Contracting Strategies: Better Data and Management Needed to Leverage Value of Interagency and Enterprisewide Contracts
Published: 2010-06-30T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Agencies can use several different types of contracts to leverage the government's buying power for goods and services. These include interagency contracts--where one agency uses another's contract for its own needs--such as the General Services Administration (GSA) and the Department of Veterans Affairs multiple award schedule (MAS) contracts, multiagency contracts (MAC) for a wide range of goods and services, and governmentwide acquisition contracts (GWAC) for information technology. Agencies spent at least $60 billion in fiscal year 2008 through these contracts and similar single-agency enterprisewide contracts. GAO was asked to testify on the management and oversight of interagency contracts, and how the government can ensure that interagency contracting is efficient and transparent. GAO's testimony is based on its recent report, Contracting Strategies: Data and Oversight Problems Hamper Opportunities to Leverage Value of Interagency and Enterprisewide Contracts ( GAO-10-367 , April 2010). In that report, GAO made recommendations to the Office of Management and Budget (OMB) to strengthen policy, improve data, and better coordinate agencies' awards of MACs and enterprisewide contracts, and to GSA to improve MAS program pricing and management. Both agencies concurred with GAO's recommendations.
section_title: What GAO Found
paragraphs: Interagency and enterprisewide contracts should provide an advantage to government agencies when buying billions of dollars worth of goods and services, yet OMB and agencies lack reliable and comprehensive data to effectively leverage, manage, and oversee these contracts. More specifically, the total number of MACs and enterprisewide contracts currently approved and in use by agencies is unknown because the federal government's official procurement database is not sufficient or reliable for identifying these contracts. Departments and agencies cite a variety of reasons to establish, justify, and use their own MACs and enterprisewide contracts rather than use other established interagency contracts--reasons that include avoiding fees paid for the use of other agencies' contracts, gaining more control over procurements made by organizational components, and allowing for the use of cost reimbursement contracts. However, concerns remain about contract duplication--under these conditions, many of the same vendors provided similar products and services on multiple contracts, which increases costs to both the vendor and the government and can result in missed opportunities to leverage the government's buying power. Furthermore, limited governmentwide policy is in place for establishing and overseeing MACs and enterprisewide contracts. Recent legislation and OMB's Office of Federal Procurement Policy initiatives are expected to strengthen oversight and management of MACs, but no initiatives are underway to strengthen approval and oversight of enterprisewide contracts. GSA faces a number of challenges in effectively managing the MAS program, the federal government's largest interagency contracting program. GSA lacks data on orders placed under MAS contracts that it could use to help determine how well the MAS program meets its customers' needs and help its customers obtain the best prices in using MAS contracts. In addition, GSA makes limited use of selected pricing tools, such as pre-award audits of MAS contracts, which make it difficult for GSA to determine whether the program achieves its goal of obtaining the best prices for customers and taxpayers. In 2008, GSA established a program office with broad responsibility for MAS program policy and strategy, but the program continues to operate under a decentralized management structure that some program stakeholders are concerned has impaired the consistent implementation of policies across the program and the sharing of information among the business portfolios. In addition, performance measures were inconsistent across the GSA organizations that manage MAS contracts, including inconsistent emphasis on pricing, making it difficult to have a programwide perspective of MAS program performance. Finally, GSA's MAS customer satisfaction survey has had a response rate of 1 percent or less in recent years that limits its utility as a means for evaluating program performance.

section_title: Letter
paragraphs: I am pleased to be here to discuss the management and oversight of  contracts designed to leverage the government’s buying power when  acquiring commercial goods and services.  To address these issues, I will  discuss our recent report that addressed the need for better data and  management to effectively oversee the awarding and use of interagency  and enterprisewide contracts. Collectively, federal agencies used these  types of contracts to buy at least $60 billion in goods and services during  fiscal year 2008. When managed properly, interagency contracting—a  process by which one agency uses another agency’s contract directly or  obtains contracting support services from another agency—can provide  several benefits for federal agencies. These include the ability to leverage  the government’s aggregate buying power for commercial goods and  services and provide a simplified and expedited procurement method.  Enterprisewide contracts, although not interagency contracts, are also  intended to leverage a particular agency’s buying power and appear to  have become more popular in recent years according to procurement  officials, as internal purchasing programs established within a federal  department or agency to acquire goods and services. Benefits of  enterprisewide contracts can include the ability to reduce contracting  administrative overhead within an agency and provide information on  agency spending.
To realize the benefits of using interagency contracts—including the  multiple award schedule (MAS) program, multiagency contracts (MACs),  and governmentwide acquisition programs (GWACs)—as well as single- agency enterprisewide contracts, the government will have to take steps to  address identified shortcomings in the management of and amount of data  available on both interagency and enterprisewide contracts that currently  make it difficult to determine whether they are being used in an efficient  and effective manner. A basic problem is the lack of data about the  number and sponsors of both MACs and enterprisewide contracts. Given  that there has been renewed focus on maximizing efficiencies in the  procurement process to achieve cost savings, we believe the federal  government will continue to miss opportunities to leverage its vast  purchasing power when buying commercial goods and services unless it  takes steps to improve the management and oversight of these contracts.
In response to this Subcommittee’s interest in improving the use of these  contracts, I will draw primarily on our recent report to discuss (1) issues  related to transparency and the framework for managing GWACs, MACs,  and enterprisewide contracts, and (2) management and pricing issues  associated specifically with the MAS program.
We conducted this work at the Office of Federal Procurement Policy  (OFPP) within the Office of Management and Budget (OMB), which has  governmentwide procurement policy responsibility. We also conducted  work at six federal agencies including the General Services Administration  (GSA), the Department of Defense (DOD), including the three military  departments, Department of Health and Human Services, Department of  Homeland Security (DHS), Department of Veterans Affairs (VA), and the  National Aeronautics and Space Administration (NASA). We also met with  Senior Procurement Executives or their representiaves from these  agencies, 16 vendors that have been awarded these contracts, and 17  contracting officers from a number of the agencies in our review to obtain  their perspectives on interagency and enterprisewide contracts. The report  that formed the basis for this statement was prepared 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.
subsections: section_title: Background
paragraphs: The largest of the interagency contracting vehicles is the MAS program  (also known as the Federal Supply Schedule or the schedules program).  GSA directs and manages the MAS program. MACs and GWACs are also  interagency contracts.  Government buyers usually pay a fee for using  other agencies’ GWACs, MACs, and schedule contracts. These fees are  usually a percentage of the value of the procurement, which are paid to  the sponsoring agency and are expected to cover the costs of  administering the contract.
Along with using interagency contracts to leverage their buying power, a  number of large departments—DOD and DHS in particular—are turning to  enterprisewide contracts as well to acquire goods and services.  Enterprisewide contracts are similar to interagency contracts in that they  can leverage the purchasing power of the federal agency but generally do  not allow purchases from the contract outside of the original acquiring  activity.
Enterprisewide contracting programs can be used to reduce contracting  administrative overhead, provide information on agency spending, support  strategic sourcing initiatives, and avoid the fees charged for using  interagency contracts.
All of these contracts are indefinite delivery/indefinite quantity (ID/IQ)  contracts. ID/IQ contracts are established to buy goods and services when  the exact times and exact quantities of future deliveries are not known at  the time of award. Once the times and quantities are known, agencies  place task and delivery orders against the contracts for goods and  services.
In fiscal year 2008, federal agencies spent at least $60 billion through  GWACs, MACs, the MAS program, and enterprisewide contracts to buy  goods and services to support their operations:  about $46.8 billion was spent on the MAS program;  about $5.3 billion was spent on GWACs;  at least $2.5 billion was spent on MACs although the actual amount  could be much higher; and  at least $4.8 billion was spent on the three enterprisewide contracts we  reviewed, although, like MACs, the actual amount spent on all  enterprisewide contracts could be higher.
Sales under the MAS program have been relatively flat in recent years, and  obligations under GWACs have declined slightly in recent years. However,  the total amount of money spent in fiscal year 2008 using the three  enterprisewide contracting programs included in our review is  approaching the amount spent for GWACs during the same period. In  addition, as OMB recently reported, numerous agencies are planning to  increase their use of enterprisewide contracts as a means of addressing  the administration’s goal of reducing the amount agencies spend on  contracting by 7 percent through fiscal year 2011.
Nevertheless, GSA’s MAS program is still the primary governmentwide  buying program aimed at helping the federal government leverage its  significant buying power when buying commercial goods and services. As  the largest interagency contracting program, the MAS program provides  advantages to both federal agencies and vendors. Agencies, using the  simplified methods of procurement of the schedules, can avoid the time,  expenditures, and administrative costs of other methods. And vendors  receive wider exposure for their commercial products and expend less  effort in selling these products.
section_title: A Lack of Transparency and Limited Governmentwide Policy May Result in Duplication and Inefficient Contracting
paragraphs: Interagency and enterprisewide contracts should provide an advantage to  government agencies when buying billions of dollars worth of goods and  services, yet OMB and agencies lack reliable and comprehensive data  to effectively leverage, manage, and oversee these contracts. More  specifically,    The total number of MACs and enterprisewide contracts currently  approved and in use by agencies is unknown because the federal  government’s official procurement database is not sufficient or reliable  for identifying these contracts,    Departments and agencies cite a variety of reasons to establish, justify,  and use their own MACs and enterprisewide contracts rather than use  other established interagency contracts—reasons that include avoiding  fees paid for the use of other agencies’ contracts, gaining more control  over procurements made by organizational components, and allowing  for the use of cost reimbursement contracts,    Concerns remain about contract duplication—vendors and agency  officials expressed concerns about duplication of effort among these  contracts, and in our review we found many of the same vendors  provided similar products and services on many different contract  vehicles. This could be resulting in duplication of products and  services being offered, increased costs to both the vendor and the  government, and missed opportunities to leverage the government’s  buying power,    Limited governmentwide policy is in place for establishing and  overseeing MACs and enterprisewide contracts.
Recent legislation and OFPP initiatives are expected to strengthen  oversight and management of MACs, but no similar initiatives are  underway to strengthen oversight of enterprisewide contracts. In April  2010, we made five recommendations to OMB to improve data, strengthen  policy, and better coordinate agencies’ awards of MACs and  enterprisewide contracts, and OMB concurred with all of our  recommendations.
subsections: section_title: The Identification and Use of MACs and Enterprisewide Contracts Is Unknown
paragraphs: Prior attempts by the acquisition community to identify interagency and  enterprisewide contracts have not resulted in a reliable database useful for  identifying or providing governmentwide oversight on those contracts. In  2006, OFPP started the Interagency Contracting Data Collection Initiative  to identify and list the available GWACs, MACs, and enterprisewide  contracts. However, the initiative was a one-time effort and has not been  updated since. In conducting our review, we were not able to identify the  universe of MACs and enterprisewide contracts because the data available  in the official government contracting data system, the Federal  Procurement Data System-Next Generation (FPDS-NG), were insufficient  and unreliable.  For instance, FPDS-NG includes a data field that is  intended to identify GWACs but we found a number of instances where  known GWACs were coded incorrectly.  We also searched the system by  contract number for MACs that we were aware of and found similar  issues, with some contracts coded properly as MACs and some not.   Despite its critical role, we have consistently reported on problems with  FPDS-NG data quality over a number of years.
Most of the senior procurement executives, acquisition officials, and  vendors we spoke with as part of our review believed a publicly available  source of information on these contracts is necessary. For example, senior  procurement executives from DHS and DOD stressed the usefulness of a  governmentwide clearinghouse of information on existing contracts.  Agency officials we spoke with said that if agencies could easily find an  existing contract, which they cannot do, they would avoid unnecessary  administrative time to enter into a new contract, which they said could be  significant. The report of the Acquisition Advisory Panel—often referred  to as the SARA panel— previously noted some of these concerns, stating  that too many choices without information related to the performance and  management of these contracts make the cost-benefit analysis and market  research needed to select an appropriate acquisition vehicle impossible.
subsections: section_title: Recommendations to OFPP
paragraphs: To improve the transparency of and data available on these contracts, we  made three recommendations to OFPP:  1.  Survey departments and agencies to update its 2006 data collection  initiative to identify the universe of MACs and enterprisewide  contracts in use and assess their utility for maximizing procurement  resources across agencies.  2.  Ensure that departments and agencies use the survey data to  accurately record these contracts in FPDS-NG.  3.  Assess the feasibility of establishing and maintaining a centralized  database to provide sufficient information on GWACs, MACs, and  enterprisewide contracts for contracting officers to use to conduct  market research and make informed decisions on the availability of  using existing contracts to meet agencies’ requirements.
section_title: Departments and Agencies Cite a Variety of Reasons for Establishing New MACs and Enterprisewide Contracts
paragraphs: Agencies cited several reasons for establishing their own MACs and  enterprisewide contracts including cost avoidance through lower prices,  fewer fees compared to other vehicles, mission specific requirements, and  better control over the management of contracts. For example:    The Army cited several reasons for establishing their MACs for  information technology hardware and services in 2005 and 2006. The  Army wanted to standardize its information technology contracts so  each contract would include the required Army and DOD security  parameters. According to the Army, GSA contracts do not  automatically include these security requirements and using a GSA  contract would require adding these terms to every order. The Army  also cited timeliness concerns with GSA contracts and GSA fees as  reasons for establishing their own contracting vehicles.  In 2005, DHS established the EAGLE and FirstSource contracting  programs.  Both involve enterprisewide contracts used for information  technology products and services. Officials stated the main reason  these programs were established was to avoid the fees associated with  using other contract vehicles and save money through volume pricing.  In addition, the programs centralized procurements for a wide array of  mission needs among DHS’ many agencies. Furthermore, DHS officials  stated they wanted to be able to coordinate the people managing the  contracts, which did not happen when using GSA contracts.
section_title: Concerns Exist About Contract Duplication
paragraphs: We found the same vendors on many different contract vehicles providing  information technology goods or services, which may be resulting in  duplication of goods and services being offered. Table 1 below shows that  the top 10 GWAC vendors, based on sales to the government, offer their  goods and services on a variety of government contracts that all provide  information technology goods and services. For example, of the 13  different contract vehicles listed in Table 1, 5 of the 10 vendors were on 10  or more of these.
Vendors and agency officials we met with expressed concerns about  duplication of effort among the MACs, GWACs, and enterprisewide  contracts across government. A number of vendors we spoke with told us  they offer similar products and services on multiple contract vehicles and  that the effort required to be on multiple contracts results in extra costs to  the vendor, which they pass to the government through the prices they  offer. The vendors stated that the additional cost of being on multiple  contract vehicles ranged from $10,000 to $1,000,000 due to increased bid  and proposal and administrative costs.
Interestingly, we found one vendor offering the exact same goods and  services on both their GSA schedule and the NASA’s GWAC and offering  lower prices on the GWAC. Another vendor stated that getting on multiple  contract vehicles can be cost-prohibitive for small businesses and forces  them to not bid on a proposal or to collaborate with a larger business in  order to be on a contract vehicle.
Government procurement officials expressed additional concerns. For  example, an official from OFPP has stated that such duplication of effort  only complicates the problem of an already strained acquisition  workforce. The GSA Federal Acquisition Service Deputy Commissioner  stated that while the agencies cite GSA fees as a reason for creating their  own vehicles, agencies fail to consider the duplication of effort and cost of  doing these procurements.
section_title: Governmentwide Policy on MACs and Enterprisewide Contracts Is Limited
paragraphs: Federal agencies operate with limited governmentwide policy that  addresses the establishment and use of MACs and enterprisewide  contracts. Federal regulations generally provide that an agency should  consider existing contracts to determine if they might meet its needs. The  six federal agencies and the three military departments we reviewed have  policies that require approval and review for acquisition planning involving  large dollar amount contracts which would generally include the  establishment of MACs and enterprisewide contracts. The review process  varies from agency to agency. For example, an official from the Office of  the Under Secretary of Defense for Acquisition, Technology, and Logistics  told us that any new DOD contract estimated at over $100 million would  be required to go through a review process to ensure that no other  contract exists that could fulfill the new requirement. As another example,  DHS requires that the senior procurement executive approve the  establishment of each enterprisewide contract.
In contrast, GWAC creation and management have governmentwide  oversight, as OFPP exercises statutory approval authority regarding  establishment of a GWAC. The senior procurement executives we spoke  with had mixed views on the proper role of OFPP in providing clarification  and oversight to agencies establishing their own contract vehicles. For  example, Army senior acquisition officials representing the senior  procurement official told us that the policy on interagency contracting is  not cohesive. In their view, OFPP should provide policy and guidance that  agencies would be required to follow. In contrast, the Senior Procurement  Executive for the Department of the Navy pointed to agency-specific  circumstances or requirements that create uncertainty about the utility of  broad OFPP guidance.
Furthermore, agencies have issued guidance encouraging the use of  enterprisewide contracts rather than using interagency contracts. For  example, DOD guidance advises that contracting officers consider the use  of internal DOD contract vehicles to satisfy requirements for services prior  to placing an order against another agency’s contract vehicle. Moreover,  OMB recently reported that 20 of the 24 largest procuring activities are  planning on reducing procurement spending by using enterprise  contracting to leverage their buying power, as part of the administration’s  goal of reducing contract spending by 7 percent over the next 2 years.
subsections: section_title: Recommendation to OFPP
paragraphs: To provide a more coordinated approach in awarding MACs and  enterprisewide contracts, we recommended that OFPP take steps to  establish a policy and procedural framework in conjunction with agencies  for establishing, approving, and reporting on new MACs and  enterprisewide contracts on an ongoing basis. The framework should  stress the need for a consistent approach to leveraging governmentwide  buying power while allowing agencies to continue to use their statutory  authorities for buying goods and services.
section_title: Legislation Requires a Business Case Analysis for MACs, but Does Not Address Enterprisewide Contracts
paragraphs: Recent legislation and OFPP initiatives are expected to strengthen  oversight and management of MACs, but these initiatives do not address  enterprisewide contracts. The 2009 National Defense Authorization Act  required, 1 year after its enactment, that the FAR be amended to require  that any MAC entered into by an executive agency after the amendment’s  effective date be supported by a business case analysis. The business  case is to include an analysis of all direct and indirect costs to the federal  government of awarding and administering a contract and the impact it  would have on the ability of the federal government to leverage its buying  power. However, the Act is silent on what steps an agency should take to  examine the effect a new contract will have on the ability of the  government to leverage its buying power. Additionally, the Act does not  address similar requirements for enterprisewide contracts. Under the Act,  the pending FAR rule relating to this legislation was required to be issued  by October 15, 2009; however, the rule was still in progress as of June 11,  2010.
A business case analysis approach for MACs has the potential to provide a  consistent governmentwide approach to awarding MACs as was pointed  out by the SARA panel. The panel noted that the OFPP review and  approval process for GWACs could serve as a good business model for  approving MACs. Using the GWAC process as a model, the full business  case analysis as described by the SARA panel would need to include  measures to track direct and indirect costs associated with operating a  MAC. It would also include a discussion about the purpose and scope, and  the amount and source of demand. Further, the business case would need  to identify the benefit to the government along with metrics to measure  this benefit.
subsections: section_title: Recommendation to OFPP
paragraphs: We recommended that as OFPP develops the pending FAR rule to  implement the business case analysis requirement above, it ensures that  departments and agencies complete a comprehensive business case  analysis as described by the SARA panel, and include a requirement to  address potential duplication with existing contracts, before new MACs  and enterprisewide contracts are established.
section_title: Management and Pricing Issues Hinder MAS Program Effectiveness
paragraphs: Our work identified a number of challenges GSA faces in effectively  managing the MAS program, the federal government’s largest interagency  contracting program. More specifically, GSA
Lacks transactional data about its customers’ use of MAS  contracts, which would provide GSA insight to facilitate more  effective management of the program;
Makes limited use of selected pricing tools that make it difficult for  GSA to determine whether the program achieves its goal of  obtaining the best prices for customers and taxpayers;
Uses a decentralized management structure for the MAS program  in conjunction with deficient program assessment tools, which  create obstacles for effective program management.
In April 2010, we made a number of recommendations to GSA to improve  MAS program management and pricing, with which GSA concurred.
subsections: section_title: GSA Needs Transactional Data to Strategically Manage MAS Contracts and Negotiate Pricing
paragraphs: GSA lacks data about the use of the MAS program by customer agencies  that it could use to determine how well the MAS program meets its  customers’ needs and to help its customers obtain the best prices in using  MAS contracts. GSA officials told us that because agency customers  generally bypass GSA and place their orders directly with MAS vendors,  they lack data on the orders placed under MAS contracts; as a result, GSA  also lacks data on the actual prices paid relative to the MAS contract  prices. While GSA does have a spend analysis reporting tool through its  GSA Advantage system that provides agencies with sales and statistical  data on their orders, it accounts for a very small percentage of overall MAS  program sales, thus restricting the amount of data available.
There are two drawbacks to the lack of available transactional data on the  goods and services ordered under the MAS program and the prices paid:  The lack of data hinders GSA’s ability to evaluate program performance  and manage the program strategically. Several GSA officials acknowledged  that it is difficult for GSA to know whether the MAS program meets their  customers’ needs without data on who uses MAS contracts and what they  are buying. The GSA Inspector General has recommended that GSA take  steps to collect these data to use in evaluating customer buying patterns  and competition at the order level in order to adopt a more strategic  management approach. We have made similar observations in prior  reports going back several decades.
The lack of data could limit the ability of GSA and its customers to achieve  the best prices through the MAS program. Some GSA officials informed us  that they could possibly use transactional data to negotiate better prices  on MAS contracts. Several agency contracting officers we spoke with cited  benefits of having additional transactional data on MAS orders to improve  their negotiating position when buying goods and services, and increasing  visibility over the purchases their respective agency makes. In addition, a  number of the senior acquisition officials at agencies in our review said  that they considered the prices on MAS contracts to be too high, and  without additional data from GSA, it was difficult to see the value in the  MAS program and the prices that GSA negotiates.
GSA officials told us that they have initiated a process improvement  initiative to collect more transactional data in the future, as they make  improvements to information systems that support the MAS program.  However, this initiative is currently in its early stages.
subsections: section_title: Recommendation to GSA
paragraphs: We recommended that GSA take steps to collect transactional data on  MAS orders and prices paid and provide this information to contract  negotiators and customer agencies, potentially through the expanded use  of existing electronic tools or through a pilot data collection initiative for  selected schedules.
section_title: GSA Makes Limited Use of Selected Pricing Tools
paragraphs: GSA uses several tools and controls in the contract award and  administration process to obtain and maintain best prices for its contracts.  These tools include:    pre-award audits of MAS contracts by the GSA Inspector General,   clearance panel reviews of contract negotiation objectives, and    Procurement Management Reviews.
However, it applies these tools to a small number of contracts, which  hinders GSA’s ability to determine whether it achieves the program’s goal  of obtaining best prices.
For example, the GSA Inspector General performs pre-award audits of  MAS contracts, which enable contract negotiators to verify that vendor- supplied pricing information is accurate, complete, and current before  contract award. These audits can also result in lower prices for MAS  customers by identifying opportunities for GSA to negotiate more  favorable price discounts prior to award. From fiscal year 2004 through  2008, the GSA Inspector General identified almost $4 billion in potential  cost avoidance through pre-award audits. However, we found that GSA  could be missing additional opportunities for cost savings on MAS  contracts by not targeting for review more contracts that are eligible for  audit. While GSA guidance instructs contract negotiators to request audit  assistance for new contract offers and extensions as appropriate when a  contract’s estimated sales exceed $25 million for the 5-year contract  period, more than 250 contracts that exceeded this threshold were not  selected for audit for the 2-year period of 2009 through 2011 due to  resource constraints. In addition, the 145 contracts that were selected for  audit represent only 2 percent of the total award dollars for all MAS  contracts.
GSA uses other tools to improve the quality of contract negotiations, but  we found that their effectiveness was limited by incomplete  implementation and a narrow scope. GSA established a prenegotiation  clearance panel process to ensure the quality of GSA’s most significant  contract negotiations by reviewing the contract’s negotiation objectives  with an emphasis on pricing, prior to contract award for contracts that  meet certain defined dollar thresholds. However, we found several  instances where clearance panel reviews were not held for contracts that  met these thresholds, and GSA officials said that they do not check  whether contracts that met the appropriate threshold received a panel  review, thus limiting the effectiveness of this tool. GSA has begun the  process of updating its prenegotiation clearance panel guidance to address  this issue.
GSA also conducts Procurement Management Reviews to assess contracts’  compliance with statutory requirements and internal policy and guidance.  However, GSA only selects a small number of contracts for review and at  the time of our fieldwork did not use a risk-based selection methodology,  which does not permit GSA to derive any trends based on the review  findings. A subsequent update to GSA’s PMR methodology to focus on  attempting to select a statistical sample of contracts for review could  address this issue.
subsections: section_title: Recommendations to GSA
paragraphs: We recommended that GSA, in coordination with its Inspector General,  target the use of pre-award audits to cover more contracts that meet the  audit threshold. In addition, we recommended that GSA fully implement  the process that has been initiated to ensure that vendors who require a  prenegotiation clearance panel receive a panel review.
section_title: Decentralized Management Structure and Limitations in Assessment Tools Limit Effective Program Management
paragraphs: The decentralized management structure for the MAS program and  shortcomings in assessment tools also create MAS program management  challenges. GSA established the MAS Program Office in July 2008 to  provide a structure for consistent implementation of the MAS program.  The program office’s charter provides it broad responsibility for MAS  program policies and strategy.
Responsibility, however, for managing the operation of individual  schedules resides with nine different acquisition centers under three  business portfolios. None of these business portfolios or the MAS  acquisition centers that award and manage MAS contracts are under the  direct management of the MAS Program Office. In addition, the program  office’s charter does not specifically provide it with direct oversight of the  business portfolios’ and acquisition centers’ implementation of the MAS  program. GSA officials and program stakeholders we spoke with had  varying opinions about this management structure, with some noting that  the program is still not managed in a coordinated way and that there is a  lack of communication and consistency among MAS acquisition centers  which impairs the consistent implementation of policies across the  program and the sharing of information between business portfolios. The  GSA Inspector General has expressed similar concerns, noting in a recent  report that a lack of clearly defined responsibilities within the new FAS  organization has harmed national oversight of the MAS program and may  have affected the sharing of best practices between acquisition centers.
We also found that performance measures were inconsistent across the  GSA organizations that manage MAS contracts, including inconsistent  emphasis on competitiveness of pricing, making it difficult to have a  programwide perspective of MAS program performance. Finally, GSA’s  MAS customer satisfaction survey has had a response rate of one percent  or less in recent years that limits its utility as a means for evaluating  program performance.
subsections: section_title: Recommendations to GSA
paragraphs: We recommended that GSA clarify and strengthen the MAS Program  Office’s charter and authority so that it has clear roles and responsibilities  to consistently implement guidance, policies, and best practices across  GSA’s acquisition centers , establish more consistent performance  measures across the MAS program to include measures for pricing, and  take steps to increase the MAS customer survey response rate.
section_title: Concluding Observations
paragraphs: Billions of taxpayer dollars flow through interagency and enterprisewide  contracts; however, the federal government does not have a clear and  comprehensive view of who is using these contracts and if they are being  used in an efficient and effective manner—one that minimizes duplication  and advantages the government’s buying power by taking a more strategic  approach to buying goods and services. Long-standing problems with the  quality of FPDS-NG data on these contracts and the lack of consistent  governmentwide policy on the creation, use, and costs of awarding and  administering some of these contracts are hampering the government’s  ability to realize the strategic value of using these contracts. Furthermore,  departments and agencies may be unknowingly contracting for the same  goods and services across a myriad of contracts—MACs, GWACs, the MAS  program, and enterprisewide contracts. In addition, GSA’s shortcomings in  data, program assessment tools, and use of pricing tools create oversight  challenges that prevent GSA from managing the MAS program more  strategically and knowing whether the MAS program provides best prices.  In agreeing with our recommendations, OMB and GSA recognize the  importance of addressing these problems, but until they are resolved, we  believe the government will continue to miss opportunities to minimize  duplication and take advantage of the government’s buying power through  more efficient and more strategic contracting.
Madam Chairman, this concludes my prepared statement. I would be  happy to respond to any questions you or the other members of the  subcommittee may have at this time.
section_title: Contacts and Staff Acknowledgements
paragraphs: For further information regarding this testimony, please contact John  Needham at (202) 512-4841 or needhamjk1@gao.gov. Contact points for  our Offices of Congressional Relations and Public Affairs may be found on  the last page of this product. Individuals making key contributions to this  statement were James Fuquay (Assistant Director); Marie Ahearn; Lauren  Heft; and Russ Reiter.
This is a work of the U.S. government and is not subject to copyright protection in the  United States. The published product may be reproduced and distributed in its entirety  without further permission from GAO. However, because this work may contain  copyrighted images or other material, permission from the copyright holder may be  necessary if you wish to reproduce this material separately.