OFPP Followup to Federal Supply Schedule Recommendations

Published by the Government Accountability Office on 2003-01-31.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

United States General Accounting Office
Washington, DC 20548

          January 31, 2003

          Ms. Angela B. Styles
          Office of Federal Procurement Policy
          Washington, D.C.

          Subject: OFPP Followup to Federal Supply Schedule Recommendations

          Dear Ms. Styles:

          This report is to bring to your attention two GAO recommendations concerning the
          acquisition of information technology services under the Federal Supply Schedule
          (FSS). In our view, implementation of these recommendations has been delayed
          because of unnecessary coupling with other FSS issues.

          In November 2000, we reported1 that contracting officers did not follow FSS ordering
          procedures requiring them to seek competitive quotes for services. We found that
          many contracting officers were unaware of the requirement. Hence, we
          recommended, and the Office of Federal Procurement Policy agreed, that the
          requirement for competitive quotes should be included in the Federal Acquisition
          Regulation (FAR). We also recommended clarification of the FAR pertaining to sole
          source orders for services using the FSS. Although a FAR case has been opened,
          little progress has been made in implementing the recommendations. Moreover, the
          latest informal estimate indicates that a final rule will not be published until April

          We are concerned about the delay because sales of services under the FSS continue
          to substantially increase. Moreover, recent federal audits suggest that the problems
          still exist. For example, in March 2002, the Office of Inspector General, National
          Aeronautics and Space Administration, found that contracting officers did not follow
          the ordering procedures for services in 8 of 20 reviewed contracts with regard to
          obtaining multiple quotes or providing sufficient information in the request for
          quotation or statement of work.2

            U.S. General Accounting Office, Contract Management: Not Following Procedures Undermines Best
          Pricing Under GSA’s Schedule, GAO-01-125 (Washington, D.C.: Nov. 28, 2000).
            Office of Inspector General, National Aeronautics and Space Administration, NASA Acquisition of
          Services Using the Federal Supply Schedules, Report Number IG-02-014 (Washington, D.C.: Mar. 27,

                                                                              GAO-03-399R OFPP Followup
Also, in November 2002, the Department of Defense, Office of Inspector General,
reported that in 36 of 44 orders for services contracting officials could not show that
they followed FAR procedures for the Federal Supply Schedule or that they had
requested quotes from multiple contractors as required by the Government Services
Administration ordering procedures. Although the competitive quotes issue has
been addressed in part by recent changes to the Defense FAR Supplement, a FAR
revision is necessary for a comprehensive implementation of the recommendation.

We understand that the delay in implementation is the result of efforts to address
matters other than the need to obtain competitive quotes. For example, one issue has
been whether the use of time-and-materials contracts should be allowed under the
Federal Supply Schedule.

We believe the guidance concerning competitive quotes and sole source awards for
services should be incorporated into the FAR before resolving other issues. More
importantly, we believe that this would provide a foundation for immediate
improvements in the use of FSS contracts.

We are also sending copies of this report to officials at the General Services
Administration. The report will be available at no charge on the GAO Web site,
www.gao.gov. If you have any questions about this report, please contact me at (202)
512-4841 or Ralph Dawn at (202) 512-4544.

Sincerely yours,

David E. Cooper
Acquisition and Sourcing Management

Office of Inspector General, U.S. Department of Defense, Acquisition: Contract Actions Awarded to
Small Businesses, Report Number D-2003-029 (Washington, D.C.: November 25, 2002).

Page 2                                                               GAO-03-399R OFPP Followup