Section 1423 of the Services Acquisition Reform Act of 2003 directed the Administrator for Federal Procurement Policy to establish an acquisition advisory panel to (1) review all federal acquisition laws and regulations and, to the extent practicable, governmentwide acquisition policies, with a view toward ensuring effective and appropriate use of commercial practices, performance-based contracting, the performance of acquisition functions across agency lines of responsibility, and the use of governmentwide contracts and (2) make any recommendations for the modification of laws, regulations, or policies that are considered necessary to protect the best interests of the federal government; ensure the continuing financial and ethical integrity of acquisitions by the federal government; and enhance effective, efficient, and fair award and administration of contracts for the acquisition of goods and services. The Administrator for Federal Procurement Policy appointed the panel members in February 2005. The panel held 31 public meetings and heard the testimony of 108 witnesses, representing 86 entities from industry, government, and public interest organizations. Witnesses included representatives from GAO. The panel’s public deliberations produced about 7,500 pages of transcript. In addition, the panel received written public statements from over 50 sources, including associations, individual companies, and members of the public. The documents and transcripts associated with the panel’s deliberations were available to the public via a Web site established specifically for the panel’s work. The panel’s final report, which was dated January 2007, was released in its final form in July 2007. The report contains seven chapters that cover the following areas: commercial practices, performance-based acquisition, interagency contracting, the federal acquisition workforce, the appropriate role of contractors supporting government, the federal procurement data, and small business. In all, the panel made 89 recommendations for the modification of laws, regulations, or policies that it considered necessary as the result of its review. The 89 recommendations in the panel report are largely consistent with our past work and recommendations. Presented below is a discussion of the seven areas the panel reviewed, the general thrust of the panel’s recommendations, and our views on them. According to the panel, the bedrock principle of commercial acquisition is competition. The panel found that defining requirements is key to achieving the benefits of competition because procurements with clear requirements are far more likely to produce competitive, fixed price offers that meet customer needs. Further, the panel found that commercial organizations invest the time and resources necessary to understand and define their requirements. They use multidisciplinary teams to plan their procurements, conduct competitions for award, and monitor contract performance. Commercial organizations rely on well-defined requirements and competitive awards to reduce prices and obtain innovative, high- quality goods and services. Hence, practices that enhance and encourage competition were the basis of the panel recommendations. Among other things, the panel recommended that the requirements process be improved, competitive procedures be strengthened, and the definition of commercial services be amended. Our work is generally consistent with the panel recommendations, and we have issued numerous products that address the importance of a robust requirements definition process and the need for competition. For example, in January 2007, we testified that poorly defined or broadly described requirements have contributed to undesired service acquisition outcomes. To produce desired outcomes within available funding and required time frames, our work has shown that DOD and its contractors need to clearly understand acquisition objectives and how they translate into the contract’s terms and conditions. The absence of well-defined requirements and clearly understood objectives complicates efforts to hold DOD and contractors accountable for poor acquisition outcomes. This has been a long-standing issue. Previously, in 2000, we reported that DOD was not clearly defining requirements for most information technology services. Requirements were not clearly defined because the orders for information technology services covered several years of effort, and officials were uncertain what support they would need in future years. The 22 orders we reviewed—with an awarded value of $553 million— typically provided for reimbursing the contractors’ costs, leaving the government bearing most of the risk of cost growth. Further, a majority of these orders were awarded without competition. More recently, we testified, in July 2007, that agencies, among other things, need to translate their true needs into executable programs by setting realistic and stable requirements. However, agencies too often promise capabilities they cannot deliver and proceed to development without adequate knowledge. As a result, programs take significantly longer, cost more than planned, and deliver different capabilities than promised. Regarding competition, we have stated that competition is a fundamental principle underlying the federal acquisition process. Nevertheless, we have reported numerous times on the lack of competition in DOD’s acquisition of goods and services. For example, we noted in April 2006 that DOD awarded contracts for security guard services supporting 57 domestic bases, 46 of which were done on an authorized sole-source basis. The sole-source contracts were awarded by DOD despite recognizing it was paying about 25 percent more than previously paid for the contracts awarded competitively. We also reported in July 2004 that guidance was needed to promote competition for defense task orders placed against indefinite delivery, indefinite quantity contracts. We found that competition requirements were waived for nearly half (34 of 74) of the multiple-award contract and federal supply schedule orders we reviewed. Often, contracting officers waived competition based on requests from the DOD program offices to retain the services of contractors currently performing the work. In addressing these requests, safeguards to ensure that waivers were granted only under appropriate circumstances were lacking. In addition, the requirements for documenting the basis for waivers were not specific, and there was no requirement that waivers be approved above the level of the contracting officer. We made recommendations to the Secretary of Defense to (1) develop guidance on the conditions under which a waiver of competition may be used, (2) require detailed documentation to support waivers, and (3) establish approval authority above the contracting officer level based on the value of the order. Although these recommendations were directed at DOD, they are relevant across all federal agencies and consistent with the panel recommendations to strengthen competitive procedures across the federal government with respect to policy, procedures, and training. As the panel noted, there have also been concerns about the federal government’s definition of a commercial service. The panel finding was that the current regulatory treatment of commercial items and services allows for goods and services not sold in substantial quantities in the commercial market to be classified as “commercial” and purchased using streamlined procedures under Part 12 of the FAR, which deals with commercial items. The panel noted that the most critical element of the definition of commercial services is that the service must be offered and sold competitively, in substantial quantities, in the commercial marketplace. If the definition is overly broad, misclassification can result and the government might lack assurances that the prices of those items and services are reasonable. When commercial market forces that meet the critical elements do not exist, the panel noted that more traditional methods, such as negotiated procurements described under FAR Part 15, should be used. FAR Part 15 describes the procedures to be used when an item or service is purchased under negotiated procurements. While we addressed issues related to commercial items in the past, we have not specifically made recommendations on the definition of commercial items or services. However, in July 2006, we reported that DOD sometimes uses commercial item procedures to procure items that are misclassified as commercial items and therefore not subject to the forces of a competitive marketplace. When an item is designated as commercial, the government should be able to determine if the price is reasonable based on prices found in the commercial marketplace. However, if the government designates a service (or an item) as commercial merely because the service is “of a type” that is sold commercially, but the offered service is not readily available in the commercial market, the government reduces its ability to assess the reasonableness of the contractor’s price because it does not have prices derived through the benefit of competition in the commercial market place. Another panel recommendation dealt with pricing of commercial services. The panel reasoned that if the service meets the definition of a commercial service—in other words, it is sold in the commercial marketplace in substantial quantities—then an agency should be able to obtain a reasonable price based on the effects of existing competition, market research, and analysis of prices for similar commercial sales. The panel reasoned that even if the agency purchased a commercial service with no or limited competition, the prices that would be obtained would reflect market forces. The panel recommended, therefore, that when an agency buys a commercial service that meets the definition of a commercial service, a contracting officer may not require certification of detailed cost breakdowns, nor may contractor costs be the subject of a postaward audit. While we recognize the panel’s position with regard to limiting the use of postaward audits with respect to procuring commercial services, our past work has been supportive of postaward audits as a tool that should be available to the acquisition workforce in certain other cases to ensure that the government receives fair and reasonable prices. Specifically, we reported that the General Services Administration (GSA) Inspector General found that the postaward audits of acquisitions using Multiple Award Schedules contracts were a deterrent to vendor pricing abuse. Additionally, they can result in recovery of money from contractors that have overpriced their products after the contract was awarded. Both GSA and the Department of Veterans Affairs have recovered millions of dollars through the use of postaward audits for their schedule contracts. For example, we found the Department of Veterans Affairs recovered $90 million from postaward audits during fiscal years 1999 to 2004. The panel reported that performance-based acquisition (PBA) has not been fully implemented in the federal government even though OMB has encouraged greater use of it—setting a general goal in 2001 of making performance-based contracts 40 percent or more of all eligible service acquisitions for fiscal year 2006. The panel reported that agencies were not clearly defining requirements, not preparing adequate statements of work, not identifying meaningful quality measures and effective incentives, and not effectively managing the contract. The panel noted that a cultural emphasis on “getting to award” still exists within the government, which precludes taking the time to clarify agency needs and adequately define requirements. The panel recommended that OFPP issue more explicit implementation guidance and create a PBA “Opportunity Assessment” tool to help agencies identify when they should consider using PBA contracts. Like the panel, we have found that agencies have faced a number of issues when using PBA contracts. For example, we reported in April 2003 that there was inadequate guidance and training, a weak internal control environment, and limited performance measures and data that agencies could use to make informed decisions on when to use PBA. We have made recommendations similar to the panel’s. For example, we have recommended that the Administrator of OFPP work with agencies to periodically evaluate how well agencies understand PBA and how they can apply it to services that are widely available in the commercial sector, particularly with more unique and complex services. The panel’s concern that agencies are not properly managing PBA contracts is also consistent with our work on surveillance of service contracts. In a March 2005 report, we found that proper surveillance of service contracts, including PBAs, was not being conducted, leaving DOD at risk of being unable to identify and correct poor contractor performance. Accordingly, we recommended that the Secretary of Defense ensure the proper surveillance training of personnel and their assignment to contracts occur no later than the date of contract award. We further recommended the development of practices to help ensure accountability for personnel carrying out surveillance responsibilities. We have also found that some agencies have attempted to apply PBA to complex and risky acquisitions, a fact that underscores the need to maintain strong government surveillance to mitigate risks. Interagency contracts are designed to leverage the government’s aggregate buying power and provide a simplified method to procure commonly used goods and services. For example, the General Services Administration provides a wide range of contracts that are available to all government agencies for purchasing a wide range of commercially available supplies and services at competitive prices. The panel found that reliance on interagency contracts is significant. According to the panel report, 40 percent of the total 2004 obligations, or $142 billion, was obligated through the use of interagency contracts. The panel also found that a significant reason for the increased use of these contracts has been reductions in the acquisition workforce accompanied by increased workloads and pressures to reduce procurement lead times. Accordingly, the panel made numerous recommendations to improve the use of interagency contracts with the intent of enhancing competition, lowering prices, improving the expertise of the acquisition workforce, and improving guidance for choosing the most appropriate interagency contract for procurements. Our work is generally consistent with the panel’s recommendations on interagency contracting. In fact, 15 of our products on interagency contracting were cited in the panel report. These reports included numerous recommendations that are consistent with the panel’s recommendations. Our reports recognize that interagency contracts can provide the advantages of timeliness and efficiency by leveraging the government’s buying power and providing a simplified and expedited method of procurement. However, a number of factors make these types of contracts high risk; these factors include their rapid growth in popularity, their use by some agencies that have limited expertise with this contracting method, and the number of parties that might be involved. Taken collectively, these factors contribute to a much more complex procurement environment—one in which accountability is not always clearly established. In 2005, because we found that interagency contracts can pose risks if they are not properly managed, we designated the management of interagency contracting a governmentwide high-risk area. Specifically, our prior work has found that agencies involved in the interagency contracting process have not always obtained required competition, evaluated contracting alternatives, or conducted adequate oversight. For example, our 2006 review at the Department of Homeland Security (DHS), found that DHS did not have comprehensive guidance for the use of all types contracts, including interagency contracts. DHS relied on this contracting method for speed and convenience, but did not assess alternatives to ensure good value when selecting among these contracting options and did not evaluate the outcomes of this contracting method. Additionally, our 2005 review of DOD’s use of two franchise funds had similar findings. For example, DOD did not have clear guidance on the proper use of interagency contracting services and selected them based on convenience without analyzing whether this was the best method meeting its purchasing needs. The franchise fund organizations providing these services did not always obtain the full benefits of competitive procedures, did not otherwise ensure fair and reasonable procedures, and may have missed opportunities to achieve savings on millions of dollars in purchases. In another review, we found task orders placed by DOD on a GSA schedule contract did not always satisfy legal requirements for competition because the work was not within the scope of the underlying contract. The panel stated that small businesses are recognized as one of the nation’s most valuable economic resources. The report noted that studies commissioned by the U.S. Small Business Administration Office of Advocacy reveal that small businesses represent 99.7 percent of employers and employ about half of all private-sector employees. The panel reported that recognizing the vital role of small businesses in the U.S. economy, Congress has emphasized small business contracting as a fundamental socioeconomic goal underlying federal procurement policy. For example, Congress established a governmentwide small business contracting goal of awarding not less than 23 percent of the total value of all federal prime contracts to small businesses each fiscal year. The panel made recommendations to change the guidance to contracting officers in awarding contracts to small businesses. These recommendations are intended to improve the policies and, hence, address the socioeconomic benefits derived from acquiring services from small businesses. All but one of the recommendations requires legislation for implementation. While our work on small business has addressed a number of these policy issues, including how they are implemented, we have not made recommendations that could change the guidance to contracting officers that would affect the socioeconomic benefits between achieving contract performance and ensuring opportunities for various categories of small businesses to participate in federal contracts. We do not usually make recommendations for statutory and regulatory changes when arguments for such changes are based on value judgments, such as those related to setting small business contracting goals. The federal acquisition workforce was not one of the topics Congress directed the panel to address. The panel reported, however, that it could not provide the insight and assistance Congress sought without addressing the problems presented by the federal acquisition workforce. Specifically, panel members recognized a significant mismatch between the demands placed on the acquisition workforce and the personnel and skills available within the workforce to meet those demands. The panel found, for example, that demands on the federal acquisition workforce have grown substantially while at the same time, the complexity of the federal acquisition system as a whole has increased. Accordingly, the panel made a number of recommendations designed to define, assess, train, and collect data on the acquisition workforce and to recruit talented entry- level personnel and retain its senior workforce. Our work is generally consistent with the panel findings and recommendations on the acquisition workforce. On the basis of observations made by acquisition experts from the federal government, private sector, and academia, we reported in October 2006 that agency leaders have not recognized or elevated the importance of the acquisition profession within their organizations. The officials further noted that a strategic approach had not been taken across government or within agencies to focus on workforce challenges, such as creating a positive image essential to successfully recruit and retain a new generation of talented acquisition professionals. In September 2006, we testified that while the amount, nature, and complexity of contract activity has increased, DOD’s acquisition workforce, the largest component of the government’s acquisition workforce, has remained relatively unchanged in size and faces certain skill gaps and serious succession planning challenges. Further, we testified that DOD’s acquisition workforce must have the right skills and capabilities if it is to effectively implement best practices and properly manage the goods and services it buys. In July 2006 we reported that in the ever-changing DOD contracting environment, the acquisition workforce must be able to rapidly adapt to increasing workloads while continuing to improve its knowledge of market conditions, industry trends, and the technical details of the goods and services it procures. Moreover, we noted that effective workforce skills were essential for ensuring that DOD receives fair and reasonable prices for the goods and services it buys and identified a number of conditions that increased DOD’s vulnerabilities to contracting waste and abuse. We had previously stated in a report issued in 2002 that procurement reforms, changes in staffing levels and workload, and the need for new skill sets have placed unprecedented demands on the acquisition workforce. For example, DOD’s civilian acquisition workforce level was downsized in the 1990s. However, we noted that DOD’s approach to acquisition workforce reduction was not oriented toward shaping the makeup of the workforce; rather, DOD relied primarily on voluntary turnover and retirements, freezes on hiring authority, and its authority to offer early retirements and buyouts to achieve reductions. The panel reported that, in some cases, contractors are solely or predominantly responsible for the performance of mission-critical functions that were traditionally performed by government employees, such as acquisition program management and procurement, policy analysis, and quality assurance. Further, the panel noted that this development has created issues with respect to the proper roles of, and relationships between, federal employees and contractor employees in the “blended” workforce. The panel stated that although federal law prohibits contracting for activities and functions that are inherently governmental, uncertainty about the proper scope and application of this term has led to confusion, particularly with respect to service contracting outside the scope of OMB’s Circular A-76, which provides guidance on competing work for commercial activities via public-private competition. Moreover, according to the panel, as the federal workforce shrinks, there is a need to ensure that agencies have sufficient in-house expertise and experience to perform inherently governmental functions by being in a position to make critical decisions regarding policy and program management issues and to manage the performance of their contractors. The panel recommended that the FAR Council consider developing a standard organizational conflict-of-interest clause for solicitations and contracts that set forth a contractor’s responsibility concerning its employees and those of its subcontractors, partners, and any other affiliated organization or individual; that OFPP update the principles for agencies to apply in determining which functions government employees must perform; and that OFPP ensure that the functions identified as those that must be performed by government employees are adequately staffed. On the basis of our work, we have similar concerns to those expressed by the panel, and our work is generally consistent with the panel’s recommendations on the appropriate role of contractors supporting the federal acquisition workforce. We have testified and reported on the issues associated with an unclear definition of what constitutes inherently governmental functions, inadequate government experience and expertise for overseeing contractor performance, and organizational conflicts of interest related to contractor responsibilities. We found that there is a need for placing greater attention on the type of functions and activities that could be contracted out and those that should not, reviewing the current independence and conflict-of-interest rules relating to contractors, and identifying the factors that prompt the government to use contractors in circumstances where the proper choice might be the use of government employees or military personnel. In our recent work at DHS, we found that more than half of the 117 statements of work we reviewed provided for services that closely support the performance of inherently governmental functions. We made recommendations to DHS to improve control and accountability for decisions resulting in buying services that closely support inherently governmental functions. Accordingly, our work is consistent with panel recommendations to update the principles for agencies to apply in determining which functions government employees must perform, and ensure that the functions identified as those that must be performed by government employees are adequately staffed. The Federal Procurement Data System-Next Generation (FPDS-NG) is the federal government’s primary central database for capturing information on federal procurement actions. Congress, executive branch agencies, and the public rely on FPDS-NG for a wide range of information including agency contracting actions, governmentwide procurement trends, and how procurement actions support socioeconomic goals and affect specific geographical areas and markets. The panel reported that FPDS-NG data, while insightful when aggregated at the highest level, continue to be inaccurate and incomplete at the detailed level and cannot be relied on to conduct procurement analyses. In its report, the panel noted its frustration with trying to use FPDS-NG data for selected detailed analyses. The panel believes the processes for capturing and reporting FPDS-NG data need to be improved if it is to meet user requirements. As a result, the panel made 15 recommendations aimed at increasing the accuracy and the timeliness of the FPDS-NG data. For example, the panel recommended that an independent verification and validation should be undertaken to ensure all other validation rules are working properly in FPDS-NG. The panel also recommended that Congress revise the OFPP Act —an act that required a federal system for collecting and disseminating procurement statistics—to assign responsibility for timely and accurate data reporting to FPDS-NG or successor system to the head of executive agency. The panel recommended that OFPP ensure that FPDS-NG reports data on orders under interagency and enterprisewide contracts and make these data publicly available. For example, the panel recommended that the OFPP Interagency Contracting Working Group address data entry responsibility as part of the creation and continuation process for interagency and enterprisewide contracts. The panel expects its recommendations, if properly implemented, to increase the accuracy and usefulness of federal procurement data. Our work has identified similar concerns as those expressed by the panel and made similar recommendations. The panel cited our work numerous times in its report. Like the panel, we have pointed out that FPDS-NG data accuracy has been a long-standing problem and have made numerous recommendations to address this problem. As early as 1994, we reported that the usefulness of federal procurement data for conducting procurement policy analysis was limited. We have also had concerns about the accountability for data accuracy and reported in fiscal year 2002 that the Federal Procurement Data Center (FPDC) does not have the knowledge to correct inaccurate data or the authority to require agencies to do so. More recently, in 2005, we again raised concerns about the accuracy and timeliness of the data available in FPDS-NG. We have also reported that the use of independent verification and validation function is recognized as a best business practice and can help provide reasonable assurance that the system satisfies its intended use and user needs. We also reported in 2005 that the need for collecting and tracking data on interagency contracting transactions has become increasingly important. One panel recommendation called for us to conduct an audit that addresses the quality of FPDS-NG data and agency compliance in providing accurate and timely data. As our work has shown, we have already addressed these issues and we believe such an audit would not be necessary if OFPP implements the other recommendations related to FPDS-NG data. OFPP representatives told us the office agrees with almost all of the 89 panel recommendations and has already acted on some SARA recommendations, while potential actions are pending on others. OFPP identified legislative actions and FAR cases that could address over one- third of the recommendations. OFPP expects to address at least 51 of the remaining recommendations and plans to work with the chief acquisition officer or senior procurement official within each agency to do so. In some cases, OFPP has established milestones and reporting requirements to help provide it with visibility over the progress and results of implementing the recommendations. Although OFPP has taken some steps to track the progress of selected recommendations, it does not have an overall strategy or plan to gauge the successes and shortcomings in how the panel recommendations are implemented and how they improve federal acquisitions. Table 1 shows how OFPP expected the 89 recommendations to be implemented. This information is presented in detail in appendix II. OFPP noted that while the panel directed 17 recommendations to Congress, legislative actions could address as many as 23 panel recommendations. Panel recommendations directed to Congress include such potential legislative changes as authorizing the General Services Administration to establish a new information technology schedule for professional services and enacting legislation to strengthen the preference for awarding contracts to small businesses. An example of the latter is amending the Small Business Act to remove any statutory provisions that appear to provide for a hierarchy of small business programs. According to the panel, this is necessary because an agency will have difficulty meeting its small business goal if any one small business program takes a priority over the others. According to OFPP, the House or Senate versions of the National Defense Authorization Act (NDAA) for 2008 include provisions that, if passed, will address six of the panel recommendations. For example, a panel recommendation to expand the requirements under Section 803 of the NDAA for 2002 to all federal agencies, which addresses competition for task and delivery orders, is included in a version of the NDAA for 2008. However, if Congress does not act on all or some of the recommendations included in the legislative proposals, responsibility for implementing more of the recommendations could shift to OFPP. For those that do not pass, OFPP representatives told us the office could take administrative actions, such as issuing a policy memorandum or initiating a FAR case, to implement most of them. OFPP identified nine recommendations that it expects to address by proposing revisions to the FAR, which involve opening FAR cases. FAR cases follow a process that allows the public, as well as federal agencies, to comment on proposed changes to the FAR. Five cases have been opened thus far. For example, one case is addressing a panel recommendation to improve competition by making the requirements of Section 803 of the Fiscal Year 2002 National Defense Authorization Act applicable not just to DOD, but to all agencies. Currently, Section 803 requires DOD to give fair notice to all multiple award contract holders to ensure that competition is likely to occur when agencies buy from multiple award contracts. OFPP has identified 51 recommendations that it plans to address. According to OFPP, it will do this by using administrative mechanisms such as issuing policy memorandums and completing ongoing initiatives. According to OFPP, 34 recommendations have been addressed in some manner while 17 are still under review, as described below: According to OFPP, seven recommendations, and a portion of three others, have been addressed by issuing seven policy memorandums, as shown in appendix III. The memorandums cover a variety of issues including enhancing competition, improving the use of PBAs, addressing workforce shortfalls and capability gaps, and addressing FPDS-NG data problems. Some of the policy memorandums have reporting requirements that can provide OFPP some degree of oversight to determine whether agencies are implementing the policy requirements while some do not. For those that do, the chief acquisition officer within each federal agency is accountable for implementing the policy and reporting results to OFPP. OFPP expects to address 22 recommendations by completing implementation of existing initiatives. For example, several of the panel acquisition workforce recommendations are directed at getting federal agencies to accurately define its workforce. OFPP believes this initiative is being implemented through its existing policy and reporting requirements, in combination with agencies continuing to migrate workforce data into the Acquisition Career Management Information System. This system maintains data on acquisition workforce personnel such as employment history, education, training, certifications, grades, series, and retirement eligibility. According to OFPP, five recommendations are addressed because existing policy and regulations already exist. It is a matter of federal agencies properly adhering to the policy and regulations. For example, one of the panel recommendations addresses the use of time-and- material contracts. Specifically, the panel recommended that current policies limiting the use of time-and-material contracts and providing for the competitive awards of such contracts should be enforced. OFPP concurs and believes that, if current time-and-material policies are enforced by agencies, this panel recommendation will be implemented. Agencies’ not adhering to existing policies and regulations, however, led to the panel’s recommendation. OFPP has not established milestones and reporting requirements that would provide help it exercise oversight on agency actions and ensure that all existing policies and regulations are followed. The 17 panel recommendations that are still under OFPP review involve a wide variety of issues. Examples include updating the principles for agencies to apply in determining which functions must be performed by government employees and potentially modifying the FAR by (1) providing regulatory guidance to improve competition by establishing weights to be given to evaluation factors, and (2) creating a contract-specific “Performance Improvement Plan” tailored to specific acquisitions to improve postaward contract performance management. We have included two recommendations in this category that OFPP representatives told us they do not agree with. First, OFPP disagrees with the panel recommendation to rename Contracting Officer Technical Representatives as Contracting Officer Performance Representatives. The panel believed that this recommendation highlights the distinctive nature of the position while affording those filling it with sufficient education and training to meet demanding oversight requirements. Together, the name change and more training could help bring about a culture change in the way PBAs are dealt with by the acquisition workforce. OFPP does not believe that the benefit of changing the name from COTR to COPR would add significant value, given the expense of amending all documents and training materials, governmentwide that address COTRs. Second, OFPP disagrees with the panel recommendation dealing with the protest of task and delivery orders because the recommendation would permit protests of awards over $5 million under multiple award contracts. The panel’s position was that task and delivery orders over $5 million were most likely not routine or repetitive purchases; rather, they were in effect contracts that should be subject to bid protests. The current bill for the National Defense Authorization Act for Fiscal Year 2008 includes a section that provides for bid protests of task and delivery orders over $10 million. The six recommendations that OFPP expects agencies to address include (1) ethics training for contractor employees, regarding which the SARA Acquisition Advisory Panel report states agencies should consider whether and how to provide such training; (2) human capital planning for the acquisition workforce, for which the panel declined to recommend that OFPP mandate a governmentwide solution; (3) the Federal Procurement Data System–Next Generation to ensure sufficient and appropriate personnel are available to test changes to the system and that sufficient funds are available for its operation. As noted above, ensuring that the panel’s agency-specific recommendations are implemented requires OFPP oversight through the use of milestones and reporting requirements, but they have not been put in place for these agency-specific recommendations. The SARA Panel, like GAO, has made numerous recommendations to improve federal government acquisition—from encouraging competition and adopting commercial practices to improving the accuracy and usefulness of procurement data. Our work is largely consistent with the panel’s recommendations, and when they are taken as a whole, we believe the recommendations, if implemented effectively, can bring needed improvements in the way the federal government buys goods and services. OFPP, as the lead office for responding to the report, is now in a key position to sustain the panel’s work by ensuring that panel recommendations are implemented across the federal government in an effective and timely manner regardless of whether Congress takes action through legislation initiatives or responsibility for implementation eventually shifts to OFPP. To do this, OFPP will need to work with the chief acquisition officers and senior procurement officials across all the federal agencies to lay out a strategy or plan that includes milestones and reporting requirements that OFPP could use to establish accountability, exercise oversight, and gauge the progress and results of implementing the recommendations. To help ensure timely and effective implementation of SARA Panel recommendations, we recommend that the Administrator of OFPP develop an oversight strategy or plan, in conjunction with agency chief acquisition officers and senior procurement officials, that would include milestones and reporting requirements OFPP could use to gauge the status and results of implementing the panel recommendations. OFPP officials provided oral comments on a draft of this report. They stated that OFPP generally agreed with our findings and observations and agreed in principle with our recommendation. They also noted that they would rely on Chief Acquisition Officers and senior procurement executives within federal agencies to help implement the recommendations. OFPP provided technical comments, which we incorporated into the report as appropriate. As agreed, unless you publicly announce its contents, we plan no further distribution of this report until 30 days from its issue date. At that time, we will send copies of this report to the Director of the Office of Management and Budget and interested congressional committees. We will also make copies available at no charge on the GAO Web site at http://www.gao.gov. If you have questions about this report or need additional information, please contact me at (202) 512-4841 or huttonj@gao.gov. Contact points for our Office of Congressional Relations and Public Affairs may be found on the last page of this report. Key contributors to this report were James Fuquay, Assistant Director; Julie Hadley; Daniel Hauser; John Krump; Jean Lee; Robert Miller; and Robert Swierczek. To determine how the Service Acquisition Reform Act (SARA) Acquisition Advisory Panel recommendations compare to GAO’s past work and recommendations, we reviewed and analyzed the panel report and related GAO products. We compared the panel recommendations to relevant GAO products and determined whether each of the panel’s recommendations is consistent with our work or whether we have no basis to take a position, based on the following criteria: The SARA Panel recommendation is consistent with our work and broad institutional knowledge obtained through long-term involvement with the subject, The SARA Panel recommendation is not consistent with our work and broad institutional knowledge obtained through long-term involvement with the subject, Our work provided no basis to take a position on the SARA Panel recommendation. In some cases, we considered the panel recommendations consistent with our past work if we thought their implementation would help address broader acquisition issues covered by our work, even though the panel recommendations were not identical or similar to our specific recommendations. As part of our analysis, we also interviewed the chair of the panel to obtain additional information on the scope of work associated with some of the report issues and to discuss the rationale behind some of the panel recommendations. The number of panel recommendations is dependent upon whether each actionable item is counted as a separate stand-alone recommendation or whether several actionable items are consolidated and counted as one recommendation. For example, the panel report contains 15 separate actionable items in its chapter on commercial practices. However, they are consolidated into 10 numbered recommendations. For the purposes of our review, we counted the actionable items as separate recommendations when we deemed it appropriate to do so. As a result, we show a total of 89 actionable items or recommendations. To determine how the panel recommendations will likely be addressed, we obtained the Office of Federal Procurement Policy’s (OFPP) comments on each recommendation and how OFPP plans or expects them to be implemented. In addition, we reviewed OFPP policy memorandums issued to senior procurement executives and recent Federal Acquisition Regulatory Council initiatives for those recommendations identified by OFPP as its planned action. We also reviewed pending legislative proposals in the U.S. Senate and House of Representatives as of October 31, 2007, to identify legislative initiatives that could address some of the panel recommendations. As a result, we present the recommendations in the following categories: (1) legislative action, (2) changes to the FAR, (3) OFPP actions, and (4) agency actions. We conducted our review from March 2007 to November 2007 in accordance with generally accepted government auditing standards. Appendix II lists the SARA Acquisition Advisory Panel recommendations and shows the recommendations that are generally consistent or not consistent with our past work, or for which we have no basis to take a position. The number of panel recommendations is dependent upon whether each actionable item is counted as a separate stand-alone recommendation or whether several actionable items are consolidated and counted as one recommendation. For example, the panel report contains 15 separate actionable items in its chapter on commercial practices. However, they are consolidated into 10 numbered recommendations. For the purposes of our review, we counted the actionable items as 15 separate recommendations, as shown below. As a result, we show a total of 89 actionable items or recommendations for all chapters in the report. We obtained the Office of Federal Procurement Policy’s comments on how each panel recommendation is being addressed and categorized as shown below. Establishes a structured training program for Contracting Officer Technical Representatives and other individuals performing these functions, that standardize competencies and training across civilian agencies and improves collective stewardship of taxpayer dollars. The Chief Acquisition Officer of each agency is responsible for the policies and programs necessary to implement this certification program. There is no requirement for a encies to report their actions to OFPP. Highlights the ke survey that CAOs developing strategies competency gaps in t workforce. Allow the hiring of retired annuitants to fill critical vacancies in the acquisition field. OFPP, to implement the General Services Administration Modernization Act (P.L. 109-313). 2. Annual reports on the use of this law are to be provided to the Office of Person November 1, each fi 2008. nel Management and OFPP by uest help and leadership i forcing the use of compe Req rein and related practices a competitive environm port, submit an a promoting competition. T 20, 2007, and ann ally ther annual report is to be provid showing how the agency is he report is d ue December eafter. A copy of the first ent. ed to OFPP. 2. The General Services Administration is to develop new competition m trics to Procurement Data System. Recommend appropriate PBA performance goals PBA learning assets useful guides and training opportunities, to ensure this acquisition strategy is used effectively. In fiscal year 2006 agencies wer methods to 40 percent or more o actions over $25,000. In Dece the goal to 50 percent for fisc ensure that their PAB plans re information. Improve the partnership between program/project managers and contracting professionals for a common understanding of how to best meet acquisition needs. 1. The Federal Acquisition Certification for Program and Project Managers shall be accepted by, at minimum, all civilian agencies as evidence that an employee meets the core training and experience requirements. 2. The F deral Acquisition Ins ute will conduct periodic tite reviews to ensure the Feder for Program and Project managed consistently. Agencies must provide OFPP with responsibility assignments and data validation ensure that 2007 Federal Pro reflect accurate and timely co report was due May 16, 2007. curement Data System data ntract information. The initial tion. Federal Acquisitions and Contracting: Systemic Challenges Need Attention. GAO-07-1098T. Washington, D.C.: July 17, 2007. Defense Contracting: Improved Insight and Controls Needed over DOD’s Time-and- Materials Contracts. GAO-07-273. Washington, D.C.: June 29, 2007. Defense A Better Contro January 17, 2007 cquisitions: DOD Needs to Exert Management and Oversight to l Acquisition of Services. GAO-07-359T. Washington, D.C.: . acting: Efforts Needed to Address Air Force Commercial Risk. GAO-06-995. Washington, D.C.: September 29, 2006. Management: DOD Vulnerabilities to Contracting Fraud, buse. GAO-06-838R. Washington, D.C.: July 7, 2006. Contract M Multiple Aw February 11, 2005. Interagen Suppo 2005. cy Contracting: Problems with DOD’s an d Interior’s Order rt Military Operations. GAO-05-201. Washington, D.C.: April 29, t Management: Guidance Needed to Promote Competition for Orders. GAO-04-874. Washington, D.C.: July 30, 2004. Contr in Purchas D.C.: June act Management: Further Efforts Needed to Sustain VA’s Progress ington, ing Medic Products and Services. GAO-04-718. Washal 22, 2004. Competitive Effic February 27, rcing: Greater Emphasis Needed on Increasing mproving Performan ce. GAO-04-367. Washington, D.C.: 2004. Contract Management: Restructuring GSA’s Federal Supply Service and Federal Technology Service. GAO-04-132T. Washington, D.C.: October 2, 2003. Contract Management: Civilian Agency Compliance with Revised Task and Delivery Order Regulations. GAO-03-983. Washington, D.C.: August 29, 2003. Military Transformation: Progress and Challenges for DOD’s Advanced Distributed Learning Programs. GAO-03-393. Washington, D.C.: February 28, 2003. Contract Management: Improving Services Acquisitions. GAO-02-179T. Washington, D.C.: November 1, 2001. Contract Management: Service Contracting Trends and Challenges. GAO- 01-1074R. Washington, D.C.: August 22, 2001. Contract Management: Few Competing Proposals for Large DOD Information Technology Orders. GAO/NSIAD-00-56. Washington, D.C.: March 20, 2000. Acquisition Reform: Multiple-award Contracting at Six Federal Organizations. GAO/NSIAD-98-215. Washington, D.C.: September 30, 1998. Homeland Security: Observations on the Department of Homeland Security’s Acquisition Organization and on the Coast Guard’s Deepwater Program, GAO-07-453T. Washington, D.C.: February 8, 2007. Implementation of OMB Circular No. A-76 at Science Agencies. GAO-07- 434R. Washington, D.C.: March 16, 2007. Defense Contracting: Improved Insight and Controls Needed over DOD’s Time-and-Materials Contracts. GAO-07-273. Washington, D.C.: June 29, 2007. NASA Procurement: Use of Award Fees for Achieving Program Outcomes Should Be Improved. GAO-07-58. Washington, D.C.: January 17, 2007. Defense Acquisitions: Tailored Approach Needed to Improve Service Acquisition Outcomes. GAO-07-20. Washington, D.C.: November 9, 2006. DOD Systems Modernization: Uncertain Joint Use and Marginal Expected Value of Military Asset Deployment System Warrant Rea Investment. GAO-06-171. Washington, D.C.: ssessment of Planned December 15, 2005. Defense Acquisitions Fees Regardless of Acqu December 19, 2005. OD Needs to Demonstrate That Performance- ber 9, 2005. Contract Management: O artment of Defense S Dep March 17, 2005. Federal Acquisition: Pro Reform Act of 2 gress in Implementing the Services Acquisit 5-233. Washington, D.C.: February 28 , 2005. Department Contract Management for March 18, 2005. Department of Energ Reforms. GAO-03-570T y: Statu . Wash s of Contract and Project Management ington, D.C.: March 20, 2003. Trends. GAO-03-443. 0, 003. Contract Management: Guidance Needed for Using Performance-Based O-02-1049. Washington, D.C.: September 23, 2002. GA Service Contracting . Contract Reform: DO Initiatives Have I September 13, 2002. as Made Progress, but Actions Needed to Ensure ed Results. GAO-02-798. Washington, D.C.: Contract Management: Taking a Strategic Approach to Improving Service Acquisitions. GAO-02-499T. Washington, D.C.: March 7, 2002. Contract Management: Trends and Challenges in Acquiring Services. GAO-01-753T. Washington, D.C.: May 22, 2001. National Laboratories: DOE Needs to Assess the Impact of Using Performance-Based Contracts. GAO-RCED-99-141. Washington, D.C.: May 7, 1999. Department of Energy Based Incentive Contr 1998. : Less ac GAO-R ts. IMD-98-185. Washington, D.C.: July 31, 1 998. High-Risk Se 2007. Transportation-Disadvantage Responsibilities and Increase Preparedness for Evacuations. GAO-07-44. Washington, D.C.: December 22, 2006. d Populations: Actions Needed to Clarify Interagency Contracting: Improved Guidance, Planning, and Oversight Would Enable the Department of Homeland Security to Address Risks. GAO-06-996. Washington, D.C.: September 27, 2006. Hurricane Katrina: Planning for and Management of Federal Disaster Recovery Contracts. GAO-06-622T. Washington, D.C.: April 10, 2006. Interagency Contracting: Franchise Funds Provide Convenience, but Value to DOD Is Not Demonstrated. GAO-05-456. Washington, D.C.: July 29, 2005. GAO’s 2005 High-Risk Update. GAO-05-350T. Washington, D.C.: February 17, 2005. Contract Management: Opportunities to Improve Surveillance on Department of Defense Service Contracts. GAO-05-274. Washington, D.C.: March 17, 2005. Contract Management: Opportunities to Improve Pricing of GSA Multiple Award Schedules Contracts. GAO-05-229. Washington, D.C.: February 11, 2005. High-Risk Series: An Update. GAO-05-207. Washington, D.C.: January 2005. Rebuilding Iraq: Fiscal Year 2003 Contract Award Procedures and Management Challenges. GAO-04-605. Washington, D.C.: Ju ne 1, 2004. Contract Management: Restructuring GSA’s Federal Supply Service and Federal Technology Service. GAO-04-132T. Washington, D.C.: October 2, 2003. Budget Issues: Franchise Fund Pilot Review. GAO-03-1069. Washington, D.C.: August 22, 2003. Management Reform: Continuing Progress in Implementing Initiatives in the President’s Management Agenda. GAO-03-556T. Washington, D .C.: March 26, 2003. Contract Management: Interagency Contract Program Fees Need Mo Oversight. GAO-02-734. Washington, D.C.: July 25, 2002. Contract Management: Taking a Strategic Approach to Improving Service Acquisitions. GAO-02-499T. Washington, D.C.: March 7, 2002. Contract Management: Improving Services Acquisitions. GAO-02-179T. Washington, D.C.: November 1, 2001. Hurricane Katrina: Agency Contracting Data Should Be More Complete Regarding Subcontracting Opportunities for Small Businesses. GAO-07- 205. Washington, D.C.: March 1, 2007. Contract Management: Impact of Strategy to Mitigate Effects of Contract Bundling on Small Business Is Uncertain. GAO-04-454. Washington, D .C.: May 27, 2004. Contract Management: Reporting of Small Business Contract Awards Does Not Reflect Current Business Size. GAO-03-704T. Washington, D.C.: May 7, 2003. Small Business Contracting: Concerns about the Administration’s Plan to Address Contract Bundling Issues. GAO-03-559T. Washington, D.C.: March 18, 2003. Small Business: HUBZone Program Suffers from Reporting and Implementation Difficulties. GAO-02-57. Washington, D.C.: October 26, 2001. Small Business: Trends in Federal Procurement in the 1990s. GAO-01- 119 . Washington, D.C.: January 18, 2001. Acquisition Reform: Multiple-award Contracting at Six Federal Organizations. GAO/NSIAD-98-215. Washington, D.C.: September 30, 1998. Human Capital: Federal Workforce Challenges in the 21st Century. GAO- 07-556T. Washington, D.C.: March 6, 2007. Human Capital: Retirements and Anticipated New Reactor Applications Will Challenge NRC’s Workforce. GAO-07-105. Washington, D.C.: January 17, 2007. Highlights of a GAO Forum: Federal Acquisition Challenges and Opportunities in the 21st Century. GAO-07-45SP. Washington, D.C.: October 6, 2006. Contract Management: DOD Vulnerabilities to Contracting Fraud, Waste, and Abuse. GAO-06-838R. Washington, D.C.: July 7, 2006. DOD Acquisitions: Contracting for Better Outcomes. GAO-06-800T Washington, D.C.: September 7, 2006. . Hurricane Katrina: Planning for and Management of Federal Disaster Recovery Contracts. GAO-06-622T. Washington, D.C.: April 10, 2006. Defense Acquisitions: Assessments of Selected Major Weapon Pr GAO-06-391. Washington, D.C.: March 31, 2006. ogram. Securities and Exchange Commission: Some Progress Made on Strategic Human Capital Management. GAO-06-86. Washington, D.C.: January 10, 2006. Interagency Contracting: Problems with DOD’s and Interior’s Orders to Support Military Operations. GAO-05-201. Washington, D.C.: April 29, 2005. DOD Civilian Personnel: Comprehensive Strategic Workforce Plans Needed. GAO-04-753. Washington, D.C.: June 30, 2004. Human Capital: Key Principles for Effective Strategic Workforce Planning. GAO-04-39. Washington, D.C.: December 11, 2003. Acquisition Workforce: Status of Agency Efforts to Address Future Needs. GAO-03-55. Washington, D.C.: December 18, 2002. Acquisition Workforce: Department of Defense’s Plans to Address Workforce Size and S April 30, 2002. tructure Challenges. GAO-02-630. Washington, D.C.: Contract Management: Improving Services Acquisitions. GAO-02-179T. Washington, D.C.: November 1, 2001. Contract Management: Service Contracting Trends and Challenges 01-1074R. Washington, D.C.: August 22, 2001. Federal Acquisition: Trends, Reforms, and Challenges. GAO/T-OCG-00-7. Washington, D.C.: March 16, 2000. Government Contractors: Are Service Contractors Performing Inherently Governmental Functions?. GAO/GGD-92-11. Washington, D.C.: November 18, 1991. Department of Homeland Security: Improved Assessment and Overs Needed to Manage Risk of Contracting for Selected Services Washington, D.C.: September 17, 2007. ight . GAO-07-990. Homeland Security: Observation Security’s Acquisition Organization and on the Coast Guard’s Deepwater Program, GAO-07-453T. Washington, D.C.: February 8, 2007. s on the Department of Homeland Implementation of OMB Circular No. A-76 at Science Agencies. GAO-07- 434R. Washington, D.C.: March 16, 2007. Suggested Areas for O Washington, D.C.: November 17, 2006. versight for the 110th Congress. GAO-07-235R. Defense Acquisitions: Future Combat Systems Challenges and Prospe for Success. GAO-05-442T. Washington, D.C.: March 16, 2005. Government Contractors: Are Service Contractors Performing Inh Governmental Functions? 18, 1991. GAO/GGD-92-11. Washington, D.C.: November Federal Housing Administration: Monitoring of Single Family Mortgages Needs Improvement. GAO/RCED-91-11. Washington, D.C.: February 7, 1991. Federal Contracting: Use of Contractor Performance Information. GA 07-111T. Washington, D.C.: July 18, 2007. Interagency Contracting: Improved Guidance, Planning, and Oversig Would Enable the Department of Homeland Security to Address Risks. GAO-06-996. Washington, D.C.: September 27, 2006. Improvements Needed to the Federal Procurement Data System-Next Generation. GAO-05-960R. Washington, D.C.: September 27, 2005. DOD Business Systems Modernization: Navy ERP Adherence to Best Business Practices Critical to Avoid Past Failures. GAO-05-858. Washington, D.C.: September 29, 2005. Interagency Contracting: Franchise Funds Provide Convenience, but Value to DOD is Not Demonstrated. GAO-05-456. Washington, D.C.: J 29, 2005. Reliability of Federal Procurement Data. GAO-04-295R. Washington, D.C December 30, 2003. Contract Management: Restructuring GSA’s Federal Supply Service and Federal Technology Service. GAO-04-132T. Washington, D.C.: October 2, 2003. Contract Management: No Reliable Data to Measure Benefits of the Simplified Acquisition Test Program. GAO-03-1068. Washington, D.C.: September 30, 2003. Contract Management: Civilian Agency Compliance with Revised Ta and Delivery Order Regulations. GAO-03-983. Washington, D.C.: August 29, 2003. Small Business: HUBZone Program Suffers from Reporting and Implementation Difficulties. GAO-02-57. Washington, D.C.: October 26 2001. Human Capital: A Self-Assessment Checklist for Agency Leaders. GAO/OCG-00-14G. Washington, D.C.: September 2000. OMB and GSA: FPDS Improvements. GAO/AIMD-94-178R. Washington, D.C.: August 19, 1994. The Federal Procurement Data System—Making It Work Better. PSAD-80-33. Washington, D.C.: April 18, 1980.

Summary: A growing portion of federal spending is related to buying services such as administrative, management, and information technology support. Services accounted for about 60 percent of total fiscal year 2006 procurement dollars. The Services Acquisition Reform Act (SARA) of 2003 established a Services Acquisition Advisory Panel to make recommendations for improving acquisition practices. In January 2007, the panel proposed 89 recommendations to improve federal acquisition practices. GAO was asked to determine how the panel recommendations compare to GAO's past work and identify how the Office of Federal Procurement Policy (OFPP) expects the recommendations to be addressed. To do this, GAO analyzed the panel report and compared its findings and recommendations to GAO's past work and recommendations, obtained OFPP's views on how it expected the recommendations to be implemented, and reviewed proposed legislation in Congress to determine if legislative provisions had the potential to address some recommendations. The SARA Panel, like GAO, has made numerous recommendations to improve federal government acquisition--from encouraging competition and adopting commercial practices to improving the accuracy and usefulness of procurement data. The recommendations in the SARA Panel report are largely consistent with GAO's past work and recommendations. The panel and GAO have both pointed out: the importance of a robust requirements definition process and the need for competition; the need to establish clear performance requirements, measurable performance standards, and a quality assurance plan to improve the use of performance-based contracting; the risks inherent in the use of interagency contracts due to their rapid growth and their improper management; stresses on the federal acquisition workforce and the need for a strategy to assess these workforce needs; concerns about the role of contractors engaged in acquisition program management and procurement traditionally performed by government employees and the proper roles of federal employees and contractor employees in a "blended" workforce; and the adverse effects of inaccurate and incomplete federal procurement data, such as not providing a sound basis for conducting procurement analyses. The panel also made recommendations that would change the guidance for awarding contracts to small businesses. While GAO's work has addressed some small business policy issues, GAO has not made recommendations that would change the guidance to be used for awarding contracts to small businesses. OFPP representatives told GAO that OFPP agrees with almost all of the panel recommendations and expected that most of the 89 panel recommendations would be implemented through one of the following means: congressional actions; changes to the Federal Acquisition Regulation; OFPP actions, such as issuing new or revised policy; and federal agency actions. OFPP has already acted on some SARA recommendations, while other actions are pending or under consideration. Milestones and reporting requirements are in place to help OFPP gauge the implementation status of some recommendations but not for others. Moreover, OFPP does not have a strategy or plan to allow it to exercise oversight and establish accountability for implementing all of the panel recommendations and to gauge their effect on federal acquisitions.