GAO under the gun to deliver study on widespread contracts

Opening the General Services Administration's Federal Supply Service (FSS) contracts to state and local governments may not be as straightforward as it seems or at least so the General Accounting Office is finding.

In eight short months as mandated under the Federal Acquisition Reform Act of 1996 GAO has to deliver to Capitol Hill a comprehensive study on cooperative purchasing including an analysis of the effect that opening the contracts might have not only on state and local government purchasing agents but also "on industry including small businesses and local dealers."

The study will have a major impact on the way Congress eventually views opening the schedules to nonfederal agencies. Meanwhile under FARA a moratorium has been placed on such cooperative purchasing until the study has been completed and filed.

But many are beginning to think the study is a wild goose chase. Just locating the purchasing offices of the nation's local governments is a tall order.

"There are half a million local governments out there. How are we supposed to contact them and find out who makes the purchasing decisions and determine the effect of opening the FSS contracts on them?" said Marcia McWreath a GAO senior evaluator heading up the legwork that will lead into the actual study. "I am not even aware of a phone directory that lists them all."

And there is already controversy. GAO is less than a month into the effort and already the auditors' methods are being second-guessed.

"I am not saying that the study is doomed from the word `go ' " said Larry Allen executive director of the Coalition for Government Procurement. "But we had a meeting with a GAO representative last week and representatives from the 10 companies present confirmed my concern that GAO does not have a long background with cooperative purchasing."

Specifically Allen said he and others in the industry worry that because of time and staffing constraints GAO will give short shrift to issues such as the total cost and effort required to run a procurement. "My concern is that they will look at prices on a state contract and compare those prices with federal contracts and draw conclusions " he said. "To compare a single award to a multiple award is apples and oranges."

But Ida Ustad associate administrator for acquisition policy at the General Services Administration expressed confidence in the GAO staff to come up with "an accurate representation" of pricing issues. "They've done prior work comparing state prices to federal contract prices. I would assume that they are going to come up with a representation of the numbers since obviously they are not going to go to all 50 states " she said.

GSA has just completed its entrance interview with GAO staff Ustad added. "I am not even going to attempt to guess what they will come up with " she said. "I'm sure it will be a challenge for them."It is a challenge also to businesses trying to come up with a position on cooperative purchasing said Larry Christensen an Eastman Kodak Co. contract negotiator.

"There is no clear-cut answer as to whether this would work to our advantage or not " he said. "The question is How do you define it? How do you know where the end of the line is? If it were states you would know. If it were cities you would know. But is it municipalities? Libraries? How do you know? So right now we are not against it but we are also not a supporter."

Paula Moskowitz who heads up purchasing initiatives for New York state acknowledged the difficulty of GAO's task.

"What we've seen in their preliminary survey is that they are trying to select the states they are going to use for a more detailed study. What we're being asked are things like `Is it easy for us to share information on contract prices and compare them' " with federal offerings she said.

"If I were writing [the GAO study] I would be able to see right away that states purchase things differently than the federal government " she said. "It would be real hard to reach definitive conclusions." It will be difficult agreed GAO's McWreath who said that she and her staff are overwhelmed by the mission but still confident that they can do an effective job.

"Even if we had a significant amount of time - a full year or two years - there are some unanswerable questions " she said. "It would be impossible even if we had 10 years to do an economic impact " given all the variables of such a large program.

McWreath and her six-member team are based in GAO's Dallas Texas office another fact that troubles the coalition's Allen.

"My speculation is that no one out of Washington wanted to handle it. This is a political hot potato " he said citing resistance to cooperative purchasing recently raised by the nation's pharmaceutical companies.

The information technology industry is largely supportive of the idea of opening up FSS schedule contracts.James McDermott GAO's assistant director of federal management and workforce issues rejected Allen's assertion and said the assignment of the work to the Dallas staff has no such implications.

McWreath said she and her staff assigned to the work are capable of tackling the issues.

"We learned very early on that this is a very complex issue " she said.