GAO dubious of savings via easier buying ways

"Contract Management: Benefits of Simplified Acquisition Test Procedures Not Clearly Demonstrated"

Agencies pushing Congress to give them permanent authority to use easier and quicker acquisition practices for small purchases have provided no evidence that their methods have saved the government time or money, according to the General Accounting Office.

Under the Federal Acquisition Streamlining Act of 1994, Congress granted agencies the authority to use simplified buying procedures for contracts up to $100,000. This allows agencies to select vendors through a quicker evaluation process and keep documentation to a minimum. Then under the Clinger-Cohen Act of 1996, Congress started a test program that allowed agencies to use these procedures when buying up to $5 million in commercial products and services.

The test expires Jan. 1, 2002, and the Office of Federal Procurement Policy has said it will ask Congress to make the authority permanent. Although a 1999 OFPP study concluded that federal procurement executives believe the program has had a positive impact, GAO could find no proof to substantiate their claim.

As a result, GAO recommended to Congress that the test — set to expire soon — be extended until 2005 and that Congress authorize language requiring OFPP to demonstrate that the program is producing the desired results.

The GAO study, mandated under the fiscal 2000 Defense Authorization Act, found that in several awards the use of simplified procedures might have hurt the government's search for "best value."

In one case, the Air Force sought high-performance computer systems to support testing and evaluation and awarded the sole-source $3.1 million contract in 18 days. The contracting officer based the pricing analysis solely on a review of the vendor's catalog, GAO found.

"While the government buyer appeared to have negotiated a 30 percent discount from catalog prices, there was no way the buyer, relying solely on the catalog, could determine whether this discount was fair and reasonable," wrote David Cooper, director of acquisition and sourcing management at GAO.

Although contracting officers do not always use the simplified buying procedures, they do like to have all options available, said Phil Kiviat, president of the Kiviat Group consulting firm, in citing why contracting officers believe the test program should be extended.

Most commercial items are not bought using the simplified acquisition procedures. Of $31.6 billion purchased in fiscal 2000, contracting officers used the expedited process for only $1.9 billion, according to data provided in the GAO report. The General Services Administration's Federal Supply Service schedule provides a similar simplified process without the $5 million limit.

The director of procurement at the Defense Department, Deidre Lee, said in a response to GAO that the Pentagon will convene an integrated process team to develop ways to measure the benefits of the test program. The team's recommendations will then be passed to OFPP for consideration. nWhat GAO found

Agencies failed to prove that the simplified acquisition procedures:

Reduced the time required to award contracts. Reduced administrative costs. Resulted in the best value. Promoted small-business participation. Improved the delivery of products and services.