In recent years, NOAA has experienced problems in acquiring goods and  services. NOAA Lacks Oversight of Some Field Acquisition Activities

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. 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. 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. NOAA Has Taken Limited Actions to Address Contracting Workforce Retirement Challenges

NOAA is facing a human capital challenge because of its aging contracting  workforce, and senior acquisition managers are concerned about the loss  of a high percentage of their contracting staff to retirement and other  attrition. However, NOAA has yet to focus on succession planning and  management for its contracting workforce, even though the agency has  approval to use flexible direct hire authority in anticipation of an  impending wave of retirements. Moreover, NOAA reported in January 2006 that  about 43 percent of its contracting employees are already eligible to retire  or will become eligible to retire between now and fiscal year 2009. However, it is too early to determine if this  Commerce-wide plan will determine the gaps in numbers and skills in the  contracting workforce to achieve mission-critical work and develop  strategies to address these gaps. Unless the future retirement and workforce capacity challenges are  strategically addressed, NOAA could soon lose a significant portion of its  contracting knowledge base. NOAA can improve oversight of its field acquisition operations by  requiring direct reporting of all of its acquisition offices and developing an  oversight process for collateral duty contracting officers; adopting a  knowledge-based acquisition process to help ensure that complex  developmental systems meet cost, schedule, and performance targets; and  addressing the imminent retirements of its contracting workforce to  ensure it has a solid knowledge base to carry out its acquisition function. To provide appropriate oversight of NOAA’s field acquisition operations,  we recommend that the Under Secretary of Commerce for Oceans and  Atmosphere take the following two actions:  take steps to ensure that NOAA’s Director of Acquisition and Grants  has direct authority over all acquisition entities within the agency by  realigning the National Data Buoy Center’s Acquisition Office to report  directly to NOAA’s acquisition director and    provide for regular monitoring of collateral duty contracting officers in  field offices to help ensure they are accountable to senior acquisition  officials for their contracting work. To determine if NOAA has established clear and consistent acquisition  policies and processes that promote, among other things, a knowledge- based acquisition approach for development and production of complex  systems, we reviewed acquisition policies, processes, and guidelines. Finally, to determine the extent to which NOAA has planned and managed  its contracting workforce to address future retirement challenges, we  interviewed NOAA and Commerce officials responsible for contracting  workforce and strategic human capital planning.
Why GAO Did This Study

The National Oceanic and Atmospheric Administration (NOAA) accounts for about half of the Department of Commerce's (Commerce) acquisition spending, over $851 million in fiscal year 2005 alone. In recent years however, NOAA has experienced instances of poor contract management. GAO was asked to determine if NOAA is positioned to effectively carry out its acquisition function. Specifically, GAO assessed the extent to which NOAA has structured an acquisition organization that provides appropriate oversight; established policies and processes that promote, among other things, a knowledge-based acquisition process for development and production of complex systems; and planned and managed its contracting workforce to address future retirement challenges.

What GAO Found

NOAA has yet to structure all of its field acquisition activities under the direct oversight of its acquisition organization, increasing the risk that taxpayers are not getting the best value for their dollars. To improve oversight of its acquisition function, NOAA reorganized in 2005 by having all acquisition divisions report to the NOAA Director of Acquisition and Grants. However, NOAA's acquisition director still lacks direct line authority to oversee a National Weather Service field office that is responsible for one of the agency's contracts worth up to half a billion dollars. Also, without appropriate oversight from the acquisition organization, collateral duty field staff who are not career contracting officers have bought millions of dollars in goods and services. Our work has shown that a well-functioning acquisition organization has direct lines of oversight between the head of acquisition and various components to help enforce policies that enable efficient and effective contract spending. Although NOAA has established clear and consistent policies for some key areas, such as advance acquisition planning, the agency lacks a knowledge-based process for developing and producing complex systems--a situation that can increase the risk of cost increases and schedule delays. NOAA is missing key elements that promote successful outcomes for complex developmental systems because it must adhere to Commerce's acquisition policies that do not support a knowledge-based approach. Without such an approach, the multibillion-dollar satellite investment that NOAA is in the early stages of acquiring is at a higher risk of not meeting program requirements. NOAA has yet to focus on succession planning and management for its contracting workforce, although the agency is pursuing hiring flexibilities to recruit new contracting employees in anticipation of an impending wave of retirements. NOAA is facing a human capital challenge because of its aging contracting workforce and has reported that about 43 percent of contracting employees are now eligible to retire or will be eligible to retire by 2009. While senior acquisition managers are concerned with the loss of a high percentage of their contracting staff to retirement and other attrition, NOAA has not specifically addressed such contracting workforce challenges in its strategic human capital plan. Also, it is unclear whether human capital planning under way by Commerce will determine the gaps in numbers and skills in the contracting workforce. Unless the future retirement and workforce capacity challenges are strategically addressed, NOAA could soon lose a significant portion of its contracting knowledge base.