Securities and Exchange Commission's Electronic Data Gathering, Analysis, and Retrieval (EDGAR) System

Testimony was given on the results of a GAO inquiry into the Securities and Exchange Commission's (SEC) efforts to design and pilot test its Electronic Data Gathering, Analysis, and Retrieval (EDGAR) System. GAO found that the time schedules for pilot testing, implementing the operational system, procurement procedures, and contract award have all been delayed. Furthermore, SEC has limited the evaluations of the tests which are required without contract modification, and GAO believes that proper assessments are needed to produce quality technical specifications for the request for proposals of the operational system. GAO found that three fundamental features initially envisioned for EDGAR have been eliminated or significantly withdrawn from the pilot system due to time constraints, which resulted in significant changes in the system design, and expected productivity gains could be seriously jeopardized. Furthermore, GAO found that SEC failed to obtain a delegation of procurement authority which may have been necessary for the procurement. Finally, GAO found that the scope of the operational system will be greater than the current pilot test system, limiting the ability of SEC to charge fees to the public. GAO maintained that EDGAR offers the potential for reducing the cost of filing corporate disclosure documents, enhancing SEC effectiveness, and making the files more readily available to the public. However, Congress may want to explore with SEC the questions of whether: (1) the milestones for the pilot should be extended to fully test all of the original functions; (2) technical oversight and evaluation of the project should be restored to a technically proficient and objective level; (3) additional applications should be separated from the operational system until they have been properly developed and tested; (4) a delegation of procurement authority should have been obtained for the pilot program and should be obtained for the system's operational phase; and (5) SEC should set fees to ensure that the public is charged only the costs incurred to provide dissemination services.