 2009 change in the U.S. methodology for reporting federal 

procurement; and the failure of U.S. notifications to distinguish covered 

from noncovered government procurement for the states. We determined 

that these limitations may affect our ability to perform certain analyses. 

For example, we were unable to disaggregate covered government 

procurement of goods, services, and construction work, owing to the lack 

of a generally accepted uniform classification system among all GPA 

parties. Moreover, the changes in reporting methodology by the United 

States and gaps in reporting by a number of parties made trend analysis 

over a period of time inappropriate. However, while these limitations 

preclude precise comparisons, we nevertheless determined that data 

were sufficiently reliable for broad comparisons in terms of orders of 

magnitude between parties’ covered government procurement.

We conducted this performance audit from August 2015 to February 2017 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

Data Limitations
Appendix I: Objectives, Scope, and 

Methodology

Page 55 GAO-17-168 Government Procurement

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.
Appendix II: Limited Tendering

Page 56 GAO-17-168 Government Procurement

The World Trade Organization’s (WTO) Agreement on Government 

Procurement (GPA) recognizes the importance of transparent measures 

for government procurement.1 Our analysis of covered government 

procurement focused on procurement conducted under open tendering 

procedures. In certain situations, the GPA also permits procurement 

through limited tendering—that is, by contacting a supplier or suppliers of 

choice directly rather than using open tendering procedures. The GPA 

permits limited tendering when, for instance, no tenders are submitted, no 

tenders conform to essential requirements of the tender documentation, 

no suppliers satisfy conditions for participation, or tenders submitted are 

collusive.2 Limited tendering is a restrictive practice for making individual 

procurement decisions, according to the Office of the U.S. Trade 

Representative. According to the GPA, limited tendering may not be used 

to avoid competition among suppliers or to discriminate against foreign 

suppliers.

Procurement data that the United States and the next five largest GPA 

parties reported to the WTO for 2010 show varying use of limited 

tendering. The United States, Japan, and Norway reported the use of 

limited tendering in at least 20 percent of central government contracts 

covered by the GPA. The practice was less common in the European 

Union and South Korea, which reported limited tendering in fewer than 10 

percent of GPA-covered central government contracts.3 (See fig. 6.)

 1

Revised Agreement on Government Procurement, Annex to the Protocol Amending the 

Agreement on Government Procurement (Mar. 30, 2012), available at 

https://www.wto.org/english/docs_e/legal_e/rev-gpr-94_01_e.htm (accessed June 13, 

2016).

2

Limited tendering procedures may be used in these circumstances provided that the 

requirements of the tender documentation are not substantially modified.

3

Data on limited tendering at the different levels of government and utilities are not 

available for all the parties within our scope. Therefore, we focused on limited tendering at 

the central government level only.

Appendix II: Limited Tendering
Appendix II: Limited Tendering

Page 57 GAO-17-168 Government Procurement

Figure 6: Percentages of Covered Central Government Procurement Reported as 

Conducted through Limited Tendering by the United States and Next Five Largest 

GPA Parties, 2010

Note: Data shown for Norway include limited tendering at all levels of government, because Norway 

does not disaggregate data on limited tendering by level of government.
Appendix III: Alternative Method for Reporting 

U.S. Covered Federal Procurement to the WTO

Page 58 GAO-17-168 Government Procurement

During our analysis of the original and revised U.S. methodologies for 

reporting U.S. covered federal central government procurement to the 

World Trade Organization (WTO), we identified an alternative 

methodology that could be used to measure the openness of U.S. central 

government procurement under the Agreement on Government 

Procurement (GPA).1

We found that the original and revised methodologies each have 

advantages and disadvantages.

• The original methodology allowed for timely reporting by capturing the 

value of awards in the given year, but it overstated procurement 

opportunities by reporting the full value of multiple-year, multipleaward contracts multiple times for each award recipient. Because 

some reported funds were never obligated, aggregating those 

contracts at the time of award and reporting this aggregate value for a 

particular year overstated the value of covered federal procurement 

opportunities.

• The revised methodology accurately captures the dollars obligated 

against awards in a particular year, but it leads to a 6-year reporting 

lag by tracking the funds actually obligated for multiple-year contracts. 

It also results in underreporting, as obligations against those contracts 

can continue after the methodology’s 6-year time frame.

Our analysis of the revised methodology showed that reporting 

preliminary estimates of dollars obligated in a multiple-year contract’s first 

3 years would meet the 2014 GPA requirement to report within 2 years of 

the reporting period and would cover the majority of funds that could be 

obligated against such an contract. However, this approach could result in 

the underestimation of funds obligated against the contract, as more 

funds could be obligated in subsequent years. Therefore, such a 

preliminary estimate would need to be updated several times to reflect the 

actual total value of the contracts awarded.

We identified an alternative methodology that would estimate GPAcovered federal procurement based on actual obligations for covered 

contracts in any given year, regardless of the year the contracts were 

awarded. This approach would ensure timely reporting since these data 

 1

While we used this alternative methodology to determine the type of data that would be 

produced, we make no comment regarding the consistency of this method with GPA 

statistical reporting requirements. 

Appendix III: Alternative Method for 

Reporting U.S. Covered Federal 

Procurement to the WTO
Appendix III: Alternative Method for Reporting 

U.S. Covered Federal Procurement to the WTO

Page 59 GAO-17-168 Government Procurement

are available on an annual basis without a time lag; moreover, these data 

would be largely consistent with total federal expenditures reported in the 

macroeconomic data used to estimate total federal procurement. 

However, these data may not represent opportunities available to foreign 

and domestic firms in the reported fiscal year, since obligations in any 

given fiscal year include obligations on task orders against contracts 

awarded in prior years.

Using this alternative approach, we found that, whereas total obligations 

for GPA-covered contracts declined from $540 billion in fiscal year 2009 

to $445 billion in fiscal year 2014, or by 18 percent, there was little yearly 

variation in federal covered government procurement as a percentage of 

total federal procurement. For example, in fiscal year 2009, covered 

contracts represented 53 percent ($289 billion) of total obligations, while 

in fiscal years 2010 through 2014, they represented 51 percent ($274 

billion), 48 percent ($261 billion), 48 percent ($248 billion), 48 percent 

($221 billion), and 48 percent ($214 billion), respectively.
Appendix IV: GAO Contact and Staff 

Acknowledgments

Page 60 GAO-17-168 Government Procurement

Kimberly M. Gianopoulos, (202) 512-8612 or gianopoulosk@gao.gov.

In addition to the contact named above, Adam R. Cowles (Assistant 

Director), Marisela Perez (Analyst-in-Charge), Gergana T. DanailovaTrainor, and Julia Kennon made major contributions to this report. Martin 

de Alteriis, Gezahegne Bekele, Christopher Cronin, Neil Doherty, Bradley 

Hunt, Reid Lowe, and Grace P. Lui provided technical assistance.

Appendix IV: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(100530)
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