FEDERAL 

ACQUISITIONS

Congress and the 

Executive Branch 

Have Taken Steps to 

Address Key Issues, 

but Challenges 

Endure 

Report to Congressional Committees

September 2018

GAO-18-627

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-18-627, a report to 

congressional committees

September 2018

FEDERAL ACQUISITIONS

Congress and the Executive Branch Have Taken 

Steps to Address Key Issues, but Challenges Endure

What GAO Found

Congress and the executive branch have taken numerous actions to address key 

issues the Acquisition Advisory Panel (Panel) identified in its 2007 report, but 

these actions have not eliminated some enduring challenges. The figure below 

presents the key issues the Panel addressed in relation to the life cycle of a 

typical contract as identified by GAO.

Figure: Key Issues the Acquisition Advisory Panel Raised, by Contracting Life Cycle Phase

Three of the key issues, and the corresponding challenges, align with specific 

phases in the contracting life cycle:

• Requirements Definition: The Panel found that fully identifying 

requirements before a contract is awarded is key to achieving the 

benefits of competition. GAO has found that unrealistic requirements 

have contributed to poor program outcomes at the Department of 

Defense (DOD), and that the Army’s requirements development 

workforce decreased by 22 percent from 2008 to 2017.

• Competition and Pricing: The Panel said that competition can help 

reduce prices. GAO’s work shows that competition rates have remained 

steady government-wide, and declined at DOD. See figure below.

Figure: Government-wide Competition Rates Compared to Civilian and Defense Agencies, 

Fiscal Years 2013-2017

View GAO-18-627. For more information, 

contact William T. Woods at (202) 512-4841 or 

WoodsW@gao.gov.

Why GAO Did This Study

In fiscal year 2017, federal agencies 

obligated more than $500 billion to 

acquire products and services. These 

products and services included military 

aircraft, information technology

software, and maintenance services.

Amid this large spending, the federal 

government has taken steps to reform 

federal acquisitions, increase 

efficiencies, and improve results. For 

example, in the Services Acquisition 

Reform Act of 2003, Congress 

established the Acquisition Advisory 

Panel to review federal acquisition 

laws, regulations, and policies; and

identify opportunities for improvement.

The Panel issued its final report in 

2007, addressing topics that span all 

three phases of the contracting life 

cycle identified by GAO: pre-contract 

award, contract award, and postcontract award.

GAO was asked to follow up on the

Panel’s report and identify progress 

made since 2007. This report identifies

the actions the federal government has 

taken to address key issues raised in 

the Panel’s report, and the challenges 

that remain. GAO reviewed 

documentation and interviewed 

personnel from federal agencies and 

the private sector. These personnel 

included staff from OMB that are 

responsible for federal procurement 

policy, as well as staff supporting a 

panel addressing DOD’s acquisition 

regulations and processes, known as 

the Section 809 Panel. GAO also 

leveraged its large body of work on 

federal acquisitions. 
GAO has also found that agencies are sometimes using bridge 

contracts—which GAO has generally defined as either extensions to 

existing contracts or new short-term, sole-source contracts—to avoid a 

lapse in service caused by delay of a follow-on contract award. In some 

instances, bridge contract awards delay opportunities for competition and 

can place the government at risk of paying higher prices for multiple 

years. The figure below depicts how an Army bridge contract for 

computer support services planned for 12 months was extended to 42 

months.

Figure: Timeline for an Army Computer Support Services Contract

Further, GAO’s work shows that agencies have not fully embraced

initiatives and techniques intended to reduce the prices they pay, 

including consolidated purchasing approaches and robust market 

research.

• Contractor Oversight: The Panel raised questions about the capacity of 

federal agencies to oversee contractors. GAO has found that agencies 

continue to award contracts warranting increased management attention 

at a steady rate, such as contracts for management support services.

With contracts like those for management support services, there is an 

increased risk that contractors may perform tasks reserved for the 

government. Additionally, GAO found that heavy workloads at the 

Department of Veterans Affairs have made it difficult for officials who 

oversee contractors to ensure contractors adhere to contract terms. 

Three of the key issues, and the corresponding challenges, cut across all the 

phases of the contracting life cycle: 

• Acquisition Workforce: The Panel found that the federal acquisition 

workforce faces workload and training challenges. GAO’s work has 

shown that DOD has enhanced its workforce, but some workforce gaps 

endure at DOD and across agencies.

• Federal Procurement Data: The Panel found that the government’s 

primary repository for acquisition data contained some unreliable data. 

Also, GAO has found that the system has demonstrated limitations. For 

example, guidance from the Office of Management Budget (OMB) 

required that agencies collect specific contract award data, but the 

system did not have the capability to do so. 

• Small Business Participation: The Panel found a number of challenges 

hindering agencies’ efforts to meet small business goals. GAO has found 

small business participation has increased, but many agencies are not in 

full compliance with requirements governing Offices of Small and 

Disadvantaged Business Utilization (OSDBUs). For example, the 

directors of these offices should report directly to agency heads or their 

deputies, but not all agencies have established this type of direct 

reporting relationship. 

What GAO Recommends

GAO is not making any new 

recommendations in this report, but it 

has made numerous 

recommendations in the past. The 

agencies have agreed with many of 

GAO’s recommendations, and have 

implemented some of them but not 

others. For example, GAO has made 

the following recommendations.

• The Army should assess the 

resources needed for the 

requirements development 

process. The Army agreed, but it 

has not yet done so.

• OMB should provide guidance for 

agencies to manage bridge 

contracts. OMB agreed and has 

drafted management guidance but 

has not yet finalized it. 

• Certain federal agencies should 

take steps to document how they 

conduct market research. The

agencies agreed and did so. 

• The Department of Veterans 

Affairs should develop tools to 

help oversee contracts. The 

department agreed and did so.

• DOD should have issued an 

updated acquisition workforce 

plan in fiscal year 2016. DOD 

agreed and issued the plan. 

• OMB should take steps to improve 

how agencies collect certain 

procurement data. OMB generally 

agreed, but has not yet addressed 

the recommendation.

• Certain federal agencies should 

take steps to comply with OSDBUrelated requirements. Most 

agencies that provided comments 

agreed or partially agreed. Two 

agencies—the National 

Aeronautics and Space 

Administration, and the U.S. 

Agency for International 

Development—have addressed 

the recommendations. 

GAO continues to believe the 

agencies should implement all of these 

recommendations. 
Page i GAO-18-627 Federal Acquisitions

Letter 1

Background 3

Key Issue Area 1: Requirements Definition 6

Key Issue Area 2: Competition and Pricing 16

Key Issue Area 3: Contractor Oversight 29

Key Issue Area 4: Acquisition Workforce 35

Key Issue Area 5: Federal Procurement Data 42

Key Issue Area 6: Small Business Participation 46

Agency Comments and Third Party Views 52

Appendix I Objective, Scope, and Methodology 54

Appendix II Comments from the Department of Defense 56

Appendix III GAO Contact and Staff Acknowledgments 57

Table

Table 1: Example of Tiered Pricing Model 25

Figures

Figure 1: Key Issue Areas the Acquisition Advisory Panel Raised, 

by Contracting Life Cycle Phase 2

Figure 2: Government-wide Competition Rates Compared to 

Civilian and Defense Agencies, Fiscal Years 2013-2017 18

Figure 3: Timeline for an Army Computer Support Services 

Contract 21

Figure 4: Fiscal Year 2015 Actual and Potential Spending and 

Savings through Strategic Sourcing Vehicles 26

Figure 5: Government-wide Obligations for Services Requiring 

Increased Management Attention and All Other Services, 

Fiscal Years 2013-2017 32

Figure 6: Number of Agencies Achieving Small Business Goals 

Has Increased from Fiscal Years 2007 to 2017 49

Contents
Page ii GAO-18-627 Federal Acquisitions

Abbreviations 

CALC Contract-Awarded Labor Category 

CIO Chief Information Officer 

COR contracting officer’s representative

DAWDF Defense Acquisition Workforce Development Fund 

DOD Department of Defense 

eSRS Electronic Subcontracting Reporting System

FITARA Federal Information Technology Acquisition Reform Act 

FPDS-NG Federal Procurement Data System – Next Generation 

GSA General Services Administration 

IAE Integrated Award Environment 

IT information technology 

NAICS North American Industry Classification System 

NDAA National Defense Authorization Act 

OFPP Office of Federal Procurement Policy 

OMB Office of Management and Budget 

OSDBU Office of Small and Disadvantaged Business Utilization 

PBA performance-based acquisition 

Panel Acquisition Advisory Panel 

PWS performance work statement 

SBA Small Business Administration 

WSARA The Weapon Systems Acquisition Reform Act of 2009 

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-18-627 Federal Acquisitions

441 G St. N.W.

Washington, DC 20548

September 12, 2018

The Honorable Trey Gowdy

Chairman

The Honorable Elijah Cummings

Ranking Member

Committee on Oversight and Government Reform

House of Representatives

The Honorable Mark Meadows

Chairman

The Honorable Gerald Connolly

Ranking Member

Subcommittee on Government Operations

Committee on Oversight and Government Reform

House of Representatives

Federal agencies obligated more than $500 billion through contracts for 

products and services in fiscal year 2017. These products and services 

included military aircraft, information technology software, and 

maintenance services. Amid this large spending, the federal government 

has taken steps to reform the federal acquisition process, increase 

efficiencies, and improve outcomes. For example, the Services 

Acquisition Reform Act of 2003 authorized the establishment of the 

Acquisition Advisory Panel (Panel) in order to review laws and regulations 

relating to various acquisition issues government-wide.1 The Panel issued 

its final report in 2007, in which it identified numerous acquisition 

challenges facing the federal government, and suggested actions to 

address those challenges.

You asked us to review the progress the federal government has made 

since the Panel issued its final report. Our report identifies actions the 

federal government has taken to address the key issues in the Panel’s 

report, and some of the acquisition challenges that remain. To frame the 

key issues the Panel identified, we reviewed the Panel report, categorized 

its findings by higher-order issue areas, and organized these issue areas 

according to the phases of the contracting life cycle identified by GAO:

 1

National Defense Authorization Act for Fiscal Year 2004, Pub. L. No. 108-136, § 1423 

(Nov. 24, 2003).

Letter
Page 2 GAO-18-627 Federal Acquisitions

• Pre-award phase activities generally include defining requirements, 

acquisition planning, and preparing the solicitation.

• Award phase activities generally involve the evaluation of offers, price 

negotiations and discussions with offerors, and the selection of 

awardees.

• Post-award phase activities generally involve contract administration, 

agency oversight of contractor performance, and closeout of the 

contract.

Figure 1 depicts how the six key issue areas identified by the Panel align 

with the contracting life cycle. Three of the issue areas—requirements 

definition, competition and pricing, and contractor oversight—align with 

specific phases of the contracting life cycle. The other three issue areas—

acquisition workforce, federal procurement data, and small business 

participation—cut across all phases of the life cycle.

Figure 1: Key Issue Areas the Acquisition Advisory Panel Raised, by Contracting Life Cycle Phase

To identify actions the federal government has taken to address 

challenges in these key issue areas, and challenges that remain, we 

reviewed prior GAO reports, relevant legislation, and acquisition guidance 

issued by the Office of Management and Budget’s (OMB) Office of 

Federal Procurement Policy (OFPP), the Department of Defense (DOD), 

the General Services Administration (GSA), and the Small Business 

Administration (SBA). We also interviewed officials from these agencies 
Page 3 GAO-18-627 Federal Acquisitions

and the Section 809 Panel, which was recently established by the 

Secretary of Defense, as required by Congress, to focus on acquisition 

issues at the Department of Defense.

2 We reviewed reports the Section 

809 panel issued in May 2017, January 2018, and June 2018 to identify 

commonalities with the Acquisition Advisory Panel’s 2007 report. Finally, 

we obtained comments on our preliminary findings from members of the 

Chief Acquisition Officer’s Council—a group of senior acquisition leaders 

which OMB established to monitor and improve the federal acquisition 

system—and two groups representing companies that sell products and 

services to federal agencies. We focused our review on actions taken 

from 2007, when the Panel issued its final report, to 2018. See appendix I 

for more information on our objective, scope and methodology.

We conducted this performance audit from July 2017 to September 2018 

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 that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

The Services Acquisition Reform Act of 2003 required the Administrator 

for Federal Procurement Policy to establish an acquisition advisory panel 

(referred to as the Panel) to review federal acquisition laws, regulations, 

and policies; and identify opportunities to enhance how agencies award 

and administer contracts for the acquisition of goods and services.3 The 

Administrator for Federal Procurement Policy appointed the Panel 

members in February 2005, and the Panel issued its final report in 2007.

 2

Congress authorized the Secretary of Defense to establish an advisory panel on 

streamlining acquisition regulations (the Section 809 Panel) in the National Defense 

Authorization Act for Fiscal Year 2016. See Pub. L. No. 114-92, §809 (Nov. 25, 2015).

See also National Defense Authorization Act for Fiscal Year 2018, Pub. L. No. 115-91, § 

803(c), 883 (Dec. 12, 2017); National Defense Authorization Act for Fiscal Year 2017, 

Pub. L. No.114-328, § 863(d) (Dec. 23, 2016).

3

See Pub. L. No. 108-136, § 1423.

Background
Page 4 GAO-18-627 Federal Acquisitions

We have a long history of reporting on the key issue areas that the Panel 

addressed in 2007. In 2007, we reported that the Panel’s findings were 

largely consistent with our prior work.4 For example, the Panel found that 

defining requirements is key to achieving the benefits of competition. 

Similarly, we have issued numerous reports that address the importance 

of robust requirements definition. Panel members also recognized a 

significant mismatch between the demands placed on the acquisition 

workforce and the personnel and skills available to meet those demands. 

In 2006, we testified that DOD’s acquisition workforce, the largest 

component of the government’s acquisition workforce, remained relatively 

unchanged while the amount and complexity of contract activity had 

increased.

Since then, we have issued many reports and testimonies on topics 

ranging from requirements development at DOD, government-wide 

competition rates, small business, and the acquisition workforce, among 

others.5 We also track a number of key acquisition issues—such as DOD 

contract management and weapons systems acquisitions—through our 

high-risk program.6 Our high-risk program identifies government 

operations with greater vulnerabilities to fraud, waste, abuse, and 

mismanagement.

Twelve years after the Services Acquisition Reform Act of 2003 required 

the Administrator for Federal Procurement Policy to establish the Panel, 

Congress required the establishment of another advisory panel by the 

Secretary of Defense in section 809 of the National Defense Authorization 

Act (NDAA) for Fiscal Year 2016 (referred to as the Section 809 Panel), 

 4

GAO, Federal Acquisition: Oversight Plan Needed to Help Implement Acquisition 

Advisory Panel Recommendations, GAO-08-160 (Washington, D.C.: Dec. 20, 2007). 

5

See, e.g., GAO, Weapon Systems Annual Assessment: Knowledge Gaps Pose Risks to 

Sustaining Recent Positive Trends, GAO-18-360SP (Washington, D.C.: Apr. 25, 2018); 

Information Technology: Further Implementation of Recommendations Is Needed to Better 

Manage Acquisitions and Operations, GAO-18-460T (Washington, D.C.: Mar. 14, 2018); 

Defense Acquisition Workforce: Opportunities Exist to Improve Practices for Developing 

Program Managers, GAO-18-217 (Washington, D.C.: Feb. 15, 2018); Small Business 

Contracting: Actions Needed to Demonstrate and Better Review Compliance with Select 

Requirements for Small Business Advocates, GAO-17-675 (Washington, D.C.: Aug. 25, 

2017); Contracting Data Analysis: Assessment of Government-wide Trends, 

GAO-17-244SP (Washington, D.C.: Mar. 9, 2017).

6

GAO, High-Risk Series: Progress on Many High-Risk Areas, While Substantial Efforts 

Needed on Others, GAO-17-317 (Washington, D.C.: Feb. 15, 2017).

Our Work in Federal 

Acquisitions

Section 809 Panel
Page 5 GAO-18-627 Federal Acquisitions

and tasked it with reviewing applicable defense acquisition regulations 

and finding ways to streamline and improve the defense acquisition 

process, among other things.7 The Section 809 Panel is reporting on a 

number of topics related to areas covered by the 2007 Acquisition 

Advisory Panel report, including competition, acquisition workforce and 

small business participation.8 The Section 809 Panel issued an interim 

report in May 2017. Volumes I and II of its final report were issued in 

January 2018 and June 2018, respectively. Its final volume is expected in 

January 2019.

 7

See Pub. L. No. 114-92, § 809.

8

The Section 809 Panel is performing its work in 10 teams: (1) Federal Acquisition 

Regulation (FAR) to Statute Baseline, (2) Streamlined Procurement Process, (3) 

Commercial Buying, (4) Barriers to Entry, (5) Characteristics of Successful Programs, (6) 

IT Acquisition, (7) Budget, (8) Streamlining Regulations, (9) Cost Accounting Standards, 

and (10) Workforce. 
Page 6 GAO-18-627 Federal Acquisitions

Issue Area Context

Acquisition requirements describe the government’s needs when agencies procure 

products (such as major weapon systems) and services (such as engineering support) 

from contractors. Federal statute, policy and best practices emphasize the need for valid, 

clear, and achievable requirements early in the acquisition process. An example of a 

requirement for a major weapon system could include the range that a missile must be 

able to travel, while a requirement for a service acquisition could include an engineer’s 

experience and education. 

In 2007, the Panel found that defining requirements is key to achieving the benefits of 

competition because procurements with clear requirements are far more likely to 

produce competitive, fixed-price offers that meet customer needs. The Panel also found 

that the government invested in requirements definition less than the private sector, and 

that better requirements definition would help facilitate implementation of performancebased acquisition (PBA). PBA is a preferred acquisition approach that focuses on 

contractors’ deliverables rather than how they perform the work.

We have found that federal agencies continue to face challenges 

involving acquisition requirements definition.

• Congress passed a defense acquisition reform law with requirementsrelated provisions in 2009, but our work shows that DOD often begins 

programs with unrealistic requirements.

• Agencies have not consistently complied with OMB’s requirements 

relating to key provisions from an information technology (IT) 

acquisition reform law.

Key Issue Area 1: 

Requirements 

Definition
Page 7 GAO-18-627 Federal Acquisitions

• Numerous efforts have been made to improve and encourage 

commercial item procurements in an attempt to take advantage of 

market innovations and reduce acquisition costs.

• DOD and GSA have taken steps to improve how personnel define 

requirements for service acquisitions, and to focus more on 

contractors’ deliverables than on how the contractors perform the 

work, but officials told us that some acquisition officials are reluctant 

to cede control of the acquisition to contractors.

We elaborate on these points below.

The 2009 Weapon Systems Acquisition Reform Act (WSARA) included 

provisions related to requirements definition for major defense acquisition 

programs.9 In December 2012, we found that WSARA was helping 

program offices identify and mitigate requirements-related risks earlier in 

the acquisition process based on our analysis of 11 weapon acquisition 

programs.10

However, we have also observed and reported that DOD has struggled to 

adequately define requirements for its largest acquisition programs. For 

example, in 2014, we found that cost and schedule growth in major 

acquisition programs can, in part, be traced to a culture in which the 

military services begin programs with unrealistic requirements. This cost 

and schedule growth decreases DOD’s buying power, reducing the 

aggregate military capability the department can deliver over time.11

In 2017, we found that the Army’s requirements development workforce 

had decreased by 22 percent since 2008, with some requirements 

development centers reporting more significant reductions.12 We 

 9

See Weapons Systems Acquisition Reform Act of 2009, Pub. L. No. 111-23 (May 22, 

2009).

10GAO, Weapons Acquisition Reform: Reform Act Is Helping DOD Acquisition Programs 

Reduce Risk, but Implementation Challenges Remain, GAO-13-103 (Washington, D.C.: 

Dec. 14, 2012).

11GAO, Defense Acquisitions: Observations on Whether the Military Service Chiefs’ Role 

in Managing and Overseeing Major Weapon Programs Should Be Expanded, 

GAO-14-520 (Washington, D.C.: May 1, 2014) and Facilities Modernization: DOD 

Guidance and Processes Reflect Leading Practices for Capital Planning, GAO-15-489 

(Washington, D.C.: July 27, 2015).

12GAO, Army Weapon System Requirements: Need to Address Workforce Shortfalls to 

Make Necessary Improvements, GAO-17-568 (Washington, D.C.: June 22, 2017).

2009 Defense Acquisition 

Reform Law Included 

Provisions Related to 

Requirements Definition, 

but DOD Still Faces 

Challenges

Section 809 Panel

In its June 2018 report, the Section 809 Panel 

suggested that the Department of Defense 

better align its acquisition, requirements, and 

budget processes. 

It also suggested that the requirements 

system focus on capabilities needed to 

achieve strategic objectives instead of 

predefined systems.

Source: Section 809 Panel June 2018 report.| GAO-18-627
Page 8 GAO-18-627 Federal Acquisitions

recommended that the Secretary of the Army conduct a comprehensive 

assessment to better understand the resources necessary for the 

requirements development process and determine the extent to which the 

shortfalls can be addressed given other funding priorities. While the Army 

agreed with the recommendation, it remains unaddressed.

WSARA also required that DOD use competitive prototyping,13 which we 

generally define as two or more competing vendors producing prototypes 

for weapon systems before a design is selected for further development, 

in major defense acquisition programs as applicable.14 We have found 

that prototyping has benefited acquisition programs by, among other 

things, helping programs understand their requirements, and we have 

found that competitive prototyping has generated additional benefits, such 

as improving the quality of systems offered.15 Even though Congress 

repealed WSARA’s competitive prototyping requirement in 2015,

Congress simultaneously codified a preference for prototyping—including 

competitive prototyping—as a risk mitigation technique, which has been 

implemented in DOD policy.16 Further, the fiscal year 2017 and 2018 

NDAAs included several new prototyping-related provisions.17

As of 2018, DOD Weapons System Acquisitions remains on our High 

Risk list.18 Among other things, we reported that DOD needs to build on 

existing reforms intended to improve requirements definition and, 

specifically, examine best practices to better integrate critical 

requirements.

 13Prototyping can be generally defined as the development and testing of a model or 

system design that uses available or emerging technologies. GAO, Weapons Systems: 

Prototyping Has Benefited Acquisition Programs, but More Can Be Done to Support 

Innovation Initiatives, GAO-17-309 (Washington, D.C.: June 27, 2017).

14See Pub. L. No. 111-23, § 203; GAO-17-309.

15GAO-17-309.

16See Pub. L. No. 114-92, § 822(b) (codified at 10 U.S.C. § 2431b). See also DOD 

Instruction 5000.02, Operation of the Defense Acquisition System (Jan. 7, 2015) (incorp. 

change 3, eff. Aug. 10, 2017). Program acquisition strategies generally are to include the 

use of competitive prototypes before the start of system development to the maximum 

extent practicable and consistent with the economical use of available financial resources. 

See 10 U.S.C. § 2431b(c).

17See, e.g., Pub. L. No. 115–91, § 215; Pub. L. No. 114-328, § 806.

18GAO-17-317.
Page 9 GAO-18-627 Federal Acquisitions

The 2014 Federal Information Technology Acquisition Reform Act 

(commonly referred to as FITARA) expanded the role of certain agency 

Chief Information Officers (CIOs) to improve acquisitions of information 

technology (IT) products and services.19 Several aspects of FITARA 

target requirements definition and OMB has expanded upon and 

reinforced these aspects in a number of ways through government-wide 

guidance.20 However, as of 2018, Improving the Management of IT 

Acquisitions and Operations remains on our High Risk List because 

agencies have not completely implemented certain FITARA requirements 

as implemented by OMB or addressed a number of our

recommendations, including several that target requirements definition.

FITARA includes a provision generally requiring that agency heads 

ensure CIOs review and approve all IT contracts prior to award, unless 

that contract is associated with a non-major investment.21 Additionally, 

OMB’s implementing guidance states that CIOs—or other authorized 

officials, as appropriate—should review and approve IT acquisition plans 

or strategies as applicable.22 These reviews can provide CIOs greater 

insight into IT acquisition requirements. However, in January 2018, we 

found that officials at 14 of 22 selected agencies did not identify, or help 

identify, IT acquisitions for CIO review as required by OMB’s guidance.23

The same number of agencies did not fully satisfy OMB’s requirement 

that the CIO or other appropriate parties review and approve IT 

 19See Carl Levin and Howard P. “Buck” McKeon National Defense Authorization Act for 

Fiscal Year 2015, Pub. L. No. 113-291, § 831, et seq. (Dec. 19, 2014); 40 U.S.C. § 11319 

(stating “[t]he term ‘information technology’ has the meaning given to it under capital 

planning guidance issued by the Office of Management and Budget.”). The term “covered 

agency” means each agency listed in 31 U.S.C. § 901(b). See also GAO, Information 

Technology: Continued Implementation of High-Risk Recommendations Is Needed to 

Better Manage Acquisitions Operations and Cybersecurity, GAO-18-566T (Washington, 

D.C.: May 23, 2018).

20See OMB, Memorandum for Heads of Executive Departments and Agencies, Subject: 

Management and Oversight of Federal Information Technology, M-15-14 (June 10, 2015). 

21See Pub. L. No. 113-291, § 831; 40 U.S.C. § 11319(c). According to OMB, non-major 

investments are those that do not meet the criteria of major IT investments. See GAO, 

Information Technology: Agencies Need to Involve Chief Information Officers in Reviewing 

Billions of Dollars in Acquisitions, GAO-18-42 (Washington, D.C.: Jan. 10, 2018).

22See OMB, Memorandum for Heads of Executive Departments and Agencies, Subject: 

Management and Oversight of Federal Information Technology, M-15-14 (June 10, 2015).

23GAO-18-42.

Agencies Have Not 

Consistently Complied 

with a Key IT Acquisition 

Reform Law

CIO Responsibilities
Page 10 GAO-18-627 Federal Acquisitions

acquisition plans or strategies. As a result, agencies increased the risk 

that they were awarding IT contracts that were duplicative, wasteful, or 

poorly conceived.24

FITARA requires that CIOs certify that their agencies are adequately 

implementing incremental IT development, as defined in capital planning 

guidance issued by OMB.25 We previously reported that OMB has 

emphasized the need to deliver investments in smaller parts, or 

increments, to reduce risk, deliver capabilities more quickly, and facilitate 

the adoption of emerging technologies.26 We have previously reported 

that a key step in implementing incremental development methods can 

include defining requirements appropriately, such as by involving end 

users and stakeholders.

27

We have found that agencies have struggled to adhere to FITARA’s 

incremental development requirements, as implemented in OMB’s capital 

planning guidance.28 In 2017, we found less than 65 percent of major IT 

software development investments were reported as being certified by the 

agency CIO for implementing adequate incremental development.29

FITARA also includes provisions addressing government software license 

management, calling for the identification and development of a strategic 

sourcing initiative to enhance government-wide acquisition, shared use, 

 24GAO-18-42.

25See Pub. L. No. 113-291, § 831(b)(1)(B)(ii); 40 U.S.C. § 11319(b)(1)(B)(ii). “Adequate 

incremental development” is defined in OMB guidance as follows: “For development of 

software or services, planned and actual delivery of new or modified technical functionality 

to users occurs at least every six months.” See OMB, Memorandum for Heads of 

Executive Departments and Agencies, Subject: Management and Oversight of Federal 

Information Technology, M-15-14 (June 10, 2015). See also GAO-18-460T.

26GAO, Information Technology: Implementation of IT Reform Law and Related Initiatives 

Can Help Improve Acquisitions, GAO-17-494T (Washington, D.C.: Mar. 28, 2017).

27GAO, Information Technology Reform: Agencies Need to Increase Their Use of 

Incremental Development Practices, GAO-16-469 (Washington, D.C.: Aug. 16, 2016). 

28See 40 U.S.C. § 11319(b)(1)(B)(ii); OMB, FY 2017 IT Budget – Capital Planning 

Guidance (Revised June 22, 2015).

29GAO, Information Technology Reform: Agencies Need to Improve Certification of 

Incremental Development, GAO-18-148 (Washington, D.C.: Nov. 7, 2017).

Incremental Development

Software Licenses
Page 11 GAO-18-627 Federal Acquisitions

and dissemination of software.30 In May 2014, we found that 22 of 24 

major agencies did not have comprehensive license policies and only 2 

had comprehensive license inventories.31 Without comprehensive policies 

and inventories, agencies are poorly positioned to understand their 

requirements for software licenses. We recommended that OMB issue a 

directive to help guide agencies in managing licenses and that the 24 

agencies improve their policies and practices for managing licenses. As 

of July 2018, OMB had addressed our recommendation, but many of the 

recommendations to other agencies remained unaddressed.

Purchasing commercial items helps an agency take advantage of market 

innovations, increase its supplier base, and reduce acquisition costs. The 

commercial item definition includes items customarily used by and sold 

(or offered) to the general public, including products with minor 

modifications.32 Federal agencies can purchase commercial items to 

meet many requirements, from the relatively simple, such as office 

furnishings and housekeeping services, to the more complex, such as 

maintenance services and space vehicles. Further, contracting officers 

can use streamlined solicitation procedures—which can reduce the time 

needed to solicit offers from vendors—if they determine that the product

or service being procured is commercial.33 We reported that federal 

agencies used commercial item procedures for over $100 billion of goods 

and services in 2015.

The issue of commercial item procurements has been a concern of 

Congress for a number of years. In the fiscal year 2018 NDAA, and four 

of its predecessor acts, Congress specified how DOD is to define and 

 30See Pub. L. No. 113-291, § 837. Strategic sourcing is an acquisition strategy that moves 

away from numerous individual procurements of goods and services to fewer consolidated 

purchases intended to improve pricing for federal agencies.

31GAO, Federal Software Licenses: Better Management Needed to Achieve Significant 

Savings Government-Wide, GAO-14-413 (Washington, D.C.: May 22, 2014).

32GAO, Defense Contracts: Improved Information Sharing Could Help DOD Determine

Whether Items Are Commercial and Reasonably Priced, GAO-18-530 (July 31, 2018). For 

a complete definition of “commercial item,” see FAR § 2.101.

33See FAR § 12.603. 

Congress and DOD Have 

Worked to Encourage 

Commercial Item 

Procurements
Page 12 GAO-18-627 Federal Acquisitions

purchase commercial items.34 For example, a fiscal year 2017 provision 

set a preference for certain commercial services, such as facilities-related 

or knowledge-based services, by prohibiting defense agencies from 

entering into non-commercial contracts above $10 million to meet those 

requirements without a written determination that no commercial services 

can meet the agency’s needs.35

In January 2018, DOD revised its regulations and corresponding 

procedures, guidance, and information related to the procurement of 

commercial items to reflect recent legislative changes.36 DOD also 

updated its acquisition regulations to provide guidance to contracting 

officers for making price reasonableness determinations, promoting 

consistency in making commercial item determinations, and expanding 

opportunities for nontraditional defense contractors to do business with 

DOD. The Department also updated its Guidebook for Acquiring 

Commercial Items, which includes information on how to define, 

determine, and price commercial items, to reflect the regulatory 

changes.37

DOD has also created six commercial item Centers of Excellence to 

provide analytical support and assist in both the timeliness and 

consistency of commercial item determinations. The centers are staffed 

with engineers and price/cost analysts to help contracting officers with 

market analysis, commercial item reviews and determinations, and 

commercial pricing analysis. The centers also provide training and 

assistance to the DOD acquisition community on various techniques and 

tools used to evaluate commercial items and commercial item pricing.

 34See Pub. L. No. 115-91, Div. A, Title VIII, Subtitle E; Pub. L. No.114-328, Div. A, Title

VIII, Subtitle F; Pub. L. No. 114-92, Div. A, Title VIII, Subtitle E; Pub. L. No. 113-291, § 

815; National Defense Authorization Act for Fiscal Year 2013, Pub. L. No. 112-239 § 822

(Jan. 2, 2013). 

35See Pub. L. No.114-328, § 876 (citing 10 U.S.C. § 2377(c)(2), which states the head of 

an agency shall use the results of market research to determine whether there are 

commercial items that meet the agency’s needs, among other things).

36See 83 FR 4431 (Jan. 31, 2018) (describing the regulatory implementation of sections of 

the National Defense Authorization Acts for Fiscal Years 2013, 2016, and 2018).

37See Department of Defense, Office of the Secretary of Defense Acquisition, Technology, 

and Logistics, Department of Defense Guidebook for Acquiring Commercial Items, Part A: 

Commercial Item Determination (January 2018). 

Section 809 Panel

In its January 2018 report, the Section 809 

Panel proposed a new approach for using 

commercial items to meet requirements. The 

panel proposed that Congress and the 

Department of Defense (DOD) tailor the 

department’s acquisition approach based on 

the level of customization a given product 

entails. For readily available commercial 

items, or those requiring minor customization, 

the panel stated that DOD should be willing 

and able to reduce management and 

oversight to capitalize on the nondefense 

marketplace.

In its June 2018 report, the Section 809 Panel 

suggested additional statutory and regulatory 

changes to simplify commercial item 

procurements.

Source: Section 809 Panel January and June 2018 reports.| 

GAO-18-627
Page 13 GAO-18-627 Federal Acquisitions

Finally, the fiscal year 2018 NDAA directed GSA to establish a program to 

procure commercial items through commercial e-commerce portals, 

which can generally be described as online marketplaces.38 OMB was 

charged with carrying out the program’s implementation phases.39 GSA 

issued the initial implementation plan in March 2018, and the next phase 

of implementation will entail market analysis and consultation with 

industry and agencies.40

In 2017, we found that federal agencies procured over $272 billion in 

services in fiscal year 2015, which was approximately 60 percent of total 

contract obligations for that year.41 We’ve also previously reported that 

services contracts are sometimes awarded for professional and 

management support services that can put contractors in a position to 

inappropriately influence government decisionmaking if proper oversight 

is not provided.42 As we previously reported, in 2009, DOD’s Defense 

Acquisition University introduced a Services Acquisition Workshop to 

provide training and guidance on developing service acquisition 

requirements. The workshop brings together the key personnel 

responsible for an acquisition to discuss the requirements and how they 

will know if a contractor has met those requirements. During the 

workshop, the teams develop the language that will articulate the 

requirements, and by the end of the process, the goal is to have draft 

acquisition documents. We reported in 2013 that DOD mandated the use 

 38See Pub. L. No. 115-91, § 846(a), (k). The fiscal year 2018 NDAA defines a “commercial 

e-commerce portal” as a commercial solution providing for the purchase of commercial 

products aggregated, distributed, sold, or manufactured via an online portal. The NDAA 

states that the term does not include an online portal managed by the government for, or 

predominantly for use by, government agencies.

39See Pub. L. No. 115-91, § 846(c).

40See GSA, Procurement through Commercial E-Commerce Portals: Implementation Plan 

(March 2018). See Pub. L. No. 115-91, § 846(c)(2) (describing Phase II of the 

implementation). 

41GAO-17-244SP.

42GAO, Managing Service Contracts: Recent Efforts to Address Associated Risks Can Be 

Further Enhanced, GAO-12-87 (Washington, D.C.: Dec. 7, 2011).

Efforts to Improve Service 

Acquisition Requirements 

Have Not Fully Overcome 

Cultural Resistance
Page 14 GAO-18-627 Federal Acquisitions

of the workshop for service acquisitions valued at $1 billion and above, 

and encouraged its use for acquisitions valued at $100 million or more.43

Performance-based acquisition (PBA) is, as the Panel reported in 2007, a 

preferred commercial technique. PBA focuses on contractors’

deliverables rather than how they perform the work. Rather than using 

traditional statements of work that define requirements in great detail, 

PBA uses performance work statements (PWS) that define requirements 

more generally based on desired outcomes.44 We have reported that 

defining requirements this way has been a struggle for DOD for several 

years.45 Additionally, we have found that implementing PBA can be 

particularly challenging when acquiring certain services.46 Services differ 

from products in several aspects and can offer challenges when 

attempting to define requirements and establish measurable, 

performance-based outcomes.

In 2012, we found that the Defense Acquisition University developed an 

Acquisition Requirements Roadmap Tool, which is an online resource 

designed to help personnel write requirements for PBA and create preaward documents, including requirements documents, using a 

standardized template. Additionally, in 2018, GSA updated its Steps to 

Performance-Based Acquisition guidance for managing PBAs and made 

sample PBA planning documents available to contracting officers across 

the federal government. The updated PBA guidance is a start-to-finish set 

of instructions for planning and executing a PBA, and the planning 

documents include examples of requirements documents, such as 

performance work statements, which set forth the contractor’s expected 

outcomes for the acquisition.

 43GAO, Defense Acquisitions: Goals and Associated Metrics Needed to Assess Progress 

in Improving Service Acquisition, GAO-13-634 (Washington, D.C.: June 27, 2013); DOD 

Office of the Under Secretary of Defense (USD), Memorandum, Subject: Service 

Acquisition Workshop (Dec. 6, 2012).

44See FAR § 2.101; FAR Subpart 37.6.

45See for example, GAO, Defense Acquisitions: Further Actions Needed to Address 

Weaknesses in DOD’s Management of Professional and Management Support Contracts, 

GAO-10-39 (Washington, D.C.: Nov. 20, 2009). 

46GAO, Defense Contracted Services: DOD Needs to Reassess Key Leadership Roles 

and Clarify Policies for Requirements Review Boards, GAO-17-482 (Washington, D.C.: 

Aug. 31, 2017); GAO-10-39.
Page 15 GAO-18-627 Federal Acquisitions

During the course of this review, we identified that some cultural 

resistance to PBA has endured. Under PBA, which is structured around 

the results to be achieved as opposed to the manner in which the work is 

to be performed, a PWS may be prepared by a contractor in response to 

an agency’s statement of objectives.47 A PWS is a type of statement of 

work that describes the required results in clear, specific and objective 

terms with measurable outcomes.48 While some DOD and GSA officials 

reported that PBA has become an increasingly standard approach, other 

DOD officials told us that some acquisition officials are still reluctant to 

give contractors control over how agencies’ requirements will be met 

under PBA because they fear that they may not get what they need. The 

officials we spoke with asserted it is difficult to overcome decades of 

conducting federal acquisition using government-drafted statements of 

work that outline—often in precise detail—how an agency expects a 

contractor to perform work.

 47See FAR § 37.603.

48See FAR § 2.101.
Page 16 GAO-18-627 Federal Acquisitions

Issue Area Context

Federal regulations generally require that agencies determine that the prices proposed 

by contractors are fair and reasonable before purchasing goods or services. Agencies 

normally establish a fair and reasonable price through competitions where multiple 

offerors submit proposals. Competition is considered the cornerstone of a sound 

acquisition process and a critical tool for the government. It helps agencies achieve the 

best prices and return on investment for taxpayers. 

Federal statutes and regulations permit agencies to award contracts noncompetitively 

in certain circumstances. Under those circumstances, agencies may obtain other types 

of data—for example via market research—to determine whether prices proposed by 

contractors are fair and reasonable. 

In 2007, the Panel found that the private sector relied heavily on competition and 

rigorous market research to effectively and efficiently buy products and services. The 

Panel also found the federal government could improve competition and pricing through 

greater adoption of commercial practices. Further, the Panel cited our prior findings 

about interagency contracting—a contracting approach in which an agency either 

places an order directly against another agency’s indefinite-delivery contract, or uses 

another agency’s contracting operation to obtain goods or services. This approach can 

reduce the prices the government pays for goods and services, but we had found that 

interagency contracts did not always adhere to federal procurement laws, regulations, 

and sound contracting practices.

We have found that federal agencies’ efforts to increase competition and 

improve pricing have had limited success.

Key Issue Area 2: 

Competition and 

Pricing
Page 17 GAO-18-627 Federal Acquisitions

• OFPP and DOD have taken steps to increase competition rates, but 

the government-wide competition rate has remained steady, while 

DOD’s rate has declined over the past 5 years.

• Agencies facing acquisition planning obstacles are sometimes using 

bridge contracts, which we have generally defined as extensions to 

existing contracts or new short-term, sole-source contracts to avoid a 

lapse in service caused by a delay in awarding a follow-on contract. In 

some instances, bridge contract awards delay opportunities for 

competition and can place the government at risk of paying higher 

prices for multiple years.

• In response to our recommendations, several agencies have taken 

steps to improve how they conduct market research and determine 

price reasonableness.

• GSA has developed new pricing tools, but is not collecting pricing 

data as it had planned. GSA officials told us pricing data helps 

contracting officers conduct market research and negotiate prices.

• OFPP has promoted consolidated purchasing approaches to improve 

pricing, but low adoption rates diminish potential savings.

• The federal government has made significant progress addressing 

challenges related to interagency contracting, where one agency uses 

another’s contract or contracting support to obtain goods or services.

We elaborate on these points below.

Despite the existence of OFPP memoranda directing agencies to 

increase competition, we found that competition rates—the percentage of 

total obligations reported for competitive contracts versus noncompetitive 

contracts—have remained largely unchanged.49 We previously reported 

that, in 2009, OFPP directed agencies to increase competition and 

reduce their spending on sole-source contracts.

50 However, in 2017, we 

found that the government-wide competition rates had remained relatively 

steady, at just below two-thirds of all contract obligations from fiscal years 

 49Competitive contract actions included contracts and orders set aside for small business 

concerns.

50GAO, Sole Source Contracting: Defining and Tracking Bridge Contracts Would Help 

Agencies Manage Their Use, GAO-16-15 (Washington, D.C: Oct. 14, 2015). See OMB 

OFPP, Memorandum for Chief Acquisition Officers and Senior Procurement Executives, 

Subject: Increasing Competition and Structuring Contracts for the Best Results (Oct. 27, 

2009).

The Government-wide 

Competition Rate Has 

Remained Steady while 

DOD’s Rate Has Declined
Page 18 GAO-18-627 Federal Acquisitions

2013 through 2017.51 Furthermore, during the same time period, DOD’s 

rate declined by over 4 percent, and civilian agency rates increased by 

1.6 percent. See figure 2.

Figure 2: Government-wide Competition Rates Compared to Civilian and Defense 

Agencies, Fiscal Years 2013-2017

We have previously identified various factors that affect competition rates, 

including the government’s preference for a specific vendor, inadequate 

acquisition planning, and overly restrictive government requirements.52

We have also identified a number of reasons why DOD’s competition 

rates have been particularly low:

 51GAO-17-244SP (defining “competition rates” as “the percentage of total obligations

reported for competitive contracts”).

52GAO, Federal Contracting: Noncompetitive Contracts Based on Urgency Need 

Additional Oversight, GAO-14-304 (Washington, D.C.: Mar. 26, 2014) and Federal 

Contracting: Opportunities Exist to Increase Competition and Assess Reasons When Only 

One Offer Is Received, GAO-10-833 (Washington, D.C.: July 26, 2010).
Page 19 GAO-18-627 Federal Acquisitions

• In 2017, we found that some companies that had not done business 

with DOD reported several barriers preventing them from competing 

for DOD contracts, including the complexity of DOD’s contracting 

process.53

• In 2014, we found that that 7 of the 14 justifications in a nongeneralizable sample of non-competitive DOD contracts cited the 

“lack of data rights” as a barrier to competition.54 Obtaining adequate 

data rights, such as unlimited rights in technical data, for instance, can 

allow the government to use, modify, and release the technical data 

used to design, produce, support, maintain, or operate an item, 

among other things.55 A long-standing factor impacting DOD’s 

competition rate has been its reliance on original equipment 

manufacturers throughout the life cycle of a program because of a 

previous decision not to purchase adequate data rights.

• In 2013, we found that DOD may be missing opportunities to 

effectively facilitate competition in future acquisitions for products and 

services previously acquired non-competitively. We reviewed 

justifications for why awards were non-competitive and found that 

some of them provided limited insight into reasons for the 

noncompetitive award, or did not fully describe actions that the 

agency could take to bring about competitive awards in future 

acquisitions of the same goods or services.56 We recommended that 

DOD identify, track, and consider the specific factors that affect 

competition when setting competition goals and develop guidance to 

 53GAO, Military Acquisitions: DOD Is Taking Steps to Address Challenges Faced by 

Certain Companies, GAO-17-644 (Washington, D.C.: July 20, 2017).

54GAO, Defense Contracting: Early Attention in the Acquisition Process Needed to 

Enhance Competition, GAO-14-395 (Washington, D.C.: May 5, 2014).

55See, e.g., DFARS § 252.227-7013 (describing rights in technical data for noncommercial 

items). This regulation defines technical data as “recorded information, regardless of the 

form or method of the recording, of a scientific or technical nature (including computer 

software documentation)... [but not including] computer software or data incidental to 

contract administration, such as financial and/or management information.” This regulation 

defines unlimited rights as “rights to use, modify, reproduce, perform, display, release, or 

disclose technical data in whole or in part, in any manner, and for any purpose 

whatsoever, and to have or authorize others to do so.” Technical data for weapon systems 

can include drawings, specifications, standards, and other details necessary to ensure the 

adequacy of item performance, as well as manuals that contain instructions for 

installation, operation, maintenance, and other actions needed to support weapon 

systems. See GAO, Defense Contracting: Actions Needed to Increase Competition, GAO13-325 (Washington, D.C.: Mar. 28, 2013).

56GAO-13-325.
Page 20 GAO-18-627 Federal Acquisitions

apply lessons learned from past procurements to help achieve 

competition in the future. We also recommended DOD collect reliable 

data on one-offer awards. DOD agreed with these recommendations, 

and implemented them in 2014.

Between 2010 and 2015, DOD’s then-Under Secretary for Acquisition, 

Technology and Logistics issued a series of Better Buying Power memos 

intended to promote competition, among other things.57 For example, 

some memos provide guidance on the effective management of technical 

data rights, which can include acquiring rights in data, as appropriate, to 

avoid future reliance on original equipment manufacturers. In 2017, we 

found that more large DOD weapon system programs were implementing 

“Better Buying Power” initiatives among other reforms, which led to better 

acquisition outcomes for some programs.58 In 2018, we further found that 

DOD programs initiated after 2010, and therefore subject to Better Buying 

Power guidance, gained nearly $5 billion in buying power—which is the 

amount of goods or services that can be purchased given a specified 

level of funding.59 The fiscal year 2018 NDAA directed the Secretary of 

Defense to ensure that DOD negotiates prices for technical data to be 

delivered under development or production contracts before selecting a 

contractor to engineer and manufacture a major weapon system, among 

other things.60

 57Department of Defense, Office of the Under Secretary of Defense for Acquisition, 

Technology and Logistics, Implementation Directive for Better Buying Power 3.0 –

Achieving Dominant Capabilities through Technical Excellence and Innovation

(Washington, D.C.: Apr. 9, 2015); Implementation Directive for Better Buying Power 2.0 –

Achieving Greater Efficiency and Productivity in Defense Spending (Washington, D.C.: 

Apr. 24, 2013); Implementation Directive for Better Buying Power – Obtaining Greater 

Efficiency and Productivity in Defense Spending (Washington, D.C.: Nov. 3, 2010); Better 

Buying Power: Guidance for Obtaining Greater Efficiency and Productivity in Defense 

Spending (Washington, D.C.: Sept. 14, 2010); and Better Buying Power – Mandate for 

Restoring Affordability and Productivity in Defense Spending (Washington, D.C.: June 28, 

2010).

58GAO, Defense Acquisitions: Assessments of Selected Weapon Programs, 

GAO-17-333SP, (Washington, D.C.: Mar. 30, 2017).

59GAO-18-360SP.

60See Pub. L. No. 115-91, § 835.
Page 21 GAO-18-627 Federal Acquisitions

When an existing contract is set to expire but the follow-on contract is not 

ready to be awarded, the government may simply extend the existing 

contract beyond the period of performance (including option years). 

Alternatively, an agency may award a new short-term sole-source 

contract to the incumbent contractor to avoid a gap in service caused by a 

delay in awarding a follow-on contract.61 These contract extensions and 

short-term sole-source contracts are often referred to as “bridge 

contracts”. Bridge contracts can be necessary tools, but they can also 

delay opportunities for competition, which we and others have noted is 

the cornerstone of a sound acquisition process.62

Additionally, bridge contracts are typically envisioned as short-term, but 

we found in 2015 that some bridge contracts spanned multiple years,

potentially undetected by agency management.63 For example, of the 29 

contracts we reviewed in-depth in 2015, six were longer than three years. 

As figure 3 illustrates, an Army bridge contract for computer support 

services was initially planned as a 12-month bridge, but because of 

subsequent bridges, ultimately spanned 42 months.

Figure 3: Timeline for an Army Computer Support Services Contract

 61See GAO-16-15 (defining “bridge contract”). Currently, there is no government-wide 

definition of a bridge contract. 

62See, e.g., GAO-10-833; OMB OFPP, Memorandum for Chief Acquisition Officers and 

Senior Procurement Executives, Subject: Increasing Competition and Structuring 

Contracts for the Best Results (Oct. 27, 2009).

63GAO-16-15. GAO’s determination that some bridge contracts spanned multiple years 

resulted from the observation that agencies would sometimes approve a series of shortterm bridge contracts.

Some Agencies Are Using 

Non-Competitive Bridge 

Contracts When Facing 

Acquisition Planning 

Obstacles
Page 22 GAO-18-627 Federal Acquisitions

Obstacles during the pre-award phase, including poor acquisition 

planning, delayed completion of requirements documents, bid protests, 

and an inexperienced and overwhelmed acquisition workforce largely 

drove the use of bridge contracts in the cases we studied. We further 

found that in the sample we reviewed, increased periods of performance 

sometimes corresponded to increased contract values, and that—

consistent with best practices—agencies paid lower prices in several 

instances after subsequent contracts were competed. We recommended 

that OFPP take steps to amend acquisition regulations to incorporate a 

definition of bridge contracts, and, in the interim, provide guidance for 

agencies to track and manage their use. OFPP agreed with the 

recommendation to provide guidance for managing bridge contracts, and 

has drafted management guidance, but has not yet finalized it as of July 

2018. This guidance includes a definition of bridge contracts.

Market research helps agencies obtain knowledge about pricing that can 

be critical to the government’s ability to determine that prices are fair and 

reasonable. Market research can include:

• Contacting knowledgeable government and industry officials,

• Obtaining information about similar items from other agencies,

• Querying government-wide databases for contract prices, and

• Reviewing the results of recent market research undertaken to meet 

similar requirements.

However, in 2014, we found that four agencies—DOD, the Department of 

Homeland Security, the Department of Transportation, and the Federal 

Aviation Administration—did not leverage many available market 

research techniques on lower dollar contracts, and, as a result, may have 

missed opportunities to promote competition.64 We recommended that the 

Secretaries of Defense and Homeland Security take action to ensure their 

acquisition personnel more clearly document the market research 

activities they conduct, and that the Secretary of Transportation (the 

Federal Aviation Administration falls under this department) update its 

 64GAO, Market Research: Better Documentation Needed to Inform Future Procurements 

at Selected Agencies, GAO-15-8 (Washington, D.C.: Oct. 9, 2014). We have also reported 

on how independent government cost estimates are used as a market research technique 

to determine that prices are fair and reasonable. GAO, Service Contracts: Agencies 

Should Take Steps to More Effectively Use Independent Government Cost Estimates, 

GAO-17-398 (Washington, D.C.: May 17, 2017).

Some Agencies Have 

Taken Steps to Improve 

How They Determine Price 

Reasonableness, but 

More Can Be Done
Page 23 GAO-18-627 Federal Acquisitions

market research guidance to include more detail on which elements of 

market research should be documented. All three agencies agreed with 

and addressed our recommendations.

In July 2018, we issued a report on DOD’s efforts to determine whether 

prices are fair and reasonable for commercial items, and we have found 

that dealing with a limited marketplace and limited price data can be a 

challenge.65 Limited market information can hinder contracting officers’

ability to make commercial item and price reasonableness 

determinations. Additionally, the inability to obtain contractor data can 

make it difficult for acquisition staff to make commercial item and price 

reasonableness determinations. We also found that better information 

sharing efforts could address some of the challenges, and recommended 

that DOD develop a strategy to better share commerciality and price 

reasonableness information across the department. DOD agreed with our 

recommendation.

GSA has developed a number of web-based tools that, according to GSA 

officials, are intended to enhance contracting officers’ understanding of 

the basis of contractors’ proposed prices, improve contracting officers’

leverage during contract negotiations, and ultimately reduce the cost of 

some government contracts. These tools are housed under GSA’s 

Acquisition Gateway, a website intended to provide federal contracting 

professionals with access to tools and resources.

• GSA has developed the Contract-Awarded Labor Category (CALC) 

tool that is intended to help federal contracting officers find awarded 

prices to use in negotiations for labor contacts. It currently contains 

pricing data from professional services and IT contracts.

• GSA has developed an independent cost estimate tool that is 

intended to help contracting personnel develop cost estimates prior to 

contract award.

• GSA has developed a Prices Paid Portal to capture how much the 

government has previously paid for certain goods and services.

Additionally, in 2016, GSA issued a Transactional Data Reporting Rule 

that requires contractors to report more granular transactional data, 

 65GAO-18-530.

GSA has Developed New 

Pricing Tools, but Some 

Agencies and Contractors 

Are Not Providing GSA 

Key Data
Page 24 GAO-18-627 Federal Acquisitions

including pricing information, to the government.66 GSA officials told us 

they anticipate that the collection of this transactional pricing data will 

greatly enhance the government’s price analyses, and provide pricing 

data for the Prices Paid Portal. GSA officials also told us that 

transactional data reporting will provide contracting officers real-time, 

prices-paid information that should help them conduct market research 

and negotiate prices faster and easier.

However, GSA officials told us that agencies do not collect and share 

pricing data in a standardized manner, and that this makes pricing 

analysis challenging. Furthermore, the Transactional Data Rule may 

provide less data than initially expected since GSA has decided to make 

reporting these data optional for contractors under certain circumstances. 

According to OMB staff, GSA is also collecting transactional data from all 

“best-in-class” contracting vehicles—those that are recommended for 

agency use as part of the OMB-directed category management effort. We 

will continue to monitor GSA’s efforts to collect pricing data.

As we have reported, category management is a multi-pronged 

acquisition approach that includes a broad set of strategies such as 

consolidated purchasing, supplier management, and improving data 

analysis and information sharing.67 Federal category management efforts 

are intended to manage entire categories of spending across the federal 

government for commonly purchased goods and services in order to 

maximize the government’s buying power and improve pricing for all 

federal buyers. In December 2014, OFPP issued a memo that directed 

GSA to develop guidance to provide agencies with consistent standards 

for the development and execution of category management.68 Category 

 66See 81 FR 41104 (June 23, 2016).

67GAO, Federal Procurement: Smarter Buying Initiatives Can Achieve Additional Savings, 

but Improved Oversight and Accountability Needed, GAO-17-164 (Washington, D.C.: Oct. 

26, 2016). “Consolidated purchasing” in this context refers to strategic sourcing and 

category management efforts.

68OMB OFPP, Memorandum for Chief Acquisition Officers and Senior Procurement 

Executives, Subject: Transforming the Marketplace: Simplifying Federal Procurement to 

Improve Performance, Drive Innovation, and Increase Savings (Dec. 4, 2014). GSA was 

directed to develop its guidance in coordination with the Strategic Sourcing Leadership 

Council, an interagency council that was established by OMB to lead the government's 

efforts to increase the use of government-wide management and sourcing of goods and 

services.

Agency Adoption of 

Consolidated Purchasing 

Approaches Has Been 

Limited, Diminishing 

Potential Savings
Page 25 GAO-18-627 Federal Acquisitions

management follows a similar government-wide effort known as strategic 

sourcing, which also strove to consolidate purchasing activities. 

According to OMB and GSA guidance, a tenet of strategic sourcing is that 

higher volume generally translates to lower prices. As we have reported, 

a key characteristic of strategic sourcing is the use of tiered pricing, 

where unit prices are reduced as cumulative sales volume increases.69

Table 1 illustrates an example of a tiered pricing model.

Table 1: Example of Tiered Pricing Model

Tiers Annual sales in dollars Discount (%) 

Base pricing < 10 million 0 

Tier 1 10 million-30 million 3 

Tier 2 30 million-60 million 5 

Tier 3 60 million-100 million 7 

Tier 4 >100 million 10 

Source: GSA guidance. | GAO-18-627

As we have reported, it is unclear whether the government will fully 

realize consolidated purchasing approaches’ potential to reduce prices. 

We have found that agencies’ adoption of strategic sourcing has 

historically been low, and that tiered price discounts negotiated with 

vendors were not reached in most instances.70 For example, we reported 

in 2016 that, in fiscal year 2015, federal agencies spent an estimated $6.9 

billion on the types of commodities—goods and services—available 

through federal strategic sourcing initiatives, but they only saved $129 

 69GAO-17-164. See also OMB, Memorandum for the Heads of Executive Departments 

and Agencies, Subject: Improving Acquisition through Strategic Sourcing, M-13-02 

(Washington D.C.: Dec. 5, 2012); 81 F.R. 69860 (Oct. 7, 2016) (proposing to rescind and 

replace OMB Memorandum M-13-02 with a new circular titled “Implementing Category 

Management for Common Goods and Services” (not issued)). Additional OFPP guidance 

includes: OMB OFPP, Memorandum for the Heads of Departments and Agencies, 

Subject: Category Management Policy 16-2: Providing Comprehensive Identity Protection 

Services, Identity Monitoring, and Data Breach Response, M-16-14 (July 1, 2016); OMB 

OFPP, Memorandum for the Heads of Departments and Agencies, Subject: Category 

Management Policy 16-1: Improving the Acquisition and Management of Common 

Information Technology: Software Licensing, M-16-12 (June 2, 2016); OMB OFPP, 

Memorandum for the Heads of Departments and Agencies, Subject: Category 

Management Policy 15-1: Improving the Acquisition and Management of Common 

Information Technology: Laptops and Desktops, M-16-02 (Oct. 16, 2015).

70See GAO, Strategic Sourcing: Improved and Expanded Use Could Save Billions in 

Annual Procurement Costs, GAO-12-919 (Washington, D.C.: Sept. 20, 2012) and 

GAO-17-164.
Page 26 GAO-18-627 Federal Acquisitions

million because of low adoption rates.71 We estimated the government 

could have saved $1.3 billion if agencies had directed more spending to 

strategic sourcing initiatives. See figure 4.

Figure 4: Fiscal Year 2015 Actual and Potential Spending and Savings through Strategic Sourcing Vehicles

In our 2016 report, we found that agencies’ adoption of the federal 

strategic sourcing initiatives was low, in part, because individual agencies 

were not held accountable for complying with their own commitment 

letters.72 In these commitment letters, agencies identified how much 

spending they planned to direct to strategic sourcing vehicles. 

 71GAO-17-164. 

72GAO-17-164. 
Page 27 GAO-18-627 Federal Acquisitions

Additionally, agencies were not held accountable for implementing 

transition plans that specified timelines for redirecting their relevant 

spending to strategic sourcing vehicles.

In 2016, we made six recommendations to OMB’s OFPP and GSA in 

order to better promote agency accountability for implementing the 

strategic sourcing initiatives and category management effort. OMB and 

GSA have taken actions to address all six recommendations, including a 

recommendation for OFPP to report on agency-specific targets for the 

use of category management that.

Although agency adoption of strategic sourcing initiatives has been low, 

we reported in 2012 and 2016 that strategic sourcing has still achieved 

significant savings for the government, and resulted in savings rates that 

are comparable to those reported by leading companies.73 For example, 

GSA officials reported that federal agencies directed almost $2 billion of 

spending through strategic sourcing contracts between fiscal years 2011 

and 2015, and achieved an estimated $470 million in savings—which 

represents an overall savings rate of about 25 percent. By comparison, 

leading companies typically achieved savings rates between 10 and 20 

percent by using strategic sourcing.

Since our 2016 analysis of savings under strategic sourcing, category 

management efforts have continued. OMB staff told us that statistics 

show early progress in category management.

Interagency contracting refers to instances when an agency either places 

an order directly against another agency’s indefinite-delivery contract, or 

uses another agency’s contracting operation to obtain goods or 

services.74 Interagency contracting can leverage the government’s buying 

power and allow agencies to meet the demands for goods and services 

efficiently. This method of contracting can reduce the prices the 

government pays for goods and services when properly managed, but it 

also poses a variety of risks.

In 2005 we reported that DOD used a Department of the Interior contract 

for information technology to obtain interrogation services quickly during 

 73GAO-12-919 and GAO-17-164.

74See FAR § 2.101.

Progress Made 

Addressing Interagency 

Contracting Challenges
Page 28 GAO-18-627 Federal Acquisitions

the Iraq War, and, as a result, six task orders for interrogation, screening, 

and other intelligence-related services were placed on an information 

technology contract.75 Our additional work found that interagency 

contracting deficiencies stemmed from increasing demands on the 

acquisition workforce, insufficient training, and—in some cases—

inadequate guidance; as well as questionable lines of responsibility for 

key functions such as requirements definition, contract negotiation, and 

contractor oversight. For these reasons, we added the management of 

interagency contracts to our High Risk list in 2005.76

In 2013, we found that the federal government had made significant 

progress in addressing challenges involving interagency contracting.77

Specifically, we found that agencies had adopted new oversight 

requirements for interagency contracts, and that OMB and GSA had 

taken steps to improve the reliability of data on interagency contracts, 

increasing transparency into how agencies used them. Therefore, we 

removed interagency contracting from our High Risk list in February 2013.

 75GAO, Interagency Contracting: Problems with DOD’s and Interior’s Orders to Support 

Military Operations, GAO-05-201 (Washington, D.C.: Apr. 29, 2005).

76GAO, GAO’s 2005 High-Risk Update, GAO-05-350T (Washington, D.C.: Feb. 17, 2005).

77GAO, High Risk Series: An Update, GAO-13-283 (Washington, D.C.: Feb. 2013).
Page 29 GAO-18-627 Federal Acquisitions

Issue Area Context 

The government uses contracts to procure a wide range of services, some of which 

warrant increased management attention because there is an increased risk that the 

contractors may perform tasks reserved for the government. The responsibility for 

overseeing contractors often falls to contracting officers’ representatives, who are 

expected to help ensure contractors perform their work in accordance with contractual 

requirements. Additionally, the Federal Acquisition Regulation (FAR) contains a 

prohibition on using personal services contracts, which are characterized by the 

employer-employee relationships they create. 

In 2007, the Panel found that uncertainty about inherently governmental functions led to 

confusion about the necessary amount of contractor oversight, and it raised questions 

about federal agencies’ capacity to oversee contractors. Additionally, the Panel 

asserted that the FAR prohibition on personal services contracts should be removed

and that new guidance should be provided to define where, to what extent, under what 

circumstances, and how agencies may procure personal services by contract.

Key Issue Area 3: 

Contractor Oversight
Page 30 GAO-18-627 Federal Acquisitions

We have found that contracts requiring increased management attention 

have posed contractor oversight challenges for federal agencies.78

• Agencies across the federal government award contracts requiring 

increased management attention, such as contracts for professional 

and management support services.

• DOD is not leveraging its annual reports to Congress on its portfolio of 

contracted services to systematically identify contracts requiring 

increased management attention.

• DOD has taken steps to improve the reliability of data on personal 

services contracts, which could help ensure contractors are 

supervised appropriately.

We elaborate on these points below.

There are benefits to using contractors to provide services, such as 

addressing surge capacity needs and providing needed expertise. But we 

and OFPP have identified the need for increased management attention 

on certain types of contracted services. These contracted services 

include professional and management support services, such as 

intelligence services and policy development.79 Additionally, some of 

these services can be closely associated with inherently governmental 

 78OMB guidance on analyzing service contract inventories has identified special interest 

functions that require “increased management attention” or “heightened management 

consideration” based on concerns that these functions can pose an increased risk of an 

agency losing control of mission and operations. See OMB OFPP, Memorandum for Chief 

Acquisition Officers and Senior Procurement Executives, Subject: Service Contract 

Inventories (Nov. 5, 2010) and OMB OFPP, Memorandum for Chief Acquisition Officers 

and Senior Procurement Executives, Subject: Service Contract Inventories (Dec. 19, 

2011).

79OMB OFPP, Memorandum for Chief Acquisition Officers and Senior Procurement 

Executives, Subject: Service Contract Inventories (Nov. 5, 2010); and OMB, OFPP 

Memorandum for Chief Financial Officers, Chief Acquisition Officers, and Senior 

Procurement Executives, Subject: Reduced Contract Spending for Management Support 

Services (Nov. 7, 2011). See GAO-12-87 and GAO, Civilian Service Contract Inventories: 

Opportunities Exist to Improve Agency Reporting and Review Efforts, GAO-12-1007 

(Washington, D.C.: Sept. 27, 2012).

Federal Agencies Are 

Awarding Contracts 

Warranting Increased 

Management Attention at 

a Steady Rate
Page 31 GAO-18-627 Federal Acquisitions

functions.80 In 2009, we found that federal agencies introduce the risk that 

contractors may inappropriately influence government authority when 

performing contracts for services “closely associated” with inherently 

governmental functions.81

In 2017, we found that agencies continued to award service contracts 

warranting increased management attention at a steady rate.82 See figure 

5. From fiscal years 2013 through 2017, the share of government-wide 

obligations for these services remained consistent for civilian agencies at 

around 20 percent, and grew for DOD from about 18 percent to 20 

percent.

 80“Inherently governmental function” means, as a matter of policy, a function that is so 

intimately related to the public interest as to mandate performance by Government 

employees. This definition is a policy determination, not a legal determination. An 

inherently governmental function includes activities that require either the exercise of 

discretion in applying Government authority, or the making of value judgments in making 

decisions for the Government. See FAR § 2.101. Section 7.503(c) of the FAR provides 

examples of such functions. Contracts shall not be used for the performance of inherently 

governmental functions. FAR § 7.503(a). The FAR also generally prohibits awarding 

personal services contracts, which are defined as contracts that, by their express terms or 

as administered, make the contractor personnel appear to be, in effect, Government 

employees, unless an agency is specifically authorized to do so by statute. See FAR § 

37.104; FAR § 2.101. Functions that are “closely associated” with inherently government 

functions may approach being in that category because of the nature of the function and 

the risk that performance may impinge on Federal officials’ performance of an inherently 

governmental function, such as services in support of an inherently governmental function, 

provision of inspection services, provision of legal advice, etc. See OMB OFPP, Policy 

Letter 11-01 to the Heads of Civilian Executive Departments and Agencies, Subject: 

Performance of Inherently Governmental and Critical Functions (Sept. 12, 2011).

81GAO-10-39.

82GAO-17-244SP.
Page 32 GAO-18-627 Federal Acquisitions

Figure 5: Government-wide Obligations for Services Requiring Increased 

Management Attention and All Other Services, Fiscal Years 2013-2017

Note: OFPP and GAO’s prior work have identified the need for increased management attention on 

certain types of contracted services.

OMB has taken steps to help agencies reduce some of the risks 

associated with contracts warranting increased management attention. In 

2011, OMB emphasized the importance of adequate management by 

government employees when contractors perform work that is closely 

associated with inherently governmental functions.

83 For example, OMB 

directed agencies to employ and train a sufficient number of qualified 

government personnel to provide active and informed management and 

oversight of contractor performance where contracts have been awarded 

for functions closely associated with the performance of inherently 

governmental functions.

 83See 76 FR 56227 (Sept. 12, 2011) (publishing OFPP Policy Letter 11-01, Performance 

of Inherently Governmental and Critical Functions).
Page 33 GAO-18-627 Federal Acquisitions

We have found that some agencies face other challenges overseeing 

their contractors. In 2010 and 2012, we reported that DOD lacked 

sufficient numbers of adequately trained personnel, including contracting 

officer’s representatives (CORs), to oversee contractors in contingency 

operations like those in Afghanistan and Iraq.84 In 2013, at the 

Department of Veterans Affairs, we found that heavy workloads and 

competing demands made it difficult for CORs to effectively monitor 

contractors and ensure they were executing their work in accordance with 

contract terms.85 In addition, we have found that these CORs often lacked

the technical knowledge and training needed to effectively oversee 

certain technical aspects of a contractor’s performance.86 We 

recommended that the Department of Veterans Affairs develop tools to 

help the officials oversee contracts. The department agreed and did so.

In 2008 and again in 2009, Congress mandated that defense and certain 

civilian agencies start providing annual reports on certain service contract 

actions.

87 These inventories can improve agency insight into the number 

of contractor personnel providing services and the functions they are 

performing, among other things, and help agencies determine whether 

any of these functions require increased management attention. Despite

the increased reporting requirements, we have found that DOD has not 

always used available inventory information to improve contractor 

oversight. In March 2018, for example, we found that the military 

departments generally had not developed plans to use the inventory to 

 84GAO, Warfighter Support: Continued Actions Needed by DOD to Improve and 

Institutionalize Contractor Support in Contingency Operations, GAO-10-551T 

(Washington, D.C.: Mar. 17, 2010) and Operational Contract Support: Sustained DOD 

Leadership Needed to Better Prepare for Future Contingencies, GAO-12-1026T 

(Washington, D.C.: Sept. 12, 2012).

85GAO, VA Health Care: Additional Guidance, Training, and Oversight Needed to Improve 

Clinical Contract Monitoring, GAO-14-54 (Washington, D.C.: Oct. 31, 2013).

86GAO-14-54.

87See National Defense Authorization Act for Fiscal Year 2008, Pub. L. No. 110-181, § 

807 (Jan. 28, 2008); 10 U.S.C. § 2330a (imposing reporting requirements on DOD). See 

also Consolidated Appropriations Act, 2010, Pub. L. No. 111-117, § 743 (Dec. 16, 2009) 

(imposing reporting requirements on executive agencies, except DOD, covered by the 

Federal Activities Inventory Reform Act of 1998, Pub. L. No. 105-270) (Oct. 19, 1998)); 

OMB OFPP, Memorandum for Chief Acquisition Offices and Senior Procurement 

Executives, Subject: Service Contract Inventories (Nov. 5, 2010).

DOD Is Not Using 

Available Information to 

Inform Contractor 

Oversight Efforts
Page 34 GAO-18-627 Federal Acquisitions

inform management decisions as required.88 We did not make any new 

recommendations at the time, noting that seven of our 18 prior 

recommendations related to the inventory remained open, including a 

recommendation for DOD to identify officials at the military departments 

responsible for developing plans and enforcement mechanisms to use the 

inventory. In its comments on our March 2018 report, DOD stated it was 

committed to improving its inventory processes.

A personal services contract is one that creates an employer-employee 

relationship between the government and contractor personnel. Because 

such contracts could be used to circumvent the competitive hiring 

procedures of the civil service laws, the use of personal services 

contracts requires specific statutory authority.89

As of July 2017, we could not verify how often DOD awarded personal 

services contacts because more than one third (17 of 45) of the contracts 

we reviewed that had been designated personal services contracts in the 

government’s primary acquisition-data repository (the Federal 

Procurement Data System-Next Generation) were incorrectly recorded.90

DOD concurred with our recommendation to address this issue and has 

taken steps to do so. As we found in 2017, agencies need accurate 

information about their personal services contracts in order to ensure that 

they are supervising contractors work appropriately.

 88See GAO, DOD Contracted Services: Long-Standing Issues Remain about Using 

Inventory for Management Decisions, GAO-18-330 (Washington, D.C.: Mar. 29, 2018). 

See also 10 U.S.C. § 2330a(e).

89FAR § 37.104.

90GAO, Federal Contracting: Improvements Needed in How Some Agencies Report 

Personal Services Contracts, GAO-17-610 (Washington, D.C.: July 27, 2017).

DOD Has Taken Steps to 

Improve the Reliability of

Data on Personal Services 

Contracts

Section 809 Panel

In its June 2018 report, the Section 809 Panel 

suggested eliminating statutory and regulatory 

distinctions between personal services 

contracts and non-personal services contracts 

to increase managerial flexibility in 

determining how to fulfill requirements.

Source: Section 809 Panel June 2018 reports.| GAO-18-627
Page 35 GAO-18-627 Federal Acquisitions

Issue Area Context 

The federal acquisition workforce manages and oversees billions of dollars in 

acquisition programs and contracts to help federal agencies get what they need at the 

right time and at a reasonable price. The acquisition workforce consists of contracting 

officers, contracting officer’s representatives, program and project managers; and may 

include others such as, engineers, logisticians, and cost estimators. A number of 

governmental organizations play critical roles in assisting agencies in building and 

sustaining their acquisition workforces. Among these agencies, OFPP provides 

government-wide guidance on acquisition workforce issues, GSA’s Federal Acquisition 

Institute promotes the development of the civilian acquisition workforce, and the 

Defense Acquisition University provides training for DOD’s acquisition workforce. 

In 2007, the Panel found the federal acquisition workforce was understaffed, 

overworked, and undertrained. The Panel also found that most agencies were not 

carrying out appropriate workforce planning activities and had not assessed the skills of 

their current acquisition workforce or the number of individuals with relevant skills that 

would be needed in the future.

We found that steps have been taken to address acquisition workforce 

issues, but workforce gaps endure.

• Congress established the Defense Acquisition Workforce 

Development Fund (DAWDF) in 2008 which helps DOD recruit, train, 

and retain acquisition personnel. It has helped DOD close some 

staffing gaps.

• The acquisition workforce faces skill gaps due to the increasing 

complexity of acquisitions, particularly IT acquisition.

Key Issue Area 4: 

Acquisition Workforce
Page 36 GAO-18-627 Federal Acquisitions

• OFPP, GSA, and DOD have introduced new training programs to help 

improve the skills of the federal acquisition workforce.

• Congress and OMB have taken several actions intended to ensure 

agencies conduct adequate workforce planning, but agencies have 

not done so consistently.

We elaborate on these points below.

In 2008, Congress established the Defense Acquisition Workforce 

Development Fund (DAWDF), which provides resources for the 

recruitment, training, and retention of DOD acquisition personnel.91 In 

2017 we reported that, as of September 2016, DOD obligated more than 

$3.5 billion for these purposes and that DAWDF had helped increase the 

total size of the DOD acquisition workforce by about 24 percent from 

2008 to 2016, among other things.92

However, DOD did not achieve its growth targets for each of its 

acquisition career fields. In December 2015, we reported that DOD had 

exceeded its planned growth for seven career fields by about 11,300 

personnel, including the priority career fields of auditing and program 

management. However, DOD had not reached its growth targets for six 

other career fields, falling about 4,400 personnel short. These included 

the additional priority career fields of contracting, business, and 

engineering. We recommended that DOD issue an updated acquisition 

workforce plan that includes revised career field goals as a guide to 

ensure that the most critical acquisition needs are being met. Since that 

time, DOD has continued to hire more people in its acquisition workforce, 

including the contracting and engineering career fields. It also issued an 

updated strategic plan in October 2016. However, as we reported in 

2017, the plan does not include workforce targets for each career field, so 

the sizes of DOD’s current staffing shortfalls, if any, are unclear.93 DOD 

officials stated that determining which career fields were a priority was 

most appropriately determined by the components rather than at the 

department level.

 91See Pub. L. No. 110-181, § 852.

92GAO, Defense Acquisition Workforce: DOD Has Opportunities to Further Enhance Use 

and Management of Development Fund, GAO-17-332 (Washington, D.C.: Mar. 28, 2017).

93GAO-17-332. 

The Defense Acquisition 

Workforce Development 

Fund Has Helped DOD 

Close Some Staffing Gaps
Page 37 GAO-18-627 Federal Acquisitions

In 2017, we also reported on the amount of unobligated balances in the 

DAWDF account that have been carried over from one fiscal year to the 

next.94 According to DOD officials, these balances—which totaled $875 

million at the beginning of fiscal year 2016—were the result of several 

factors. For example, DOD officials generally did not begin the process of 

collecting and distributing DAWDF funds before DOD received its annual 

appropriations. Other factors that affected DAWDF execution included 

hiring freezes and imbalances between DOD’s DAWDF requirements and 

the minimum amount that DOD was required to put into DAWDF. In order 

to improve fund management, we recommended that DOD officials clarify 

whether and under what conditions DAWDF funds could be used to pay 

for personnel to help manage the fund. DOD indicated that it planned to 

address the recommendation.

We continue to highlight DOD acquisition workforce issues in our HighRisk List, through the DOD Contract Management area, because 

agencies continue to face challenges in maintaining sufficient staff levels 

and monitoring the competencies of their acquisition workforce.95 In our 

2017 High Risk report, we determined that DOD should continue efforts to 

ensure that its acquisition workforce is appropriately sized and trained to 

meet the department’s needs, among other actions.

The acquisition workforce faces skill gaps due to the increasing 

complexity of acquisitions, particularly IT acquisitions, according to 

officials we spoke with for this review. Officials from DOD, GSA, and one 

industry group indicated that a lack of technical knowledge presents 

challenges for effectively planning and executing complex IT acquisitions.

Additionally, we have reported that the government’s ability to respond to 

evolving cybersecurity threats depends in part on the skills and abilities of 

the IT acquisition workforce.96

Cross-functional or multidisciplinary teams may help to address the 

acquisition skill gaps because they can provide a broad range of 

 94GAO-17-332. 

95GAO-17-317. 

96GAO, Cybersecurity Workforce: Urgent Need for DHS to Take Actions to Identify Its 

Position and Critical Skill Requirements, GAO-18-175 (Washington, D.C.: Feb. 6, 2018). 

Section 809 Panel

In its June 2018 report, the Section 809 Panel 

made recommendations to improve the 

resourcing, allocation, and management of 

the Defense Acquisition Workforce 

Development Fund (DAWDF). 

Source: Section 809 Panel June 2018 reports.| GAO-18-627

Increasingly Complex 

Acquisitions Are Creating 

Skill Gaps
Page 38 GAO-18-627 Federal Acquisitions

specialized skills.97 In 2014, Congress included provisions in FITARA to 

ensure timely progress by federal agencies toward developing, 

strengthening and deploying IT acquisition cadres consisting of personnel 

with highly specialized skills in IT acquisitions.98 This legislation followed 

an initiative OMB started in 2010 when OMB’s United States Chief 

Information Officer issued a 25 point implementation plan requiring each 

major IT investment to establish an integrated program team to include, at 

a minimum, a dedicated, full-time program manager and an IT acquisition 

specialist.99 In 2016, we reported on three characteristics that contribute 

to the creation and operation of a comprehensive integrated program 

team.100 We also found that shortfalls in these characteristics—

leadership, team competition and team processes—had contributed to 

significant problems in major IT acquisitions.

Over the past 10 years, OFPP, GSA and DOD have introduced new 

training programs to help improve the skills of the federal acquisition 

workforce.

• In fiscal year 2007, OFPP launched two new certification programs for 

civilian agencies: (1) the program/project managers’ certification, and 

(2) the contracting officers’ representatives’ certification.

• In 2011, GSA introduced the Federal Acquisition Institute Training 

Application System, which includes continuous learning modules, 

certification modules, and a learning management system. In 2013, 

OFPP issued a memo requiring all civilian federal agencies to 

increase use of the system.101

 97GAO, IT Workforce: Key Practices Help Ensure Strong Integrated Program Teams; 

Selected Departments Need to Assess Skill Gaps, GAO-17-8 (Washington, D.C.: Nov. 30, 

2016).

98See Pub. L. No. 113-291, § 835; 41 U.S.C. § 1704 note.

99See OMB, 25 Point Implementation Plan to Reform Federal Information Technology 

Management (Dec. 9, 2010).

100GAO-17-8.

101OMB OFPP, Memorandum for Chief Acquisition Officers and Senior Procurement 

Executives, Subject: Increasing Efficiencies in the Training, Development, and 

Management of the Acquisition Workforce (Sept. 3, 2013).

New Training 

Opportunities Help 

Address Skill Gaps
Page 39 GAO-18-627 Federal Acquisitions

• In 2015, OFPP and the United States Digital Service jointly developed 

the Digital Information Technology Acquisition Professional Training 

Program to help make acquisition personnel better IT buyers.

• In 2015, GSA established the Center for Acquisition Professional 

Excellence to improve training for GSA’s own acquisition personnel.

• In 2016, DOD reported that, since 2008, its Defense Acquisition 

University increased its capacity with a 28 percent increase in 

classroom graduates and a 15 percent increase in online training 

graduates. In addition, DOD reports that its overall acquisition 

workforce certification level increased from 58.3 percent in fiscal year 

2008 to 76 percent in fiscal year 2017.102

• In 2018, OFPP established a new certification program for digital 

services as part of the overall effort to increase expertise in buying 

technology.103

Workforce planning involves identifying critical occupations, skills, and 

competencies; analyzing workforce gaps; building the capabilities needed 

to support workforce strategies; and monitoring and evaluating progress 

toward achieving workforce planning and strategic goals, among other 

things. Since 2009, Congress and OMB have taken several steps 

involving agencies’ acquisition workforce planning efforts.

• In the fiscal year 2009 NDAA, Congress directed OMB to prepare a 5-

year Acquisition Workforce Development Strategic Plan for civilian 

agencies to increase the size of the federal acquisition workforce, 

among other things.104 In response, OMB issued the plan in October 

2009.105

 102Department of Defense Acquisition Workforce Strategic Plan for Fiscal Years 2016-

2021, October 2016.

103OMB OFPP, Memorandum for Chief Acquisition Officers and Senior Procurement 

Officials, Subject: Establishment of Federal Acquisition Certification in Contracting CorePlus Specialization in Digital Services (FAC-C-DS) (May 18, 2018).

104Duncan Hunter National Defense Authorization Act for Fiscal Year 2009, Pub. L. No. 

110-417, § 869 (Oct. 14, 2008).

105OMB OFPP, Memorandum for Chief Acquisition Officers, Senior Procurement 

Executives, Chief Financial Officers, and Chief Human Capital Officers, Subject: 

Acquisition Workforce Development Strategic Plan for Civilian Agencies – FY 2010-2014

(Oct. 27, 2009).

Gaps Persist in Agency 

Workforce Planning Efforts
Page 40 GAO-18-627 Federal Acquisitions

• From 2011 to 2016, Congress required DOD to develop biennial plans 

to improve the defense acquisition workforce.106 However, DOD did 

not always meet this biennial requirement, issuing an acquisition 

strategic plan in 2010 and then not issuing another until October 

2016. In 2016, we reported that DOD officials cited budget 

uncertainties as the primary reason for the delay.107

• In July 2016, OMB released its Federal Cybersecurity Workforce 

Strategy, which cited the need for agencies to examine specific IT, 

cybersecurity, and cyber-related work roles, and to identify personnel 

skills gaps.108 We have ongoing work reviewing federal agencies’ IT 

and cybersecurity workforce planning.

Nonetheless, we have found gaps in agency workforce planning efforts. 

In December 2015, we found that DOD had assessed workforce 

competencies for 12 of its 13 career acquisition fields, but had not 

established a timeline for reassessing competencies in 10 of those fields 

to gauge progress in addressing previously identified gaps.109 We made 

four recommendations to DOD as a result. DOD concurred with all four 

recommendations, including the recommendation that the department 

issue an updated acquisition workforce plan in fiscal year 2016, which 

DOD implemented. The other three recommendations remain 

unaddressed as of June 2018, including the recommendation to establish 

a timeframe for reassessment.

Similarly, in 2017, we found that the Department of Homeland Security 

was continuing to refine its acquisition workforce planning efforts.110 In 

April 2017, we reported that the department’s 2016 staffing assessments 

 106See Pub. L. No. 114-328 §1102(a) (Dec. 23, 2016), repealing 10 U.S.C. §115b 

(codifying the requirement for submission of the strategic workforce plan on a biennial 

basis in the National Defense Authorization Act for Fiscal Year 2012, Pub. L. No. 112-81, 

§ 935(a)(1)(A) (Dec. 31, 2011)). 

107GAO, Defense Acquisition Workforce: Actions Needed to Guide Planning Efforts and 

Improve Workforce Capability, GAO-16-80 (Washington, D.C.: Dec. 14, 2015). 

108See OMB, Memorandum for Heads of Executive Departments and Agencies, Subject:

Federal Cybersecurity Workforce Strategy, M-16-15 (July 12, 2016).

109DOD has taken steps to implement the recommendation, reporting that it plans to 

conduct four career field assessments a year, starting in October 2017 with an anticipated 

completion date for all career fields by 2021. See GAO-16-80. 

110GAO-17-317. 
Page 41 GAO-18-627 Federal Acquisitions

did not take into account all acquisition-related positions, which could limit 

its insight into the size and nature of potential staffing shortfalls.

111

Additionally, in November 2016, we found that the five departments in our 

review—the Departments of Defense, Commerce, Health and Human 

Services, Transportation, and the Treasury—had not fully implemented 

key workforce planning steps and activities for IT acquisitions.112 For 

example, four of these agencies had not demonstrated an established IT 

workforce planning process, which should include training for acquisition 

personnel. In addition, none of these agencies had fully developed 

strategies and plans to address IT workforce gaps. We recommended 

that the selected departments implement IT workforce planning practices 

to facilitate (1) more rigorous analyses of gaps between current skills and 

future needs, and (2) the development of strategies for filling the gaps. As 

of June 2018, all five recommendations remain open.

 111GAO, Homeland Security Acquisitions: Earlier Requirements Definition and Clear 

Documentation of Key Decisions Could Facilitate Ongoing Progress, GAO-17-346SP 

(Washington, D.C.: Apr. 6, 2017). 

112GAO-17-8.
Page 42 GAO-18-627 Federal Acquisitions

Issue Area Context 

The Federal Procurement Data System-Next Generation (FPDS-NG) is the federal 

government’s primary repository for procurement data. Government officials and others 

use FPDS-NG for a variety of analytical and reporting purposes, such as examining 

data across government agencies, providing managers a mechanism for determining 

where contract dollars are being spent, and populating USASpending.gov, a website 

that contains data on federal awards. The General Services Administration, with 

guidance from the Office of Federal Procurement Policy, established and administers 

FPDS-NG.

In 2007, the Panel found that FPDS-NG contained unreliable data at the granular level, 

didn’t have appropriate validation rules in place, and lacked appropriate administration.

We found that OMB, GSA, and federal agencies have taken steps to 

improve data reliability, but the government’s primary repository for 

acquisition data still faces capability limitations.

• OMB and GSA have taken steps to improve FPDS-NG data quality.

• FPDS-NG’s current capabilities face limitations.

• OMB’s IT Dashboard provides detailed information on major IT 

acquisitions at 26 agencies, but accuracy and reliability issues 

endure.

We elaborate on these points below.

Key Issue Area 5: 

Federal Procurement 

Data
Page 43 GAO-18-627 Federal Acquisitions

From 2008 to 2011, OMB repeatedly directed agencies to take specific 

actions to improve the quality of the data they report in FPDS-NG.

• In May 2008, OMB provided agencies guidance on how to verify, 

validate, and certify their FPDS-NG data.113

• In October 2009, OMB directed agencies to explicitly describe their 

data quality improvement and validation activities.114

• In May 2011, OMB directed agencies to verify that they have the 

policies, procedures, and internal controls in place to monitor and 

improve procurement data quality generally, and that they have 

similar controls for ensuring that contractors comply with their 

reporting requirements.115

Since 2007, GSA has reported improvements in FPDS-NG data quality. 

Agencies are responsible for developing a process and monitoring results 

to ensure timely and accurate reporting of contractual transactions in 

FPDS-NG and are required to submit certifications about the accuracy of 

contract reporting to GSA. In 2017, GSA reported that these certifications 

collectively demonstrate that the data in FPDS-NG have an overall 

accuracy rate of 95 percent.116 GSA also reports that the overall 

completeness rate for FPDS-NG data has increased from 98.0 percent in 

fiscal year 2009 to 99.2 percent in fiscal year 2016.

Nonetheless, our work has recently identified data reliability challenges 

with FPDS-NG data. For example, in 2017 we found that FPDS-NG did 

not accurately identify some indefinite delivery contracts.117 And in March 

 113See OMB OFPP, Memorandum for Chief Acquisition Officers, Senior Procurement 

Executives, and Small Agency Council Members, Subject: Improving Acquisition Data 

Quality – FY 2008 FPDS Data (May 9, 2008). This memorandum superseded OMB 

OFPP, Memorandum for Chief Acquisition Officers, Subject: Federal Procurement Data 

Verification and Validation (Mar. 9, 2007).

114See OMB OFPP, Memorandum for Chief Acquisition Officers, and Senior Procurement 

Executives, Subject: Improving Acquisition Data Quality for Fiscal Years 2009 and 2010

(Washington, D.C.: Oct. 7, 2009).

115OMB, Memorandum for Chief Acquisition Officers, Senior Procurement Executives, and 

Small Agency Council Members, Subject: Improving Federal Procurement Data Quality –

Guidance for Annual Verification and Validation (Washington, D.C.: May 31, 2011).

116GAO-17-610.

117GAO, DATA Act: OMB, Treasury, and Agencies Need to Improve Completeness and 

Accuracy of Spending Data and Disclose Limitations, GAO-18-138 (Washington, D.C.: 

Nov. 8, 2017).

Some FPDS-NG Data 

Reliability Concerns 

Endure
Page 44 GAO-18-627 Federal Acquisitions

2016, we identified some FPDS-NG data limitations, including the 

misclassification of some contractors as small businesses, and some 

incorrect obligations data.118

GSA has updated the FPDS-NG system to expand its capabilities several 

times since the Panel issued its 2007 report. The most recent version was 

released in October 2017, and it increased the type of data that could be 

collected. For example, FPDS-NG now collects more detailed information 

on women-owned business types, inherently governmental services, and 

legislative mandates. A previous update in 2009 standardized how FPDSNG tracks and reports competition data.

Despite these changes, FPDS-NG has limitations in the type of 

acquisition data it can track. For example, in November 2017, we 

reported that agencies were unable to use FPDS-NG to track and report 

specific contract award data elements in accordance with OMB guidance 

because the required data had no corresponding data-entry field in 

FPDS-NG.119 We recommended that OMB take steps to improve how 

agencies collect certain procurement data. OMB generally agreed, but 

has not yet addressed the recommendation. Similarly, in 2014 we found 

limitations in FPDS-NG with regard to tracking small business 

subcontractors.120 Specifically, we found that FPDS-NG did not contain 

data on subcontracts, and was not designed to identify the type of 

subcontracting plan used or to link small business subcontractors to 

particular prime contracts.121

 118GAO, Alaska Native Corporations: Oversight Weaknesses Continue to Limit SBA’s 

Ability to Monitor Compliance with 8(a) Program Requirements, GAO-16-113 

(Washington, D.C.: Mar. 21, 2016).

119GAO-18-138.

120GAO, Federal Subcontracting: Linking Small Business Subcontractors to Prime 

Contracts Is Not Feasible Using Current Systems, GAO-15-116 (Washington, D.C.: Dec. 

11, 2014).

121GAO-15-116. GAO reported that a different system, the Electronic Subcontracting 

Reporting System (eSRS), is intended to report information on contractors’ performance 

against small business subcontracting goals. See FAR § 19.702(a). We noted that eSRS 

can indicate that subcontracting to small businesses has occurred or may occur, but the 

utility of eSRS in linking small business subcontractors to prime contracts is limited. The 

system is not intended to provide a list of subcontractors associated with a particular 

contract. In addition, agency officials stated that information in the system is limited to 

contracts awarded after the system was created or above certain dollar thresholds.

FPDS-NG Capabilities 

Have Expanded, but 

Limitations Remain
Page 45 GAO-18-627 Federal Acquisitions

In fiscal year 2020, GSA plans to fully integrate FPDS-NG with nine other 

legacy systems operated by the agency’s Integrated Award Environment 

(IAE). IAE was initiated in 2001 to bring together 10 different acquisition 

data systems into a unified system. GSA, DOD, and OMB staff expect 

that the IAE will contribute to improved FPDS-NG data reliability and 

better system governance. Integration with other systems will reduce the 

need to input the same data multiple times, which creates opportunities 

for errors. DOD and OMB staff also stated that FPDS-NG is currently 

managed through the IAE governance model, which offers a clear 

governance structure, including strategic planning, conflict resolution, and 

decision-making.

In 2009, OMB deployed a public website, known as the IT Dashboard, to 

provide detailed information on major IT acquisitions at 26 agencies, 

including ratings of the IT acquisitions’ performance against cost and 

schedule targets. Among other things, agencies are to submit investment 

risk ratings from their CIOs.122

For more than 6 years, we have issued a series of reports about the IT 

Dashboard, noting the significant steps OMB has taken to enhance the 

oversight, transparency, and accountability of federal IT acquisitions. We 

have also reported concerns about the accuracy and reliability of IT 

Dashboard data. We have made 47 recommendations to OMB and 

federal agencies to help improve the accuracy and reliability of this data 

and to increase its availability. As of March 2018, 19 of the 

recommendations remain open, including recommendations that 

agencies factor active risks into their IT Dashboard ratings, and ensure 

that major IT investments are included on the Dashboard.123

 122GAO, IT Dashboard: Agencies Need to Fully Consider Risks When Rating Their Major 

Investments, GAO-16-494 (Washington, D.C.: June 2, 2016).

123GAO-18-460T. 

OMB’s IT Dashboard 

Enhances Transparency 

and Oversight, but 

Accuracy and Reliability 

Issues Persist
Page 46 GAO-18-627 Federal Acquisitions

Issue Area Context 

The federal government has a long-standing policy to maximize contracting 

opportunities for small businesses. Congress has established, and the Small Business 

Administration (SBA) maintains, goals for small business participation in federal 

contracting. SBA also manages several programs targeted at increasing participation 

by particular business types, including: Small Disadvantaged Businesses, ServiceDisabled Veteran-Owned Small Businesses, Women-Owned Small Businesses, and 

those in Historically Underutilized Business Zones (HUBZone). Agency-specific goals 

are established through negotiation between SBA and the respective agency. 

In 2007, the Panel found a number of challenges hindering agencies’ efforts to achieve 

small business participation goals. In particular, the Panel made recommendations 

focused on a lack of parity across small business types (identifying that some statutes 

appeared to prioritize certain small business programs over others), consolidation or 

bundling of contract requirements, and how small businesses are prioritized under 

multiple award contracts (contracts awarded to two or more contractors under a single 

solicitation).

We found that small business participation in government contracting has 

increased over the past few years, but small business advocates report 

emerging concerns, and agencies struggle with policy compliance.

• Executive branch agencies have increased small business 

participation over time.

• Small business advocates have expressed concerns that category 

management will reduce the number of small businesses eligible for a 

Key Issue Area 6: 

Small Business 

Participation
Page 47 GAO-18-627 Federal Acquisitions

given opportunity; the executive branch has taken some steps to 

address such concerns.

• Most agencies did not demonstrate that they are in full compliance 

with requirements involving their small business offices.

• SBA has improved how it assesses firms’ eligibility for small business 

programs, but we found it should do more to oversee its womenowned small business program and its HUBZone program.

We elaborate on these points below.

Since the Panel issued its report in 2007, Congress and executive branch 

agencies have continued efforts to encourage small business 

participation, with improved results over time.124 In the 2010 Small 

Business Jobs Act, Congress addressed the three primary small business 

issues raised by the Panel. These issues included taking action on issues 

of parity, requiring justifications and reporting for contract bundling, and 

addressing small business concerns about multiple award contracts, 

among other things.125

Meanwhile, executive branch agencies have also taken steps to 

encourage small business participation. For example:

• GSA strongly supports small business participation in its Federal 

Supply Schedules program. The schedule program provides federal 

agencies a simplified method of purchasing commercial products and 

services at prices associated with volume buying. GSA set aside 

some specific schedule categories—such as photographic services 

and library furniture—for small businesses. GSA also developed a 

forecasting tool in 2016, intended to give small businesses a preview 

of upcoming federal contracting opportunities.

• In a 2013 rule, SBA clarified how contracting officers should assign 

small business codes under multiple award contracts.126 North 

 124We have ongoing work looking at the implementation of veteran-owned small business 

programs at the Department of Veterans Affairs.

125See Small Business Jobs Act of 2010, Pub. L. No. 111-240, § 1311-1313, 1347 (Sept. 

27, 2010) (addressing multiple award contract requirements, consolidation or bundling of 

contract requirements, and small business contracting parity).

126See 78 FR 61114 (Oct. 2, 2013), codified at 13 C.F.R. § 121.402(c) (Multiple Award 

Contracts).

Agencies Have Met More 

Small Business Goals 

Over Time

Section 809 Panel

Federal agencies continue to address 

challenges related to small business 

participation. For example, the Department of 

Defense (DOD) did not meet all of its small 

business goals in 2017. In its January 2018 

report, the Section 809 Panel recommended 

that DOD refocus its small business policies 

and programs to prioritize the department’s 

mission, among other things.

Source: GAO analysis of Small Business Dashboard data 

and Section 809 Panel January 2018 report.| GAO-18-627
Page 48 GAO-18-627 Federal Acquisitions

American Industry Classification System (NAICS) codes are the basis 

for SBA’s size standards; therefore, the NAICS code that a 

contracting officer assigns determines whether a firm is eligible for 

small business set-asides. In its rule, SBA observed that when NAICS 

codes are assigned to a multiple award contract solicitation, a 

business concern may be small for one or some of the NAICS codes, 

but not all. In that situation, an agency could receive small business 

credit on an order for an award to a “small business” where a firm 

qualifies as small for any NAICS code assigned to the contract, even 

though the business is not small for the NAICS code that was 

assigned or that should have been assigned to that particular order. 

SBA’s rule stated that, to ensure small businesses receive the awards 

that are intended for them, contracting officers should assign NAICS 

codes to discrete components of a contract in certain circumstances. 

The contracting officers we interviewed stated that assigning a NAICS 

code can be challenging when one or more codes could apply to a 

contract and we noted that SBA’s rule may further clarify code 

assignment for these officials. However, updates to the FAR are 

required to fully implement SBA’s final rule. This FAR rule-making 

process is ongoing.127

In fiscal year 2017, the federal government met three of its five 

government-wide small business participation goals. This is progress 

compared to fiscal year 2007, when the government met just one of its 

five small business goals. While individual agencies’ success varied, 

there was significant improvement in the number of agencies meeting 

service-disabled veteran-owned and women-owned small business goals. 

Additionally, the number of agencies meeting all of their small business 

goals increased from two to seven. Meanwhile, HUBZone goals have 

remained unmet for a majority of agencies. See figure 6.

 127GAO, Small Business Contracting: SBA Efforts May Clarify the Assignment of Industry 

Codes, and Most Code Appeals Were Dismissed, GAO-18-76 (Washington, D.C.: Dec. 5, 

2017). See also 81 FR 88072 (Dec. 6, 2016). A regulatory update on 81 FR 88072 was 

published in June 2018. See 83 FR 27217 (June 11, 2018).
Page 49 GAO-18-627 Federal Acquisitions

Figure 6: Number of Agencies Achieving Small Business Goals Has Increased from 

Fiscal Years 2007 to 2017

Note: Data analyzed for 24 Chief Financial Officer Act agencies.

According to OMB guidance, under category management the federal 

government should “buy as one.” Specifically, agencies are expected to 

move away from making numerous individual procurements to purchasing 

through a broader aggregate approach.128

Small business advocates we spoke with have reported a number of 

concerns to us about the government-wide category management effort. 

Because category management includes streamlining the number of 

available contracts, small business advocates—including officials at DOD 

and SBA—have told us that they worry the initiative will reduce the 

 128See OMB OFPP, Memorandum for Chief Acquisition Officers and Senior Procurement 

Executives, Subject: Transforming the Marketplace: Simplifying Federal Procurement to 

Improve Performance, Drive Innovation, and Increase Savings (Dec. 4, 2014).

Small Business Advocates 

Have Concerns About 

Category Management
Page 50 GAO-18-627 Federal Acquisitions

number of small businesses eligible for a given opportunity, and that the 

number of small businesses awarded federal contracts may fall.

The executive branch has taken some steps to provide small businesses 

with contracting opportunities through category management. For 

example, the category management effort includes a set of cross-agency 

priority goals that include small business utilization. Another element of 

category management identifies best-in-class contracting vehicles that 

are recommended for agency use. Some best-in-class vehicles under 

category management focus on small business providers, including 

GSA’s Alliant Small Business vehicle that provides IT solutions. 

Additionally, in 2015, we found that DHS’s “on-ramp/off-ramp”

mechanisms offered an option to help maintain a pool of eligible small 

businesses by reopening an indefinite-delivery, indefinite-quantity 

vehicle’s solicitation to new small business vendors after participating 

businesses outgrew their small size status and left the program.129 GSA 

recently reported that two of its small business interagency contracts—

OASIS Small Business and 8(a) Stars II—used on-ramp procedures in 

2017 and 2018.130

However, in 2014 we analyzed small business participation in strategic 

sourcing, a predecessor to category management, and found that 

agencies had not implemented OMB requirements to develop 

performance measures to determine how strategic sourcing initiatives had 

affected small business participation.131 As of June 2018, four of the six 

contracting agencies we reviewed had implemented our recommendation 

to do so.

 129An “off ramp” requires businesses that have outgrown or otherwise lost their small 

business status to leave a small business contract pool after completing any ongoing task 

orders, while an “on ramp” permits the agency to replenish the pool of small businesses 

by reopening the solicitation to new small businesses. GAO, DHS IT Contracting: Steps 

Taken to Enhance EAGLE II Small Business Opportunities, but Better Assessment Data 

Needed, GAO-15-551 (Washington, D.C.: June 24, 2015). 

130OASIS Small Business is a best-in-class multiple award IDIQ contract that provides 

professional services. 8(a) STARS II is a small business set-aside, government-wide 

acquisition contract that provides IT solutions. 

131GAO, Strategic Sourcing: Selected Agencies Should Develop Performance Measures 

on Inclusion of Small Businesses and OMB Should Improve Monitoring, GAO-14-126 

(Washington, D.C.: Jan. 23, 2014).
Page 51 GAO-18-627 Federal Acquisitions

In the Small Business Act, Congress required certain agencies to create 

and appropriately staff Offices of Small and Disadvantaged Business 

Utilization (OSDBUs) to advocate for small businesses.132 Throughout the 

years, Congress amended the requirements on multiple occasions, 

generally expanding the areas for the OSDBU to maintain involvement in, 

and providing details on how the OSDBU office should function.133

However, among other results, we have found that many agencies have 

not demonstrated that they are in full compliance with a number of 

requirements related to the functions and duties of these offices, such as 

establishing a direct reporting relationship between the OSDBU director 

and the agency head or deputy head, and specifying that the director 

must have supervisory authority over staff performing certain duties.134 As 

we reported in August 2017, noncompliance with these legislative 

requirements may limit the extent to which an office can advocate for 

small businesses, and we made recommendations to 19 agencies to 

come into full compliance with these OSDBU requirements or report to 

Congress on why they have not. Most agencies that provided comments 

agreed or partially agreed with the recommendations. As of June 2018, 

two of the 19 agencies—the National Aeronautics and Space 

Administration and the U.S. Agency for International Development—had 

implemented our recommendations.

 132See Small Business Act and Small Business Investment Act of 1958, amendment, Pub. 

L. No. 95-507, § 221 (Oct. 24, 1978); 15 U.S.C. § 644(k). 

133See, e.g., Pub. L. No. 114-328, § 1812, 1813, 1821 (2016); Pub. L. No. 114-92, § 870 

(2015); Pub. L. No. 112-239, § 1691 (2013).

134GAO-17-675. 

Most Agencies Did Not 

Demonstrate Full 

Compliance With Small 

Business Office 

Requirements
Page 52 GAO-18-627 Federal Acquisitions

Over the past decade, we have identified a number of weaknesses in the 

processes SBA uses to certify and recertify businesses as being eligible 

to participate in its selected programs—specifically HUBZone and 

women-owned programs, and the 8(a) program for small disadvantaged 

businesses—and made recommendations to SBA to address them.135

SBA has taken steps to address these weaknesses, but some remain. In 

March 2010, we made six recommendations to improve how SBA 

assesses the continuing eligibility of firms to participate in the 8(a) 

program, and we have closed all six recommendations as 

implemented.136 In 2014, we made two recommendations to improve 

SBA’s oversight of firms’ participation in its women-owned small business 

program. We had found that SBA had not yet developed procedures that 

provided reasonable assurance that only eligible businesses obtained 

set-aside contracts. Then in 2015, we made two recommendations to 

improve SBA’s oversight of firms’ participation in the HUBZone program. 

We had found that SBA lacked an effective way to communicate program 

changes to small businesses as well as key oversight controls over the 

process that small businesses used to recertify that they are eligible to 

participate. The four recommendations in these two reports remained 

open as of May 2018.

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

and comment. We received written comments from DOD, which are 

reprinted in appendix II, and one technical comment via e-mail. OMB and 

GSA provided technical comments via e-mail. We addressed OMB’s, 

DOD's and GSA's comments as appropriate. SBA told us that they had 

no comments on the draft report. 

We also offered three third party organizations—two industry groups and 

the Section 809 Panel—the opportunity to provide their views on sections 

 135GAO, Small Business Administration: Government Contracting and Business 

Development Processes and Rule-Making Activities, GAO-17-573 (Washington, D.C.: 

June 30, 2017). For examples, also see GAO, Small Business Contracting: Opportunities 

Exist to Further Improve HUBZone Oversight, GAO-15-234 (Washington, D.C.: Feb. 12, 

2015); Women-Owned Small Business Program: Certifier Oversight and Additional 

Eligibility Controls Are Needed, GAO-15-54 (Washington, D.C.: Oct. 8, 2014); Small 

Business Administration: Steps Have Been Taken to Improve Administration of the 8(a) 

Program, but Key Controls for Continued Eligibility Need Strengthening, GAO-10-353 

(Washington, D.C.: Mar. 30, 2010). SBA’s 8(a) program is a business development 

program for small disadvantaged businesses.

136GAO-10-353.

SBA Has Improved How It 

Assesses Firms’ Eligibility 

for Small Business 

Programs, but Work 

Remains

Agency Comments 

and Third Party Views
Page 53 GAO-18-627 Federal Acquisitions

of the report that relate to them. They confirmed these sections of the 

report are accurate. 

We are sending copies of this report to the appropriate congressional 

committees, the Director of the Office of Management and Budget, the 

Secretary of Defense, the Administrator of General Services, the 

Administrator of the Small Business 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) 512-4841 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 are listed in appendix III.

William T. Woods

Director, Contracting and National Security Acquisitions
Appendix I: Objective, Scope, and 

Methodology

Page 54 GAO-18-627 Federal Acquisitions

This report identifies actions the federal government has taken to address 

the key issues the Acquisition Advisory Panel (the Panel) raised in its 

2007 report, and some of the acquisition challenges that remain.

To frame the key issues the Panel identified in its 2007 report, we worked 

with internal subject matter experts and officials from the Office of 

Management and Budget’s (OMB) Office of Federal Procurement Policy 

(OFPP), Department of Defense (DOD), General Services Administration 

(GSA), and Small Business Administration (SBA) to categorize the 

Panel’s 89 recommendations into six higher-level issue areas:

• Requirements definition,

• Competition and pricing,

• Contractor oversight,

• Acquisition workforce,

• Federal procurement data, and

• Small business participation.

To identify progress made and challenges that remain in each of these 

issue areas, we reviewed relevant GAO reports and testimonies; key 

legislation such as the Weapon Systems Acquisition Reform Act of 2009,1

and the Small Business Jobs Act of 2010; 2 acquisition guidance issued 

by OMB, DOD, GSA, and SBA; and interim reports from the Section 809 

Panel, which is addressing acquisition challenges at DOD, and plans to 

issue its final report in January 2019. We also interviewed officials from 

OMB, DOD, GSA, and SBA; and Section 809 Panel staff. Further, we 

collected input from members of the Chief Acquisition Officers Council 

and two industry groups: the Professional Services Council and the 

Coalition for Government Procurement.3

The GAO reports cited throughout this report include detailed information 

on the scope and methodology from our prior reviews. For findings based 

 1

Pub. L. No. 111-23. 

2

Pub. L. No. 111-240.

3

The Professional Services Council is an industry group that advocates for the 

government technology and professional services industry. The Coalition for Government 

Procurement is a non-profit association of commercial contractors that offer commercial 

services and products in the federal market. We also solicited written responses from the 

Chief Information Officers Council, but this council did not provide us any information.

Appendix I: Objective, Scope, and 

Methodology
Appendix I: Objective, Scope, and 

Methodology

Page 55 GAO-18-627 Federal Acquisitions

on analyses of data from the Federal Procurement Data System-Next 

Generation (FPDS-NG) in our prior work, we updated the previous 

analyses to include the most recent years available. We reviewed current 

documentation for FPDS-NG in order to identify any changes that might 

impact our analyses. We determined that the FPDS-NG data were 

sufficiently reliable for the purpose of updating previous analyses.

We conducted this performance audit from July 2017 to September 2018 

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 that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objective.
Appendix II: Comments from the Department 

of Defense

Page 56 GAO-18-627 Federal Acquisitions

Appendix II: Comments from the Department 

of Defense
Appendix III: GAO Contact and Staff 

Acknowledgments

Page 57 GAO-18-627 Federal Acquisitions

William T. Woods, (202) 512-4841 or WoodsW@gao.gov

In addition to the contact named above, Nathan Tranquilli (Assistant 

Director), Betsy Gregory-Hosler (Analyst-in-Charge), Holly Williams, 

George Bustamante, and Brandon Voss made key contributions to this 

report. Ted Alexander, Cheryl Andrew, Peter Del Toro, Brenna Derritt, 

Alexandra Dew Silva, Tim DiNapoli, Jennifer Dougherty, Kathleen 

Drennan, Lorraine Ettaro, Stephanie Gustafson, Dave Hinchman, Javier 

Irizarry, Justin Jaynes, Julia Kennon, Sherrice Kerns, Emily Kuhn, 

Heather B. Miller, Angie Nichols-Friedman, Shannin O’Neill, Miranda 

Riemer, William Russell, Bill Shear, Roxanna T. Sun, and Katherine 

Trimble also made contributions to the report.

Appendix III: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(102196)
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