The NOAA acquisition function is carried out by the headquarters acquisition office, headed by the Director of Acquisition and Grants, as well as 10 divisions, of which 6 are located at NOAA headquarters in Silver Spring, Maryland, and 4 in regions throughout the country (see table 1). In 2005, NOAA employed 123 contracting and acquisition support staff in its acquisition function across headquarters and regional locations. NOAA’s acquisition function also provides procurement services to several other Commerce components, including the International Trade Administration, the Bureau of Economic Analysis, and the Economic Development Administration. In fiscal year 2005, NOAA administered over 15,000 contract actions with total awards over $851 million. In recent years, NOAA has experienced problems in acquiring goods and services. For example, NOAA’s inadequate negotiations and oversight, and lack of proper review, led the National Weather Service to pay for defective equipment and execute a contract modification without adequate negotiation for the transition power source for a high-resolution Doppler weather radar system jointly designed, acquired, and operated by Commerce, the Department of Defense, and the Department of Transportation. As a result, contract costs increased by approximately $4.5 million. Similarly, the Commerce Inspector General reported that NOAA had insufficient management controls to ensure adequate oversight of the procurement of over $65 million in new fisheries research vessels. For example, NOAA did not have the information required to effectively monitor the schedule and cost of the vessels and failed to implement an effective award fee plan on a timely basis to encourage superior performance by the contractor. Although NOAA has taken some actions, the agency has yet to structure all of its field acquisition activities under the appropriate oversight of its acquisition organization, increasing the risk that taxpayers are not getting best value for their dollars. After the Commerce Inspector General criticized the lack of effective oversight and management controls over acquisition processes, NOAA changed the structure of its acquisition organization in 2005 to have acquisition divisions report to the Director of Acquisition and Grants. Yet the acquisition director lacks direct line authority over a field acquisition office in Mississippi. In addition, some NOAA field operations rely on staff who are not career contracting officers but whose collateral responsibilities are to procure goods and services without appropriate oversight from the acquisition organization. Our work has shown that a well-functioning acquisition organization has direct lines of oversight between the head of acquisition and various components of the organization to help enforce acquisition policies that enable the agency to get the best value on goods and services. In some respects, NOAA’s reorganization has fallen short in providing comprehensive authority to the NOAA acquisition director to provide appropriate oversight to field acquisition activities. After the Commerce Inspector General faulted NOAA’s contracting oversight, in an effort to better ensure oversight and management of acquisition across the agency, NOAA established an Acquisition and Grants Office in headquarters in 2005. The reorganization elevated the office, formerly part of the NOAA Office of Finance and Administration, as a new staff office reporting directly to the Deputy Under Secretary for Oceans and Atmosphere. Also, the NOAA regional acquisition divisions—which previously were separate entities reporting to the directors of the regional service centers in which they were located—all now report directly to the Director of the Acquisition and Grants Office as part of the reorganization. By elevating its acquisition office to a level that reports directly to an Under Secretary and having the divisions as direct reports to the acquisition director, NOAA has positioned itself to appropriately oversee agencywide acquisition activities and enforce acquisition policies. However, the reorganization was not comprehensive because it did not include the National Weather Service’s National Data Buoy Center acquisition office at the Stennis Space Center, Mississippi. Specifically, the Buoy Center does not report to the NOAA acquisition director (see fig. 1), even though this acquisition office is responsible for administering multiple contracts, including one of NOAA’s largest contracts, worth up to $500 million. While contracting officers in the Buoy Center acquisition office derive their contracting authority from headquarters, they report through the Buoy Center chain of command, not to NOAA’s acquisition director. This reporting relationship was first established more than 20 years ago in a Commerce appropriation act, which created the Buoy Center acquisition office, and was stipulated in each subsequent appropriations act through 1988, but not since. During the recent reorganization, NOAA officials believed these laws prohibited NOAA from changing the reporting relationship to one where the Buoy Center acquisition office would report directly to the NOAA Acquisition and Grants Office. However, an analysis by our general counsel found no law requiring the Buoy Center acquisition office to report to the Director of the Buoy Center or prohibiting NOAA from making this change. Commerce’s General Counsel agreed with our assessment. Although we did not identify any inefficiencies resulting from this current reporting relationship, we believe NOAA runs the risk of poor outcomes of contracts. Certain NOAA field offices rely on “collateral duty” contracting officers who perform contracting duties in addition to their mission-related responsibilities but who are not career contracting officers. In these locations, collateral duty contracting officers have authority to make individual purchases of up to $25,000 for such day-to-day needs as provisions for ships. While NOAA relies on collateral duty contracting staff for a relatively small share of total agency procurement spending, these staff administered about 6,400 contract actions worth over $36 million alone in fiscal year 2005. NOAA’s acquisition director as well as senior field division contracting officers expressed concern about how well they can monitor the actions by staff with collateral duty contracting responsibilities to ensure that they follow NOAA acquisition policies. For example, unlike with their own contracting staff, some NOAA regional acquisition divisions provide only sporadic oversight over collateral duty contracting officers through occasional audits, either performed in person or through contract file samples sent by these staff for review. One regional acquisition division is only able to audit work by staff with collateral contracting responsibilities once every 2 to 3 years. NOAA acquisition managers attributed their inability to provide regular oversight to limited time and resources, given other responsibilities. Our review of contracting weaknesses at a Department of Homeland Security agency found challenges similar to NOAA’s with regard to providing appropriate oversight to collateral duty contracting officers. In view of such situations, we have found that an agency needs to explore ways of making collateral duty contracting officers in field locations accountable through the acquisition function for the contracting work. Although NOAA has established clear and consistent acquisition policies and processes for day-to-day acquisitions of goods and services, the agency lacks a knowledge-based acquisition process for development and production of complex systems. For example, NOAA has implemented planning processes intended to improve opportunities to achieve savings and reduce administrative burden in acquiring goods and services. However, NOAA has experienced difficulties in acquiring more complex developmental systems such as lacking sufficient management controls when it acquired its new fisheries research vessels. NOAA is missing key elements that promote successful outcomes because it must adhere to Commerce’s acquisition policies that do not promote a knowledge-based approach to acquiring complex developmental systems. Our work has shown that a knowledge-based approach would enable decision makers to be reasonably certain, at critical investment decision junctures in the acquisition life cycle, that the system is likely to meet cost, schedule, and performance targets. To facilitate effective planning, award, and administration of contracts that help to ensure the best value on goods and services, NOAA recently implemented new policies and processes to guide the agency’s acquisition activities. For example, to ensure consistency of the NOAA acquisition process, a new acquisition handbook establishes standard operating procedures, which the agency previously lacked, such as required reviews and approvals, and quality assurance of acquisition activities within the agency. To ensure that contracting employees are adhering to proper procedures, NOAA instituted periodic acquisition management reviews. Under these reviews NOAA’s acquisition director (or a senior contracting officer appointed by the director) personally inspects a sample of completed contract files from an acquisition division in order to identify and remedy any systemic problem areas and identify best practices to share with other divisions. In the last few years, reviews in several divisions found a lack of proper contract file management, as required in part 4.8 of the Federal Acquisition Regulation. The acquisition director consequently instructed the division heads to take steps with their staff to correct this problem. Recognizing that NOAA lacked effective acquisition planning and that this lack was hindering effective workload management, the Acquisition and Grants Office in fiscal year 2005 implemented new advance acquisition planning requirements. For example, all staff offices and programs must develop annual acquisition plans that include acquisitions that are over $100,000 or expected to result in new contracts. To support these new planning requirements and provide real-time data, the acquisition office deployed an online strategic acquisition management tool in fall 2005, in which NOAA staff offices and programs enter their annual acquisition plans for the upcoming fiscal year. Although the tool is new and still requires occasional modifications, NOAA officials generally agreed that it provides considerable benefits for the acquisition process to better plan the agency’s use of resources and reduce the administrative burden previously experienced with managing unscheduled contracting requirements. Because of the high dollar value and risk associated with acquiring complex developmental systems, Commerce requires that its subordinate organizations, including NOAA, adhere to departmentwide policy and processes regarding such acquisitions. However, Commerce policies and processes do not promote a knowledge-based approach for acquiring these systems, increasing the risk that Commerce will make decisions to commit the government to major investments without knowing that NOAA’s systems can be developed at estimated costs, according to planned schedules, and with expected performance. Commerce officials acknowledged that their acquisition policy for developing major systems is outdated and said they are revising it. While the current policy identifies key decision points that a program must complete while acquiring a complex developmental system, it still lacks key features of a knowledge- based acquisition framework—specific criteria and metrics—that can be used to measure whether a program is ready to move through each key decision point.