Information Technology: A Statistical Study of Acquisition Time
Published: 1995-03-13T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Pursuant to a congressional request, GAO reviewed federal information technology (IT) acquisitions to determine how various factors affect the IT acquisition process.
section_title: What GAO Found
paragraphs: GAO found that: (1) the average time taken to complete an IT acquisition varies according to the procurement type, dollar value, and whether a bid protest is filed; (2) hardware, software, maintenance, and support services are the major types of IT resources being acquired; (3) contracts under $250,000 take an average of 158 days to award, while contracts $25 million or more take 669 days to award; (4) most procurements are awarded either as sole source or full and open competition contracts; (5) the average time taken to award IT contracts increases as the contract value increases; (6) protested contracts take longer to award than nonprotested contracts in every dollar strata; (7) large dollar contracts are much more likely to be protested; and (8) other factors such as competition type and evaluation methods also increase contract award time.

section_title: Letter
paragraphs: At your request, we examined federal information technology (IT) acquisitions to determine how various factors, such as procurement dollar size, contract type, and bid protests, affect the length of time to award a contract. While considerable anecdotal data exist on how long the procurement process takes, very little validated and projectable data have been available on a governmentwide basis.
To develop such data, we drew a statistically valid sample of all contract award notices published over a 2-year period in the Commerce Business Daily and sent detailed questionnaires to the relevant contracting officers. We received an 81 percent response rate, which represents 2,720 contracts worth almost $16 billion, and stratified the sample by the six agencies with the most contract award notices and by four different dollar ranges—$25,000 to $250,000, $250,000 to $2.5 million, $2.5 million to $25 million, and $25 million and more. We used the data obtained to answer frequently asked questions about IT acquisitions. Details of our objectives, scope, and methodology are contained in appendix I. Statistics for individual agencies are presented in appendix II, and our questionnaire is reprinted in appendix III.
The federal government spends at least $25 billion annually on IT. As documented in numerous GAO reports, the government often receives too little in improved service, increased efficiency, or lower costs as a result of this investment. While the acquisition process is the focus of much of the concern and frustration with government’s poor return, this lack of success stems from several factors, including (1) ineffective management practices for proposing, selecting, and controlling technology investments, (2) not defining expected outcomes in terms of quality, delivery, and cost, and (3) poorly managing the acquisition process.
This report addresses factors affecting the third problem area—the IT acquisition process. It provides insights to those interested in this process by comparing key variables that affect the length of the process for the four discrete dollar value ranges and identifying issues requiring further study and analysis. However, care must be taken to ensure that the information provided here is not taken out of context. While this information can be useful in identifying and correcting problems specifically related to IT acquisition, it should be clearly understood that other factors, such as those mentioned above, will also affect how well agencies implement and use IT.
As such, effectively implementing and using technology is a much broader issue than just the acquisition process. Our recent report on improving agency performance through the effective use of IT demonstrated that successful organizations generally adopt a series of critical management practices to help improve mission performance. We identified 11 of these critical practices, including making a top-level commitment to effectively using IT; establishing direct relationships among the planning, budgeting, and evaluation processes; upgrading skill and knowledge levels; focusing on process improvement; and managing information projects as investments. A critical point that was emphasized throughout the report was that these practices need to be deployed collectively. Improving the IT acquisition process is only one step toward the larger goal of improving the management of IT and ensuring that the full potential of these investments is realized.
subsections: section_title: Background
paragraphs: The IT acquisition process extends from the initial determination of needs to the final implementation of the acquired product. This report addresses three IT acquisition stages—presolicitation, solicitation, and source selection. During the presolicitation phase, contracting personnel develop specifications, prepare the acquisition plan, and apply for and receive a delegation of procurement authority (DPA). In the solicitation phase, agencies prepare and release the solicitation, respond to vendor questions, and close the solicitation. During source selection, agencies evaluate the proposals, may negotiate with vendors, call for best and final offers, and award the contract.
Several laws and regulations, including the Brooks Act and the Warner Amendment, the Competition in Contracting Act (CICA), the Federal Acquisition Streamlining Act, the Federal Acquisition Regulation (FAR), and the Federal Information Resources Management Regulation (FIRMR), govern these three phases.
The Brooks Act, 40 U.S.C. 759, gives GSA exclusive authority to procure IT and the power to delegate this authority by issuing a DPA to other federal agencies. GSA has given agencies a blanket delegation, usually $2.5 million, below which they can procure IT resources without requesting a specific DPA from GSA. GSA will raise or lower this blanket authority based on an agency’s history of acquiring IT. For any acquisition above the blanket delegation, agencies must obtain a DPA by submitting an agency procurement request (APR) to GSA.
The Warner Amendment, 40 U.S.C. Section 759(a)(3)(C), exempts certain Defense IT procurements from the Brooks Act, and thus from the requirement to obtain procurement authority from GSA. These exempted procurements include those that support mission-critical, command and control, and intelligence activities.
CICA, Public Law 98-369, establishes a policy of full and open competition for all federal procurements. The act requires that contracts with limited competition be formally justified. Such contracts are often awarded as sole source, compatibility limited, or limited to specific make and model.
CICA also sets forth mechanisms for vendors to protest the government’s procurement actions. Through CICA, protests may be made to the agency, GSA’s Board of Contract Appeals (GSBCA) for IT resources, the General Accounting Office (GAO), the U.S. District Courts, or the U.S. Court of Federal Claims. Questions or objections having to do with certain small business or labor matters are reviewed by the Small Business Administration or the Department of Labor.
The Federal Acquisition Streamlining Act, Public Law 103-355, was passed in 1994 to streamline the way the government buys goods and services, including IT. Among its provisions, the act authorized the simplified acquisition threshold at $100,000, established pilot programs to test alternative and innovative procurement techniques, promoted electronic commerce, encouraged the use of off-the-shelf purchases, and required contracting personnel to conduct more extensive debriefings to losing offerors. The executive branch is currently developing regulations to implement the act.
The FAR is the body of procurement regulations that all executive agencies must follow when acquiring different types of supplies and services, including IT. The FIRMR, used in conjunction with the FAR, applies specifically to the acquisition, management, and use of IT resources.
The following questions and answers provide information on the average time taken to complete the various steps in the IT acquisition process, as well as on other related factors.
section_title: How Long Does It Take to Award Different Dollar Value IT Contracts?
paragraphs: The average time to award IT contracts increases as the size of the contract increases. In our sample of four dollar thresholds, contract award time frames ranged from 158 to 669 days, as shown in figure 1 below.
section_title: What Acquisition Steps Are Involved and Did Any One Consistently Take the Most Time?
paragraphs: Contracts under $250,000 generally went through five basic steps: purchase requisition, presolicitation notice, release of the solicitation, closing of the solicitation, and contract award. For those between $250,000 and $25 million, one or two additional steps—the acquisition plan and best and final offer—were sometimes added. Those that were $25 million and above generally had the first five steps plus four additional steps: the APR, DPA, acquisition plan, and best and final offer.
No one step consistently took the most time. The acquisition steps that took the longest also varied by dollar strata. Specifically, contracts from $25,000 to $250,000 and $2.5 million to $25 million took the longest average time from the presolicitation notice to the release of the solicitation (57 days (36 percent) and 98 days (29 percent), respectively). Procurements of $25 million and above took comparatively more time from the solicitation closing to receipt of the best and final offers (186 days or 28 percent). This latter period would generally include the time required to evaluate proposals and conduct discussions in these more complex procurements.
Figure 2 provides details on the average time taken in awarding IT contracts for the four dollar strata.
section_title: What Are the Two Most Common Types of Procurements and How Long Does It Take to Award Them?
paragraphs: As noted earlier, CICA establishes a policy of full and open competition for all procurements unless an exception is specifically justified. In our sample, the two most common types of procurements were (1) sole source and (2) full and open competition. These two types made up 81 percent of the total number of contracts awarded and accounted for 83 percent of the total value of contracts in our sample.
Sole source contracts from $25,000 to $250,000 averaged 150 days to award, while such contracts of $25 million and more took an average of 295 days. Fully competitive contracts in the lowest dollar strata averaged 184 days, and it took an average of 708 days to award them in the highest dollar strata. Figure 3 lists the time frames for both types of contracts by dollar strata.
section_title: Are the Number of Contracts and Total Dollar Value Consistent Across All Dollar Strata?
paragraphs: No. The smallest dollar strata had the largest number of contracts and the highest strata contained the most contract dollars. Table 1 shows the number of contracts and total dollars across each of the four dollar strata.
section_title: What Major IT Resources Are Being Acquired and Are There Any Differences in the Time Taken to Acquire Them?
paragraphs: Hardware, software, maintenance, and support services are the major types of IT resources being acquired. Although the four types of resources were acquired in about the same amount of time—5 and 8 months respectively for the two lowest dollar strata—some differences occurred at the two highest dollar strata.
As shown in figure 4 below, contracts from $2.5 million to $25 million, where software was the primary purchase, took 579 days compared to about 357 and 375 days, respectively, for contracts that were primarily hardware and maintenance, and 284 days for support services. For contracts $25 million and over, hardware took an average of 780 days compared to about 565 days for both software and support services, and 338 days for maintenance.
section_title: How Do Bid Protests Affect Contract Time?
paragraphs: Protested contracts took longer to award than nonprotested contracts in every dollar strata. The increased time was most significant in the lowest and highest dollar strata. Protested contracts from $25,000 to $250,000 took, on average, 50 days longer (31 percent) than nonprotested contracts, and protested contracts of $25 million and more took, on average, 222 days longer (41 percent) than nonprotested contracts.
Protested contracts took longer to award for a variety of reasons. In addition to the time taken to resolve the protests, other factors, such as competition type and evaluation method, can also increase the contract award time. As shown in figures 3 and 7, full and open contracts take longer to award than sole source contracts and best value contracts take longer to award than lowest cost contracts. Of the protested contracts that were $25 million and more, 85 percent were full and open and none were sole source. Also, almost 70 percent of those protested contracts used the best value evaluation method. Furthermore, large dollar contracts are much more likely to be protested. For example, while 44 percent of contracts $25 million and more were protested, only 3 percent of the small dollar contracts were protested. Figure 5 shows the differences in days to award protested and nonprotested contracts.
section_title: How Long Does It Take to Award Contracts That Have Amended Solicitations?
paragraphs: Contracting officers issue amendments to add, change, or clarify some aspect of the contract solicitation including the requirements, evaluation criteria, or closing date. For all dollar strata, contracts that had amended solicitations took longer to award than contracts without amended solicitations—ranging from an average of 45 days longer at the smallest dollar strata to 406 days longer at the largest dollar strata. Figure 6 shows the average days to award contracts with amended and unamended solicitations for each dollar strata.
section_title: How Long Does It Take to Award Lowest Cost and Best Value Procurements?
paragraphs: Lowest cost contracts are awarded to the offeror with the lowest-priced technically acceptable proposal. In best value contracts, the government may consider other factors, such as technical merit, along with cost in making the award. The time to award both lowest cost and best value contracts increased with the size of the dollar strata. Lowest cost contracts from $25,000 to $250,000 averaged 173 days to award, and such contracts $25 million and more took an average of 567 days. Best value contracts from $25,000 to $250,000 averaged 226 days compared to 777 days for contracts that were $25 million and more. Figure 7 shows how long it takes to award both types of contracts in each of the four dollar strata.
section_title: How Long Does the DPA Process Take?
paragraphs: The average time to receive a DPA increased as the amount of the contract increased. It took agencies about 30 to 40 days to receive DPAs for contracts under $2.5 million and 60 to 90 days for contracts $2.5 million and more.
We calculated the time to receive a DPA from the day the agency’s contracting office approves the APR to the day GSA issues the DPA. (For some agencies, this period includes the time to send the APR from the bureau through the department level before sending it to GSA. We included this period because the contracting office must wait for GSA approval before proceeding with the contract.) GSA calculates the time to issue a DPA from the time it determines that an agency’s APR is acceptable for review until it issues the DPA. Under this method, GSA’s records show that GSA issued DPAs in an average of 13 days. Figure 8 provides our data showing how many days it takes agencies to receive DPAs by dollar strata.
section_title: Do Warner Amendment Contracts Take Less Time Than Brooks Act Contracts and How Frequently Does DOD Use Them?
paragraphs: Small dollar Warner Amendment contracts showed no appreciable time savings over Brooks Act contracts. However, large dollar Warner Amendment contracts were awarded an average of 6 months faster than Brooks Act contracts. DOD used the Warner exemption from the Brooks Act in over half of its IT procurements, which accounted for 26 percent of the total dollar value of its contracts. Table 5 lists the percent of contracts using the Warner exemption and the amount of time required to award DOD contracts.
section_title: How Will the Federal Acquisition Streamlining Act Affect IT Acquisitions, and Can Our Survey Data Be Used as a Baseline to Measure Related Progress?
paragraphs: While all aspects of the act will affect IT procurements, provisions that have the most potential for significantly expediting IT procurements include (1) establishing the simplified acquisition threshold at $100,000, (2) developing and implementing the Federal Acquisition Computer Network, which will provide a governmentwide electronic commerce capability, (3) revising requirements related to purchases of commercial products and services, and (4) requiring contracting officers to more extensively debrief losing offerors.
All four of these provisions can help reduce the time it takes to procure IT. Our data could be used as a baseline to measure improvements in this area. For example, our baseline data show that contracts in the increased threshold range for simplified acquisitions ($100,000) took 149 days to award. Also, once the acquisition computer network is in place, our data could be used as a baseline to measure related improvements at all dollar levels.
section_title: What Additional Research Is Suggested by Our Data?
paragraphs: As addressed below, our data identified several factors that may lengthen acquisition time. These factors warrant further study to determine if they can be streamlined or eliminated without compromising the acquisition, and if they can be applied across all government agencies.
What processes lengthen the time for high-dollar acquisitions and can they be reduced or eliminated?
Can any acquisition steps be eliminated without sacrificing quality or critical federal objectives such as preferential treatment for small and disadvantaged businesses?
Of the four major IT resources—hardware, software, maintenance, and support services—why does it take so much longer to acquire software in the $2.5 million to $25 million strata and hardware in the $25 million or more strata? Is the additional time and cost taken to award best value contracts warranted? Do they provide commensurate benefits to the government?
Does GSA’s DPA process add value to procurements and do agencies receive the DPAs in a timely manner?
Does the extra time taken to award Brooks Act contracts (those that are compared to Warner exempt) result in higher quality products and services?
We also grouped our data according to the six agencies that awarded the most IT contracts (see appendix III). This information can be further researched to determine if these agencies have unique processes and procedures that can be adopted by other agencies.
We discussed our methodology and the resulting individual agency statistics with agency officials from Army, Navy, Air Force, DOD, HHS, NASA, Treasury, and GSA. These officials agreed with our methodology and told us that the information contained in this report would be useful in helping them identify areas for further research and improvement.
As arranged with your office, we are sending copies of this report to the Chairmen of the Senate Committee on Governmental Affairs and that committee’s Subcommittee on Oversight of Government Management, the Chairmen and Ranking Minority Members of the House Committee on Government Reform and Oversight, and the Chairmen and Ranking Minority Members of the Senate and House Committees on Appropriations; the Director of the Office of Management and Budget; the Administrators of the General Services Administration and the National Aeronautics and Space Administration; the Secretaries of Defense, the Army, the Navy, the Air Force, Health and Human Services, and Treasury; and other interested parties. We will also make copies available to others upon request.
Should you have any questions about this report, please contact me at (202) 512-6413. Other major contributors are listed in appendix IV.
section_title: Objectives, Scope, and Methodology
paragraphs: As you requested, we compiled data about the federal IT procurement process. In this report, we agreed to provide statistical data about the IT procurement process, including information about the time taken (1) to acquire IT within various dollar strata, (2) to complete sole source and full and open procurements, and (3) by DOD to acquire Brooks Act and Warner exempt contracts. Our data were limited to statistical information about the IT procurement process. We made no attempt to determine the appropriate amount of time required to complete the procurement steps or identify problems that may have lengthened the procurement time, since these issues were beyond the scope of this report.
To obtain the IT procurement information, we developed and mailed questionnaires to the contracting personnel of 35 federal agencies. This mailing was based on a stratified random sample of IT contract award notices published in the Commerce Business Daily from January 1990 through September 1992—the most current data when we drew the sample. To ensure that we obtained factual data, we designed the questionnaire to require data from contract files and requested that the individual most familiar with the precontract award process, such as the procuring contracting officer, complete the questionnaire. The procurement process covered in our questionnaire began with the acquisition plan, purchase requisition, or presolicitation notice, whichever came first, and ended when the contract was awarded.
We stratified the sample to include the six agencies with the most contract award notices during our sampling period—Army, Navy, Air Force, the Department of Health and Human Services (HHS), the National Aeronautics Space Administration (NASA), and the Department of the Treasury. These agencies constituted 75 percent of the contracts in the total sample population. We also included the categories of other DOD agencies and all other civilian agencies.
We also stratified our sample by four dollar ranges: $25,000 to $250,000; $250,000 to $2,500,000; $2,500,000 to $25,000,000; and $25,000,000 and above. Unless noted otherwise, we presented the data as the arithmetic mean and the time as calendar days. To measure the time to conduct the acquisition process, we used the earliest point the contracting office was involved as the starting date and the date of contract award as the closing date. The data reflect discrete procurement events, such as receiving the purchase requisition or issuing the solicitation.
We received an 81 percent response rate, which consisted of 2,720 contracts worth almost $16 billion. The sample was conducted at the 95 percent confidence level, with a maximum precision of plus or minus 5 percent at the agency and dollar level. Non-IT procurements, modifications to existing contracts, duplicate submissions, and interagency agreements were excluded from the sample, and joint awards were consolidated and considered as one procurement.
To develop the questionnaire and identify pertinent procurement questions, we analyzed the GAO report Information Technology: A Model to Help Managers Decrease Acquisition Risks, as well as government procurement regulations such as the Federal Acquisition Regulation and the Federal Information Resources Management Regulations. To ensure that information for the questionnaire was available, we tested a draft questionnaire at three agencies using agency contract files. In addition, contracting officers, officials from the Office of Management and Budget’s Office of Information and Regulatory Affairs and Office of Federal Procurement Policy, and officials from GSA reviewed and commented on the questionnaire.
We conducted nine pretests at the Department of the Army, Defense Information Systems Agency, National Institutes of Health, Library of Congress, Internal Revenue Service, Army Corps of Engineers, Environmental Protection Agency, Department of the Navy, and Department of Agriculture to ensure that contract officers could understand and answer the questions and that the questions applied to all types of IT procurements. We used the pretest results to finalize our questionnaire.
We verified the data in five ways. First, we reviewed the returned questionnaires and called agency contract personnel in those instances where data in the questionnaire were not provided or the answers were unclear. Second, where the questionnaire data appeared on exception reports produced from the database, we examined the questionnaire and, if appropriate, called agency contract personnel to clarify. Third, we verified that an appropriate official had completed the questionnaire. Fourth, we verified 45 questionnaires selected by random sample by comparing the data given in the questionnaire with substantiating documents from the agency’s contract file. The accuracy rate of this verification was 96.4 percent. Fifth, we verified the protest decision data with attorneys from GAO and GSBCA.
We discussed our methodology and the resulting individual agency statistics with officials from each of the six stratified agencies, DOD, and GSA. These officials agreed with our methodology and told us that the information contained in this report would be useful in helping them identify areas for further research and improvement. We conducted our work from April 1993 through January 1995, in accordance with generally accepted government auditing standards.
section_title: IT Acquisition Statistics for Individual Agencies
paragraphs: This appendix contains the individual statistics of the agencies we stratified in our sample. We have included these statistics to provide agencies with (1) information to identify areas for further research and (2) a baseline from which to measure any improvements. The data in this appendix are statistically valid and are stratified by both agency and dollar amount. All of the data in these charts represent a precision of no more than plus or minus fifteen percent, unless noted otherwise.
The chart below lists the number of contracts in our sample for each agency and dollar strata.
subsections: section_title: Figure II.2: Sole Source Contracts—Days to Award Contract by Agency
paragraphs: The $250K to $2.5M category represents a maximum precision of plus or minus 22 percent.
section_title: Figure II.3: Full and Open Competition Contracts—Days to Award Contract by Agency
section_title: Figure II.4: IT Hardware Contracts—Days to Award by Contract Agency
section_title: Figure II.5: IT Software Contracts—Days to Award by Contract Agency
paragraphs: The $250K to $2.5M dollar strata represents a maximum precision of plus or minus 16 percent.
section_title: Figure II.6: IT Maintenance Contracts—Days to Award by Contract Agency
section_title: Figure II.8: Best Value Evaluation Method—Days to Award Contract by Agency
section_title: Figure II.9: GSA’s DPA Process—Days to Receive a DPA by Agency
section_title: Survey of Federal Information Technology Procurement
section_title: Major Contributors to This Report
subsections: section_title: Accounting and Information Management Division, Washington, D.C.
section_title: Program Evaluation and Methodology Division
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subsections: section_title: Address Correction Requested