	Background

The Services Acquisition Reform Act of 2003 required the Administrator  for Federal Procurement Policy to establish an acquisition advisory panel  (referred to as the Panel) to review federal acquisition laws, regulations,  and policies; and identify opportunities to enhance how agencies award  and administer contracts for the acquisition of goods and services. Our Work in Federal Acquisitions

We have a long history of reporting on the key issue areas that the Panel  addressed in 2007. In 2007, the Panel found that defining requirements is key to achieving the benefits of  competition because procurements with clear requirements are far more likely to  produce competitive, fixed-price offers that meet customer needs. We have found that federal agencies continue to face challenges  involving acquisition requirements definition. In 2017, we found that the Army’s requirements development workforce  had decreased by 22 percent since 2008, with some requirements  development centers reporting more significant reductions. While the Army  agreed with the recommendation, it remains unaddressed. In 2007, the Panel found that the private sector relied heavily on competition and  rigorous market research to effectively and efficiently buy products and services. OFPP and DOD have taken steps to increase competition rates, but  the government-wide competition rate has remained steady, while  DOD’s rate has declined over the past 5 years. Agencies facing acquisition planning obstacles are sometimes using  bridge contracts, which we have generally defined as extensions to  existing contracts or new short-term, sole-source contracts to avoid a  lapse in service caused by a delay in awarding a follow-on contract. In  some instances, bridge contract awards delay opportunities for  competition and can place the government at risk of paying higher  prices for multiple years. See figure 2. As figure 3 illustrates, an Army bridge contract for computer support  services was initially planned as a 12-month bridge, but because of  subsequent bridges, ultimately spanned 42 months. OFPP agreed with the  recommendation to provide guidance for managing bridge contracts, and  has drafted management guidance, but has not yet finalized it as of July  2018. All three agencies agreed with  and addressed our recommendations. Key Issue Area 3: Contractor Oversight

Issue Area Context    The government uses contracts to procure a wide range of services, some of which  warrant increased management attention because there is an increased risk that the  contractors may perform tasks reserved for the government. In 2007, the Panel found that uncertainty about inherently governmental functions led to  confusion about the necessary amount of contractor oversight, and it raised questions  about federal agencies’ capacity to oversee contractors. Agencies across the federal government award contracts requiring  increased management attention, such as contracts for professional  and management support services. In 2017, we found that agencies continued to award service contracts  warranting increased management attention at a steady rate. In 2013, at the  Department of Veterans Affairs, we found that heavy workloads and  competing demands made it difficult for CORs to effectively monitor  contractors and ensure they were executing their work in accordance with  contract terms. We  recommended that the Department of Veterans Affairs develop tools to  help the officials oversee contracts. The department agreed and did so. We found that steps have been taken to address acquisition workforce  issues, but workforce gaps endure. OFPP, GSA, and DOD have introduced new training programs to help  improve the skills of the federal acquisition workforce. Congress and OMB have taken several actions intended to ensure  agencies conduct adequate workforce planning, but agencies have  not done so consistently. DOD concurred with all four  recommendations, including the recommendation that the department  issue an updated acquisition workforce plan in fiscal year 2016, which  DOD implemented. We found that OMB, GSA, and federal agencies have taken steps to  improve data reliability, but the government’s primary repository for  acquisition data still faces capability limitations. We recommended that OMB take steps to improve how  agencies collect certain procurement data. OMB generally agreed, but  has not yet addressed the recommendation. In 2007, the Panel found a number of challenges hindering agencies’ efforts to achieve  small business participation goals. For example, the Department of  Defense (DOD) did not meet all of its small  business goals in 2017. However, among other results, we have found that many agencies have  not demonstrated that they are in full compliance with a number of  requirements related to the functions and duties of these offices, such as  establishing a direct reporting relationship between the OSDBU director  and the agency head or deputy head, and specifying that the director  must have supervisory authority over staff performing certain duties. Most agencies that provided comments  agreed or partially agreed with the recommendations. As of June 2018,  two of the 19 agencies—the National Aeronautics and Space  Administration and the U.S. Agency for International Development—had  implemented our recommendations. SBA has taken steps to address these weaknesses, but some remain. Appendix I: Objective, Scope, and Methodology

This report identifies actions the federal government has taken to address  the key issues the Acquisition Advisory Panel (the Panel) raised in its  2007 report, and some of the acquisition challenges that remain. To frame the key issues the Panel identified in its 2007 report, we worked  with internal subject matter experts and officials from the Office of  Management and Budget’s (OMB) Office of Federal Procurement Policy  (OFPP), Department of Defense (DOD), General Services Administration  (GSA), and Small Business Administration (SBA) to categorize the  Panel’s 89 recommendations into six higher-level issue areas:
Competition and pricing,
Federal procurement data, and
Small business participation. To identify progress made and challenges that remain in each of these  issue areas, we reviewed relevant GAO reports and testimonies; key  legislation such as the Weapon Systems Acquisition Reform Act of 2009,  and the Small Business Jobs Act of 2010;  acquisition guidance issued  by OMB, DOD, GSA, and SBA; and interim reports from the Section 809  Panel, which is addressing acquisition challenges at DOD, and plans to  issue its final report in January 2019.
Why GAO Did This Study

In fiscal year 2017, federal agencies obligated more than $500 billion to acquire products and services. These products and services included military aircraft, information technology software, and maintenance services.
Amid this large spending, the federal government has taken steps to reform federal acquisitions, increase efficiencies, and improve results. For example, in the Services Acquisition Reform Act of 2003, Congress established the Acquisition Advisory Panel to review federal acquisition laws, regulations, and policies; and identify opportunities for improvement. The Panel issued its final report in 2007, addressing topics that span all three phases of the contracting life cycle identified by GAO: pre-contract award, contract award, and post-contract award.
GAO was asked to follow up on the Panel's report and identify progress made since 2007. This report identifies the actions the federal government has taken to address key issues raised in the Panel's report, and the challenges that remain. GAO reviewed documentation and interviewed personnel from federal agencies and the private sector. These personnel included staff from OMB that are responsible for federal procurement policy, as well as staff supporting a panel addressing DOD's acquisition regulations and processes, known as the Section 809 Panel. GAO also leveraged its large body of work on federal acquisitions.

What GAO Found

Congress and the executive branch have taken numerous actions to address key issues the Acquisition Advisory Panel (Panel) identified in its 2007 report, but these actions have not eliminated some enduring challenges. The figure below presents the key issues the Panel addressed in relation to the life cycle of a typical contract as identified by GAO.
Three of the key issues, and the corresponding challenges, align with specific phases in the contracting life cycle:
Requirements Definition: The Panel found that fully identifying requirements before a contract is awarded is key to achieving the benefits of competition. GAO has found that unrealistic requirements have contributed to poor program outcomes at the Department of Defense (DOD), and that the Army's requirements development workforce decreased by 22 percent from 2008 to 2017.
Competition and Pricing: The Panel said that competition can help reduce prices. GAO's work shows that competition rates have remained steady government-wide, and declined at DOD. See figure below.
GAO has also found that agencies are sometimes using bridge contracts—which GAO has generally defined as either extensions to existing contracts or new short-term, sole-source contracts—to avoid a lapse in service caused by delay of a follow-on contract award. In some instances, bridge contract awards delay opportunities for competition and can place the government at risk of paying higher prices for multiple years. The figure below depicts how an Army bridge contract for computer support services planned for 12 months was extended to 42 months.
Contractor Oversight: The Panel raised questions about the capacity of federal agencies to oversee contractors. GAO has found that agencies continue to award contracts warranting increased management attention at a steady rate, such as contracts for management support services. With contracts like those for management support services, there is an increased risk that contractors may perform tasks reserved for the government. Additionally, GAO found that heavy workloads at the Department of Veterans Affairs have made it difficult for officials who oversee contractors to ensure contractors adhere to contract terms.
Three of the key issues, and the corresponding challenges, cut across all the phases of the contracting life cycle:
Acquisition Workforce: The Panel found that the federal acquisition workforce faces workload and training challenges. GAO's work has shown that DOD has enhanced its workforce, but some workforce gaps endure at DOD and across agencies.
Federal Procurement Data: The Panel found that the government's primary repository for acquisition data contained some unreliable data. Also, GAO has found that the system has demonstrated limitations. For example, guidance from the Office of Management Budget (OMB) required that agencies collect specific contract award data, but the system did not have the capability to do so.
Small Business Participation: The Panel found a number of challenges hindering agencies' efforts to meet small business goals. GAO has found small business participation has increased, but many agencies are not in full compliance with requirements governing Offices of Small and Disadvantaged Business Utilization (OSDBUs). For example, the directors of these offices should report directly to agency heads or their deputies, but not all agencies have established this type of direct reporting relationship.

What GAO Recommends

GAO is not making any new recommendations in this report, but it has made numerous recommendations in the past. The agencies have agreed with many of GAO's recommendations, and have implemented some of them but not others. For example, GAO has made the following recommendations.
The Army should assess the resources needed for the requirements development process. The Army agreed, but it has not yet done so.
OMB should provide guidance for agencies to manage bridge contracts. OMB agreed and has drafted management guidance but has not yet finalized it.
Certain federal agencies should take steps to document how they conduct market research. The agencies agreed and did so.
The Department of Veterans Affairs should develop tools to help oversee contracts. The department agreed and did so.
DOD should have issued an updated acquisition workforce plan in fiscal year 2016. DOD agreed and issued the plan.
OMB should take steps to improve how agencies collect certain procurement data. OMB generally agreed, but has not yet addressed the recommendation.
Certain federal agencies should take steps to comply with OSDBU-related requirements. Most agencies that provided comments agreed or partially agreed. Two agencies—the National Aeronautics and Space Administration, and the U.S. Agency for International Development—have addressed the recommendations.
GAO continues to believe the agencies should implement all of these recommendations.