Contracting Strategies: Data and Oversight Problems Hamper Opportunities to Leverage Value of Interagency and Enterprisewide Contracts
Published: 2010-04-29T00:00:00

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. However, concerns exist about duplication, oversight, and a lack of information on these contracts, and pricing and management of the MAS program. GAO was asked to assess the reasons for establishing and the policies to manage these contracts; the effectiveness of GSA tools for obtaining best MAS contract prices; and GSA's management of the MAS program. To do this, GAO reviewed statutes, regulations, policies, contract documentation and data, and interviewed officials from OMB and six agencies.
section_title: What GAO Found
paragraphs: GWACs, MACs--two types of interagency contracts--and enterprisewide contracts should provide an advantage to the government in buying billions of dollars worth of goods and services. However, data are lacking and there is limited governmentwide policy to effectively leverage, manage, and oversee these contracts. The total number of MACs and enterprisewide contracts is unknown, and existing data are not sufficiently reliable to identify them. In addition, GWACs are the only interagency contracts requiring OMB approval. Agencies GAO reviewed followed statutes, acquisition regulations, and internal policies to establish and use MACs and enterprisewide contracts. Avoiding fees associated with using other agencies' contracts and more control over procurements are some of the reasons agencies cited for establishing MACs and enterprisewide contracts. However, many of the same contractors provided similar products and services on multiple contracts--a condition that increases costs to both the vendor and the government and misses opportunities to leverage the government's buying power. Recent legislation and OMB's Office of Federal Procurement Policy initiatives are expected to strengthen management of MACs, but no such initiatives exist for enterprisewide contracts. GSA's MAS program--the largest interagency contracting program--uses several tools and controls to obtain best prices, but the limited application of certain tools hinders its ability to determine whether it achieves this goal. GSA has established two regulatory pricing controls for MAS contracts: seek the best prices vendors provide to their most favored customers; and a price reduction clause that provides the government a lower price if a vendor lowers the price for similarly situated commercial customers. GSA uses other pricing tools--e.g., pre-award contract audits by its Inspector General and Procurement Management Reviews--on a limited basis. For example, the Inspector General performs pre-award audits on a small sample of MAS contracts annually, but has identified contract cost avoidance of almost $4 billion in recent years. In 2008, GSA established a MAS advisory panel that recommended changes to the pricing controls noted above; concerns remain that such changes could adversely affect GSA's ability to negotiate best prices. A lack of data, decentralized management, and limitations in assessment tools create challenges for GSA in managing the MAS program. The agency lacks data about customer agencies' use of the program, limiting its ability to determine how well the program meets customers' needs. The MAS program office lacks direct program oversight, as GSA has dispersed authority for managing MAS among nine acquisition centers under three business portfolios. Program stakeholders have identified concerns that this structure has impaired consistent policy implementation. Shortcomings in assessment tools also result in management challenges. For example, performance measures are inconsistent, including inconsistent emphasis on pricing. GSA's customer satisfaction survey has such a low response rate that its utility for evaluating program performance is limited.

section_title: Letter
paragraphs: Since 2002, spending on federal contracts has more than doubled, with  approximately $530 billion obligated in fiscal year 2008.  As this spending  has increased, there has been renewed focus on maximizing efficiencies in  the procurement process to achieve cost savings.  One way to accomplish  this is by increasing the use of contracts designed to leverage the  government’s buying power when acquiring commercial goods and  services.  These include the multiple award schedule (MAS) program  contracts (also known as the Federal Supply Schedule), multiagency  contracts (MAC), and governmentwide acquisition contracts (GWAC).   The General Services Administration (GSA) directs and manages the MAS  program.  It has delegated authority to the Department of Veterans Affairs  (VA) to operate schedules for medical supplies. Other agencies have  established and operate MACs and GWACs.  MAS contracts, MACs, and  GWACs are all interagency contracts.
When managed properly, interagency contracting—a process by which  one agency either uses another agency’s contract directly or obtains  contracting support services from another agency—can leverage the  government’s aggregate buying power and provide a simplified and  expedited method for procuring commonly used goods and services.  Enterprisewide contracts, which, according to procurement officials,  appear to have become more popular in recent years, are internal  purchasing programs established within a federal department or agency to  acquire goods and services.  They 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 by federal activities  other than the original acquiring activity.  In fact, the Office of  Management of Budget (OMB) recently reported that 20 of the 24 largest  procuring activities are planning to achieve contracting savings by  implementing strategic sourcing initiatives by using enterprisewide  contracting to leverage their buying power.  These initiatives are part of  OMB’s goal, announced in December 2009, of reducing contract cost by 7  percent by September 30, 2011.
Though precise numbers are unavailable, in fiscal year 2008, government  buyers used the MAS program, MACs, and GWACs to acquire at least $60  billion of commercial goods and services, including billions spent through  enterprisewide contracts.  Some in the procurement community have  raised concerns about a proliferation of some of these contracts, noting  that without coordinated governmentwide oversight of MACs and  enterprisewide contracts it is unclear whether the use of these contracts  helps government buyers leverage their buying power.  The perceived  growth in the number of these contracts and duplication that has occurred  with their growth may also adversely affect the overall administrative  efficiencies and cost savings expected with their use.  Furthermore, in  recent years, we and others have highlighted challenges with MAS  program pricing and compliance with the Federal Acquisition Regulation  (FAR) to obtain the best possible value.  In this context, you requested  that we address management issues associated with the growth in use of  interagency contracting vehicles and enterprisewide contracts, and  especially the management of the GSA’s MAS program contracts.   Specifically, this report addresses:  1.  the data that exist to describe MACs, GWACs, and enterprisewide  contracts use governmentwide; the extent to which policies and  guidance exist to establish and manage these contracts; and the  reasons agencies use these contracts;  2.  the effectiveness of tools and controls GSA uses to obtain the best  possible prices for customers of its MAS program; and   3.  the extent to which GSA has performance information and an  oversight structure in place to manage the MAS program.
We conducted this work at the Office of Federal Procurement Policy  (OFPP) within OMB, which has governmentwide procurement policy  responsibility. We also conducted work at six federal agencies including  GSA, the Department of Defense (DOD), including the three military  departments, Department of Health and Human Services, Department of  Homeland Security (DHS), VA, and the National Aeronautics and Space  Administration (NASA) because these agencies established and or used  the MAS, GWAC, MAC, or enterprisewide contract programs and were  responsible for almost 87 percent of total federal procurement obligations  in fiscal year 2008.  To assess the oversight of and benefits provided these  programs, we reviewed policies, agency directives, relevant studies, audit  reports, the FAR, and other regulations relevant to our review objectives.   We interviewed OFPP representatives responsible for overseeing  interagency contracting, the Senior Procurement Executives or their  representatives for the agencies where we conducted work, and other  agency officials responsible for multiagency and enterprisewide contracts.   To determine the magnitude of multiagency and enterprisewide contracts,  we attempted to use the Federal Procurement Data System-Next  Generation (FPDS-NG) but found that the data were not sufficiently  reliable to determine the universe and use of MACs or enterprisewide  contracts.  Despite its critical role, we have consistently reported on  FPDS-NG data quality issues over a number of years.  This lack of  reliability made it impossible to determine the universe and use of these  types of contracts.  Hence, we conducted literature searches and reviewed  agencies’ and government contractors’ Web pages to identify examples of  MACs and enterprisewide contracts. After identifying examples of these  contracts, we judgmentally selected for review 14 contracting programs  from 5 of the 6 agencies and 2 of the 3 military departments that had at  least one of the three contract types (MAC, GWAC, and enterprisewide  contracts), and met with agency officials and vendors to confirm our  identification of examples and to obtain their perspectives on the  proliferation of these vehicles.  Because the MAS program represents the  single largest federal program providing multiagency contracts, we  concentrated our work on the MAS program.  Furthermore, because GSA  rather than VA sets the policy for the MAS program, we focused on GSA’s  management of the program.  We reviewed GSA’s management structure  for overseeing the program and the tools and controls GSA established for  obtaining fair and reasonable pricing for MAS contracts.  We reviewed  GSA memorandums, regulations, manuals, and other relevant  documentation; interviewed agency officials; and analyzed GSA processes  and practices related to program oversight and contract negotiations.  We  also conducted structured interviews with 16 vendors with high sales on  the GSA MAS program and had also been awarded GWACs, MACs, or  enterprisewide contracts. The 16 vendors represented both large and small  businesses. We also judgmentally selected 17 contracting officers from 4  of the 6 agencies selected for review and the 3 military departments who  had placed orders through one of the reviewed contract vehicles to obtain  their perspectives on the management and pricing of the MAS contracts,  MACs, GWACs and enterprisewide contracts.  We also met with  representatives of several private sector organizations—the Coalition for  Government Procurement, Jefferson Solutions, LLC, the Professional  Services Council, and the Washington Management Group—that represent  vendors and contractors to obtain their views on issues related to our  review objectives.
We conducted this performance audit from October 2008 through April  2010 in accordance with generally accepted government auditing  standards.  Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives.  We believe  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.  A more detailed discussion of  our scope and methodology is in appendix I.
subsections: section_title: Background
paragraphs: Government buyers generally use three types of available interagency  contracts—MACs, GWACs, and MAS program contracts—all of which  leverage the government’s buying power when acquiring goods and  services.  These interagency contracts can be established under several  statutory authorities, including: (1) the Economy Act, which authorizes  agencies to place orders for goods and services with another government  agency; (2) the Clinger-Cohen Act of 1996, which authorizes GWACs; and  (3) the Federal Property and Administrative Services Act of 1949, as  amended, which provides authority for GSA’s MAS program.
The Federal Acquisition Streamlining Act of 1994, also has a bearing on  interagency contracting, since its enactment, along with that of the  Clinger-Cohen Act of 1996, authorized fundamental changes in the  management of government acquisition programs.  These statutes (1)  made it easier for federal agencies to purchase commercial items; (2)  streamlined the processes for making small purchases; (3) eliminated GSA  as the sole authority for all federal information technology acquisitions;  and (4) allowed for establishment of GWACs and other contracting  vehicles including enterprisewide contracts.  Since then, some agencies  have established and operated MACs, GWACs, and enterprisewide  contracts, while GSA operates the MAS program.  Agencies, including GSA  and VA for the MAS program, usually charge their customer agencies fees  for using their GWACs, MACs, and schedule contracts.  These fees are  usually a percentage of the value of the procurement to cover the costs of  administering the contract.  Table 1 describes the various contract types  we examined, including the number in existence and fees charged when  known, and their fiscal year 2008 sales.
In fiscal year 2008, as shown in table 1, federal agencies used GWACs,  MACs, and the MAS program to buy at least $60 billion of goods and  services to support their operations including some agencies spending  billions using enterprisewide contracts.  GWACs, MACs, the  enterprisewide contracts we examined, and contracts under the MAS  program are all indefinite delivery/indefinite quantity (ID/IQ) contracts-- contracts that 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 known, an agency places individual delivery orders for  goods and task orders for services against these contracts.
MACs and GWACs provide advantages to both agencies and vendors.  For  agencies, they provide a means of procuring goods and services without  the time and expense of a full and open solicitation for each order.  For  vendors, the FAR requires agencies to provide a fair opportunity to be  considered for orders exceeding $3,000.  The Economy Act, along with  other authorities, allows an agency to enter into a MAC and then make it  available for other government agencies to place task or delivery orders to  obtain a variety of goods and services.  The Economy Act is applicable to  orders placed under MACs, with the exception of MACs for information  technology that are established pursuant to the Clinger-Cohen Act.  Per  the FAR guidance for the Economy Act, an agency planning to place an  order against another agency’s MAC must document that the servicing  agency has an appropriate pre-existing contract available for use or that it  has the capabilities or expertise to enter into a contract for the required  goods or services, which is not available within the requesting agency.  MACs are established within their respective agencies and no external  reporting on their use is required.  As a result, governmentwide  comprehensive data on the number of MACs and dollars involved with  their use are not readily available.
GWACs provide a broad range of information technology goods and  services and resources for agency activities.  Each GWAC is operated by  an executive agent designated by OMB.  The Economy Act does not  apply when placing orders under GWACs.  As of March 30, 2010, four  agencies—GSA, NASA, the Department of Health and Human Services,  and the Environmental Protection Agency—had OMB authorization to  operate GWACs.  As shown in table 2 below, these agencies were  responsible from 1 to 11 GWAC programs having obligations in fiscal year  2008 totaling almost $5.3 billion.
Obligations placed against GWACs have ranged from about $5 to $6 billion  annually, but have declined slightly in recent years from $5.8 billion in  fiscal year 2004 to $5.3 billion in fiscal year 2008.
subsections: section_title: Enterprisewide Contracts
paragraphs: 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 contracting programs are IDIQ contracts established  solely for the use of the establishing agency and can be used to reduce  contracting administrative overhead, provide information on agency  spending, meet various requirements across the agency, and avoid the fees  charged for using interagency contracts, such as a GWAC.  Creating  enterprisewide contracts can also be a method to support strategic  sourcing within the agency and a means of tailoring requirements for  agency-unique purposes.  They can also be used to specify and enforce  specific contract terms and conditions and bring more consistency into  the agency contracting processes.  Three significant enterprisewide  contracting programs are DHS’s Enterprise Acquisition Gateway for  Leading-Edge Solutions (EAGLE) and FirstSource programs and the  Department of the Navy’s SeaPort Enhanced program.  EAGLE and  FirstSource provide contracts with 64 vendors for information technology  services and commodities, respectively, for the 16 components that make  up DHS and obligated over $1.2 billion in fiscal year 2008.  The Department  of the Navy’s SeaPort Enhanced program provides contracts for procuring  engineering, technical, programmatic, and professional support services.   Currently the program has contracts with over 1,800 vendors and obligated  almost $3.6 billion in fiscal year 2008.
section_title: MAS Program
paragraphs: GSA has had a prominent role in providing goods and services to federal  agencies for decades as part of its responsibility for administering supplies  for federal agencies.  Through its MAS program (also referred to in this  report as the schedules program), GSA provides federal agencies with a  simplified method for procuring various quantities of a wide range of  commercially available 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, avoid the time expenditures and  administrative costs of other methods.  Vendors receive wider exposure  for their commercial products and expend less effort to selling these  products.  Moreover, the MAS program is the primary governmentwide  buying program aimed at helping the federal government leverage its  significant buying power when buying commercial goods and services.
Together, GSA and VA operate 58 schedules.  GSA operates 49 schedules,  which offer a wide range of goods and services such as office furniture  and supplies, personal computers, scientific equipment, library services,  network support, laboratory testing services, and management and  advisory services.  GSA delegated to the VA the authority to solicit,  negotiate, award, and administer contracts for selected schedules.  VA has  seven schedules for various categories of medical/surgical supplies and  equipment and pharmaceuticals, and two schedules for various health care  services including professional health care and staffing services and  laboratory testing and analysis services.
In August 1997, after passage of FASA and the Clinger-Cohen Act, GSA  revised its acquisition regulations to promote greater use of commercial  buying practices, and streamline the purchasing process for its  customers.  GSA expected these changes to lead to more participation by  both large and small businesses, and to increased competition, thereby  providing federal agencies a wider range of goods and services at  competitive prices.  As of December 2009, there were almost 19,000  available contracts providing goods and services on the GSA and VA  schedules.  While MAS sales by both GSA and VA have grown significantly  since 1998, sales have leveled off in recent years, as shown in figure 1.
Over the last several years, GSA initiated several changes within the MAS  program.  In late 2006, the agency reorganized and created the Federal  Acquisition Service (FAS), which combined the duties of the Federal  Technology Service and the Federal Supply Service.  As part of this  reorganization, GSA established three primary FAS business portfolios— General Supplies and Services; Integrated Technology Services; and  Travel, Motor Vehicle, and Card Services—and gave them management  and operational control over the MAS schedules.  Within these portfolios,  nine acquisition centers located throughout the United States award and  manage MAS contracts.  GSA also established within FAS the Office of  Acquisition Management, which is responsible for ensuring that GSA  activities comply with federal laws, regulations, and policies, and that  operating practices are consistent across business lines and acquisition  centers.  In July 2008, within the Office of Acquisition Management, GSA  created the MAS Program Office to develop and implement acquisition  policy and guidance, define systems requirements, and coordinate  program-wide improvements.  VA manages its portion of the MAS program  from its National Acquisition Center, located in Hines, Illinois.  The MAS  Governance Council, established in 2008 as part of the creation of the MAS  Program Office, includes representatives from both GSA and VA, and is  responsible for addressing and coordinating MAS program issues that  affect both GSA and VA.
In 2008, GSA also established a MAS Advisory Panel to provide  independent advice and recommendations on MAS program pricing  policies and provisions in the context of commercial pricing practices.   The panel is made up of representatives from GSA and other federal  agencies as well as industry associations.  The panel issued its report in  February 2010, and made numerous recommendations to GSA regarding  the MAS program pricing provisions, competition requirements, and data  collection, among other things.
section_title: Prior Reviews of Interagency Contracts and the MAS Program Raised Concerns
paragraphs: Prior reviews and audits of interagency contracting and the MAS program  by GAO and inspectors general have highlighted several management  challenges and concerns.  Between 1999 and 2009, we and agencies’  inspectors general issued 12 audit reports identifying a lack of competition  for task and delivery orders issued under ID/IQ contracts.  These reports  addressed task and delivery orders awarded under the MAS program,  GWACs, MACs, and enterprisewide contracts and found that the orders  were either not competed, did not provide for fair opportunity, and/or  restricted competition.  For example, in 2004, we found that contracting  officers waived competition requirements for nearly half—34 out of 74—of  MAS orders reviewed.
In early 2005, we reported that the use of interagency contracting vehicles  had grown rapidly and numerous issues had surfaced, including problems  with internal controls, inadequate competition, unclear definitions of roles  and responsibilities, and inadequate training of contracting personnel.  As  a result, we designated the management of interagency contracting as high  risk in 2005. We stated in our 2005 high risk report that the government  needed to bolster oversight and control over interagency contracting so  that it would be well-positioned to realize the benefits of these contracts.
Even though interagency contracting remains on our list of high-risk areas,  there has been an improvement.  In 2009, we reported that OMB and  federal agencies have made progress toward improving the use of  interagency contracting.  For example, we reported that OMB issued  policy guidance designed to improve the use of interagency contracting  across the government.
In 2005, we also reported on GSA’s schedules program pointing out several  problems related to schedule contract pricing based on GSA’s review of  selected MAS contract files from fiscal year 2004.  Nearly 60 percent of  the contract files GSA reviewed lacked the documentation needed to  establish clearly that GSA had effectively negotiated schedule prices.  GSA  was also not effectively using pricing tools such as pre-award audits, to  meet its pricing objectives.  In response to a recommendation in our  report, GSA significantly increased the number of annual pre-award audits  resulting in a total of almost $4 billion in cost avoidances over a five year  period.
In 2007, the Acquisition Advisory Panel—often referred to as the SARA  panel—reported in fiscal year 2004, FPDS-NG data showed that total  obligations for interagency contracting reached $142 billion, or 40 percent  of the total obligated governmentwide on contracts that year.  The panel  concluded that pressures and incentives for agencies to establish and use  interagency contracting vehicles, coupled with little oversight or  transparency, had created an environment that allowed the uncoordinated  proliferation of interagency contracts, which in turn hampered the  government’s ability to maximize the effectiveness of these contracts  While the panel report provided an estimate of the total obligations for  interagency contracts in fiscal year 2004, it also stated that the FPDS-NG  data used to make this estimate and analyze interagency contracts were  not reliable at the detailed level.
In 2009, the DOD’s Inspector General found problems with enterprisewide  contracting reporting that the Department of the Navy’s SeaPort Enhanced  internal controls were not adequate.  Furthermore, the Inspector General  found that the SeaPort Enhanced program office did not ensure that task  orders were open for bidding for the length of time specified and deviated  from FAR criteria by not performing adequate market research.  In another  report issued in 2009, the DOD Inspector General reported that 72  percent—21 out of 29—of the task orders awarded under a GWAC valued  at $13.9 million had insufficient competition.
section_title: With Insufficient and Unreliable Data and Limited Governmentwide Policy, Agencies’ Use of Interagency and Enterprisewide Contracts May Result in Inefficient Contracting
paragraphs: Interagency and enterprisewide contracts should provide an advantage to  the government in buying billions of dollars worth of goods and  services, yet OMB and agencies cannot be sure they are leveraging  this buying power because they lack the necessary comprehensive,  reliable data to effectively manage and oversee these contracts.   Additionally, the government's lack of an overarching governmentwide  policy to ensure that leveraging happens further exacerbates the problem.   Absent governmentwide data and policy, agencies have created numerous  MACs and enterprisewide contracts using existing statutes, the FAR, and  agency-specific policies.  The creation of these contracts is based on a  number of rationales and reasons including avoiding fees that would be  paid for using interagency contracts, allowing for cost-reimbursement  contracts, and getting more control over the procurement actions of their  sub-components.  Under these conditions, however, duplication of similar  contracts and inefficiencies have occurred.  Both government contracting  officials and representatives of vendors expressed concerns about this  condition.  While some steps are being taken to improve this condition,  more can be done to improve the government's buying power.
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  2003, a FAR rule established an interagency contracting directory to  collect information on interagency contracting vehicles.  In 2006, OFPP  started the Interagency Contracting Data Collection Initiative to identify  and list the available GWACs, MACs, and enterprisewide contracts.  OFPP  requested that all federal agencies with interagency contracts report the  number of contracts available with a description of what was available on  each contract, which agencies could use it, the reason for creating it, and  whether or not there was a completed business case analysis on the  contract.  Twenty-two of the 24 major federal agencies responded to OMB.   The initiative was a one-time effort and thus has not been updated since.
In conducting this review, we could not identify the universe of MACs and  enterprisewide contracts because the data available in the official  government contracting data system, FPDS-NG, were insufficient and  unreliable.  Despite its critical role, we have consistently reported on  FPDS-NG data quality issues over a number of years and found problems.   In 2009, we testified that OMB has taken steps to address some of these  problems; however, the quality of some FPDS-NG data remains an issue.   The fiscal year 2009 National Defense Authorization Act requires that the  Director of OMB direct improvements to the FPDS-NG to collect more  complete and reliable data on interagency contracting actions.  These  requirements, however, do not call for capturing data on enterprisewide  contracts, which are now being used to achieve savings as part of the  governmentwide strategic sourcing initiative.
Most of the senior procurement executives, acquisition officials and  vendors we spoke with believed a publicly available source of information  on these contracts is necessary.  Senior procurement executives from DHS  and DOD stressed the usefulness of a governmentwide clearinghouse of  information on existing contracts.  Sixteen of the 17 contracting officers  we spoke with stated that having a publicly available listing of contracts,  for example, could reduce their market research time.  For instance, one  official stated that it is a “hunt and search” effort to find contract vehicles  and that a central database would reduce market research time and allow  contract actions to be processed faster.  An official from GSA told us there  is not enough information on currently available contracts, which requires  their contracting officers to rely on Internet searches and informal  discussions to locate contract vehicles.  Furthermore, a number of vendors  we spoke with also stated they would favor a central source of  information on available contracts and believe this source would help  increase transparency.
Agency officials we spoke with said that if agencies could easily find an  existing contract they would avoid unnecessary administrative time to  enter into a new contract, which they said could be significant.  One  official stated that if there were an awareness of what was available to use,  it would help to reduce their acquisition lead time.  A Department of the  Navy procurement official told us that by awarding fewer larger contracts,  the Department of the Navy and DOD have created efficiencies resulting in  lower prices.  The SARA panel report 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.  This is particularly important given OMB’s June 2008  guidance on interagency contracting that requires agencies to make a  determination that using an interagency contracting vehicle is in their best  interest; taking into account factors such as whether the vehicle is suitable  to meet their needs and provides the best value.
section_title: Governmentwide Policy on MACs and Enterprisewide Contracts Is Limited; Agencies Use Various Procedures to Establish and Manage These Contracts
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.  In  contrast, GWAC creation and management has governmentwide oversight.   OFPP, as part of OMB, exercises statutory approval authority regarding  establishment of a GWAC.  Once established, agencies provide annual  reports to OFPP, as part of OMB, on GWACs.  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.   They also think surveillance of interagency contracts is a major issue since  proper oversight is sometimes lacking.  Similarly, officials from the Office  of the Under Secretary of Defense for Acquisition, Technology, and  Logistics stated that OFPP is the right agency to take the leadership role  on strategic sourcing for services.  They added, however, that OFPP might  not have sufficient staff to do so.  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.
The six federal agencies and the three military departments we reviewed,  responsible for almost 87 percent of total federal procurement obligations  in fiscal year 2008, have policies that require approval and review for  acquisition planning involving contracts for large dollar amounts 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.  The policy requires that each enterprisewide contract  coordinate requirements between operating entities and determine  administrative costs prior to approval.
Furthermore, agencies have issued guidance encouraging the use of  enterprisewide contracts rather than using interagency contracts.  DOD  guidance on acquisition of services—accounting for over 50 percent of  DOD’s obligated contract dollars—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.  Similarly, DHS senior procurement executives told us that DHS  policy requires buyers to consider EAGLE and FirstSource—both DHS  enterprisewide contracts—before they go to other sources to fulfill  information technology requirements.  In fact, OMB recently reported that  20 of the 24 largest procuring activities are planning on reducing  procurement spending by implementing strategic sourcing initiatives by  using enterprise contracting to leverage their buying power.  These  initiatives are part of the administration’s goal of reducing contract  spending by 7 percent over the next 2 years.
section_title: Departments and Agencies Cite a Variety of Reasons for Establishing MACs and Enterprisewide Contracts Instead of Using Existing Contracts
paragraphs: Agencies we met with cited several reasons for establishing their own  MACs and enterprisewide contracts including cost avoidance through  lower prices, and fewer fees compared to other vehicles, mission specific  requirements, and better control over the management of contracts.  As  shown in tables 3 and 4 below, when deciding to award a MAC or an  enterprisewide contract, agencies listed a number of reasons in the  acquisition plans for not using existing contracts.
The following examples provide more detail about why agencies created  MACs and enterprisewide contracts shown in tables 3 and 4.
The Army cited several reasons for establishing their ITES-2S and  ITES-2H contracts—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.
The Department of the Navy cited numerous reasons for setting up its  SeaPort Enhanced program, an enterprisewide contract, established in  April 2001.  According to the Department of the Navy Senior  Procurement Executive, the Department of the Navy created this  program to reduce costs associated with buying services.  Program  officials stated there were problems with interagency contracting and  wanted to make sure they had more control over their procurements.   They stated further that GSA’s fees made its schedules programs cost  prohibitive.  The Department of the Navy officials also stated they  wanted more insight into their procurements, which they could not  gain when using the GSA schedules.  Finally, the Department of the  Navy also wanted to be able to use cost-reimbursable contracts, which  are not allowed by the GSA’s MAS program.  The Department of the  Navy felt this prohibition hindered their efforts to make their  acquisitions efficient.  In 2005, DHS established EAGLE and FirstSource contracting programs  that 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 its many agencies.  EAGLE was approved around  the time of Hurricane Katrina and DHS determined it would be easier  to coordinate assistance if the department had contractors together  under one program, which would allow DHS to better manage them.   Furthermore, DHS officials stated they wanted to be able to coordinate  the people managing the contracts, which did not happen when using  GSA contracts.
Other departments and agencies are moving toward awarding their own  contracts.  For example, in late 2009, VA was in the process of establishing  a new MAC to provide an array of information technology services,  including program management, systems engineering, cybersecurity and  enterprise network systems.  VA officials stated that this new contracting  program—called the Transformation Twenty-One Total Technology (T4)— will help VA and others procure services at a lower fee than what VA  would pay by ordering through the GSA schedules program or the NASA  GWAC.
section_title: Vendors and Agency Officials Expressed Concerns about Contract Duplication and Associated Management Efforts and Costs
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.  See table 5 below  showing that the top 10 GWAC vendors, based on sales to the government,  offer their goods and services on a variety government contracts that all  provide information technology goods and services.  For example, of the  13 different contract vehicles, 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, which they said can result in increased  procurement costs and an increased workload for the acquisition  workforce.  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.  One vendor stated that they provide  similar goods and services on the Department of the Navy’s Seaport  Enhanced contract and their GSA schedule.  In addition, 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.  Finally, a third vendor stated that GSA vehicles compete  with enterprisewide or agency-specific vehicles, and from industry's  perspective, it has introduced redundant buying capacity.
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.  GSA officials have also remarked on the growth of  multiagency and enterprisewide contracts, which often compete directly  with GSA schedule contracts.  The FAS 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.  Rather, these agencies need to consider the  GSA fee as an opportunity cost for the agency if they do not have to create  their own contract.  In addition, he noted that creating additional contracts  can place unnecessary demands on an already strained acquisition  workforce.
section_title: Legislation Requires the FAR to be Amended to Provide Requirements for 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, one 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.  Under the act,  the FAR requirement for 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 January 29, 2010. The act also requires  an amendment of FAR to require that all interagency acquisitions include a  written agreement between the requesting agency and the servicing  agency that assigns responsibility for the administration and management  of the contract and a determination that the acquisition is the best  procurement alternative.
Senior procurement executives we met with were generally in favor of this  new requirement for MACs.  For example, DOD representatives said that  the requirement would help them better manage MACs because it will  create metrics with which they can measure success.  The NASA Senior  Procurement Executive noted that the new requirement could better  ensure that other agencies properly use the NASA contract vehicles.   However, VA officials representing the department’s Senior Procurement  Executive expressed concern about the time it might take to approve a  contract and ensure that agencies comply with the new requirement.
Nevertheless, a business case analysis approach for MACs has the  potential to provide a governmentwide approach to awarding MACs as  was pointed out by the SARA panel.  The panel reported that proper  business planning requires management deliberation and accountability,  identification of the roles and responsibilities of the requiring and  servicing agency, and the means to communicate this to approving  officials.  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.  Moreover, the  agency seeking approval to establish a MAC would be required to identify  the planned contracting practices, the division of responsibilities between  the servicing agency and the customer agency, and the management  structure.
section_title: GSA’s Efforts to Determine Whether It Obtains the Best Prices on MAS Contracts Is Hindered by the Limited Application of Selected Pricing Tools
paragraphs: GSA’s MAS program is the largest government interagency contracting  program, with approximately 17,000 of the 19,000 contracts involved in the  federal supply schedules program, but GSA’s limited application of  selected pricing tools hinders its ability to determine whether it obtains  the best MAS contract prices.  Because vendors do not compete against  each other to receive MAS contracts, GSA uses two regulatory controls to  obtain the best prices for its customers throughout the existence of the  MAS contracts they use.  The first is the goal that GSA obtain the best  prices for MAS contracts that vendors offer their most favored customers.   The second is a price reduction clause in each MAS contract that generally  operates to reduce the MAS contract price after contract award whenever  the vendor lowers its prices for its similarly situated commercial  customers.  GSA also uses tools such as pre-award audits and clearance  panel reviews to negotiate best prices and ensure the quality of contract  negotiations, respectively, but the use of these tools is limited to a  relatively small number of MAS contracts, thus hindering their  effectiveness.  We also found several instances where GSA acquisition  centers did not hold clearance panel reviews as required.  An advisory  panel established by GSA has made recommendations that could result in  changes to the program’s pricing controls and tools but concerns remain  that these changes could adversely affect GSA’s ability to negotiate best  prices.
subsections: section_title: GSA Has Established Two Key Regulatory Controls to Obtain Vendors’ Best Prices
paragraphs: The goal of the MAS program, according to internal GSA guidance, is to  use commercial terms and conditions and the leverage of the government’s  volume buying to negotiate the best possible prices and terms for  customers and taxpayers.  Vendors do not compete against each other to  receive MAS contracts.  Instead, GSA evaluates a vendor’s offer under a  multiple award schedule solicitation by comparing the terms and  conditions of the MAS contract solicitation to the terms and conditions of  the vendor’s agreements with its commercial customers, taking into  account factors such as prices and discounts offered to the vendor’s  commercial customers, sales volume, and contract length, in order to  establish price negotiation objectives.  Additional information on the  MAS contract award process is available in appendix II.
The negotiation objective described above, which calls for comparing  prices and discounts that a vendor offers the government with the prices  and discounts that a vendor offers its similarly situated commercial  customers, is done as part of GSA’s goal to receive “most favored  customer” pricing for MAS contracts.  When trying to achieve this  negotiation objective, GSA seeks to obtain the best price a vendor  provides its most favored customer while recognizing that there may be  legitimate reasons why the best price is not achieved given that terms and  conditions of commercial sales vary.  For example, a vendor may incur  more expenses selling to the government than to a customer who receives  the vendor’s best prices, which could justify a smaller price discount for  the government.  Most favored customer pricing is one of the two key  regulatory provisions that GSA has established in its acquisition  regulations that work together to obtain the best prices throughout the life  of MAS contracts.  The second pricing provision is the inclusion of a price  reduction clause in MAS contracts.  This provision provides price  protection for the government following contract award if a vendor lowers  its prices to commercial customers during the contract period.  However,  GSA officials we spoke with said that they do not collect data to show how  often the price reduction clause is invoked to reduce schedule prices, as  the data they track on price adjustments for MAS contracts does not  specify whether the price is increased or reduced.  Consequently, it is  difficult to assess whether the clause accomplishes its objective over the  life of the various schedule contracts.  Despite this lack of data, several  vendors and MAS acquisition center officials we met with expressed  concerns about the resources and administrative burden required for  vendors to comply with the current pricing provisions.  For example,  representatives of one vendor we met with noted the difficulty in defining  and tracking labor categories across a large company in order to comply  with the most favored customer pricing provision.  On the other hand,  GSA Inspector General Officials we spoke with said that the pricing  provisions are essential tools to ensuring that GSA can negotiate best  prices for its customers.
section_title: Limited Use of Certain MAS Pricing Tools Hinders Their Effectiveness
paragraphs: In addition to its regulatory pricing controls, GSA also uses pre-award  audits, prenegotiation clearance panels and procurement management  reviews (PMR) as tools to negotiate favorable pricing outcomes and  ensure the quality of MAS contract negotiations.  These tools also provide  information on MAS contracts’ compliance with the regulatory pricing  controls discussed above.  However, GSA uses these tools primarily for a  small number of larger dollar value contracts, thus limiting its ability to  evaluate the effectiveness of the regulatory pricing controls and obtain the  best prices under MAS contracts.
One of these tools is the pre-award audit, conducted by the GSA Inspector  General.  These audits enable contract negotiators to verify that vendor- supplied pricing information is accurate, complete, and current before  contract award.  Ultimately, the pre-award audits can result in lower  prices for the users of MAS contracts by identifying opportunities for GSA  to negotiate more favorable price discounts when awarding contracts  based on an analysis of the prices, terms, and conditions offered to the  vendor’s most favored customer.  For example, a pre-award audit of an  office furniture vendor’s MAS contract with an estimated value of  approximately $700 million identified the potential for greater discounts  that could result in savings of approximately $20 million over the contract  period given that the government was the vendor’s largest customer.  For  contract extensions, these audits can also review compliance with the  price reduction clause in the prior contract period.
Following a decline in the number of pre-award audits--and associated  cost avoidance--in the early 2000s compared to earlier years, GSA  increased the number of pre-award audits in recent years by providing  additional funding to the GSA Inspector General to perform the reviews,  allocating $5 million annually for pre-award audits.  As a result, the GSA  Inspector General has identified almost $4 billion in potential cost  avoidance through pre-award audits from fiscal years 2004 through 2008.   Figure 2 below shows the increase in identified MAS contract cost  avoidance as the number of pre-award audits has increased in recent  years:  While the number of pre-award audits and identification of potential cost  avoidance has increased in recent years, GSA could be missing additional  opportunities for cost savings on MAS contracts by not targeting for  review more contracts that are eligible for audit.  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.  However, not all contracts  that meet this threshold receive an audit, and the current number of aud its  represents a very small number of contracts relative to the size of the MAS  program.  For example, 69 pre-award audits were completed in fiscal year  2008.  In addition, for the GSA Inspector General’s audit planning effort for  the two year period of 2009 through 2011, more than 250 contracts that  exceeded the $25 million threshold were not selected for audit due to  resource constraints, compared to 145 contracts that were.  These 145  contracts, with an award value of approximately $4.7 billion, represent  only 2 percent of the total award dollars for all MAS contracts.
GSA uses other tools designed to improve the quality of MAS contract  negotiations, but their effectiveness is limited by incomplete  implementation and a narrow scope.  In 2003, GSA established an  Acquisition Quality Measurement and Improvement Program, which was  designed to create management controls to assess and improve the quality  of MAS contract negotiations.  This program included a prenegotiation  clearance panel process to help MAS acquisition center management  ensure the quality of its most significant contract negotiations.  Under this  initiative, MAS acquisition centers hold meetings on contracts that meet a  defined dollar threshold to review the contract’s negotiation objectives  with an emphasis on pricing.
MAS acquisition center officials we spoke with said the panel reviews  were a valuable tool to ensure that contract negotiators have done a  proper market analysis to support the contract’s pricing and that the  processes used within an acquisition center to negotiate and award  contracts are consistent.  Nevertheless, we found that acquisition centers  had not fully implemented the panel reviews, thus limiting their  effectiveness.  We identified several instances of contracts that met their  acquisition center’s dollar threshold where there was no indication that a  panel review was held.  These ranged from one contract for consulting  services with an estimated value of $12.5 million to another for  information technology equipment and services with an estimated value of  approximately $276 million. GSA officials we spoke with regarding the  panel reviews said that they do not check whether contracts that met the  appropriate threshold received a panel review, even though this is  supposed to be done as part of the panel reporting process.  In addition,  the GSA Inspector General recently reported that GSA had not clearly  defined management reporting responsibilities for the panel reviews  following the reorganization of the FAS, further limiting the intended  benefits of the initiative.  In response to these issues, GSA has begun the  process of updating its prenegotiation clearance panel guidance to reflect  the current FAS management structure and review whether panel reviews  were completed for contracts that met or exceeded the panel thresholds,  which it plans to finalize in 2010.
GSA also conducts PMRs through its Office of the Chief Acquisition  Officer to assess the quality of contract negotiations through a review of  selected contract files’ compliance with statutes, regulations, and internal  policy and guidance.  The reviews replaced a similar effort that was part of  the Acquisition Quality Measurement and Improvement Program, and  cover a number of acquisition organizations within GSA, including MAS  acquisition centers.  In terms of MAS contract pricing, the PMRs review  whether a contract’s discounts, terms and conditions are equal to or better  than those for the vendor’s most favored customer, and whether the  contract negotiator properly documented how the contract’s price was  determined to be fair and reasonable, among other things.  Following the  review, the acquisition center receives a report that includes the review’s  findings, as well as recommendations for improvement that require  corrective action plans.  In PMR reports we reviewed from fiscal years  2008 and 2009, we found several examples of PMR findings relating to  deficiencies in MAS contract pricing including: insufficient file  documentation to support price reasonableness; files that did not clearly  establish the price/discount relationship with vendors’ categories of  customers; and contract files that did not address which of the vendor’s  customers would serve as the basis for the price reduction clause.
While the PMRs can be a valuable tool for identifying areas for  improvement in MAS contract negotiations and pricing, the scope of the  reviews has been limited to a small number of MAS contracts, thus  minimizing their usefulness for assessing trends in MAS contracts’  compliance with GSA policy and guidance.  In the PMR reports we  reviewed, GSA’s PMR team selected samples of between 12 and 16  contracts for review at each MAS acquisition center, a small amount  relative to the universe of approximately 17,000 MAS program contracts,  and at the time of our fieldwork, the selection methodology did not focus  on risk or yield a statistical sample of contracts for review.  GSA officials  that manage the PMR process said that the number of contracts in each  sample they review makes it difficult to derive trends from the PMR  review findings, although 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.
section_title: Advisory Panel Recommendations on Pricing Provisions Raise Concerns
paragraphs: Recently, GSA has attempted to examine the relevance of GSA’s pricing  controls established to obtain the best available pricing for MAS contracts  in the current marketplace.  In 2008, GSA established an advisory panel to  examine the MAS program’s most favored customer and price reduction  regulatory provisions in the context of current commercial pricing  practices.  The panel, comprised of both government and industry  representatives, met 16 times, receiving testimony from 30 program  stakeholders.  The panel issued its report in February 2010, which  contained 20 recommendations regarding the MAS program, several of  which address GSA’s MAS pricing provisions.  Specifically, the panel  recommended that GSA eliminate the price reduction clause for MAS  services and product contracts on the basis that new statutory competition  requirements (known as “fair opportunity” requirements) and additional  data collection on MAS orders should ensure that the government receives  competitive prices.  Regarding the price objective for MAS contracts, the  panel recommended that GSA issue clear guidance to implement the price  objective for MAS contracts to obtain fair and reasonable prices at the  time of contract award.  MAS Advisory Panel members and program  stakeholders we spoke with stated that this could mean that the “most  favored customer” price would no longer be the objective for the MAS  program.  Senior Procurement Executives from GSA and VA, with whom  we spoke, both members of the panel, had differing opinions on the  panel’s draft recommendations.  The GSA Senior Procurement Executive  noted that the pricing provisions had not served their intended purpose,  and that competition for orders would make the provisions irrelevant.  The  VA Senior Procurement Executive, however, was in favor of retaining the  price reduction clause for products, and said that the most favored  customer price objective provides some assurance of market pricing for  goods and services.  He also said that the elimination of the price  reduction clause would have a negative impact on cost recoveries from  VA’s pre- and post-award audits for its schedule contracts.
GSA will need to consider several issues as it evaluates the panel’s  recommendations.  First, while the panel made efforts to collect data to  assist it in its deliberations, there is minimal quantitative data in the  panel’s report to support its conclusions.  For example, although the panel  reported that those who testified before it said that the price reduction  clause is rarely triggered, GSA (as noted earlier) does not track data on the  number of contract modifications due to price reductions.
Second, while the panel reported that competition for MAS orders is the  best way to ensure that the government receives competitive prices, there  may be risks in relying solely on competition as a substitute for these  pricing provisions.  For example, DOD, the largest MAS customer, has  been subject to fair opportunity competition requirements since 2002, but  DOD’s analysis of competition data for fiscal year 2008 shows that fair  opportunity was not given on more than one-third of DOD’s MAS orders,  which totaled approximately $3.6 billion.  Our prior work and numerous  DOD Inspector General reviews have also identified problems with the  implementation of this requirement, such as issues with excessive waivers  of the requirement and repeated instances of orders that did not provide  for sufficient competition.
Third, changes to the MAS program pricing objective could also have an  adverse impact on the program’s pricing tools.  For example, elimination  of most favored customer as the pricing objective could impair the ability  of the GSA Inspector General to identify potential cost avoidance in its  pre-award audits of MAS contracts.  GSA Inspector General  representatives told us that the most favored customer pricing objective is  critical to their evaluation of vendors’ price proposals.  Moreover, they  said that if GSA adopts the panel’s proposals, their ability to continue  identifying potential cost avoidance for MAS contracts would depend on  whether GSA establishes another negotiation objective as a replacement  for “most favored customer.”  Our prior work has also highlighted the  importance of having a price objective that leverages the government’s  buying power, as agencies may not pursue additional discounts when  placing MAS contract orders.  In our recent review of 336 blanket  purchase agreements based on MAS contracts, agencies did not seek  price discounts when they established blanket purchase agreements in  almost half of the instances reviewed, despite the fact that they are  required to do so.
section_title: Effective MAS Program Management Is Hindered by a Lack of Data, a Decentralized Management Structure, and Shortcomings in Assessment Tools
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 value in using  MAS contracts.  In addition, the decentralized management structure for  the MAS program hinders consistent implementation of the MAS program  within GSA, as well as program wide oversight.  The MAS Program Office,  established in 2008 to manage strategic and policy issues, lacks direct  oversight authority for the MAS program, as GSA has dispersed  responsibility for the management of individual contract schedules among  nine different acquisition centers under three business portfolios.   According to some MAS program officials, this has impaired the consistent  implementation of policies across the MAS program and the sharing of  best practices, and the GSA Inspector General has identified issues with  oversight of the MAS program.  Finally, there are shortcomings in  assessment tools that also result in management challenges.  For example,  MAS performance measures are inconsistent across the GSA organizations  that manage MAS contracts, including inconsistent emphasis on pricing,  which limits GSA’s ability to have a program wide perspective on its  operations.
subsections: section_title: GSA Lacks Important Data to Strategically Manage MAS Contracts and Pricing
paragraphs: GSA lacks important data that would facilitate more strategic management  of the MAS program.  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.  GSA does offer two electronic procurement tools, GSA Advantage  and e-Buy, which permit agencies to place MAS contract orders with  vendors and post requests for quotes with vendors.  GSA Advantage also  has a spend analysis reporting tool that provides agencies with sales and  statistical data on their orders through the system.  However, these tools  account for a very small percentage of overall MAS program sales and  have other limitations in their use, thus restricting the amount of data  available.  In fiscal year 2008, customer sales through GSA Advantage  totaled approximately $559 million, representing only 1.5 percent of total  program sales, and GSA officials we spoke with said that its use is limited  to procuring goods as opposed to services.  GSA officials also said that  while customers can use e-Buy to post requests for quotes of any size and  fulfill fair opportunity competition requirements, they do not generally use  e-Buy to place orders due to its inability to process orders greater than the  micro-purchase threshold of $3,000.
There are several drawbacks to the lack of available transactional data on  the goods and services ordered under the MAS program and the prices  paid.  First, it hinders GSA’s ability to evaluate program performance and  manage the program strategically.  Our prior work has highlighted the  importance of having comprehensive spend data as part of a successful  approach to procurement, noting that the use of procurement data to  determine how much is being spent for goods and services and to identify  buyers and suppliers can identify opportunities to leverage buying, save  money, and improve performance.  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.  Furthermore, the GSA Inspector General has recommended  that GSA take steps to collect this 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.
Secondly, the lack of data could limit the ability of GSA and its customers  to achieve the best value in terms of MAS prices.  Some GSA officials  informed us that they could possibly use transactional data to negotiate  better prices on MAS contracts.  For example, one MAS acquisition center  official said that if they saw large percentage discounts off the contract  price on orders, they would question the price during the next contract  option period.  Program stakeholders also expressed concerns regarding  the lack of MAS program data.  Several of the agency contracting officers  we spoke with cited benefits of having additional transactional data on  MAS orders.  For example, one contracting officer said additional data  could improve their negotiating position when buying goods and services,  while two others said it would increase visibility over their purchases.  Similarly, the MAS Advisory Panel has recommended that GSA make  order-level pricing information available to MAS contract negotiators and  agency contracting officers to conduct market research and assist in price  reasonableness determinations.  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.  As noted earlier in this report, agencies we met with  cited similar concerns over GSA’s prices as a reason they created new  MAC and enterprisewide contracts.  A number of these officials also said  that GSA should play a role in providing this data to its customers to assist  in their strategic procurement efforts.
MAS vendors, GSA officials and agency contracting officers we met with  had mixed opinions on the best way to collect this data, which might  include collecting data from MAS vendors, customer agencies, or through  greater use of electronic ordering portals like GSA Advantage.  GSA  officials also 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.
section_title: Decentralized Management Structure Limits Consistent Program Implementation and Oversight
paragraphs: Responsibility for management of the MAS program is dispersed among  several different organizations in FAS, which has resulted in program  management challenges due to inconsistent implementation of policies  and guidance and program oversight weaknesses.  Following the  reorganization of GSA that created FAS, the agency 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,  and established a Governance Council comprised of representatives from  across FAS as well as VA to help foster collaboration in the MAS program.   To date, the office has undertaken several initiatives to fulfill its charter.   The Governance Council recently developed a set of strategic priorities for  the MAS program for the upcoming years, including the development of  additional training on the MAS program for both GSA and agency  contracting personnel, expanded customer outreach, and the improvement  of information systems that support the program.  As part of its  responsibility to support process improvement efforts, the program office  has also undertaken initiatives to digitize MAS contract files and  implemented a pilot program to process MAS contract modifications  electronically.
While the MAS Program Office is responsible for ensuring consistency in  the MAS program, responsibility for managing the operation of individual  schedules resides with nine different acquisition centers under three  business portfolios.  None of these business portfolios—which manage  other acquisition programs in addition to the MAS program—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.  Figure 3 below depicts the organizational structure of the MAS  program.
MAS Program Office officials stated that despite not having direct  authority over the organizations that manage the MAS program, they are  able to work through issues that arise with the business portfolios.   However, GSA officials in MAS acquisition centers as well as some MAS  vendors we spoke with had varying opinions about the program’s current  management structure.  Some MAS program officials, vendors, and  program stakeholders gave positive feedback on the Program Office’s  efforts to date.  For example, one vendor stated that the electronic  modification effort had made processing contract updates easier and more  transparent.  Furthermore, some GSA officials and industry  representatives we spoke with said that the program office’s governance  council provided the acquisition centers with input on policy and strategy  issues, and that the program office was making progress with the strategic  management of the MAS program.  However, other MAS program officials  stated 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.  For  example, one MAS acquisition center official we spoke with said that the  lack of communication among portfolios has hindered their ability to  respond to vendor questions relating to schedules under other portfolios.   The GSA Inspector General has expressed similar concerns, noting in a  recent report that inconsistent pricing policy among MAS acquisition  centers had contributed to instances in which the government did not have  assurance of the reasonableness of MAS contract pricing, and that there  were opportunities for a more consistent approach in pursuing volume  discounts for MAS contracts.  The report also found 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.  While at the time of our  work the MAS Program Office was a relatively new organization within  FAS, the issues identified with consistency of program implementation  and the use of pricing tools identified earlier in this report highlight the  challenges the office will face in providing coherent program oversight in  the future.
section_title: Limitations in Assessment Tools That Focus on Internal Operations and MAS Customers Also Hinder Effective Program Management
paragraphs: In addition to a lack of data and a decentralized management structure,  shortcomings in assessment tools also create MAS program management  challenges.  Our prior work on performance measurement in the federal  government noted that when complex program goals are broken down  into a set of performance measures, it is important to ensure that the  measures sufficiently cover the key aspects of an agency’s performance,  and that the overall measurement of performance does not become biased  by measures that assess some priorities while neglecting others. GSA has  developed performance measures for the organizations that manage the  MAS program to establish accountability for program performance and  drive continual improvement.  They include measures for sales volume,  program costs, and time to complete contracting actions such as  processing contract offers and modifications.  While these may be valid  measures of program performance, the measures are inconsistent among  the organizations and do not place as much emphasis on pricing, a key  aspect of the program, making it difficult to have a program wide  perspective of MAS program performance.  For example, the fiscal year  2009 performance scorecard for the Information Technology Schedule has  a performance measure to track state and local government sales, while  the General Supplies and Services business portfolio, which also manages  a schedule that state and local governments can use, does not.   Furthermore, the Travel, Motor Vehicle, and Card Services business  portfolio has a draft performance measure for fiscal year 2010 related to  the quality of documentation in contract files, but the Information  Technology Schedule and the General Supplies and Services business  portfolio do not.
There are also inconsistencies in the extent to which the organizations  measure performance as it relates to MAS contract pricing.  The  Information Technology Schedule has tracked price competitiveness for  its products by comparing prices for MAS vendors on GSA Advantage to  prices for the same products in the private sector, with a goal for GSA’s  prices to be at least 10 percent less.  Similarly, the Travel, Motor Vehicle,  and Card Services business portfolio has established a performance  measure that will track how its prices compare against a baseline of prices  paid for similar products in the private sector.  However, the General  Supplies and Services business portfolio does not track any measures  related to pricing.  A GSA official in the FAS Office of Strategic Business  Planning and Process Improvement, which oversees performance  management, noted that they are in the early stages of internal discussions  regarding the development of performance measures related to quality,  which would address pricing, as well as developing a separate scorecard  for the MAS program.
GSA also uses an annual MAS customer satisfaction survey to assess MAS  customers’ perspectives on MAS prices, information available on the MAS  program, and training efforts, among other things.  The results of such  surveys can be used to monitor trends in customer satisfaction over time  and identify areas for improvement.  OMB guidance for federal agencies  on statistical surveys advises that agencies should aim to achieve the  highest practical response rate, and conduct a nonresponse analysis when  response rates do not reach 80 percent, as lower response rates increase  the risk of bias in the survey results.  However, the MAS customer  satisfaction survey reports we reviewed for fiscal years 2007 through 2009  had a response rate of 1 percent or less, and did not include a nonresponse  analysis, raising concerns over the use of the surveys’ results to measure  MAS program performance.  A GSA official who oversees the survey  acknowledged that the low response rate is an indicator that GSA should  improve its survey methodology.
section_title: Conclusions
paragraphs: Billions of taxpayer dollars flow through MACs, GWACs, the MAS  program, and enterprisewide contracts; however, the federal government  does not have a clear 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.   Longstanding 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 of 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 contracting for the same goods and services across a myriad of  contracts—MACs, GWACs, the MAS program, and enterprisewide  contracts.  A more comprehensive business case analysis for MACs and  enterprisewide contracts could help ensure that these contracts are being  established and used in an efficient and effective manner.
Agencies are sometimes reluctant to turn to the GSA MAS program  because they are not confident that GSA prices are as low as they could be  and, as a result, create their own contracts.  While GSA has established  pricing provisions and tools to use to ensure that it obtains the best prices  that vendors offer to their commercial customers and takes advantage of  price decreases after it awards its MAS contracts, some of these tools are  not applied effectively.  Consequently, it is difficult for both GSA and  federal agencies to know whether MAS prices truly achieve the program’s  goal of providing best prices.  Furthermore, the proposal to eliminate the  most favored customer price objective and price reduction clause could  further weaken GSA’s ability to negotiate best prices.  In addition, GSA’s  decentralized program management structure and shortcomings in  program assessment tools and data create oversight challenges that  prevent GSA from obtaining reliable feedback from its customers and  managing the MAS program more strategically.  Furthermore, given that  the MAS program is the government’s leading interagency contracting  program, it is important that OFPP stay informed of GSA’s plans to  address these issues, in order to identify potential lessons learned that  could be relevant for other interagency contracting programs.
Until these issues with interagency and enterprisewide contracts and the  MAS program are addressed, 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.
section_title: Recommendations for Executive Action
paragraphs: To provide better transparency and a coordinated approach in awarding  MACs and enterprisewide contracts, we recommend that the Director of  the Office of Management and Budget direct the Administrator of the  Office of Federal Procurement Policy to take the following five actions in  conjunction with the agencies’ senior procurement executives:     Survey departments and agencies to update the 2006 Office of Federal  Procurement Policy Interagency Contracting Data Collection Initiative  to identify the universe of MACs and enterprisewide contracts in use  throughout federal departments and agencies and assess their utility  for maximizing procurement resources across agencies;     Ensure that departments and agencies use the survey data to  accurately record these contracts in FPDS-NG;    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 the  government’s buying power across departments and agencies while  continuing to use their statutory authorities for buying goods and  services;    Assess the feasibility of establishing and maintaining a centralized  database, which could provide sufficient information on GWACs,  MACs, and enterprisewide contracts, for contracting officers to  conduct market research and make informed decisions on the  availability of existing contracts to meet the agencies’ requirements;  and    As part of developing the pending FAR rule to implement the 2009  National Defense Authorization Act, ensure 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.
To strengthen GSA MAS program pricing and management, we  recommend that the Administrator of the General Services Administration  take the following eight actions:  In coordination with the GSA Inspector General, target the use of pre- award audits to cover more contracts that meet the audit threshold;     Fully implement the process that has been initiated to ensure that  vendors that meet the pre-negotiation clearance panel threshold  receive a panel review;    When considering the MAS Advisory Panel recommendations to clarify  the price objective and eliminate the price reduction clause, ensure  that any alternative means to negotiate and determine best prices are  validated and in place before eliminating these pricing provisions,    Collect transactional data on MAS orders and prices paid, possibly  through the expanded use of existing electronic tools or through a pilot  data collection initiative for selected MAS schedules and make the  information available to MAS contract negotiators and customer  agencies,     Establish more consistent performance measures across the MAS  program, including measures for pricing;     Take steps to increase the MAS customer survey response rate by using  a methodologically sound means to identify bona fide program users  and employing survey techniques that produce meaningful and  actionable information that can lead to program improvements;    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  including policies and practices related to the above recommendations;  and    Report GSA’s plans to address these recommendations to the  Administrator of the Office of Federal Procurement Policy.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to OMB, DOD, Department of Health  and Human Services, DHS, VA, GSA, and NASA. We received email  comments from OMB. We also received email comments from DHS, VA  and NASA noting that they had no technical comments.  We received  written comments from DOD, the Department of Health and Human  Services, and GSA, which are included as appendixes III-V.
OMB concurred with our recommendations in its response. NASA’s  response stated that it found our report to be complete, concise, and  accurate and provided a balanced view of issues. In their written  responses, GSA and the Department of Health and Human Services  concurred with our recommendations and DOD stated that it looks  forward to working with the OMB’s Administrator for OFPP and with GSA  on their efforts to implement the recommendations.  In addition, the GSA  Inspector General provided technical comments on the topic of pre-award  audits that we incorporated into the report as appropriate.
In its comments on a draft of this report, OMB agreed with our assessment  that interagency and enterprisewide contracts should provide an  advantage to the government by leveraging the government’s buying  power and maximizing efficiencies in the procurement process.  OMB also  stated that the growth in the use of interagency contracting vehicles raises  concerns about potential duplication and redundancy of effort and  capacity.  OMB further stated that it is actively engaged in initiatives to  improve transparency into these vehicles as well as the governance,  reporting and regulations covering the establishment, management, and  use of interagency contracts.  Finally, OMB stated that it agrees that  governmentwide guidance in this area will help the government to  effectively leverage, manage, and oversee these contracts.
In written comments on a draft of this report, GSA stated that it agreed  with our findings and recommendations pertaining to GSA and agreed to  make additional efforts to improve MAS program pricing and  management.  GSA also stated that it plans to brief the Administrator of  the OFPP on its plans to implement the recommendations.  In addition,  GSA noted the key role that competition plays in helping agencies achieve  the best value through the MAS program.  Specifically, GSA stated that the  pre-award audit cost avoidance amounts identified by the GSA IG do not  account for additional price reductions that might be realized from other  regulatory procedures in the FAR that call for users of the MAS program to  seek competition and additional price reductions on MAS orders.  As  noted in our report, the pre-award amounts reflect cost avoidance in the  negotiated contract-level prices for MAS contracts as opposed to order- level prices, which GSA acknowledges are challenging to collect  information on.  In addition, GSA stated in its written comments that the  requirement for ordering activities to seek price discounts at the order  level is an additional key regulatory pricing control for the MAS program.   While competition and requirements to seek additional price discounts are  key aspects of ensuring that agencies can achieve the best value through  the MAS program, we note that our objective was to evaluate the  effectiveness of the tools and controls GSA uses to obtain the best  possible prices for its customers in negotiating MAS contract prices, as  opposed to tools used at the ordering level by agencies.  Finally, as noted  in our report, our recent review of 336 MAS blanket purchase agreements  found that agencies did not seek additional price discounts as required by  the FAR in almost half of the instances reviewed.  These points highlight  the importance of GSA’s role in using pricing tools to negotiate the best  possible prices up front for its MAS contracts.
OFPP, DOD, Department of Health and Human Services, and GSA also  provided technical comments, which were incorporated as appropriate.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution of it until 30 days from  the date of this report.  We will then send copies of this report to  interested congressional committees; the Director of the Office of  Management and Budget; the Secretaries of Defense, Health and Human  Services, Homeland Security, and Veterans Affairs; and the Administrators  of the General Services Administration and the National Aeronautics and  Space Administration.  The report also is available at no charge on the  GAO Web site at http://www.gao.gov.  If you or your staff have any   questions about this report, please contact me at (202) 512-4841 or  needhamjk1@gao.gao.  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 on  appendix VI.
section_title: Appendix I: Scope and Methodology
paragraphs: Our overall objective was to address management issues associated with  the growth in the use of interagency contracting vehicles and  enterprisewide contracts, and especially the management of the General  Services Administration’s (GSA) multiple award schedule (MAS) program  contracts.  To conduct this review we selected agencies that established or  used the MAS, governmentwide acquisition contract (GWAC), multiagency  contract (MAC) or enterprisewide contract programs.  The six agencies  and three military departments selected in our review were responsible for  almost 87 percent of total federal procurement obligations in fiscal year  2008. We met with representatives from the Office of Management and  Budget’s Office of Federal Procurement Policy (OFPP), selected agencies’  Senior Procurement Executives or representatives, and selected Heads of  Contracting Activities and contracting officers at the departments and  agencies included in our review.  We also met with vendors and several  private sector organizations that represent the vendor community.  See  table 6 below for a list of agencies, reason for selection, and contracting  activities included in our review.
In addition, we used a structured interview process to discuss our review  objectives with a mix of 16 large and small vendors with high sales on the  GSA MAS program and also awarded GWACs, MACs, or enterprisewide  contracts.  Table 7 identifies the vendors included in our review.
To determine the magnitude of interagency contracting and the extent to  which policies and guidance exist to establish, oversee, and manage  MACs, GWACs, and enterprisewide contracts, we tried to identify the  universe of these contract vehicles.  We found that an official central list of  these vehicles did not exist.  We also tried to use the Federal Procurement  Data System-New Generation (FPDS-NG) to identify these vehicles but  found this system did not adequately identify these vehicles.  To determine  if the data on interagency contracts were reliable we tried to verify some  of the data generated from FPDS-NG.  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.  For example, the  Environmental Protection Agency has a number of GWACs but when we  searched on the contract numbers in FPDS-NG, none of the GWAC  contracts were correctly coded as a GWAC.  Similarly, some of the  National Institutes of Health GWAC contracts were not correctly coded.   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.  This lack of reliability with FPDS-NG data made it  impossible to determine the universe of these types of contracts.  Despite  its critical role, we have consistently reported on FPDS-NG data quality  issues over a number of years. Accordingly, we conducted literature  searches, reviewed 13 agencies’ and departments’ Web pages and also  selected the ten largest government contractors’ which received the most  GWACs procurement obligations in fiscal year 2008 and reviewed their  Web pages to identify examples of MACs, GWACs, and enterprisewide  contracts.  This produced a list of 14 MAC programs, 9 GWAC programs,  and 7 enterprisewide contracting programs, but we acknowledge that it  likely understates the total number of these programs.  Based on this list,  we judgmentally selected to review 14 contracting programs in 5 agencies  and the 2 military departments to provide a broad perspective on agencies  use.  Table 8 lists the MAC, GWAC, enterprisewide contract programs, and  agencies responsible for the vehicles that we selected to obtain additional  information.
We met with OFPP officials to assess their role in agencies awarding  MACs, GWACs, and enterprisewide contracts.  We also met with agency  officials responsible for these types of contracts and discussed their  reasons and the rational for not using other existing contracts.  We also  obtained and reviewed the program’s acquisition plans and business cases  if they were available.  Since GWACs are the only type of interagency  contract receiving governmentwide oversight from OFPP, we obtained and  reviewed the agencies’ annual reports to OFPP discussing how they are  achieving their goals as prescribed by the Office of Management and  Budget and the direct/indirect costs associated with management of these  contracts.  We met with selected agencies’ Heads of Contracting Activities  as well as the agencies’ Senior Procurement Executives or their  representatives to obtain their assessment on the use and awarding of  these vehicles.  We also judgmentally selected 17 contracting officers from  4 agencies and 3 military departments (see table 6 above) in our review  who had placed orders through one of the reviewed contract vehicles.  In  our discussions with these contracting officers, we used a structured  interview process to discuss how they identify available contracts and,  then, determine which contract to use.  In discussions with vendors, we  used a structured interview process to obtain their views on potential  duplications of products and services provided on these contracts and the  costs associated with being on different contracts that provide similar  products and services.  In addition, to assess the oversight of and benefits  provided by GWACs, MACs, and the MAS program, we reviewed policies,  agency directives, relevant studies, audit reports, the Federal Acquisition  Regulation (FAR), and other regulations relevant to our review objectives.   We also met with representatives of several private sector organizations— the Coalition for Government Procurement, Jefferson Solutions, LLC, the  Professional Services Council, and the Washington Management Group— that represent vendors and contractors to obtain their views on issues  related to our review objectives.
To determine the effectiveness of tools, controls, and information GSA  uses to obtain the best possible prices for its customers, we reviewed GSA  policies and guidance for MAS contract negotiations, including GSA’s  Acquisition Manual, specific guidance on contract price negotiations, and  guidance for compliance reviews of MAS contracts.  We discussed  implementation of GSA’s policies and guidance as they pertain to MAS  contract pricing with representatives of GSA’s headquarters components  and the Federal Acquisition Service (FAS) at:    GSA Office of Acquisition Management, Arlington, Va.;     MAS Program Office, Arlington, Va.;     Office of the Chief Acquisition Officer, Washington, D.C.; and     GSA’s Office of Inspector General, Arlington, Va.
We also obtained, analyzed, and discussed acquisition center policies and  procedures for negotiating MAS contracts with MAS Acquisition Center  officials located at GSA’s:    Center for Innovative Acquisition Development, Arlington, Va.;    Center for Information Technology Schedule Programs, Arlington, Va.;   Integrated Workplace Acquisition Center, Arlington, Va.;     Office of Travel, Motor Vehicle, and Card Services, Arlington, Va.;     Management Services Center, Auburn, Wa.; and     Greater Southwest Acquisition Center, Fort Worth, Tx.
Further, we obtained and reviewed information on compliance with GSA  pricing policies and guidance, including prenegotiation clearance panel  reports, GSA Inspector General reports, and GSA Procurement  Management Review Reports, as well as information on GSA Inspector  General pre-award audits and cost avoidance estimates.  Further, we  reviewed information on recommended changes to the MAS program by  the MAS Advisory Panel, and discussed the recommendations with seven  of the MAS Advisory Panel members.  We also discussed the  recommendations with the selected vendors and agency contracting  officers noted above, as well as with MAS Acquisition Center officials.  We  also obtained and analyzed data from the Department of Defense on the  implementation of fair opportunity competition requirements.  To help  ensure the reliability of this data, we interviewed relevant DOD personnel  and performed electronic testing for missing data and obvious errors.  We  determined the data were sufficiently reliable for the purposes of our  review.
To determine the extent to which GSA has an oversight structure in place  to manage the MAS program we reviewed and analyzed documentation on  the MAS program organizational structure and its Program Office charter  and minutes of the MAS program Governance Council.  We also obtained  and reviewed information on the MAS Program Office’s improvement  initiatives.  We discussed the organizational structure and MAS Program  Office initiatives with program office representatives, numerous MAS  acquisition center officials, and the selected vendors.  We also reviewed  GSA Inspector General reports related to the FAS reorganization.  Further,  we obtained and reviewed information on GSA’s electronic tools for  placing and processing MAS orders and discussed the use of these tools  with representatives of the FAS Office of the Chief Information Officer as  well as the selected vendors and agency contracting officers noted above.   We also reviewed and compared information on performance measures  for the MAS program across FAS business portfolios.  We obtained and  reviewed MAS customer satisfaction survey reports for fiscal years 2007  through 2009.  We used OMB guidance on standards for statistical surveys  in executive branch agencies to evaluate the usefulness of the reports.
Finally, we reviewed and analyzed selected GAO and Inspector General  reports issued since 1999 that addressed issues associated with  interagency and enterprisewide contracts.  In particular, we reviewed  information in these reports that addressed agencies’ compliance with  competition requirements for these types of contracts.
We conducted this performance audit from October 2008 through April  2010 in accordance with generally accepted government auditing  standards.  Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives.  We believe  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix II: General Services Administration Multiple Award Schedule Pricing Process and Tools
section_title: Appendix IV: Comments from the Department of Health and Human Services
section_title: Appendix V: Comments from the General Services Administration
section_title: Appendix VI: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the name above, Jim Fuquay, Assistant Director; Marie  Ahearn; Lauren Heft; Kathy Hubbell; Keith Hudson; Julia Kennon; Victoria  Klepacz; Susan Neill; Kenneth Patton; and Russ Reiter made key  contributions to this report.