A Lack of Transparency and Limited Governmentwide Policy May Result in Duplication and Inefficient Contracting

Interagency and enterprisewide contracts should provide an advantage to  government agencies when buying billions of dollars worth of goods and  services, yet OMB and agencies lack reliable and comprehensive data  to effectively leverage, manage, and oversee these contracts. More  specifically,    The total number of MACs and enterprisewide contracts currently  approved and in use by agencies is unknown because the federal  government’s official procurement database is not sufficient or reliable  for identifying these contracts,    Departments and agencies cite a variety of reasons to establish, justify,  and use their own MACs and enterprisewide contracts rather than use  other established interagency contracts—reasons that include avoiding  fees paid for the use of other agencies’ contracts, gaining more control  over procurements made by organizational components, and allowing  for the use of cost reimbursement contracts,    Concerns remain about contract duplication—vendors and agency  officials expressed concerns about duplication of effort among these  contracts, and in our review we found many of the same vendors  provided similar products and services on many different contract  vehicles. This could be resulting in duplication of products and  services being offered, increased costs to both the vendor and the  government, and missed opportunities to leverage the government’s  buying power,    Limited governmentwide policy is in place for establishing and  overseeing MACs and enterprisewide contracts. Recent legislation and OFPP initiatives are expected to strengthen  oversight and management of MACs, but no similar initiatives are  underway to strengthen oversight of enterprisewide contracts. In April  2010, we made five recommendations to OMB to improve data, strengthen  policy, and better coordinate agencies’ awards of MACs and  enterprisewide contracts, and OMB concurred with all of our  recommendations. Both involve enterprisewide contracts used for information  technology products and services. Management and Pricing Issues Hinder MAS Program Effectiveness

Our work identified a number of challenges GSA faces in effectively  managing the MAS program, the federal government’s largest interagency  contracting program. More specifically, GSA
Lacks transactional data about its customers’ use of MAS  contracts, which would provide GSA insight to facilitate more  effective management of the program;
Makes limited use of selected pricing tools that make it difficult for  GSA to determine whether the program achieves its goal of  obtaining the best prices for customers and taxpayers;
Uses a decentralized management structure for the MAS program  in conjunction with deficient program assessment tools, which  create obstacles for effective program management. GSA Needs Transactional Data to Strategically Manage MAS Contracts and Negotiate Pricing

GSA lacks data about the use of the MAS program by customer agencies  that it could use to determine how well the MAS program meets its  customers’ needs and to help its customers obtain the best prices in using  MAS contracts. The program office’s charter provides it broad responsibility for MAS  program policies and strategy. We also found that performance measures were inconsistent across the  GSA organizations that manage MAS contracts, including inconsistent  emphasis on competitiveness of pricing, making it difficult to have a  programwide perspective of MAS program performance. Finally, GSA’s  MAS customer satisfaction survey has had a response rate of one percent  or less in recent years that limits its utility as a means for evaluating  program performance. Furthermore,  departments and agencies may be unknowingly contracting for the same  goods and services across a myriad of contracts—MACs, GWACs, the MAS  program, and enterprisewide contracts.
Why GAO Did This Study

Agencies can use several different types of contracts to leverage the government's buying power for goods and services. These include interagency contracts--where one agency uses another's contract for its own needs--such as the General Services Administration (GSA) and the Department of Veterans Affairs multiple award schedule (MAS) contracts, multiagency contracts (MAC) for a wide range of goods and services, and governmentwide acquisition contracts (GWAC) for information technology. Agencies spent at least $60 billion in fiscal year 2008 through these contracts and similar single-agency enterprisewide contracts. GAO was asked to testify on the management and oversight of interagency contracts, and how the government can ensure that interagency contracting is efficient and transparent. GAO's testimony is based on its recent report, Contracting Strategies: Data and Oversight Problems Hamper Opportunities to Leverage Value of Interagency and Enterprisewide Contracts ( GAO-10-367 , April 2010). In that report, GAO made recommendations to the Office of Management and Budget (OMB) to strengthen policy, improve data, and better coordinate agencies' awards of MACs and enterprisewide contracts, and to GSA to improve MAS program pricing and management. Both agencies concurred with GAO's recommendations.

What GAO Found

Interagency and enterprisewide contracts should provide an advantage to government agencies when buying billions of dollars worth of goods and services, yet OMB and agencies lack reliable and comprehensive data to effectively leverage, manage, and oversee these contracts. More specifically, the total number of MACs and enterprisewide contracts currently approved and in use by agencies is unknown because the federal government's official procurement database is not sufficient or reliable for identifying these contracts. Departments and agencies cite a variety of reasons to establish, justify, and use their own MACs and enterprisewide contracts rather than use other established interagency contracts--reasons that include avoiding fees paid for the use of other agencies' contracts, gaining more control over procurements made by organizational components, and allowing for the use of cost reimbursement contracts. However, concerns remain about contract duplication--under these conditions, many of the same vendors provided similar products and services on multiple contracts, which increases costs to both the vendor and the government and can result in missed opportunities to leverage the government's buying power. Furthermore, limited governmentwide policy is in place for establishing and overseeing MACs and enterprisewide contracts. Recent legislation and OMB's Office of Federal Procurement Policy initiatives are expected to strengthen oversight and management of MACs, but no initiatives are underway to strengthen approval and oversight of enterprisewide contracts. GSA faces a number of challenges in effectively managing the MAS program, the federal government's largest interagency contracting program. GSA lacks data on orders placed under MAS contracts that it could use to help determine how well the MAS program meets its customers' needs and help its customers obtain the best prices in using MAS contracts. In addition, GSA makes limited use of selected pricing tools, such as pre-award audits of MAS contracts, which make it difficult for GSA to determine whether the program achieves its goal of obtaining the best prices for customers and taxpayers. In 2008, GSA established a program office with broad responsibility for MAS program policy and strategy, but the program continues to operate under a decentralized management structure that some program stakeholders are concerned has impaired the consistent implementation of policies across the program and the sharing of information among the business portfolios. In addition, performance measures were inconsistent across the GSA organizations that manage MAS contracts, including inconsistent emphasis on pricing, making it difficult to have a programwide perspective of MAS program performance. Finally, GSA's MAS customer satisfaction survey has had a response rate of 1 percent or less in recent years that limits its utility as a means for evaluating program performance.