FACNET is a governmentwide systems architecture for acquisition based on electronic data interchange (EDI), which is the computer-to-computer exchange of routine business documents using standardized data formats. A key goal of FACNET and the governmentwide EC program is to present a “single face to industry”—making the government look like a single entity rather than a collection of independent departments and agencies. The EC program aims to simplify and standardize doing business by eliminating the need to deal with numerous different agencies’ procurement processes, forms, and rules. FASA requires that agencies award at least 75 percent of eligible contracts through a system that has implemented all the FACNET functions.Contracting offices in agencies that are not in compliance by December 31, 1999, will lose their authority to use simplified acquisition procedures for contracts exceeding $50,000. Agencies can exclude certain contract actions when calculating the percentage of FACNET use: The Federal Acquisition Regulatory (FAR) Council has determined that certain contract actions, such as delivery orders, task orders, and in-scope modifications against established contracts, should not be considered when determining agency compliance with FASA’s 75-percent criterion.Essentially, this means that only contract awards should be counted. FASA authorizes the head of each executive agency to exempt its procuring activities (or portions thereof) from the requirement to implement full FACNET capability based on a determination that such implementation is not cost-effective or practicable. Contracts awarded by exempted activities are not to be considered in determining agency compliance with the criterion. FASA provides that the FAR Council may determine—after considering our report on this subject—that classes of contracts are not suitable for acquisition through a system with full FACNET capability. In our January 1997 report, we questioned the FASA-mandated approach to EC. Also, we observed that since passage of FASA, alternative electronic purchasing methods had become readily available to the government and its vendors. Given these alternative methods, the prescriptive requirements of FASA, and problems with implementation, we questioned the extent to which FACNET made good business sense for simplified acquisitions. We recommended that the executive branch (1) develop a coherent EC strategy and implementation approach incorporating the single-face-to-industry goal and (2) seek legislative changes, if FASA’s requirements for FACNET were an impediment to implementing the governmentwide EC strategy. Since then, the President’s Management Council has tasked a high-level management committee to review EC implementation and develop a more integrated federal EC strategy. The executive branch also recently proposed legislative changes to repeal mandated use of FACNET. On July 8, 1997, the Senate approved an amendment to the Fiscal Year 1998 National Defense Authorization Bill that would, among other things (1) repeal mandated use of FACNET; (2) define EC to include electronic mail or messaging, World Wide Web technology, electronic bulletin boards, purchase cards, electronic funds transfer, and EDI; and (3) ensure that any notices of agency requirements or solicitation for contract opportunities are provided in a form that allows convenient and universal user access through a single governmentwide point of entry. The amendment calls for uniformity in federal EC implementation to the maximum extent that is practicable. The House National Defense Authorization Bill did not contain any language regarding FACNET. Therefore, the Senate amendment will be addressed in conference. This report provides information that could be useful in congressional deliberations. Responses from 24 agencies indicated a general consensus among senior federal procurement officials that, for several types of contracts, the use of FACNET is inappropriate, impractical, or inefficient. As discussed below, the agencies provided clear, reasonable, and consistent reasons for excluding contracts from mandatory FACNET processing. A primary function of FACNET, mandated by FASA, is to enable agencies to provide widespread electronic public notice of solicitations for contracting opportunities. Several agencies’ senior procurement officials identified procurements for which nationwide public solicitation of offers was inappropriate or ineffective in filling requirements. These officials considered such procurements unsuitable for acquisition through FACNET. A major group of contracts in this category is procurements with “on-site” or local vendor requirements that generally require soliciting competition from vendors in a local area. Construction and building maintenance services contracts, for example, typically require a site visit to understand the work to be performed, examine conditions affecting the work, and accurately estimate the cost of performance. One agency cited its requirement for weed control services as a typical example of a contract that requires a local presence by vendors to bid intelligently and keep costs down for acceptable performance. Another agency noted that purchases of subsistence items are limited to the local commuting area because they require the buyer to view and select the commodities. According to procurement officials, nationwide solicitation through FACNET for procurements with “on-site” or local commuting area requirements was often inappropriate because vendors from outside the area could not reasonably be expected to be able to fulfill the requirement, resulting in additional costs to prepare and evaluate offers with no commensurate benefit to vendors or the agency. Widespread public notice may not be required or appropriate for other types of contracts. For example, agencies’ officials noted that awards to Small Disadvantaged Business Concerns, referred to as 8(a) contractors, do not use public solicitation of offers. Senior procurement officials found FACNET unsuitable for numerous contracts because essential procurement information could not be sent, received, or communicated effectively through FACNET. In particular, senior procurement officials considered FACNET inappropriate for procurements requiring extensive government specifications, lengthy written or oral proposals, sensitive or classified information, technical evaluations, and urgent delivery or performance. For example, contracts for various services, such as research and development efforts, were cited frequently because of the lengthy statements of work and other attachments that were often required. According to procurement officials, transmitting such information through FACNET is difficult, costly, and often infeasible. The Department of Defense (DOD) is working with the National Technical Information Service to address this issue by developing methods for making drawings, specifications, and standards cited in government solicitations available electronically. According to DOD officials, early results of this program appear promising. Several procurement officials indicated that procurements involving sensitive information are not suitable for FACNET processing because, in their view, FACNET does not currently provide adequate security.Additionally, acquisitions that require urgent delivery of a service or material are not considered good candidates for FACNET because procurements that are conducted through FACNET would take too long to complete. Procurement officials also cited several types of acquisitions that could not be conducted through FACNET because vendors were not on FACNET. For example, for some procurements with on-site or local commuting area requirements, agencies’ officials indicated that there were few or no local vendors participating in FACNET. Several agencies’ officials considered FACNET impractical for overseas procurements, especially in developing countries because vendors did not have the technical sophistication or infrastructure to sell via FACNET. Likewise, some procurement officials said it is unreasonable to expect individuals and noncommercial organizations to be on FACNET since they are not set up to sell products or services on a frequent basis and investing in FACNET for a few orders was not considered cost-effective. Procurement officials from several agencies considered FACNET unsuitable if they found other purchasing methods or EC technologies to be more efficient, less costly, and easier to use. For example, procurement officials noted a number of alternative purchasing methods they considered more economical and easier to use than FACNET. These methods included purchase card procurements and orders placed against electronic catalogs and existing contracts, such as General Services Administration (GSA) supply schedules, GSA Advantage, and governmentwide indefinite delivery/indefinite quantity contracts. Several procurement officials stated that the Internet and Web-based technologies are better EC options than FACNET because they are easier to access, have fewer technical limitations, and are relatively inexpensive for agencies and contractors to implement and use. Procurement officials also said that it was generally less expensive and quicker to purchase commercial products and services valued under $25,000 locally using traditional oral and paper-based solicitation methods rather than FACNET when sufficient competition was available. One official noted that for actions between $2,500 and $10,000, which do not require “posting” notices of solicitations, contracting offices without FACNET capability processed these procurements in a few days using locally available suppliers with good past performance records; FACNET capable sites were not able to meet their customers’ needs in the same time frames. Available data shows limited and declining use of FACNET for contract awards. However, the lack of governmentwide data on agencies’ use of other EC purchasing methods, such as purchase cards and orders placed electronically against catalogs and indefinite delivery/indefinite quantity contracts, impedes efforts to assess the government’s progress in moving toward doing business electronically and achieving the “single face to industry” goal. In our earlier report, we estimated that in 1995, less than 2 percent of about 2 million federal procurement actions above the micro-purchase threshold and below the simplified acquisition threshold ($2,501 and $100,000) were made through FACNET. The most recent and readily available data from the EC Program Office (January through June 1997) indicated that the volume of procurement actions processed through FACNET had declined, when compared to the same period a year earlier.