GWACs provide a broad range of information technology goods and  services and resources for agency activities. With Insufficient and Unreliable Data and Limited Governmentwide Policy, Agencies’ Use of Interagency and Enterprisewide Contracts May Result in Inefficient Contracting

Interagency and enterprisewide contracts should provide an advantage to  the government in buying billions of dollars worth of goods and  services, yet OMB and agencies cannot be sure they are leveraging  this buying power because they lack the necessary comprehensive,  reliable data to effectively manage and oversee these contracts. Both government contracting  officials and representatives of vendors expressed concerns about this  condition. GSA’s Efforts to Determine Whether It Obtains the Best Prices on MAS Contracts Is Hindered by the Limited Application of Selected Pricing Tools

GSA’s MAS program is the largest government interagency contracting  program, with approximately 17,000 of the 19,000 contracts involved in the  federal supply schedules program, but GSA’s limited application of  selected pricing tools hinders its ability to determine whether it obtains  the best MAS contract prices. The first is the goal that GSA obtain the best  prices for MAS contracts that vendors offer their most favored customers. An advisory  panel established by GSA has made recommendations that could result in  changes to the program’s pricing controls and tools but concerns remain  that these changes could adversely affect GSA’s ability to negotiate best  prices. This provision provides price  protection for the government following contract award if a vendor lowers  its prices to commercial customers during the contract period. However, GSA uses these tools primarily for a  small number of larger dollar value contracts, thus limiting its ability to  evaluate the effectiveness of the regulatory pricing controls and obtain the  best prices under MAS contracts. As a result, the GSA  Inspector General has identified almost $4 billion in potential cost  avoidance through pre-award audits from fiscal years 2004 through 2008. The MAS Program Office,  established in 2008 to manage strategic and policy issues, lacks direct  oversight authority for the MAS program, as GSA has dispersed  responsibility for the management of individual contract schedules among  nine different acquisition centers under three business portfolios. For example,  MAS performance measures are inconsistent across the GSA organizations  that manage MAS contracts, including inconsistent emphasis on pricing,  which limits GSA’s ability to have a program wide perspective on its  operations. Program stakeholders also expressed concerns regarding  the lack of MAS program data. Limitations in Assessment Tools That Focus on Internal Operations and MAS Customers Also Hinder Effective Program Management

In addition to a lack of data and a decentralized management structure,  shortcomings in assessment tools also create MAS program management  challenges. Recommendations for Executive Action

To provide better transparency and a coordinated approach in awarding  MACs and enterprisewide contracts, we recommend that the Director of  the Office of Management and Budget direct the Administrator of the  Office of Federal Procurement Policy to take the following five actions in  conjunction with the agencies’ senior procurement executives:     Survey departments and agencies to update the 2006 Office of Federal  Procurement Policy Interagency Contracting Data Collection Initiative  to identify the universe of MACs and enterprisewide contracts in use  throughout federal departments and agencies and assess their utility  for maximizing procurement resources across agencies;     Ensure that departments and agencies use the survey data to  accurately record these contracts in FPDS-NG;    Establish a policy and procedural framework in conjunction with  agencies for establishing, approving, and reporting on new MACs and  enterprisewide contracts on an ongoing basis; the framework should  stress the need for a consistent approach to leveraging the  government’s buying power across departments and agencies while  continuing to use their statutory authorities for buying goods and  services;    Assess the feasibility of establishing and maintaining a centralized  database, which could provide sufficient information on GWACs,  MACs, and enterprisewide contracts, for contracting officers to  conduct market research and make informed decisions on the  availability of existing contracts to meet the agencies’ requirements;  and    As part of developing the pending FAR rule to implement the 2009  National Defense Authorization Act, ensure that departments and  agencies complete a comprehensive business case analysis as  described by the SARA panel, and include a requirement to address  potential duplication with existing contracts, before new MACs and  enterprisewide contracts are established. To strengthen GSA MAS program pricing and management, we  recommend that the Administrator of the General Services Administration  take the following eight actions:  In coordination with the GSA Inspector General, target the use of pre- award audits to cover more contracts that meet the audit threshold;     Fully implement the process that has been initiated to ensure that  vendors that meet the pre-negotiation clearance panel threshold  receive a panel review;    When considering the MAS Advisory Panel recommendations to clarify  the price objective and eliminate the price reduction clause, ensure  that any alternative means to negotiate and determine best prices are  validated and in place before eliminating these pricing provisions,    Collect transactional data on MAS orders and prices paid, possibly  through the expanded use of existing electronic tools or through a pilot  data collection initiative for selected MAS schedules and make the  information available to MAS contract negotiators and customer  agencies,     Establish more consistent performance measures across the MAS  program, including measures for pricing;     Take steps to increase the MAS customer survey response rate by using  a methodologically sound means to identify bona fide program users  and employing survey techniques that produce meaningful and  actionable information that can lead to program improvements;    Clarify and strengthen the MAS program office’s charter and authority  so that it has clear roles and responsibilities to consistently implement  guidance, policies, and best practices across GSA’s acquisition centers  including policies and practices related to the above recommendations;  and    Report GSA’s plans to address these recommendations to the  Administrator of the Office of Federal Procurement Policy. To conduct this review we selected agencies that established or  used the MAS, governmentwide acquisition contract (GWAC), multiagency  contract (MAC) or enterprisewide contract programs.
Why GAO Did This Study

Agencies can use several different types of contracts to leverage the government's buying power for goods and services. These include interagency contracts--where one agency uses another's contract for its own needs--such as the General Services Administration (GSA) and the Department of Veterans Affairs multiple award schedule (MAS) contracts, multiagency contracts (MAC) for a wide range of goods and services, and governmentwide acquisition contracts (GWAC) for information technology. Agencies spent at least $60 billion in fiscal year 2008 through these contracts and similar single-agency enterprisewide contracts. However, concerns exist about duplication, oversight, and a lack of information on these contracts, and pricing and management of the MAS program. GAO was asked to assess the reasons for establishing and the policies to manage these contracts; the effectiveness of GSA tools for obtaining best MAS contract prices; and GSA's management of the MAS program. To do this, GAO reviewed statutes, regulations, policies, contract documentation and data, and interviewed officials from OMB and six agencies.

What GAO Found

GWACs, MACs--two types of interagency contracts--and enterprisewide contracts should provide an advantage to the government in buying billions of dollars worth of goods and services. However, data are lacking and there is limited governmentwide policy to effectively leverage, manage, and oversee these contracts. The total number of MACs and enterprisewide contracts is unknown, and existing data are not sufficiently reliable to identify them. In addition, GWACs are the only interagency contracts requiring OMB approval. Agencies GAO reviewed followed statutes, acquisition regulations, and internal policies to establish and use MACs and enterprisewide contracts. Avoiding fees associated with using other agencies' contracts and more control over procurements are some of the reasons agencies cited for establishing MACs and enterprisewide contracts. However, many of the same contractors provided similar products and services on multiple contracts--a condition that increases costs to both the vendor and the government and misses opportunities to leverage the government's buying power. Recent legislation and OMB's Office of Federal Procurement Policy initiatives are expected to strengthen management of MACs, but no such initiatives exist for enterprisewide contracts. GSA's MAS program--the largest interagency contracting program--uses several tools and controls to obtain best prices, but the limited application of certain tools hinders its ability to determine whether it achieves this goal. GSA has established two regulatory pricing controls for MAS contracts: seek the best prices vendors provide to their most favored customers; and a price reduction clause that provides the government a lower price if a vendor lowers the price for similarly situated commercial customers. GSA uses other pricing tools--e.g., pre-award contract audits by its Inspector General and Procurement Management Reviews--on a limited basis. For example, the Inspector General performs pre-award audits on a small sample of MAS contracts annually, but has identified contract cost avoidance of almost $4 billion in recent years. In 2008, GSA established a MAS advisory panel that recommended changes to the pricing controls noted above; concerns remain that such changes could adversely affect GSA's ability to negotiate best prices. A lack of data, decentralized management, and limitations in assessment tools create challenges for GSA in managing the MAS program. The agency lacks data about customer agencies' use of the program, limiting its ability to determine how well the program meets customers' needs. The MAS program office lacks direct program oversight, as GSA has dispersed authority for managing MAS among nine acquisition centers under three business portfolios. Program stakeholders have identified concerns that this structure has impaired consistent policy implementation. Shortcomings in assessment tools also result in management challenges. For example, performance measures are inconsistent, including inconsistent emphasis on pricing. GSA's customer satisfaction survey has such a low response rate that its utility for evaluating program performance is limited.