Contract Management: OFPP Policy Regarding Share-in-Savings Contracting Pursuant to the E-Government Act of 2002

Published by the Government Accountability Office on 2003-03-24.

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

United States General Accounting Office
Washington, DC 20548

          March 24, 2003

          The Honorable Angela B. Styles
          Office of Federal Procurement Policy

          Subject: Contract Management: OFPP Policy Regarding Share-in-Savings
          Contracting Pursuant to the E-Government Act of 2002

          Dear Ms. Styles:

          In January 2003, we issued two reports that provide insight regarding the
          share-in-savings (SIS) provisions of the E-Government Act of 2002: one on critical
          elements of training for new acquisition initiatives and one on commercial practices
          that foster successful SIS contracting.3 As follow-up to these reports, we are writing
          to underscore the need for the Office of Federal Procurement Policy (OFPP) to
          ensure (1) that members of the federal acquisition workforce understand and
          appropriately apply this new authority and (2) that appropriate data are collected and
          available to meet mandated reporting requirements regarding the effective use of SIS

          As you know, SIS contracting represents a significant change in the way the federal
          government acquires information technology. In our report on improving training for
          new acquisition initiatives, we emphasized the importance that industry and
          government experts place on training to successfully implement such change.
          Training on this information technology acquisition initiative will be essential to its
          effective implementation. In our report on SIS contracting, we highlighted the federal
          government’s limited experience with SIS contracting as well as conditions that
          fostered successful implementation in commercial SIS contracts. In commenting on
          a draft of our commercial SIS contracting report, OFPP staff acknowledged the need
          to consider lessons learned by industry, and they stated that our report would be
          taken into account when structuring future policy regarding the use of this
          contracting technique in the federal government. In view of the potential benefits of
          this initiative, we think OFPP should consider developing policy and guidance that
          (1) specifically address the need for a well-defined training program and
          (2) incorporate practices that fostered success in the commercial SIS contracts we

            Section 210, Public Law 107-347 (Dec. 17, 2002).
            Acquisition Management: Agencies Can Improve Training on New Initiatives, GAO-03-281
          (Washington, D.C.: Jan. 15, 2003).
            Contract Management: Commercial Use of Share-in-Savings Contracting, GAO-03-327
          (Washington, D.C.: Jan. 31, 2003).

                                                                      GAO-03-552R OFPP SIS Policy
The E-Government Act requires (1) the Director of the Office of Management and
Budget (OMB) to submit a report containing descriptive as well as evaluative
information on the use of SIS contracts to the Congress not later than 2 years after
the date of the enactment of the act and (2) the Comptroller General to conduct a
review of the OMB report and provide an independent assessment of the
effectiveness of the use of SIS contracts not later than 6 months after the OMB report
is issued.

Providing meaningful reports to the Congress will depend on the availability of good
data. However, experience has shown that such data have not always been available
to make program assessments. For example, in March 1998, we reported that
procurement data were inadequate to determine whether the key purposes of the
Federal Acquisition Streamlining Act of 1994 were being achieved.4 Given this past
experience and the limited use of SIS contracting by the federal government, we
encourage you to consider the need to collect data on the federal government’s use of
SIS contracting pursuant to the E-Government Act. The data should be uniform,
reliable, and sufficient to accurately assess SIS use, and provide meaningful reports
to Congress regarding the effectiveness of SIS contracting in improving agency
processes and achieving agency missions.

We are also sending copies of this report to the Administrator of the General Services
Administration. In addition, the report will be available at no charge on the GAO Web
site at http:// 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. Key contributors to
this report were Robert Ackley, Daniel Hauser, Mary Jo Lewnard, and Karen Sloan.

Sincerely yours,

David E. Cooper
Acquisition and Sourcing Management


 Acquisition Reform: Implementation of Key Aspects of the Federal Acquisition Streamlining Act
of 1994, GAO/NSIAD-98-81 (Washington, D.C.: Mar. 9, 1998).

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