There was little coordination in data systems across the  government. IAE Has Evolved over Two Stages

IAE has developed in two stages using different acquisition strategies. If there was no  viable system that could be adapted or adopted to meet an identified  need, GSA acquired a new system. GSA also established an IAE funding  strategy that consisted of contributions from agencies that use IAE  systems. In 2008, to further eliminate redundancy, reduce costs, and  improve efficiency, GSA began consolidating its portfolio of systems into  one integrated system called the System for Award Management (SAM). Unlike the existing systems (sometimes called “legacy” systems) in which  a single contractor designed, developed, and operated each of them, IAE  relies on multiple vendors to perform these same tasks for SAM. The  intent of this approach is to enhance competition and innovation and for  the government to own the software associated with the system. SAM will  be developed in phases. In each phase, capabilities from selected IAE  systems will be added to SAM and those legacy systems will then be shut  down. Initial Strategy Was to Assemble a Portfolio of Standardized Systems

During the first IAE stage, GSA worked to create a portfolio of  governmentwide systems through an acquisition strategy known as  “adopt, adapt, acquire.” GSA and OMB officials surveyed various  government stakeholders to develop an inventory of existing data  systems and to identify additional data-related needs of the government. Using this information, the ACE directed GSA to adopt or adapt existing  agency-specific systems for governmentwide use. Consolidating  the IAE portfolio was intended to reduce costs by eliminating redundancy,  streamlining acquisition processes, and consolidating infrastructure. Progress Made in Developing SAM, but Cost Increases and Schedule Delays Could Jeopardize Program Completion

GSA and its contractors have made progress in developing SAM and  phase 1 is scheduled to be completed in May 2012. GSA also has worked  with contractors to establish a hosting center for the system and a help  desk to support users. To a lesser extent, external factors, including recent  statutory requirements and policy changes, have contributed to higher  operational costs as well by increasing the demand for help desk  services. In response  to rising costs and resource constraints, GSA officials have delayed  SAM’s development schedule and taken other actions to reduce or defer  other costs. 1). Most of the cost growth, about $65 million, is due to higher than expected  hosting costs. 2). Consequences of Higher SAM Development Costs Threaten IAE Going Forward

Schedule delays and other GSA actions taken in response to cost growth  and funding shortages are likely to lead to further cost increases that  pose a risk to IAE. While GSA has taken some steps to reduce these costs, it has not  reevaluated whether its current acquisition strategy, including its  approach to acquire hosting services, is still the most cost-effective  approach to implement SAM. In addition, although the SAM development  phases have been pushed out several years, GSA has not modified its  development contract with IBM to reflect these changes. The program  continues to pay the same fixed-price amount to the contractor for system  development activities as well as operation and maintenance of SAM,  even though there was little to operate and maintain for the first 2 years of  development. Despite dramatically different circumstances marked by higher costs and  constrained resources, GSA has not reassessed its business case for  SAM. Tying contract  payments to the migration of the data systems and schedule milestones  would ensure that the government is not paying for work that has not yet  been accomplished. Recommendations for Executive Action

To ensure that GSA has a sound approach for providing IAE services in  the future, we recommend that the Administrator of GSA take the  following two actions:
Reassess the SAM business case to compare the costs and benefits  of various alternatives such as: terminating SAM development and continuing to operate the  legacy systems, maintaining the current acquisition approach to developing SAM, pursuing a different acquisition strategy for SAM, such as using a  single contractor to develop and operate the system. If the results of this assessment support continuing the current  acquisition approach, then: reevaluate the hosting strategy to ensure that it is the most cost- effective approach that can be supported with available resources,  and  take steps to ensure that the SAM development contract  payments are more closely aligned with the program schedule and  delivery of capabilities. In its written  comments, GSA concurred with our recommendations and indicated that  it will take appropriate action. CCR is the  primary registrant database for the U.S. government.
Why GAO Did This Study

The U.S. Government spends more than $500 billion each year on contracts. To ensure contracts are managed effectively, the government has established policies and procedures for advertising, awarding, administering, and reporting on them. Historically, data systems used to implement these steps have been fragmented and duplicative, with multiple systems across different agencies providing similar services. The Integrated Acquisition Environment (IAE) was initiated in 2001 to bring together different data systems into a unified system. It is intended to reduce duplication and information technology costs, and create a more streamlined and integrated federal acquisition process.
GAO was asked to assess (1) the acquisition strategy being used to develop IAE; (2) progress that has been made in consolidating IAE systems; and (3) any challenges that may affect the completion of IAE. GAO analyzed program costs, schedules, contracts, acquisition documents, and briefings, and interviewed IAE program officials and contractors.

What GAO Found

The development of IAE has occurred in two stages using different acquisition strategies. In 2001, GSA began establishing a portfolio of standardized government-wide data systems through an acquisition strategy known as adopt, adapt, acquire. GSA adopted or adapted existing agency-specific systems for government-wide use, or if no viable system met an identified need, GSA acquired a new system. These efforts resulted in a portfolio of nine data systems. In 2008, GSA began consolidating its portfolio of systems into one integrated system called the System for Award Management (SAM). In developing the system, GSA hoped to eliminate redundancy, reduce costs, and improve efficiency. Unlike the existing systems that were each designed, developed, and operated by a single contractor, IAE relies on multiple vendors to perform these same tasks for SAM. The intent of this approach is to enhance competition and innovation and for the government to own the software associated with the system. SAM will be developed in phases. In each phase, capabilities from selected IAE systems will be added to SAM and those legacy systems will be shut down.
GSA has made progress in developing SAM and phase 1, consisting of three systems, is scheduled to be completed in May 2012. GSA also has established a computing center to host SAM and a help desk to support users. Since 2009, however, IAE costs have increased by $85 million, from about $96 to $181 million. Most of the cost growth is due to GSA omitting hardware and other key components in acquiring a hosting infrastructure for SAM. External factors, including recent statutory requirements and policy changes, also have contributed to higher costs by increasing the use of the IAE systems beyond what was anticipated. Higher costs led to the need to supplement existing funding, but the program did not receive all of the additional funding it requested. In response to rising costs and limited funding, GSA officials have delayed SAMs development schedule by almost 2 years, and taken other actions to reduce or defer costs where possible.
Higher costs and constrained resources pose a risk to IAE going forward. GSA will need to continue operating the legacy IAE systems and contend with higher SAM development costs for several more years. While GSA has taken some steps to reduce costs, it has not reevaluated the business case for SAM or determined whether it is the most cost effective alternative. Such a reevaluation is particularly important in light of the increased infrastructure costs, which are now a major impediment to completing SAM. In addition, although the SAM development phases have been pushed out several years, GSA has not modified its primary development contract to align the payment schedule with the delays. The program has continued to pay the same fixed price amount to the contractor for SAM development, operation, and maintenance even though there was little to operate and maintain for nearly 2 years. Aligning contract payments with schedule milestones will ensure that the government is not paying for work that has not yet been accomplished.

What GAO Recommends

GAO recommends that GSA reassess the IAE business case to determine whether the current acquisition strategy is the most cost effective alternative and if so, reevaluate the current hosting strategy and align contract payments with the program schedule. GSA agreed with GAOs recommendations and indicated that it will take appropriate action.