The implementing regulations have not yet been  promulgated. Civilian Agencies’ Use of Schedule BPAs for Services Has Increased Significantly, but DOD Data Issues Preclude an Accurate Picture of Total Government Use

We estimate that the federal government obligated between $3.7 billion  and $7.9 billion by placing orders under schedule BPAs during fiscal year  2008. Although orders under schedule BPAs (for goods and  services) comprised only about 2.3 percent of civilian agencies’ reported  obligations during fiscal year 2008, usage of schedule BPAs by civilian  agencies has grown substantially over time, by 382 percent from fiscal year  2004 to 2008 ($659 million to $3.2 billion). Unlike civilian agencies, DOD does not use the available fields in FPDS-NG  to distinguish its schedule BPAs from its traditional BPAs and indefinite  delivery contracts. A contracting officer at the Food Safety and Inspection  Service stated that she can place orders under a single award BPA without  further competition in less time than would be needed to meet the  competition requirements for ordering directly from a GSA schedule  contract. Agencies Did Not Take Full Advantage of Opportunities for Competition

Agencies in our sample competed BPAs when establishing them—meaning  that, for purposes of this report, contracting officers considered more than  one vendor—64 percent of the time. When orders are placed under GSA schedule contracts, the FAR allows  contracting officers to limit the number of vendors they consider, which  includes considering only one vendor. However, we also found examples of justifications for awarding BPAs  directly to one vendor that are not specifically mentioned in the FAR,  some of which may not conform with sound procurement policy. Frequent Use of Single Award BPAs Resulted in Lack of Competition of Orders

The FAR allows a contracting officer to decide whether to award a BPA to  a single vendor or to multiple vendors for the same requirement. One of the single award BPAs, established in 2004, for which  we found no evidence of competition had an estimated amount of nearly  $60 million. Agencies frequently received discounts from GSA schedule prices if they  requested them when establishing BPAs. The agencies in  our review infrequently requested discounts when placing orders. In some cases, agencies had negotiated discounts when  establishing the schedule BPAs and were also able to obtain further  discounts for orders. Agencies Generally Did Not Comply wit the Annual Review Requirement and Missed Oppo for Savings

		Few Contracting Officers Conducted Complete Annual Reviews

Contracting officers conducted annual reviews that addressed all of the  required FAR elements for only 19 of the 320 BPAs in our sample that  required an annual review. For some of the BPAs in our sample, the BPA  amount originally estimated had been exceeded, but because annual  reviews were not conducted, agencies missed opportunities to obtain  discounts. Although the  Navy considered more than one schedule vendor when placing the order,  this situation still involves a potential CICA violation because the  underlying schedule contract had expired by the time the order was placed  and it is not clear that statutory requirements for full and open  competition were otherwise met. Recommendations for Executive Action

We are making the following three recommendations to the Administrator  of the Office of Federal Procurement Policy:  To ensure that federal agencies take greater advantage of the  opportunities that competition provides under schedule BPAs:  take steps to amend the FAR to clarify when establishing a schedule BPA  using the limited source justifications of the FAR, including when to only  one vendor, is or is not appropriate; and    consider including in the pending proposed FAR rule that implements the  provisions of section 863 of the National Defense Authorization Act of  2009 an amendment to FAR 8.4 specifying that the requirement to place on  a competitive basis any order above the simplified acquisition threshold  (generally $100,000) under multiple award contracts also applies to orders  under single and multiple award BPAs. Appendix I: Scope and Methodology

The overall focus of this review was agencies’ use of blanket purchase  agreements (BPA) established under the General Administration Service’s  (GSA) schedules program. Our objectives were to determine: (1) the  extent to which agencies use schedule BPAs, what they buy with them,  and why agencies use them; (2) whether agencies are competing BPAs and  the orders under them; (3) whether agencies are taking advantage of  opportunities for savings by seeking discounts when using these BPAs;  and (4) whether agencies are conducting the required annual reviews. We used the EDA, DOD’s  online contract retrieval system, to review the BPAs. We reviewed BPA files to  determine whether the requirement was competed when the BPA was  established and when an order was placed by determining whether more  than one vendor had been contacted.
Why GAO Did This Study

The Federal Acquisition Regulation (FAR) allows agencies to establish blanket purchase agreements (BPA) under the General Services Administration's (GSA) Schedules Program, where contracts are awarded to multiple vendors for commercial goods and services and made available for agency use. BPAs are agreements between agencies and vendors with terms in place for future use; funds are obligated when orders are placed. When establishing BPAs under schedule contracts, agencies must follow procedures regarding the number of vendors considered, request discounts, and conduct annual reviews in accordance with requirements. This report assesses selected agencies' use of schedule BPAs and evaluates whether they considered more than one vendor when establishing BPAs and placing orders under them, took opportunities for savings, and conducted annual reviews. To conduct this work, GAO reviewed a sample of 336 schedule BPAs and 352 fiscal year 2007 orders and met with officials.

What GAO Found

In fiscal year 2008, civilian agencies obligated $3.2 billion under schedule BPAs--up 383 percent from fiscal year 2004. GAO estimates that DOD's obligations ranged from $0.5 to $4.7 billion, placing total obligations in 2008 between $3.7 and $7.9 billion. GAO was unable to determine more fully DOD's obligations because DOD does not utilize fields in the federal procurement data system to distinguish schedule BPAs from other BPAs. DOD has begun to take actions to address this issue. Civilian agencies' use of BPAs for services grew significantly faster--475 percent--than their overall services contracting between 2004 and 2008. Contracting officers use BPAs for flexibility and speed, noting, for example, advantages in disaster response preparation and when funding for a fiscal year is unknown. Of the BPAs GAO reviewed, 64 percent had been competed--meaning, for purposes of this report, that more than one vendor was considered--when established. For 12 percent of BPAs that had not been competed, contracting officers provided a variety of justifications, some of which appear inconsistent with sound procurement policy. The FAR is not clear about justification requirements for BPAs awarded with limited competition, including to one vendor. Also, the majority of BPAs had been awarded to a single vendor, which resulted in a lack of competition when placing orders because the FAR does not currently require competition of orders under single award BPAs. Multiple award BPAs--awarded to more than one vendor for the same requirement--provide an opportunity to benefit from further competition when placing orders, but many contracting officers placed orders directly with one vendor without further competition. Congress recently enhanced competition requirements for multiple award contracts, but the application of this requirement to schedule BPAs has not yet been established. Some of the BPAs GAO reviewed had lengthy durations, exceeding 5 years. GAO found no evidence that agencies sought discounts when 47 percent of the BPAs reviewed were established. In the other cases, some contracting officers explicitly requested, or even demanded, discounts, while others merely encouraged them. Agencies frequently received discounts when they requested them. For instance, the Justice Department was able to save $20 million under a BPA where the contracting officer requested and received discounts. However, at times, such opportunities were missed when discounts were not requested, even when the estimated amount of the BPA was in the hundreds of millions of dollars. Contracting officials rarely conducted the required annual reviews. The reviews for only 19 of the 320 BPAs that required them addressed all of the FAR elements. By not conducting annual reviews, agencies miss opportunities for savings and can run the risk of violating competition requirements. One contracting officer was unaware that the underlying GSA schedule contract had expired, and orders continued to be placed under the BPA--a potential violation of the Competition in Contracting Act.