Contract Management:

No Reliable Data to Measure Benefits of the Simplified Acquisition Test Program

GAO-03-1068: Published: Sep 30, 2003. Publicly Released: Sep 30, 2003.

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In recent years, the federal government has introduced new ways to streamline the acquisition process. One of those vehicles is the simplified acquisition procedures test program, which removes some of the procedural requirements for buying commercial goods and services. Using the test program, federal procurement officials can make purchases faster than they have in the past for procurements not exceeding $5 million. Congress mandated that GAO determine the extent to which federal executive agencies--at a minimum, the Department of Defense (DOD)--have taken advantage of the test program and any benefits realized. One way to measure use is to examine test program data from the Federal Procurement Data System (FPDS). It is the central repository of contracting information. In addition to examining FPDS data, GAO looked at data from DOD's data system.

Because the Federal Procurement Data System contains unreliable data about the simplified acquisition test program, GAO was unable to determine the extent to which federal executive agencies--including DOD--have used the test program and have realized any benefits. Specifically, the database indicated that the Departments of Treasury, Defense, and Justice were the three largest dollar-value users of the test program in fiscal year 2001 (the latest year with complete data available). But GAO found that FPDS either overstated or understated use of the test program by millions of dollars. The table below shows examples of discrepancies at different buying organizations within these three departments. GAO also found data reliability problems with contract data in DOD's own data system--the Defense Contract Action Data System (DCADS)--which feeds into FPDS on an ongoing basis. For example, for fiscal year 2002, DCADS showed about $146 million in test program contract actions for two buying organizations for the Naval Air Systems Command and the Defense Intelligence Agency. After reviewing contract actions that had the highest dollar value, procurement officials at these two DOD buying organizations said that none of the entries were awarded through the test program. There were also reliability problems at other buying commands. The federal buying organizations we visited have not collected any other data that would allow us to assess whether the test program is helping to increase efficiency, improve contract prices, reduce administrative costs, or improve the delivery of goods and services. Anecdotal evidence indicates that the test program is getting favorable reviews. For example, nearly all procurement officials with whom GAO spoke at the buying organizations GAO visited indicated that the program's primary benefit is the ability to process a contract more efficiently.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: The Departments of Treasury, Justice, and Defense should independently take appropriate actions to ensure that reliable FPDS test program data are available to make program assessments.

    Agency Affected: Department of Justice

    Status: Closed - Implemented

    Comments: DOD concurred with this recommendation. In response, DOD issued a memorandum in September 2003 to the military departments and defense agencies emphasizing the need to ensure all data entered into the contract reporting system regarding the simplified acquisition test program is accurate, so that data exists to demonstrate the continuing need for this authority. DOD also asked each military department and the Defense Logistics Agency to identify a participant for a study group being convened to develop a methodology to evaluate the benefits of the test program. To allow time for the data to improve after this guidance was issued, DOD postponed conducting the sample and completed its evaluation of the simplified test program by September 2005. Additionally, after this report was issued, Congress extended the simplified acquisition test program to January 1, 2008 through Section 817 of the 2005 national defense authorization (P.L. 108-375).

    Recommendation: The Departments of Treasury, Justice, and Defense should independently take appropriate actions to ensure that reliable FPDS test program data are available to make program assessments.

    Agency Affected: Department of the Treasury

    Status: Closed - Implemented

    Comments: In November 2003, the Department of Justice issued Procurement Guidance #03-06, "Accuracy of Commercial Item Test Authority Data Reported to the General Services Administration's Federal Procurement Data System (FPDS)." This guidance stresses the importance of reporting accurate and reliable FPDS data in order to measure the use of, and determine the benefits of, simplified procedures for acquiring commercial items costing up to $5 million. In addition, Justice's procurement offices have been directed to implement appropriate procedures to ensure the accuracy of their contract action data prior to reporting to FPDS. In the time since this report was issued, Congress extended the simplified acquisition test program until January 1, 2008 through Section 817 of the 2005 National Defense Authorization Act (P.L. 108-375).

    Recommendation: The Departments of Treasury, Justice, and Defense should independently take appropriate actions to ensure that reliable FPDS test program data are available to make program assessments.

    Agency Affected: Department of the Treasury

    Status: Closed - Implemented

    Comments: In commenting on the draft report, the Department of the Treasury's U.S. Mint agreed with the finding that it did not use the test program. In June 2004, Treasury procurement officials informed GAO that the department would utilize the General Services Administration's (GSA) Federal Procurement Data System-Next Generation (FPDS-NG), a web-based system that replaces the legacy FPDS system, and was expected to correct the data-entry errors and miscoding that were identified in GAO's review of U.S. Mint FPDS records. By October 2004, Treasury fully implemented FPDS-NG. Treasury is now able to input contract action data directly into the FPDS-NG, as opposed to using its internal procurement system for originating contract action data and then reentering and separately transmitting the data to FPDS. A Treasury procurement official stated that with inputting data directly into FPDS-NG, the Mint would no longer experience incorrect coding problems. In the meantime since this report was issued, Congress extended the simplified acquisition test program until January 1, 2008 through Section 817 of the 2005 National Defense Authorization Act (P.L. 108-375).

    Recommendation: Before Congress provides permanent authority for using simplified procedures to acquire commercial items costing up to $5 million, the Secretary of Defense should work with the Administrator of the Office of Federal Procurement Policy to develop evaluation mechanisms for measuring test program benefits.

    Agency Affected: Department of Justice

    Status: Closed - Implemented

    Comments: According to DOD and consistent with GAO's recommendation, as of September 2005, efforts were completed to collect data from the military departments and Defense Logistics Agency (DLA) and analyze the results in order to evaluate the benefits of the simplified acquisition test program. Although DOD's efforts did not involve working with the Administrator of the Office of Federal Procurement Policy, the evaluation mechanism undertaken by DOD is responsive to GAO's recommendation. Specifically, DOD's effort began with developing metrics for evaluating the benefits of the test program (namely, to assess whether the test program was having an impact in 2 areas--competition and procurement lead time). In May 2005, DOD asked the military departments and DLA to review a sample of their fiscal year 2004 contract actions conducted under the simplified acquisition test program procedures (FAR subpart 13.5) in order to assess the impacts on competition and procurement lead time. According to DOD, although the evaluation showed mixed results in terms of competition (reported impacts ranged between increased to decreased competition), the evaluation results were positive with regard to shortening procurement lead time (reported administrative time savings ranged from 6 to 38 days). DOD's evaluation concluded that the primary benefit of the simplified acquisition test program authority is that it provides flexibility and allows larger dollar value contracts to be awarded in a more streamlined and efficient manner. According to DOD, the simplified acquisition test program continues to receive favorable reviews; DOD buying activities want to retain this authority; and DOD supports extending the test program or making it permanent.

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