Page 1 GAO-13-133R Interagency Contracting

United States Government Accountability Office

Washington, DC 20548

January 29, 2013

Congressional Committees

Subject: Interagency Contracting: Agency Actions Address Key Management Challenges, 

but Additional Steps Needed to Ensure Consistent Implementation of Policy Changes

Federal agencies collectively spend more than half a trillion dollars annually through 

contracts to acquire goods and services in support of their missions. One method for 

realizing efficiency in the procurement process is through the use of interagency contracting, 

where one agency either places an order directly against another agency’s contract or uses 

the contracting services of another agency to obtain supplies or services. Interagency 

contracting can provide a number of benefits to agencies, helping them to streamline the 

procurement process, take advantage of unique expertise in a particular type of 

procurement, and achieve savings by leveraging the government’s collective buying power. 

But these acquisitions also pose a variety of risks. We designated the management of 

interagency contracting as a high risk area in 2005, in part because of the need for stronger 

internal controls and clear definitions of agency roles and responsibilities.1 We subsequently 

reported on interagency contracting in 2010, and identified the need for governmentwide 

policies to govern the creation of interagency contract vehicles and better data to effectively 

oversee and manage them.2 Since then, key policy changes have been made to both guide

the creation of new interagency contracts and strengthen the use of existing contract 

vehicles. For example, federal acquisition regulations have been revised and guidance has 

been created to require, among other things, that agencies formally document the roles and 

responsibilities in an interagency agreement for certain interagency acquisitions.

We performed this review under the authority of the Comptroller General as part of our 

ongoing efforts to support congressional oversight of GAO’s high-risk areas. We evaluated 

(1) progress made by the Office of Management and Budget’s (OMB) Office of Federal 

Procurement Policy (OFPP) and the General Services Administration (GSA) in addressing 

issues identified in our 2010 report on interagency contracting, and (2) progress made by 

federal agencies in implementing policy changes related to the use of interagency contracts.

To address our objectives, we reviewed corrective action plans developed by OFPP and 

GSA to respond to issues identified in our 2010 report, along with policy memorandums, 

guidance, and studies on efforts to address these issues. We also met with OFPP and GSA 

 

1

GAO, High-Risk Series: An Update, GAO-05-207 (Washington, D.C.: January 2005).

2

GAO, Contracting Strategies: Data and Oversight Problems Hamper Opportunities to Leverage Value of 

Interagency and Enterprisewide Contracts, GAO-10-367 (Washington, D.C.: Apr. 29, 2010).
Page 2 GAO-13-133R Interagency Contracting

officials to discuss these actions. We examined agency progress in implementing recent 

policy changes related to the use of interagency contracts that require agencies to complete 

a best procurement approach determination and interagency agreements, at three levels. 

First, we reviewed OFPP’s analysis of reports from the 24 Chief Financial Officer (CFO) Act 

agencies, which included a discussion of management controls related to these policy 

changes, to gain a governmentwide perspective.3 Next, we met with agency officials from 

the Department of Defense (DOD), GSA, and the Department of the Interior and reviewed 

agency policies, guidance, templates, ordering guidelines, and training materials 

implementing interagency contracting requirements, including regulations incorporated into 

subpart 17.5 of the Federal Acquisition Regulation (FAR) in December 2010. We selected 

DOD, GSA, and the Department of the Interior for further review because these agencies 

are the largest users and providers of interagency contracting services, as reported in the 

Federal Procurement Data System-Next Generation (FPDS-NG). Finally, to evaluate the 

implementation of recent policy changes for specific contract actions, we used FPDS-NG 

data on new awards in fiscal year 2011 to select 20 orders DOD placed using another 

agency’s contract (direct acquisitions) and 20 contracts or orders that another agency 

awarded for DOD (assisted acquisitions). DOD is the largest user of interagency contracts. 

We selected contracts and orders with the highest total obligations in fiscal year 2011. For a 

full description of our scope and methodology, see enclosure I.

We conducted this performance audit from June 2012 to January 2013 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 findings and conclusions based on our audit objectives. We believe the 

evidence obtained provides a reasonable basis for our findings and conclusions based on 

our audit objectives.

Results in Brief

Both OFPP and GSA have implemented corrective actions to address the key interagency 

contracting issues identified in our 2010 report regarding the creation, use, and oversight of 

interagency contracts. Specifically, OFPP has developed a policy framework for the 

establishment and oversight of interagency contract vehicles, which focuses on ensuring 

that new interagency contracts demonstrate value through a sound business case. In 

response to our concerns regarding the lack of data to leverage, manage, and oversee 

these contracts, OFPP has taken steps to enhance the functionality of a database that 

provides information on interagency contracts. These actions are intended to make it easier 

for agency buyers to perform market research and improve the information available to 

OFPP on the use of these contracts. GSA also has initiated several efforts to improve the 

availability and use of pricing data on its Multiple Award Schedules program, a key 

interagency contract vehicle, with the goal of improving the ability of GSA and its customers 

to get better prices.

Federal agencies have taken a variety of steps to implement recent policy changes related 

to the use of interagency contracts that require them to complete a best procurement 

 

3

The 24 CFO Act agencies are the Departments of Agriculture, Commerce, Defense, Education, Energy, Health 

and Human Services, Homeland Security, Housing and Urban Development, the Interior, Justice, Labor, State, 

Transportation, the Treasury, and Veterans Affairs; the Environmental Protection Agency; the National 

Aeronautics and Space Administration; the U.S. Agency for International Development; the General Services 

Administration; the National Science Foundation; the Nuclear Regulatory Commission; the Office of Personnel 

Management; the Small Business Administration; and the Social Security Administration.
Page 3 GAO-13-133R Interagency Contracting

approach determination and an interagency agreement. However, DOD’s implementation of 

certain aspects of these policies was inconsistent on the orders we reviewed. At the 

governmentwide level, OFPP’s analysis of reports from the 24 CFO Act agencies found that 

most had issued guidance, developed templates, and conducted internal reviews to 

reinforce these policy changes and strengthen the management of interagency acquisitions. 

Our review of efforts at DOD, GSA, and the Department of the Interior—the largest users 

and providers of interagency acquisition services—confirmed that these agencies have 

taken similar actions. At GSA and DOD, some actions are still in progress. GSA has not 

updated the ordering guides for all its interagency contract vehicles to include the 

requirement for its customers to make a best procurement approach determination despite 

internal direction to do so; DOD has not updated its acquisition regulation to reflect this 

requirement. We also assessed the implementation of these policy changes on recent 

contract actions at DOD. Most of the DOD orders we reviewed were supported by the 

required determinations. These determinations, which help ensure agencies make sound 

business decisions to support their use of an interagency contract, varied in the degree to 

which they addressed the factors cited in the FAR or OFPP guidance, although most 

determinations addressed most of the factors. These variations appear to be the result of 

differences between the FAR and OFPP guidance and DOD’s acquisition regulation. In 

addition, for almost all of the DOD orders we reviewed, the department substantially 

complied with the requirement that agencies document roles and responsibilities in a written 

agreement. We are recommending that DOD and GSA take steps to update policies and 

guidance to ensure that recent interagency contracting policy changes are consistently 

implemented.

Background

An interagency acquisition takes place when an agency needing supplies or services (the 

requesting agency) either places an order using another agency’s contract in a direct 

acquisition or obtains acquisition assistance from another agency (the servicing agency) in 

an assisted acquisition. Agencies spend tens of billions of dollars annually through 

interagency contract vehicles, such as GSA’s Multiple Award Schedules (MAS) program, 

governmentwide acquisition contracts (GWAC), and multi-agency contracts (MAC).4 In 

recent years, for example, annual spending through governmentwide acquisition contracts 

and GSA’s MAS program has totaled more than $40 billion.

Citing risks in the use of interagency contracts as well as instances of agencies awarding 

out-of-scope work through interagency contracts and not complying with laws and 

regulations, GAO designated the management of interagency contracting as a 

governmentwide high risk area in 2005.5 Subsequent to the high risk designation, Congress6

 

4

The MAS program, also known as the Federal Supply Schedules program, consists of contracts awarded by 

GSA or the Department of Veterans Affairs for similar or comparable goods or services, established with more 

than one supplier, at varying prices. Federal Acquisition Regulation (FAR) § 8.401 and § 8.402. The MAS 

program offers a large group of commercial products and services ranging from office supplies to information 

technology services. Multi-agency contracts are task-order or delivery-order contracts established by an agency 

that can be used governmentwide to obtain goods and services consistent with the Economy Act. FAR § 2.101. 

Governmentwide acquisition contracts are contracts for information technology established by one agency for 

governmentwide use. FAR § 2.101.

5

GAO-05-207. 

6

Pub. L. No. 110-417, § 865 (2008).
Page 4 GAO-13-133R Interagency Contracting

and GAO continued to highlight interagency contracting areas that needed attention,7

• a business case analysis and policy framework to support the creation of certain new 

interagency contract vehicles;

including the need for:

• a central source of information on existing interagency contract vehicles to help 

agencies effectively leverage these contracts; 

• data on use of GSA’s MAS program, the largest interagency contracting program, to 

help its customers maximize the program’s value; and

• additional management controls and guidance for interagency acquisitions.

OFPP, which provides direction on governmentwide procurement policies, issued 

comprehensive guidance on interagency contracting in June 2008.8 The guidance required 

the requesting agency to ensure that the use of an interagency acquisition is a sound 

business decision and strengthened the management of assisted interagency acquisitions 

by requiring formal agreements between requesting and servicing agencies delineating their 

respective roles and responsibilities. Since 2005, DOD has had a similar policy to ensure 

that the use of a non-DOD contract is in the department’s best interest.9 We previously have 

reported that OFPP’s guidance should help address the deficiencies we have identified in 

the government’s management of interagency contracting.10 Over the last 2 years, 

significant changes were also made regarding the creation and use of interagency contracts. 

Specifically, FAR subpart 17.5 was amended in 2010 to incorporate additional requirements 

related to the use of interagency contracts similar to those in OFPP’s 2008 guidance, 

including the need to make a best procurement approach determination and put in place an 

interagency agreement that outlines roles and responsibilities for assisted acquisitions.11

Additionally, OFPP issued guidance in September 2011 that established a process for the 

development, review, and approval of business cases for new interagency contracts.12 The 

business case requirement is also included in the FAR.

OFPP and GSA Have Implemented Corrective Actions to Address Key Interagency 

Contracting Issues

Both OFPP and GSA have acted to improve the oversight of and data on interagency 

contracts. OFPP has developed a policy framework for the establishment of new 

interagency contract vehicles, which should lower the risk of duplication and increase 

 

7

See GAO-10-367 and High-Risk Series: An Update, GAO-11-278 (Washington, D.C.: February 2011).

8

OMB, Office of Federal Procurement Policy, Improving the Management and Use of Interagency Acquisitions 

(Washington, D.C.: June 6, 2008).

9

DOD, Office of the Secretary of Defense, Proper Use of Non-DOD Contracts (Oct. 29, 2004); DOD Federal 

Acquisition Regulation Supplement (DFARS) subpart 217.78. This policy went into effect on January 1, 2005.

10GAO, High-Risk Series: An Update, GAO-09-271 (Washington, D.C.: January 2009); and GAO-11-278. 

11An interim rule was issued and became effective on December 13, 2010 and the final rule was issued on 

January 3, 2012 and became effective on February 2, 2012. 75 Fed. Reg. 77733; 77 Fed. Reg. 183. More 

recently, an interim rule was issued and became effective on November 20, 2012, that requires agencies that 

perform interagency acquisitions on behalf of DOD to certify that the agency will comply with defense 

procurement requirements. 77 Fed. Reg. 69720.

12OMB, Office of Federal Procurement Policy, Development, Review, and Approval of Business Cases for 

Certain Interagency and Agency-Specific Acquisitions (Washington, D.C.: Sept. 29, 2011).
Page 5 GAO-13-133R Interagency Contracting

awareness of proposed vehicles before they are created. In addition, OFPP has improved 

the functionality of its interagency contract directory, with the goal of making it easier for 

agency buyers to identify existing contracts and perform market research and for OFPP to 

gather data on their use. GSA has initiated several efforts to improve the availability and use 

of pricing data on the Multiple Award Schedules program to improve the ability of the agency 

and its customers to obtain the best value from these contracts.

OFPP Has Developed a Policy Framework for Establishing New Interagency Contracts

In response to congressional direction and our prior recommendation, OFPP issued 

guidance in September 2011 that requires agencies to develop business cases for creating 

new governmentwide acquisition contracts and multi-agency contracts. The business cases 

must address three key elements: (1) the scope of the contract vehicle and potential 

duplication with existing contracts; (2) the value of the new contract vehicle, including 

expected benefits and costs of establishing a new contract; and (3) the administration and 

expected interagency use of the contract vehicle.13 The guidance also requires senior 

agency officials to approve the business cases and post them on an OMB website to 

provide interested federal stakeholders an opportunity to review and provide feedback. 

Feedback is addressed through various channels, including posting written comments 

through the website and sending letters or memos to stakeholders. According to OFPP, it 

also conducts follow-up with sponsoring agencies when significant questions are raised 

during the interagency vetting process, including questions related to potential value or 

duplication.

OFPP has continued to monitor the business case process to ensure it is functioning 

effectively. For example, OFPP completed an analysis of the seven business cases that 

were submitted during fiscal year 2012. The submissions reviewed included business cases 

for new interagency contract vehicles as well as agency-specific contract vehicles that could 

create a significant overlap with certain other interagency vehicles, both of which are subject 

to OFPP’s business case guidance. The analysis focused on how well agencies complied 

with the business case guidance, demonstrated the value of the proposed contract vehicles, 

and addressed potential duplication with other contract vehicles. OFPP officials we met with 

noted that, overall, the business cases analyzed complied with the guidance. They plan to 

use the results of their analysis to identify best practices to further refine the business case 

process.

OFPP and GSA Have Begun to Address the Need for Better Data

In response to our prior recommendations, OFPP and GSA have taken a number of steps to 

address the need for better data on interagency contract vehicles. We previously have 

reported that a lack of reliable information on interagency contracts hampers agencies’ 

ability to do market research as well as efforts to manage and leverage them effectively.14

 

13OFPP’s guidance also applies the business case requirements to certain agency-specific contract vehicles and 

blanket purchase agreements. The third element of the business case is not required for multi-agency vehicles 

where interagency use is not expected to be significant.

To promote better and easier access to data on existing interagency contracts, OFPP has 

worked to improve the Interagency Contract Directory, a searchable online database of 

indefinite delivery vehicles for interagency use created in 2003. OFPP officials advised us

that they conducted focus groups in March 2012 with members of the acquisition community 

to discuss potential uses of the database as well as desired content, features, and 

14GAO-10-367 and GAO-11-278. 
Page 6 GAO-13-133R Interagency Contracting

capabilities. OFPP officials we met with explained that they have used the feedback to 

implement short-term improvements and plan long-term enhancements to the database. 

Short-term improvements include enhancing the search function and simplifying the 

presentation of search results, which should aid market research. Potential long-term 

enhancements include the ability to access vendor past performance information and upload 

contract documents, such as statements of work, to the system. OFPP officials also noted 

that this information will be helpful in providing data on the use of interagency contract 

vehicles, as the database provides information on the amount of obligations against the 

contracts, and eventually may provide other information such as a notification when 

contracts not designated for interagency use are being used in that manner. The updated 

version of the database went live in October 2012. 

OFPP also has posted on an OMB website information on governmentwide acquisition 

contracts and other agreements available for use under the Federal Strategic Sourcing 

Initiative.15 The website is only accessible by federal agencies. The site includes information 

on the vehicle’s servicing agency and scope, as well as a link to additional information. This 

information will also be posted for new interagency contract vehicles established under 

OFPP’s business case guidance. Finally, a new strategic sourcing governance council, 

established in December 2012, is expected to address the effective use of existing 

interagency contract vehicles to support governmentwide strategic sourcing efforts, 

providing another means to use information on existing vehicles to maximize their value.

In addition, GSA has undertaken efforts to collect and provide its customers more data on 

individual transactions involving certain MAS program contracts, including prices paid. Our 

prior work found that GSA’s ability to strategically manage the MAS program, and its 

customers’ ability to get the best prices, was hindered by a lack of transactional data on the 

goods and services purchased through MAS contracts.16 To address these concerns and 

move toward more data-driven pricing, GSA’s Federal Acquisition Service, which manages 

the MAS and other contract programs, established a team in 2011 to focus on improving 

access to comprehensive and reliable data across its programs. GSA officials told us the 

team is currently working to identify commonly collected core data fields and is considering 

options for how to share the data with internal and external users. The team also plans to 

identify additional data elements not currently collected that would be beneficial to the 

Federal Acquisition Service, its customers, and its stakeholders. Further, the team plans to 

make recommendations on how to provide access to that information and develop a 

strategy for analyzing, using, and distributing it.

Improving the availability of data is also a key facet of GSA’s Schedules Modernization 

initiative, launched in June 2012. As part of this initiative, GSA has several projects under 

way designed to improve its ability to collect and share MAS program data, with the goal of 

improving pricing:

• The Point of Sale/Transactional Data pilot program requires vendors on three 

product Schedules to automatically provide the Schedules price on all purchases 

 

15The Federal Strategic Sourcing Initiative was established in 2005 to address governmentwide opportunities to 

strategically source commonly purchased products and services. For additional information on this initiative, see 

GAO, Strategic Sourcing: Improved and Expanded Use Could Save Billions in Annual Procurement Costs, GAO12-919 (Washington, D.C.: Sept. 20, 2012).

16GAO-10-367. 
Page 7 GAO-13-133R Interagency Contracting

made using a GSA SmartPay card, which could provide cost savings for customer 

agencies. Customers also receive transactional data on their purchases.

• The Enterprise Acquisition Solution Formatted Price List pilot supports the electronic 

submission, evaluation, negotiation, award, and publishing of pricing information for 

vendors on selected services Schedules. Among other benefits, GSA anticipates that 

this effort will eventually enable better price analysis for Schedules contracts and 

provide customers easier access to pricing information on Schedules orders. GSA 

officials said that they have begun the process to revise the GSA Acquisition 

Regulation to allow the agency to implement this functionality more broadly for the 

MAS program. GSA anticipates issuing a final rule in fiscal year 2013. 

• GSA’s price comparison tool pilot assists MAS contract negotiators by providing 

them pricing data from government and commercial databases for certain products. 

• The Market Driven Modification effort provides MAS vendors information on how 

their prices compare to other vendors and encourages pricing modifications, to 

reduce price variability for top selling items.

GSA is committed to collecting and providing more transactional data on its contracting 

programs for both itself and its customers, but GSA officials have acknowledged potential 

challenges in their efforts to collect more transactional data on the MAS program. These 

challenges include securing adequate funding to complete the work, identifying viable data 

sources, and ensuring the data they provide are timely, meaningful, and reflect the 

circumstances of the acquisition, as well as developing tools to process this information. 

Agencies Have Taken Steps to Implement Interagency Contracting Policy Changes, 

but DOD’s Implementation Could Be Improved

Federal agencies have taken a variety of steps to implement policy changes related to the 

use of interagency contracts that require agencies to complete a best procurement 

approach determination and an interagency agreement. For example, according to OFPP, 

most of the 24 Chief Financial Officer Act agencies reported that they have issued guidance 

and conducted internal reviews to reinforce the new policies and strengthen the 

management of interagency acquisitions. Our review confirmed that DOD, GSA, and the 

Department of the Interior—the largest users and providers of interagency acquisition 

services—have taken similar actions. At GSA and DOD, some actions, such as updating 

ordering guides and incorporating policy requirements into acquisition regulation 

supplements, are still in progress. We also assessed the implementation of these policy 

changes on DOD contract actions. The best procurement approach determinations we 

reviewed varied in the degree to which they addressed the factors cited in the FAR or OFPP 

guidance, although most determinations addressed most factors. These variations appear to 

be the result of differences between the FAR and OFPP guidance and DOD’s acquisition 

regulation. The interagency agreements we reviewed substantially complied with 

requirements for documenting agencies’ roles and responsibilities.

Agencies Have Implemented Policy Changes on the Use of Interagency Contracts

Agencies have taken steps to implement and reinforce interagency contracting policies to 

help ensure that the acquisitions are properly justified and that roles and responsibilities are 

clear for all parties involved. Federal acquisition regulations were revised in December 2010 

to include two new requirements related to the use of interagency contracts: (1) the 

requesting agency must determine that a direct or assisted interagency acquisition is the 
Page 8 GAO-13-133R Interagency Contracting

best procurement approach, and (2) the servicing agency and requesting agency must sign 

a written interagency agreement for assisted acquisitions, which establishes the general 

terms and conditions governing the relationship. In July 2012, OFPP requested information 

from the 24 Chief Financial Officer Act agencies, which account for almost all contract 

spending governmentwide, about their efforts to implement the new FAR requirements and 

strengthen the management of interagency acquisitions. Most of the agencies reported that 

they had implemented management controls, such as guidance, templates, internal reviews, 

or other methods to reinforce these requirements and strengthen their management of 

interagency acquisitions. For example, 20 of the 24 agencies reported using guidance to 

reinforce the requirement that the requesting agency make a best procurement approach 

determination for a direct acquisition. All 24 agencies also reported having oversight 

mechanisms to ensure their internal controls are operating properly. Thirteen of these 

agencies reported conducting internal compliance reviews that included assessments of 

interagency acquisitions.

We did not independently verify the information that OFPP collected from the 24 Chief 

Financial Officer Act agencies, but our own review of efforts at DOD, GSA, and the 

Department of the Interior confirmed that these agencies had taken steps to implement 

interagency contracting policy changes, as shown below in table 1.

Table 1: Agency Efforts to Implement Requirements on the Use of Interagency Contracts

Agency

Issued internal policies and 

guidance on best procurement 

approach determination

Issued internal policies and 

guidance on interagency 

agreements

Incorporated compliance 

with requirements in 

internal reviews

DOD   

GSA   

Interior   

Legend:  Yes

 In progress

Source: GAO analysis of agency responses and documentation.

GSA and Interior have issued internal guidance on the requirement to complete a best 

procurement approach determination for interagency acquisitions. DOD, GSA, and Interior 

have also issued internal policies and guidance on the requirement to complete an 

interagency agreement for assisted acquisitions, and have developed templates or directed 

staff to use OFPP’s interagency agreement template. Additionally, key components of GSA 

and Interior involved in interagency acquisitions as well as the military services and defense 

agencies within DOD have incorporated these or similar requirements into internal 

compliance reviews for their acquisition functions.

Some policy and guidance updates at DOD and GSA are still in progress. For example, 

DOD has not yet issued internal guidance on the best procurement approach determination 

requirement, although it has convened a working group to review its interagency contracting 

policies and update and supplement DOD’s federal acquisition regulation supplement 

(DFARS) as needed to reflect the new FAR requirements. Additionally, GSA has updated 

ordering information for the MAS program and Alliant GWAC to include the best 

procurement approach determination requirement, but it has not updated the ordering 
Page 9 GAO-13-133R Interagency Contracting

information for some of its other interagency contract vehicles despite an internal directive to 

do so. In an April 2011 instructional letter, GSA directed its offices to update ordering guides 

for its interagency contract vehicles to reflect the FAR requirements, including the need for a 

best procurement approach determination, but the offices responsible for GSA’s Alliant 

Small Business, VETS, and 8(a) STARS II GWACs had not yet done so more than a year 

later.17 GSA is not responsible for ensuring that users of its interagency contracts complete 

the best procurement approach determination; however, updating ordering guidance in 

accordance with its own instructions would help ensure its customers implement the 

requirement.

DOD’s Interagency Acquisitions Generally Had Required Documentation, but Some Lacked 

Specified Elements

DOD prepared best procurement approach determinations and interagency agreements, 

when applicable, for nearly all of the direct and assisted acquisitions we reviewed. However, 

we found inconsistencies in how well DOD addressed the factors related to best 

procurement approach determinations. These appear to be the result of differences between 

the DFARS and the FAR and OFPP guidance.

Best Procurement Approach Determinations for Direct Acquisitions

Defense organizations completed best procurement approach or comparable determinations 

for 17 of 20 direct acquisitions we reviewed.18

• Five of the 17 determinations addressed all of the applicable elements in the FAR or 

OFPP guidance. 

These determinations varied in the degree to 

which they addressed the applicable elements in the FAR or OFPP guidance:

• Twelve of the 17 addressed two of the elements cited in the FAR and OFPP’s prior 

guidance—the suitability of the contract vehicle and the value of using it—but did not 

address the third factor—the expertise of the requesting agency to place and 

administer orders. This may be because the preparer of the determinations followed 

the DFARS, which currently does not require the consideration of the requesting 

agency’s expertise in placing an order under an interagency contract vehicle. DOD 

plans to update its policies, but at the time of our review had not yet issued internal 

guidance or updated the DFARS to incorporate the best procurement approach 

determination requirement in the FAR, including the factor dealing with agency 

expertise. 

• The three remaining acquisitions did not prepare a determination.

 

17GSA’s Alliant Small Business, VETS, and 8(a) STARS II GWACs are governmentwide acquisition contracts for 

information technology established by GSA with small businesses; service-disabled, veteran-owned small 

businesses; and small, disadvantaged businesses, respectively.

18A recent DOD Inspector General review of purchases made through the Department of Veterans Affairs found 

that DOD organizations did not complete best procurement approach determinations for 4 of 5 direct acquisitions 

reviewed for which the requirement applied. For additional information, see Inspector General, Department of 

Defense, Contracting Improvements Still Needed in DOD’s FY 2011 Purchases Made Through the Department 

of Veterans Affairs, DODIG-2013-028 (Alexandria, Va.: Dec. 7, 2012).
Page 10 GAO-13-133R Interagency Contracting

Best Procurement Approach Determinations for Assisted Acquisitions

Defense organizations completed best procurement approach or comparable determinations 

for 19 of 20 assisted acquisitions reviewed. These determinations varied in the degree to 

which they addressed the required elements in the FAR or OFPP guidance: 

• Nine orders had determinations that addressed all three of the required elements 

specified in the FAR—ability to satisfy the requesting agency’s requirements, costeffectiveness of using the services of another agency, and ability to comply with 

appropriation limitations and the requesting agency’s laws and policies. 

• Five orders that were issued prior to or shortly after the FAR was updated had 

determinations that addressed some, but not all, of the four elements cited in OFPP’s 

guidance. Again, this may be because the preparer of the determinations followed 

the DFARS, which includes factors that are similar to the factors listed in OFPP’s 

guidance but not identical. These differences should not be an issue in the future 

because the DFARS includes comparable factors to the FAR for assisted 

acquisitions.

• Five orders were supported by determinations that were not in effect on the date the 

order was placed or did not reflect the agency that actually assisted in the 

acquisition. 

• The remaining acquisition did not prepare a determination.

Interagency Agreements for Assisted Acquisitions

The need to clearly define roles and responsibilities in an assisted interagency acquisition, 

via an interagency agreement, is a key control for mitigating interagency contracting risks. 

The FAR provides that in preparing the agreement agencies should review OFPP’s 2008 

guidance on interagency acquisitions, which identifies 14 elements for a model agreement.19

• Fourteen interagency agreements addressed all of the required agreement elements. 

These elements include the scope and period of the agreement, roles and responsibilities, 

and the legal authority used to conduct the acquisition. DOD organizations prepared 

interagency agreements for each of the 20 assisted acquisitions we reviewed. Most of these 

agreements adequately documented the elements required by the FAR and OFPP 

guidance: 

• Four interagency agreements we reviewed were missing 1 or 2 of the 14 total 

required elements. These agreements did not address the scope of organizations 

covered by the agreement, the period of the agreement, or both. 

• The remaining two agreements did not reflect the correct requesting and servicing 

agency for the order.

For all 20 assisted orders, DOD was the requesting agency. We also recently reported on 

assisted acquisitions between the Department of State and DOD, where DOD served as the 

servicing agency. We found that State and DOD did not fully meet requirements for 

interagency agreements supporting State’s missions in Iraq and Afghanistan.20

 

19FAR § 17.502-1(b). 

We identified 

the need for both agencies to improve compliance with interagency acquisition requirements 

20GAO, Iraq and Afghanistan: State and DOD Should Ensure Interagency Acquisitions Are Effectively Managed

and Comply with Fiscal Law, GAO-12-750 (Washington, D.C.: Aug. 2, 2012).
Page 11 GAO-13-133R Interagency Contracting

and made a number of specific recommendations toward that end. The agencies concurred 

with these recommendations.

Conclusions

A federal policy framework is now in place that addresses the key risks associated with 

interagency contracting. OFPP and GSA have taken a number of steps to improve practices 

regarding the creation and use of interagency contract vehicles. The policy framework, as 

well as making more data available, should help agencies more fully realize the benefits of 

interagency contracting. Agencies have also begun to update internal policies and 

disseminate information on new policy requirements, although GSA has yet to make such 

information readily available to customers using certain contract vehicles to ensure they 

implement all applicable requirements, and DOD must complete its policy review. This is

particularly important for DOD, where the inconsistency we found in how its organizations 

addressed the best procurement approach determination appears to be due to the lack of 

updated policies and guidance. Now that a new framework for managing the use of 

interagency contracts is in place, implementation of these requirements is important in order 

for agencies to demonstrate whether the new policies established to address interagency 

contracting deficiencies produce the desired results. 

Recommendations for Executive Action

To ensure that DOD organizations fully comply with interagency acquisition regulations, we 

recommend that the Secretary of Defense direct the Office of Defense Procurement and 

Acquisition Policy, as part of its ongoing interagency acquisition policy review, to ensure that 

its acquisition regulations, policies, and guidance on interagency contracting are updated to 

reflect new FAR rules, including those related to a best procurement approach 

determination.

To ensure that users of interagency contracts are aware of interagency acquisition 

requirements, we recommend that the Administrator of General Services direct the Federal 

Acquisition Service to fully implement the actions called for in its April 2011 instructional 

letter to update ordering guides for its governmentwide and multi-agency contracts as 

needed to reflect new FAR rules for interagency acquisitions.

Agency Comments and Our Evaluation

We provided a draft of this report to DOD, GSA, Interior, and OMB for their review and 

comment. DOD concurred with our recommendation and confirmed the creation of its 

Interagency Acquisition Policy Review working group, which is tasked with ensuring that 

DOD has a sound interagency acquisition policy that is consistent with statutory and 

regulatory requirements. GSA also concurred with our recommendation. Written comments 

provided by DOD and GSA appear in enclosures II and III, respectively. OMB’s Office of 

Federal Procurement Policy provided comments via e-mail, in which it noted the actions 

taken to improve the management and use of interagency contracts, including strengthened 

regulations and internal agency controls. OFPP stated that these actions have helped to 

create a more strategic environment that facilitates smarter buying and increased 

administrative efficiencies, and that they will continue to work closely with agencies to 

ensure that policies and procedures are operating effectively. Interior had no comments on 

the draft report. 
Page 12 GAO-13-133R Interagency Contracting

We are sending copies of this report to the appropriate congressional committees; the 

Secretary of Defense; the Secretary of the Interior; the Administrator of General Services, 

and the Director of the Office of Management and Budget. In addition, this report will be 

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-

4841 or woodsw@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 were Ron Schwenn, Assistant Director; Alexandra Dew Silva; 

Kristine Hassinger; Lauren Heft; Katheryn Hubbell; Julia Kennon; Janet McKelvey; Kenneth 

Patton; and Robert Swierczek.

William T. Woods

Director, Acquisition and Sourcing Management

Enclosures—3 
Page 13 GAO-13-133R Interagency Contracting

List of Committees

The Honorable Thomas R. Carper 

Chairman

The Honorable Tom Coburn 

Ranking Member

Committee on Homeland Security and Governmental Affairs 

United States Senate

The Honorable Carl Levin 

Chairman

The Honorable James M. Inhofe 

Ranking Member

Committee on Armed Services 

United States Senate

The Honorable Darrell E. Issa 

Chairman

The Honorable Elijah E. Cummings 

Ranking Member

Committee on Oversight and Government Reform 

House of Representatives

The Honorable Howard P. “Buck” McKeon

Chairman

The Honorable Adam Smith

Ranking Member

Committee on Armed Services

House of Representatives
Page 14 GAO-13-133R Interagency Contracting

Enclosure I: Objectives, Scope, and Methodology

Our objectives were to assess: (1) progress made by the Office of Management and 

Budget’s (OMB) Office of Federal Procurement Policy (OFPP) and the General Services 

Administration (GSA) in addressing interagency contracting issues identified in our 2010 

report on interagency contracting, and (2) progress made by agencies in implementing 

policy changes related to the use of interagency contracts.

To address our objectives, we reviewed corrective action plans developed by OFPP and 

GSA to respond to issues identified in our 2010 report, along with policy memorandums, 

guidance, and studies on efforts to address interagency contracting issues. We also met 

with OFPP and GSA officials to discuss their progress in implementing these actions. To 

examine agencies’ progress in implementing recent interagency contracting policy changes 

on a governmentwide basis, we reviewed OFPP’s analysis of reports from the 24 Chief 

Financial Officer (CFO) Act agencies on management controls for interagency acquisitions. 

We did not independently verify the information that OFPP collected from the 24 Chief 

Financial Officer Act agencies. However, we reviewed OFPP’s data collection instrument, 

discussed the findings with OFPP officials, and reviewed OFPP’s analysis for completeness 

and obvious errors. We found the data sufficiently reliable for the purposes of this report. We 

also met with agency officials from the Department of Defense (DOD), GSA, and the 

Department of the Interior and reviewed agency policies, guidance, templates, ordering 

guidelines, and training materials implementing new interagency contracting regulations 

incorporated into subpart 17.5 of the Federal Acquisition Regulation (FAR) in December 

2010.21

 

We selected DOD, GSA, and the Department of the Interior for further review based 

on the amount of obligations or support provided by these agencies through interagency 

acquisitions, as reported in the Federal Procurement Data System-Next Generation (FPDSNG).

To further assess the implementation of recent interagency contracting policy changes, we 

used FPDS-NG data on new awards made during fiscal year 2011 to select 20 direct 

interagency orders and 20 assisted interagency contracts and orders from DOD, the largest 

user of interagency contracts, with the highest total obligations in fiscal year 2011.22

 

21An interim rule was issued and became effective on December 13, 2010 and the final rule was issued on 

January 3, 2012, and became effective on February 2, 2012. 75 Fed. Reg. 77733; 77 Fed. Reg. 183.

For the 

direct acquisitions, we selected DOD orders in which the contract instrument used was 

associated with another agency, such as GSA. For assisted acquisitions, we selected 

contracts and orders in which DOD was the funding agency, while another agency (such as 

GSA or Interior) was the contracting agency. To assess DOD’s implementation of OFPP 

guidance and FAR rules related to the use of interagency contracts, we reviewed the award 

document and best procurement approach determination for each direct order. For assisted 

orders, we reviewed documentation of the solicitation date, the award document, best 

procurement approach determination, and interagency agreement between the requesting 

and servicing agency. For a select number of orders in which the award date was prior to or 

shortly after the December 2010 issuance of interim FAR rules that required agencies to 

complete a best procurement approach determination, we assessed the determination 

provided against prior OFPP guidance that required agencies to make a “best interest” 

determination before using an interagency contract and the DOD federal acquisition 

22Our prior work has found problems with FPDS-NG data reliability; however, for the purposes of this review we 

found the data to be sufficiently reliable for selecting orders to review. For an overview of prior findings on FPDSNG, see GAO, Federal Contracting: Observations on the Government’s Contracting Data Systems, GAO-09-

1032T (Washington, D.C.: Sept. 29, 2009). 
Page 15 GAO-13-133R Interagency Contracting

regulation supplement (DFARS) that also requires DOD organizations to determine whether 

use of a non-DOD contract is in the best interest of DOD.

We conducted this performance audit from June 2012 to January 2013 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 findings and conclusions based on our audit objectives. We believe the 

evidence obtained provides a reasonable basis for our findings and conclusions based on

our audit objectives.
Page 16 GAO-13-133R Interagency Contracting

Enclosure II: Comments from the Department of Defense
Page 17 GAO-13-133R Interagency Contracting
Page 18 GAO-13-133R Interagency Contracting
Page 19 GAO-13-133R Interagency Contracting

Enclosure III: Comments from the General Services Administration

(121081)
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