This is an 11 percent increase over the amount spent in 1997. Overall, contracting for goods and  services accounted for about 24 percent of the government’s discretionary  resources in fiscal year 2001. In fiscal year 2001,  DOD contracted for more than $152.6 billion of goods and services, or  more than twice the amount spent by the next nine largest federal agencies  combined. Further Growth in Contract Spending Is Likely

Further growth in contract spending, at least in the short term, is likely  given the President’s request for additional funds for defense and  homeland security, agencies’ plans to update their information technology  systems, and other factors. In particular, federal  agencies are increasingly relying on contracts awarded by other federal  agencies to obtain goods and services and have turned to using government  purchase cards for many of their low dollar value procurements. Agency officials at each of the  agencies we reviewed reported increases in their use of the schedules  program over the past 5 years, driven largely by increased purchases of  information technology and professional, administrative, and management  support services. Acquisition Workforce and Workload Trends

Over the last decade, the federal acquisition workforce has had to adapt  to changes in staffing levels, workloads, and the need for new skill sets. For example, contracting specialists are required  to have a greater knowledge of market conditions, industry trends, and  the technical details of the commodities and services they procure. Ensuring that  agencies will have the right people with the right skills to successfully meet  the increasingly complex demands expected in the future has become a  priority at most of the agencies we reviewed. While agencies still face many  hurdles, our recent work has found that most agencies have taken steps to  address their strategic human capital planning challenges. Changes in the acquisition workforce have been accompanied by changes  in the types of actions being managed. While managing spending effectively is always a key management  responsibility, the need for effective management is more acute in agencies  that rely heavily on acquiring goods and services to carry out their missions  or support their operations. Changes in what the government buys, its contracting approaches and  methods, and its acquisition workforce combine to create a dynamic  acquisition environment. However, our work has found that the lack of proper training,  guidance, and internal controls can increase an agency’s procurement risk  and lead to reduced public confidence. Agency  officials concurred with our analyses and provided technical comments,  which we incorporated as appropriate. Treasury’s acquisition workforce represents about 1.5 percent of its total workforce. Other key organizations: Federal Transit Administration and Federal Highway Administration.
Why GAO Did This Study

The federal government, comprised of more than 60 agencies and nearly 1.7 million civilian workers, acquires most of its goods and services through contracts. Recent changes in what the government buys, its contracting approaches and methods, and its acquisition workforce have combined to create a dynamic acquisition environment. Many of these recent changes enhance contracting efficiency and offer a number of benefits, such as reduced administrative burdens. However, GAO's past work has found that if these changes are not accompanied by proper training, guidance, and internal controls, agency procurements may be at greater risk. While effectively managing contracts is always a key management responsibility, this responsibility is more acute in those agencies that rely heavily on acquisitions to accomplish their missions. The goal of this report is to identify for Congress, the administration, and accountability organizations those procurement-related trends and challenges that may affect federal agencies. Specifically, GAO analyzed recent federal procurement patterns, the use of various procurement methods, and changes in the acquisition workforce.

What GAO Found

Federal agencies procured more than $235 billion in goods and services during fiscal year 2001, reflecting an 11 percent increase over the amount spent 5 years earlier. Further growth in contract spending, at least in the short term, is likely to increase given the President's request for additional funds for defense and homeland security, agencies' plans to update their information technology systems, and other factors. Overall, contracting for goods and services accounted for about 24 percent of the government's discretionary resources in fiscal year 2001. Federal agencies are taking advantage of the streamlined acquisition processes that were developed in the 1990s, including relying on contracts awarded by other federal agencies to obtain goods and services. The increase in the use of this acquisition method is driven largely by purchases of information technology and by professional, administrative, and management support services. Similarly, agencies are increasingly using purchase cards for many of their low dollar value procurements. Over the last decade, the federal acquisition workforce has had to adapt to changes in staffing levels, workloads, and the need for new skill sets. Procurement reforms have required contracting specialists to have a greater knowledge of market conditions, industry trends, and the technical details of the commodities and services they procure. A priority at most agencies we reviewed was attracting and retaining the right people with the right skills to successfully address the increasingly complex actions expected in the future. Many agencies have made progress with strategic human capital planning efforts. We reviewed 10 agencies that represent over 90 percent of the federal government's acquisition spending. All agencies provided comments on our report and concurred with our analyses.