United States General Accounting Office 

GAO Report to Congressional Committees 

September 2003 CONTRACT 

MANAGEMENT 

No Reliable Data to 

Measure Benefits of 

the Simplified 

Acquisition Test 

Program 

GAO-03-1068 

Highlights of GAO-03-1068, a report to the 

Senate and House Committees on Armed 

Services 

In recent years, the federal 

government has introduced new 

ways to streamline the acquisition 

process. One of those vehicles is 

the simplified acquisition 

procedures test program, which 

removes some of the procedural 

requirements for buying 

commercial goods and services. 

Using the test program, federal 

procurement officials can make 

purchases faster than they have in 

the past for procurements not 

exceeding $5 million. 

Congress mandated that GAO 

determine the extent to which 

federal executive agencies—at a 

minimum, the Department of 

Defense (DOD)—have taken 

advantage of the test program and 

any benefits realized. One way to 

measure use is to examine test 

program data from the Federal 

Procurement Data System (FPDS). 

It is the central repository of 

contracting information. In 

addition to examining FPDS data, 

GAO looked at data from DOD’s 

data system. 

Before Congress decides whether 

to make the test program a 

permanent contracting vehicle, 

GAO recommends that DOD and 

other selected federal executive 

agencies ensure that reliable data 

are available to make program 

assessments. DOD agreed with 

GAO’s recommendation, while the 

other selected federal agencies had 

no comments on the 

recommendation. 

www.gao.gov/cgi-bin/getrpt?GAO-GAO-03­

1068. 

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact David Cooper 

at (202) 512-4125 or cooperd@gao.gov. 

September 2003 

CONTRACT MANAGEMENT 

No Reliable Data to Measure Benefits of 

the Simplified Acquisition Test Program 

Because the Federal Procurement Data System contains unreliable data 

about the simplified acquisition test program, GAO was unable to determine 

the extent to which federal executive agencies—including DOD— have used 

the test program and have realized any benefits. Specifically, the database 

indicated that the Departments of Treasury, Defense, and Justice were the 

three largest dollar-value users of the test program in fiscal year 2001 (the 

latest year with complete data available). But GAO found that FPDS either 

overstated or understated use of the test program by millions of dollars. The 

table below shows examples of discrepancies at different buying 

organizations within these three departments. 

Examples of Discrepancies with FPDS’s Data 

Value of test program 

Department’s contracts, according to What procurement officials said about 

buying organization FPDS (fiscal year 2001) FPDS’s data 

Department of the $242 million U.S. Mint said it did not use the test


Treasury’s U.S. Mint program at all 


DOD’s Defense $4 million Defense Logistics Agency said it obligated 


Logistics Agency $146 million in test program contracts


Department of $118 million After reviewing portions of FPDS data, 


Justice’s Federal about $31 million in contract actions,


Prison Industries Federal Prison Industries said none of 


those items were purchased under the test 

program 

Sources: FPDS (data); GAO (analysis). 

GAO also found data reliability problems with contract data in DOD’s own 

data system—the Defense Contract Action Data System (DCADS)—which 

feeds into FPDS on an ongoing basis. For example, for fiscal year 2002, 

DCADS showed about $146 million in test program contract actions for two 

buying organizations for the Naval Air Systems Command and the Defense 

Intelligence Agency. After reviewing contract actions that had the highest 

dollar value, procurement officials at these two DOD buying organizations 

said that none of the entries were awarded through the test program. There 

were also reliability problems at other buying commands. 

The federal buying organizations we visited have not collected any other 

data that would allow us to assess whether the test program is helping to 

increase efficiency, improve contract prices, reduce administrative costs, or 

improve the delivery of goods and services. Anecdotal evidence indicates 

that the test program is getting favorable reviews. For example, nearly all 

procurement officials with whom GAO spoke at the buying organizations 

GAO visited indicated that the program’s primary benefit is the ability to 

process a contract more efficiently. 
Contents 


Letter 1 

Results in Brief 2 

Background 2 

No Reliable Data Available to Assess Test Program 4 

Conclusion 6 

Recommendations for Executive Action 7 

Agency Comments 7 

Appendix I Scope and Methodology 

Appendix II 	 Comments from Department of Justice’s Federal 

Bureau of Prisons 

Table 

Table 1: Examples of Discrepancies with FPDS’s Data 

Abbreviations 

DCADS Defense Contract Action Data System 


DOD Department of Defense 


FAR Federal Acquisition Regulation 


FPDS Federal Procurement Data System 


GAO General Accounting Office 


OFPP Office of Federal Procurement Policy 


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Page i GAO-03-1068 Simplified Acquisition Test Procedures 

9 

10 

5 
United States General Accounting Office 

Washington, DC 20548 

September 30, 2003 


The Honorable John W. Warner 


Chairman 


The Honorable Carl Levin 


Ranking Minority Member 


Committee on Armed Services 


United States Senate 


The Honorable Duncan Hunter 


Chairman 


The Honorable Ike Skelton 


Ranking Minority Member 


Committee on Armed Services 


House of Representatives 


Acquisition reform has fundamentally changed the way the federal 


government procures billions of dollars worth of goods and services each


year. The procurement process is more streamlined than ever before. 


Government buyers can make their purchases with less turnaround time, 


they have less paperwork, and they can rely on a variety of tools to help 


them expedite the process. One tool is the simplified acquisition 


procedures test program, which reduces the procedural requirements for 


buying commercial goods and services not exceeding $5 million. 


Congress mandated that we report on the test program and address the (1) 


extent to which federal executive agencies—at a minimum, the 


Department of Defense (DOD)—have used the test program, (2) benefits 


realized through its use, and (3) impact that the program has had on 


contract competition.1


To satisfy these objectives, we obtained and analyzed test program data 


from the Federal Procurement Data System (FPDS) and DOD’s Defense 


Contract Action Data System (DCADS). We used these data to identify 


buying organizations that were among the largest total-dollar-value users 


of the test program and to review contract files at selected buying 


1

 Our reporting mandate is found in the Bob Stump National Defense Authorization Act for 

Fiscal Year 2003, Pub. L. No. 107-314, sec. 812, Dec. 2, 2002. 

Page 1 GAO-03-1068 Simplified Acquisition Test Procedures 
Results in Brief 

Background 

organizations to determine the accuracy of the data reported. We 

interviewed procurement officials to determine whether use of the test 

program has resulted in noticeable benefits or affected competition. 

Because the FPDS and DCADS databases contain unreliable test program 

data, we were unable to determine the extent to which federal executive 

agencies, including DOD, have taken advantage of the program. Neither 

were we able to determine the test program’s benefits and impact on 

competition. 

The federal buying organizations we visited have not collected any other 

data that would allow us to assess whether the test program is helping to 

increase efficiency, improve contract prices, reduce administrative costs, 

or improve the delivery of goods and services. Two years ago, we reported 

that data were not being collected to provide a basis for measuring 

whether the test program produced the desired results of maximizing 

efficiency and economy and minimizing administrative burden and cost. 

We recommended that data be collected to demonstrate the benefits of the 

test program. In response to our recommendation, DOD said it planned to 

convene an integrated process team to determine ways to measure the 

benefits of the test program. However, DOD has not taken action to 

measure the program’s benefits. 

This report recommends that DOD and the Office of Federal Procurement 

Policy (OFPP) develop evaluation mechanisms for measuring test program 

benefits. It also recommends that the Departments of Treasury, Justice, 

and Defense improve the reliability of test program data to make program 

assessments. DOD partially concurred with the first recommendation and 

agreed with the second. The other two federal executive agencies had no 

comments on our recommendations. 

To streamline the federal procurement process, Congress in 1994 

authorized the use of simplified acquisition procedures for purchases not 

exceeding $100,000.2

 Simplified procedures allow agency officials to 

expedite the evaluation and selection processes and keep documentation 

to a minimum. 

2

 Federal Acquisition Streamlining Act of 1994, Pub. L. No. 103-355, Oct. 13, 1994. 

Page 2 GAO-03-1068 Simplified Acquisition Test Procedures 
In 1996, Congress expanded the use of simplified acquisition procedures3 

by authorizing a test program that allows government buyers to procure 

commercial items not exceeding $5 million4

 in order to maximize 

efficiency and economy and minimize burden and administrative costs for 

both the government and industry.5

 For example, government buyers 

• 	 may issue a combined synopsis and solicitation and may require 

proposal submission in fewer than 45 days, as would otherwise be 

required; 

• 	 need not establish a formal evaluation plan or competitive range, 

conduct discussions with vendors, or score quotations or offers; and 

• 	 can minimize the documentation required to justify contract award 

decisions. 

Under simplified acquisition procedures, the Federal Acquisition 

Regulation (FAR) requires competition to the maximum extent 

practicable.

6 

The test program, which expires on January 1, 2004, is only one of a 

number of streamlined contracting vehicles that federal agencies use to 

procure goods and services. Other options include purchase cards, 

multiple award Federal Supply Schedule contracts, governmentwide 

acquisition contracts, and multiple award task and delivery order 

contracts. In one way or another, these options allow government buyers 

to simplify and expedite the procurement process. 

In 2001, to find out whether the test program was achieving desired 

results, we evaluated DOD’s use of the program for commercial 

3

 Clinger-Cohen Act of 1996, Pub. L. No. 104-106, Div. D, Feb. 10, 1996 (short title changed 

from Federal Acquisition Reform Act of 1996 to Clinger-Cohen Act of 1996, Pub. L. No. 104-

208, sec. 808, Sept. 30, 1996). 

4

 Federal Acquisition Regulation, Subpart 13.5. 

5

 Since then, there has been another effort to simplify procurement in special situations. 

The Homeland Security Act of 2002 temporarily expands the use of simplified acquisition 

procedures (Pub. L. No. 107-296, sec. 855(b), Nov. 25, 2002). The act authorizes executive 

agencies to use simplified procedures in any procurement of property or services acquired 

as part of the fight against terrorism and related threats. 

6

 FAR sec. 13.104. 

Page 3 GAO-03-1068 Simplified Acquisition Test Procedures 
purchases.7

 We reported that data had not been collected to provide a 

basis for measuring whether the test program was maximizing efficiency 

and economy and minimizing administrative burden and cost. However, 

our report summarized a 1999 OFPP survey showing that procurement 

executives believed the program improved the federal procurement 

process and that the test program should be made permanent. We asked 

Congress to consider requiring the OFPP to develop a method for 

demonstrating that the test program was producing desired results. 

FPDS is the central repository of federal contracting information, and it 

contains detailed data on contract actions exceeding $25,000. Although 

federal agencies collect contract data using their own data systems, their 

data must be transmitted to and consolidated in FPDS on an ongoing 

basis. FPDS can assist procurement managers in making such decisions as 

understanding the consequences of their purchasing decisions, projecting 

future needs, or leveraging overall buying power. 

FPDS was designed to provide basic contracting information, such as 

whether the simplified acquisition test program was used. FPDS also was 

designed to provide insight on small business participation and 

competition, among other things. Federal officials can use the data to 

perform oversight responsibilities. The General Services Administration, 

through the Federal Procurement Data Center, operates and maintains 

FPDS. DOD accumulates similar data on contract actions of over $25,000 

in the DCADS database, and, like other federal agencies, transmits 

contract information to FPDS. 

We found significant data-reporting errors related to the test program in 

both FPDS’s and DCADS’s databases. Because of unreliable data, we were 

unable to determine the extent to which federal executive agencies have 

used the simplified acquisition test program and what benefits they may 

have realized from its use. We also could not determine the impact that the 

test program has had on contract competition. 

To verify FPDS’s data, we visited the Departments of Treasury, Defense, 

and Justice—the three largest dollar-value users of the simplified 

No Reliable Data 

Available to Assess 

Test Program 

7

 U.S. General Accounting Office, Contract Management: Benefits of Simplified 

Acquisition Test Procedures Not Clearly Demonstrated, GAO-01-517 (Washington, D.C.: 

Apr. 20, 2001). 

Page 4 GAO-03-1068 Simplified Acquisition Test Procedures 
acquisition test program in fiscal year 2001, as reported in FPDS. FPDS’s 

data showed that the Departments of Treasury, Defense, and Justice had 

test program contract actions worth about $303 million, $209 million, and 

$157 million, respectively, in fiscal year 2001, the latest year with the most 

complete data available. We found that these figures were either 

overstated or understated by millions of dollars. 

For example, as shown in table 1, FPDS’s data showed that the 

Department of the Treasury’s U.S. Mint had about $242 million in test 

program contract actions, making it the largest user of the test program in 

fiscal year 2001. However, the U.S. Mint officials told us that they did not 

use the program at all. We also found reporting errors with FPDS’s data for 

DOD. An official at one of DOD’s buying commands—the Defense 

Logistics Agency—said it had about $146 million in test program contract 

actions, but FPDS’s data showed only $4 million. In the case of the 

Department of Justice, FPDS’s data showed that the Federal Prison 

Industries, which is a part of the Federal Bureau of Prisons, had about 

$118 million in test program contract actions. Federal Prison Industries 

officials told us they used the test program extensively, but when we 

asked them to review a portion of FPDS’s data, about $31 million worth of 

contract actions, they said that none of the contract actions listed were 

part of the test program. 

Table 1: Examples of Discrepancies with FPDS’s Data 

Department’s 

buying 

organization 

Value of test program 

contracts, according to 

FPDS (fiscal year 2001) 

What procurement officials 

said about FPDS’s data 

Department of the $242 million U.S. Mint said it did not use the 

Treasury’s U.S. Mint test program at all 

DOD’s Defense $4 million Defense Logistics Agency said 

Logistics Agency 	 it obligated $146 million in test 

program contracts 

Department of $118 million After reviewing portions of 

Justice’s Federal FPDS’s data, about $31 million 

Prison Industries in contract actions, Federal 

Prison Industries said none of 

those items were purchased 

under the test program 

Sources: FPDS (data); GAO (analysis). 

As with other federal agencies, DOD has its own database system to 

collect contract data, and it transmits those data to FPDS on an ongoing 

basis. We decided to take a closer look at DOD’s database—DCADS—for 

Page 5 GAO-03-1068 Simplified Acquisition Test Procedures 
fiscal year 2002, the latest year with the most complete data. As we found 

with FPDS, there were reporting errors in DCADS. According to DCADS, 

DOD had a total of $1.9 billion in test program contract actions. For 

verification, we reviewed selected test program contract actions for DOD’s 

buying organizations that were major dollar-value users of the test 

program, according to DCADS. While we did find that one Air Force 

buying organization correctly reported its test program contract actions, 

other buying commands reported them incorrectly in DCADS. For 

example, DCADS’s data showed that an organization within the Naval Air 

Systems Command had about $122 million in test program contract 

actions and that the Defense Intelligence Agency’s Virginia Contracting 

Activity had $24 million. We asked procurement officials at DOD’s buying 

organizations to review DCADS’s data for contract actions that had the 

highest dollar value. They said that none of those listed were awarded 

under the test program. Three other DOD buying organizations also had 

reporting errors. 

In addition to the data reliability problems we found with FPDS’s and 

DCADS’s test program data, we also found that federal buying 

organizations had not collected any other data to document whether the 

test program is helping to increase efficiency, improve contract prices, 

reduce administrative costs, or improve the delivery of goods and services. 

However, indications are that the test program is well received. Nearly all 

procurement officials with whom we spoke at selected buying 

organizations view the test program favorably. They cite as the program’s 

primary benefit the ability to process a contract more efficiently, and the 

majority advocates making the test authority permanent. 

In commenting on our 2001 report, DOD stated its intention to convene an 

integrated process team to consider ways for measuring the benefits of the 

test program. However, DOD has not acted on this initiative. 

In discussing the results of this effort, DOD officials stated that they are 

willing to assess the benefits of the test program. Justice and Treasury 

Department officials stated that they would work to improve the reliability 

of test program’s data. 

Conclusion 	 The simplified acquisition test program, which streamlines the process for 

buying commercial items that do not exceed $5 million, expires on 

January 1, 2004. Most procurement officials with whom we spoke at 

selected buying organizations said that they would like the test program to 

be made permanent and that there are benefits associated with buying 

Page 6 GAO-03-1068 Simplified Acquisition Test Procedures 
commercial items using simplified procedures. However, anecdotal 

information is not enough to determine this program’s overall impact and 

benefits. Inherent in any test program is the expectation that federal 

agencies establish evaluation mechanisms for assessing program results, 

which includes ensuring that reliable data are collected and used for the 

assessments. Our observations are that there is no reliable information for 

measuring the test program’s benefits. 

Recommendations for 

Executive Action 

Agency Comments 

Before Congress provides permanent authority for using simplified 

procedures to acquire commercial items costing up to $5 million, we 

recommend that DOD work with the Administrator of OFPP to develop 

evaluation mechanisms for measuring test program benefits. In addition, 

the Departments of Treasury, Justice, and Defense should independently 

take appropriate actions to ensure that reliable FPDS test program data 

are available to make program assessments. 

We asked OFPP and the Departments of Treasury, Justice, and Defense for 

written comments on the draft report. OMB, which oversees OFPP, and 

DOD provided oral comments. OMB did not comment on the specifics of 

the report but made a general observation that the test program provides a 

benefit if used correctly. It said the test program enables agencies to gain 

timely access to the marketplace while still reaping the benefits of open 

market competition. OMB further noted that the test program may be 

especially beneficial as an alternative to the Federal Supply Schedule and 

multiple or single award task and delivery order contracts, when 

prenegotiated terms and conditions of these vehicles are not suitable to 

meet an agency’s needs. 

DOD partially concurred with our recommendation that it work with 

OFPP to develop evaluation mechanisms for measuring test program 

benefits. DOD stated that it would develop a methodology to evaluate the 

benefits of the test program, on the basis of such metrics as procurement 

lead-time, and share the results with OFPP. Using this methodology, the 

benefits of the test program would be measured by sampling test program 

contracts from the contract reporting system. DOD concurred with our 

recommendation that it take appropriate actions to ensure that reliable 

FPDS test program data are available to make program assessments. DOD 

is planning to issue a memorandum to the military departments and 

defense agencies emphasizing the need for all test program data to be 

entered into the contract-reporting system accurately, so reliable data are 

available to demonstrate the continuing need for this program. 

Page 7 GAO-03-1068 Simplified Acquisition Test Procedures 
The Department of Justice’s Federal Bureau of Prisons concurred with the 

information reflected in the report; the bureau’s comments appear in 

appendix II. The Department of the Treasury’s U.S. Mint agreed with our 

finding that it did not use the test program. 

We are sending copies of this report to other interested congressional 


committees and the Secretary of Defense; Secretary of the Air Force; 


Secretary of the Army; Secretary of the Navy; Director, Defense Logistics 


Agency; Director, Office of Management and Budget; Administrator, Office 


of Federal Procurement Policy; Administrator of General Services; 


Assistant Attorney General for Administration, Department of Justice; 


Secretary of the Treasury; and Director, U.S. Mint. We will also make 


copies available to others on request. In addition, this report will be 


available at no cost on the GAO Web site at http://www.gao.gov. 


If you have questions about this report, please contact me at (617) 788-


0500 or Ralph Dawn at (202) 512-4544. Key contributors to this assignment 


were Jeffrey Rose, Ralph Roffo, Marie Ahearn, Lily Chin, and Julia 


Kennon. 


Sincerely yours, 


David E. Cooper 


Director, Acquisition and Sourcing Management 


Page 8 GAO-03-1068 Simplified Acquisition Test Procedures 
Appendix I: Scope and Methodology 


Our objectives were to determine the (1) extent to which federal executive 

agencies used the simplified acquisition test authority, (2) benefits they 

realized through its use, and (3) impact that the program has had on 

contract competition. To satisfy these objectives, we obtained and 

analyzed test program data from the Federal Procurement Data System 

(FPDS) and the Department of Defense’s (DOD) Defense Contract Action 

Data System (DCADS). Using the data, we identified buying organizations 

that were among the largest dollar-value users of the test program, and we 

reviewed contract files at selected buying organizations to determine the 

accuracy of the data reported. We interviewed procurement officials from 

the Office of Federal Procurement Policy and from the Departments of 

Treasury, Defense, and Justice to obtain their views of the benefits from 

using the test authority. In addition, we reviewed federal regulations and 

available test program guidance. 

We initially identified, using FPDS’s data, the major dollar-value users of 

the test program during fiscal year 2001, the year of the most recent and 

complete data we had available at the time of our review. According to the 

data, the Departments of Treasury, Defense, and Justice were the largest 

dollar-value users of the test program. We then used the data to identify 

the buying organizations within each of these departments that were the 

largest dollar-value users. We met with procurement officials at selected 

buying organizations to verify the reliability of FPDS’s test program data 

and to discuss the benefits realized. 

We also reviewed the DCADS database to respond to our congressional 

mandate’s minimum requirements. Using DCADS’s complete fiscal year 

2002 data, we selected the buying organizations within DOD commands 

that were major dollar-value users of the test authority. The selected 

organizations were the (1) Air Force Air Mobility Command, (2) Air Force 

21st Contracting Squadron, (3) Army Communications-Electronics 

Command, (4) Naval Air Systems Command’s Naval Air Warfare Center, 

(5) Defense Intelligence Agency’s Virginia Contracting Activity and (6) 

Defense Logistics Agency’s Defense Supply Center Philadelphia. We 

discussed with procurement officials at each of these buying organizations 

the reliability of DCADS’s test program data and the program benefits 

realized. 

We conducted our work from March through August 2003 in accordance 

with generally accepted government auditing standards. 

Page 9 GAO-03-1068 Simplified Acquisition Test Procedures 
Appendix II: Comments from Department of 

Justice’s Federal Bureau of Prisons 

(120216) Page 10 GAO-03-1068 Simplified Acquisition Test Procedures 
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