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entitled 'Improvements Needed to the Federal Procurement Data System-
Next Generation' which was released on September 27, 2005. 

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September 30, 2005: 

The Honorable Joshua B. Bolten: 
Director, Office of Management and Budget: 

Subject: Improvements Needed to the Federal Procurement Data System-
Next Generation: 

Dear Mr. Bolten: 

Federal government purchases of goods and services have grown to more 
than $300 billion annually.[Footnote 1] The Federal Procurement Data 
System-Next Generation (FPDS-NG) is the only governmentwide system for 
obtaining information on how these funds are being spent. The FPDS-NG 
was intended to improve the prior FPDS system in several ways, 
including providing more timely and accurate data; enabling users to 
generate their own reports; and providing easier user access to data. 
The system was developed by Global Computer Enterprises (GCE) under 
contract with the General Services Administration (GSA). The FPDS-NG is 
currently in a transition period, which is scheduled to end by October 
2005. 

We initiated a review to assess the extent to which FPDS-NG has 
demonstrated the intended improvements, and to determine whether the 
FPDS-NG is currently capable of collecting and reporting on interagency 
contracting data. As discussed more fully in the Scope and Methodology 
section of this letter, we reviewed documents related to FPDS-NG; held 
discussions with officials from GSA and GCE, and private sector and 
government users. We also made numerous attempts to use the system to 
generate reports. 

Based on our review, we have concerns regarding whether the new system 
has achieved the intended improvements in the areas of timeliness and 
accuracy of data, as well as ease of use and access to data. We also 
are concerned whether the FPDS-NG system has the flexibility to capture 
data on interagency contracting transactions. Completion of the FPDS-NG 
transition provides an opportunity for assessing the implementation of 
the system to date and to make needed adjustments prior to exercising 
options for additional periods of performance by the FPDS-NG 
contractor.[Footnote 2] We are recommending actions to help achieve the 
intended improvements for FPDS-NG, which should be considered as part 
of that assessment. 

BACKGROUND: 

The Office of Federal Procurement Policy Act of 1974 required that the 
Administrator of the Office of Federal Procurement Policy (OFPP) within 
the Office of Management and Budget (OMB) establish a system for 
collecting and developing information about federal procurement 
contracts.[Footnote 3] Subsequently, the FPDS was implemented in 1978. 
Since 1982, GSA has administered the system on OFPP's behalf. The 
Congress, GAO, executive branch agencies, and the public rely on FPDS 
data for information on agency contracting actions, governmentwide 
procurement trends, and achievement of goals related to small business. 

Since 2000, efforts have been underway to modernize the FPDS. In April 
2003, GSA awarded the FPDS-Next Generation contract to Global Computer 
Enterprises. The FPDS-NG became operational in October 2003 and entered 
into a 2-year transition period during which the contractor has worked 
with federal agencies to review and transfer their data, and validate 
and connect their contract writing systems to FPDS-NG.[Footnote 4] The 
FPDS-NG became available to the public in December 2004. 

GAO has reported on its concerns regarding the FPDS almost since the 
system's beginning.[Footnote 5] In December 2003, we reiterated our 
concerns regarding long-standing inaccuracies and incomplete data in 
the system, and made specific recommendations to OMB to help improve 
the successor system, FPDS-NG, as it was being implemented.[Footnote 6] 
Subsequently, OMB issued a memorandum requiring federal departments and 
agencies to take certain steps to ensure their full participation in 
the FPDS-NG initiative.[Footnote 7]

KEY CONCERNS: 

Our review raised concerns regarding whether the FPDS-NG has achieved 
its intended improvements. The following examples reflect our key areas 
of concern regarding the new system: 

* Timeliness and accuracy of data: Interviews with several users 
indicate a lack of confidence in the system's ability to provide timely 
and accurate data. The FPDS-NG vision included improving the timeliness 
and accuracy of data by requiring agencies and departments to connect 
to FPDS-NG via contract writing systems. These systems enable the real-
time electronic submission of data, thereby reducing the risk of errors 
by eliminating or reducing manual re-keying into FPDS-NG. Although GSA 
and contractor officials believe that roughly 90 percent of agencies 
with contract writing systems have completed their connections to the 
FPDS-NG, this is not the case for the Department of Defense (DOD)--by 
far the largest contracting entity in the government. In fact, DOD has 
delayed its timeframes for connecting to the system at least twice, and 
currently estimates it will not be fully connected until sometime in 
fiscal year 2006 given the complexity of its reporting needs and other 
requirements.[Footnote 8] Given that DOD data represent about 60 
percent of the contracting actions that will be captured within FPDS-
NG, this delay significantly affects the ability of FPDS-NG to reflect 
timely and accurate procurement data. 

Additionally, prior to transferring data and connecting their contract 
writing systems to FPDS-NG, agencies and departments were to review 
their data and identify and correct any deficiencies, as well as to 
"certify" the accuracy and completeness of their fiscal year 2004 data 
with the FPDS-NG contractor. GSA officials informed us that the data 
review process, including certification of accuracy and completeness of 
fiscal year 2004 data, has been more rigorous than in prior years and 
that this might become an annual process. Although GSA officials told 
us that many agencies have reviewed and verified their data, GSA has 
not informed users about the extent to which agencies' data are 
accurate and complete. This lack of confirmation perpetuates a lack of 
confidence in the system's ability to provide quality data. 

* Ease of use and access to data: The FPDS-NG website provides users 
the ability to generate reports at any time through standard report 
templates or an "ad hoc" reporting tool. Although GAO analysts attended 
contractor-provided training on these reporting tools, we did not find 
either easy to use.[Footnote 9] We repeatedly encountered significant 
performance problems, including system time-outs and delays, when 
trying to generate both kinds of reports. Additionally, while the ad 
hoc reporting capability is a potentially useful new feature that 
allows users to create their own reports, it takes time and effort to 
build a customized report query, which then cannot be saved and must be 
rebuilt every time this feature is utilized. With respect to access, 
our interviews with private sector users, GSA officials, and the FPDS-
NG contractor indicated that repeated requests have been made for 
governmentwide procurement data and a summary report, such as the prior 
FPDS Federal Procurement Report; however, such a report is not 
currently available. GSA officials have indicated that they are 
exploring ways to improve the ad hoc reporting tool and provide 
governmentwide procurement reports, but the timeframe for implementing 
these potential improvements is uncertain. 

While FPDS-NG has enabled users to access government procurement data 
more readily through its web-based reporting features, some users have 
more complex data needs that require the ability to access and download 
raw data.[Footnote 10] These users can access data through archived 
files from the FPDS-NG website or through Web services, which provides 
an interface between external systems and the FPDS-NG. In either case, 
FPDS-NG presents the data in an XML format, which is a way to present 
data in a simple and machine-readable format.[Footnote 11] However, our 
attempts to extract contracting data across multiple government 
agencies using current XML-compliant software were unsuccessful. Data 
had to be extracted separately for each agency from multiple archived 
files, involving over 1,000 tables for fiscal year 2004 alone. 
Subsequent discussions with the FPDS-NG contractor indicated this is 
the only means currently available for accessing the raw data. 
Obtaining this data through multiple XML files involves a significant 
increase in time and effort, and does not facilitate user access to 
data to meet information needs. 

INTERAGENCY CONTRACTING TRANSACTIONS: 

The need for collecting and tracking data on interagency contracting 
transactions has become increasingly important. In recent years, 
federal agencies have been making greater use of existing contracts 
provided by other agencies, such as multiple award schedules and 
governmentwide acquisition contracts, as well as interagency 
acquisition services provided through the use of franchise funds. 
However, total spending using other agencies' contracting vehicles and 
services is unknown because there is currently no system that tracks 
and reports this information. Challenges associated with these 
acquisition vehicles and their management led GAO to designate 
interagency contracting as a governmentwide high-risk area in January 
2005.[Footnote 12]

Over the last decade, Congress has repeatedly called for DOD to report 
on certain types of interagency contracting and financial data. More 
recently, the Senate Armed Services Committee conveyed its expectation 
that DOD business systems have the capability to track basic 
information about interagency transactions. This information includes 
the following: number and dollar value of transactions under each 
interagency contracting vehicle; the status of open transactions; the 
status of funds under interagency transactions (including appropriation 
type and year, and fund balance received, obligated, expended, and 
available); and the amount of any funds returned or to be returned to 
DOD or to the Department of Treasury.[Footnote 13] DOD officials have 
indicated that they plan to use FPDS-NG to track interagency 
contracting data and request changes to the system to capture more 
specific information in this regard. 

GSA documentation indicates that the vision for FPDS-NG included system 
capability that was flexible enough to change as new data collection 
needs arose, such as those related to interagency contracting 
activities. GSA officials told us that some interagency contracting 
data are available in FPDS-NG. However, our efforts to obtain data and 
to generate reports on interagency contracting transactions were 
unsuccessful. GSA officials also expressed concerns that FPDS-NG may 
not be the appropriate system to collect certain types of data on 
interagency transactions. Given these circumstances, it is unclear 
whether FPDS-NG has the flexibility to address these new data needs and 
whether it is the appropriate system for this purpose. 

CONCLUSION: 

The FPDS-NG is currently the only system providing information on over 
$300 billion in annual government spending, yet concerns remain 
regarding the timeliness, accuracy, accessibility, and ease of use of 
the system. Additionally, the growth in interagency contracting and the 
associated challenges involved heightens the need for data in this area 
to provide sufficient oversight. Given that the FPDS-NG transition 
period is ending, the opportunity exists to address key areas of 
concern as the system's implementation to date is assessed. 

RECOMMENDATIONS: 

In order to help achieve the intended improvements for FPDS-NG, we 
recommend that the Director of OMB: 

* Ensure that DOD, and any other agencies that have not yet moved to an 
electronic data submission environment, connect to FPDS-NG via contract 
writing systems as soon as possible, and provide confirmation of 
agencies' review and verification of the accuracy and completeness of 
their data in FPDS-NG. 

* Develop a plan to improve ease of use and access to data, including 
report generation, governmentwide reporting needs, and accessing raw 
data through more efficient means. 

* Determine whether the FPDS-NG currently has the capability to collect 
and report on interagency contracting data and whether it is the 
appropriate system to capture this data in the future. 

AGENCY COMMENTS: 

We provided a draft of this letter to OMB and GSA for comment. OMB and 
GSA officials commented orally that their respective agencies concurred 
with the recommendations, and OMB stated that it would take into 
consideration the findings of the report, including whether the use, 
access and capability of FPDS-NG appropriately meets the government's 
needs. Officials from both agencies indicated that ensuring DOD 
connects its contracting writing systems to FPDS-NG as soon as possible 
is a top priority. Additionally, GSA agreed that an overall statement 
about the agenciesí verification of the accuracy and completeness of 
the data in FPDS-NG could be made now that most agencies have completed 
that process. OMB and GSA officials stated that new software is 
expected to improve reporting capability and that additional 
improvements are being explored to improve ease of use of the system. 
GSA added that additional reports and improved capability are planned 
for early in fiscal year 2006. 

Regarding interagency contracting, OMB stated that currently FPDS-NG 
has a limited role in identifying and reporting information on 
interagency contracting transactions. GSA stated that FPDS-NG was not 
intended to collect information on financial transactions between 
government agencies and that OMB would need to decide whether FPDS-NG 
should be modified so that the system could collect and report on this 
type of information. 

SCOPE AND METHODOLOGY: 

The information in this letter is based on previous GAO reviews and 
limited additional work conducted from February 2005 through August 
2005, in accordance with generally accepted government auditing 
standards. In conducting our work, we reviewed relevant GAO reports and 
audit documentation. We also held discussions with officials at GSA, 
the FPDS-NG contractor (GCE), and with several private sector and 
government users. We attended training at the GCE facility on FPDS-NG 
report generation; we attempted to generate standard reports and to 
build several ad hoc report queries using the FPDS-NG system; and we 
reviewed relevant documents concerning FPDS and FPDS-NG. 

We are sending copies of this letter to the Chairs and Ranking Members 
of the Senate Homeland Security and Governmental Affairs Committee, the 
House Government Reform Committee, and other interested congressional 
committees, as well as to the Administrator of General Services. We 
will provide copies to others upon request. This letter will also be 
available on GAO's home page at http://www.gao.gov. If you or your 
staff has any questions about this letter, please contact me at (202)-
512-4841 or woodsw@gao.gov. Contact points for our Offices of 
Congressional Relations and Public Affairs may be found on the last 
page of this report. GAO staff who made contributions to this letter 
were Amelia Shachoy, Assistant Director; Art James; Julia Kennon; 
William McPhail; Lisa Simon; Shannon Simpson; and Robert Swierczek. 

Sincerely yours,

Signed by: 

William T. Woods, Director: 
Acquisition and Sourcing Management: 

Enclosure: 

ENCLOSURE I: Related GAO Products: 

GAO, Contract Management: Impact of Strategy to Mitigate Effects of 
Contract Bundling on Small Business Is Uncertain, GAO-04-454 
(Washington, D.C.: May 27, 2004). 

GAO, Reliability of Federal Procurement Data, GAO-04-295R (Washington, 
D.C.: Dec. 30, 2003). 

GAO, Contract Management: No Reliable Data to Measure Benefits of the 
Simplified Acquisition Test Program, GAO-03-1068 (Washington, D.C.: 
Sept. 30, 2003). 

GAO, Contract Management: Civilian Agency Compliance with Revised Task 
and Delivery Order Regulations, GAO-03-983 (Washington, D.C.: Aug. 29, 
2003). 

GAO, Small Business: HUBZone Program Suffers from Reporting and 
Implementation Difficulties, GAO-02-57 (Washington, D.C.: Oct. 26, 
2001). 

GAO, OMB and GSA: FPDS Improvements, GAO/AIMD-94-178R (Washington, 
D.C.: Aug. 19, 1994). 

GAO, The Federal Procurement Data System--Making It Work Better, 
GAO/PSAD-80-33 (Washington, D.C.: Apr. 18, 1980). 

GAO, The Federal Procurement Data System Could Be an Effective Tool for 
Congressional Surveillance, GAO/PSAD-79-109 (Washington, D.C.: Oct. 12, 
1979). 

(120409): 

FOOTNOTES

[1] The total dollar value of contracting actions reported in the 
Federal Procurement Data System-Next Generation exceeded $300 billion 
in fiscal years 2003 and 2004. 

[2] According to GSA, the FPDS-NG contract was for an initial 2-year 
and 5-month base period for development and maintenance. Additionally, 
the contractor can receive up to five 1-year contract options based on 
performance. 

[3] Office of Federal Procurement Policy Act of 1974, Pub.L. No. 93-400 
(1974). 

[4] Contract writing systems are computer software that, among other 
things, allow agencies to report their contracting data electronically 
to FPDS-NG through a machine-to-machine interface. The Office of 
Management and Budget (OMB) directed federal agency and department 
heads to identify and allocate funds to ensure that their contract 
writing systems were capable of electronically transferring data 
directly to FPDS-NG no later than the end of fiscal year 2005. The 
reliability of data in FPDS-NG is expected to improve because agency 
submissions to FPDS-NG will be based on data already entered into the 
contract writing systems, reducing or eliminating separate data entry 
requirements and providing contracting data in "real-time."

[5] See Enclosure I for a list of GAO reports regarding FPDS issues. 

[6] GAO, Reliability of Federal Procurement Data, GAO-04-295R 
(Washington, D.C.: Dec. 30, 2003). 

[7] OMB memorandum: Timely and Accurate Procurement Data, August 25, 
2004. 

[8] DOD, Office of the Under Secretary of Defense memorandum, 
Transition to the Federal Procurement Data System-Next Generation, July 
8, 2004; DOD, Office of the Under Secretary of Defense memoranda, 
Update on Transition to the Federal Procurement Data System-Next 
Generation, Dec. 6, 2004; Jan. 24, 2005; and Aug. 1, 2005. 

[9] There are three ways to access FPDS-NG data: (1) direct website 
access, which includes a data query search tool, over 50 standard 
report templates, and an ad hoc reporting capability; (2) downloading 
fiscal year 2004 and fiscal year 2005 data files archived on the 
website; and (3) Web services access, which allows external systems to 
access data and "real-time" data updates. Access to the raw data 
through option (2) or (3) allows users to manipulate and present the 
data in different ways than is available through the FPDS-NG standard 
templates or ad hoc reporting features. There is a one-time integration 
fee for the Web services option, which is typically used by commercial 
companies. 

[10] Raw data are data that have not been processed; the data appear in 
the original format as entered into agencies' contract writing systems 
and then reported electronically to FPDS-NG. 

[11] XML (Extensible Markup Language) is a flexible way to create 
common information formats and share both the format and the data on 
the World Wide Web, intranets, and elsewhere. While XML has been 
successful as a markup language for documents and data, the overhead 
associated with generating, parsing, transmitting, storing, or 
accessing XML-based data has hindered its use in some environments. 

[12] GAO, High-Risk Series: An Update, GAO-05-207 (Washington, D.C.: 
January 2005). 

[13] S. Rep. No. 109-69 at 352 (2005), accompanying S. 1042, 109th 
Cong. (2005).