Section 5 Pilot Requirements for Pilot to Simplify Federal Award Reporting

The DATA Act also requires that OMB, or an agency it designates,  establish a pilot program to facilitate the development of  recommendations to (1) standardize reporting elements across the  federal government, (2) eliminate unnecessary duplication in financial  reporting, and (3) reduce compliance costs for recipients of federal  awards. Establish well-defined, appropriate, clear, and measurable objectives. OMB launched a number of pilot-related initiatives in May  2015 and expects to continue activities until at least May 2017. The Grants Portion of Section 5 Pilot Is Generally On Track to Meet DATA Act Requirements but the Procurement Portion Is Not

		The Design of the Grants Portion of the Pilot Is Generally On Track to Meet DATA Act Requirements

If HHS effectively implements its stated plans for the grants portion of  the Section 5 Pilot, it is likely that the grants portion of the pilot will  comply with the act. The Design of the Procurement Portion May Not Contribute to Pilot’s Ability to Meet DATA Act Requirements

We have concerns about the extent that the design of the procurement  portion of the pilot reflects the requirements specified in the DATA Act. OFPP and GSA  do not yet have a detailed plan for selecting participants that will result in  a diverse group of recipients with awards from multiple programs and  agencies. OFPP staff stated that they also intend to select participants for testing  their prototype system using a nongeneralizable sample of contractor  data reported through the Federal Procurement Data System-Next  Generation. However, they did not provide us with specific information on  how they would ensure that the sample met all requirements under the  act, nor did they provide a detailed, documented sampling plan equivalent  to the grants portion of the pilot. Design of Grants Portion of the Pilot Partially Adheres to Leading Practices While Design of the Procurement Portion Does Not

We assessed the designs of the grants and procurement portions of the  pilot against leading practices that we identified from our prior work and  other sources. DATA Act Grants Test Models  Under the Office of Management and  Budget’s (OMB) direction, the Department of  Health and Human Services (HHS) intends to  develop recommendations for reducing  grantee reporting burden by testing different  areas. Specifically, five of the six test  models include either no or few specifics about how any observed  reduction in burden could be generalizable beyond the context of the  pilot. Design of the Procurement Portion of the Pilot Is Generally Not Meeting Leading Practices

Based on our review of the working draft plan for the procurement portion  of the pilot dated November 2015, related documents, and interviews with  cognizant staff, we found that the design did not reflect leading practices  for pilot design. The  draft plan we reviewed did not include detailed information on the  methodology, strategy, or types of data planned to be collected. The draft  procurement plan does not indicate how data will be evaluated to track  program performance, how final results will be evaluated, or conclusions  drawn. To help ensure and more clearly convey how the procurement  portion of the pilot will contribute to meeting the Section 5 Pilot  design requirements, we recommend that the Director of OMB  determine and clearly document (1) how it will collect certified  payroll data over a 12-month reporting cycle, (2) ensure the  diversity of pilot participants, and (3) how the inclusion of federal  contracts will contribute to an aggregate amount of $1 billion to $2  billion. OMB and HHS did not  offer a view on our recommendations. GSA did not have any comments. Appendix I: Objectives, Scope, and Methodology

This review (1) describes the administration’s approach to the Section 5  Pilot; (2) assesses whether current activities and plans will likely allow the  Office of Management and Budget (OMB) and its partners to meet  requirements and time frames established under the Section 5 Pilot; and  (3) evaluates the extent to which the design for the pilot is consistent with  leading practices. HHS officials told us that they have updated that plan.
Why GAO Did This Study

The DATA Act directs OMB or a designated federal agency to establish a pilot program to develop recommendations for simplifying federal award reporting for grants and contracts. The grants portion will test six ways to reduce recipient reporting burden while the procurement portion will initially focus on centralizing contractor reporting of certified payroll. The act requires GAO to review DATA Act implementation as it proceeds.
This report (1) describes OMB's approach to the DATA Act pilot requirements, (2) assesses whether current plans and activities will likely allow OMB and its partners to meet the requirements under the act, and (3) evaluates the extent to which designs for the grants and procurement portions of the pilot are consistent with leading practices. GAO reviewed available pilot documentation; assessed them against leading practices for pilot design; and interviewed staff at OMB, HHS, and GSA, as well as groups representing recipients of federal grants and contracts. GAO will conduct a follow-on review focused on OMB's implementation of its pilot designs.

What GAO Found

As required by the Digital Accountability and Transparency Act of 2014 (DATA Act), the Office of Management and Budget (OMB) is conducting a pilot program, known as the Section 5 Pilot, aimed at developing recommendations for reducing recipient reporting burden for grantees and contractors. OMB partnered with the Department of Health and Human Services (HHS) to design and implement the grants portion of the pilot, and with the General Services Administration (GSA) to implement the procurement portion. OMB launched the Section 5 Pilot in May 2015 and expects to continue pilot-related activities until at least May 2017.
If implemented according to HHS's proposed plan, the grants portion of the pilot will likely meet the requirements established under the act. In contrast, GAO has concerns with how the procurement portion of the pilot will contribute to the Section 5 Pilot's design requirements. For example, OMB has not fully described how it will select pilot participants that will result in a diverse group of contractors as required by the act. OMB staff stated that they intend to select participants for testing the procurement pilot by using a nongeneralizable sample of contractor data, but they have not provided a detailed, documented sampling plan.
The design of the grants portion of the pilot partially adhered to leading practices. Although five out of the six grants test models had clear and measurable objectives, only one had specific details about how potential findings could be scalable to be generalizable beyond the context of the pilot. HHS officials said they have updated their plan to address these concerns but that plan was not provided in time to allow GAO to analyze it for this review.
The design of the procurement portion of the pilot did not reflect leading practices. For example, the plan did not include specific information on the methodology, strategy, or types of data to be collected. Further, the plan we reviewed did not address the extent to which the proposed pilot approach would be scalable to produce recommendations that could be applied government-wide. The design also did not indicate how data will be evaluated to draw conclusions. Finally, while OMB has solicited general comments related to contractor reporting pain points, it has not released specific details on the design to stakeholders despite their repeated requests for that information.

What GAO Recommends

GAO recommends that OMB (1) clearly document how the procurement portion of the pilot will contribute to the design requirements under the DATA Act and (2) ensure that the design of the procurement portion of the pilot reflects leading practices. OMB, HHS, and GSA did not comment on our recommendations. GAO incorporated technical comments from OMB and HHS where appropriate.