Reliability of Federal Procurement Data

Published by the Government Accountability Office on 2003-12-30.

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


United States General Accounting Office
Washington, DC 20548

          December 30, 2003

          The Honorable Joshua B. Bolten
          Director, Office of Management and Budget

          Subject: Reliability of Federal Procurement Data

          Dear Mr. Bolten:

          The purpose of this letter is to convey our serious and continuing concerns with the
          reliability of the data contained in the Federal Procurement Data System (FPDS) and
          to recommend steps to help improve data reliability as the successor system, FPDS-
          Next Generation (FPDS-NG), is implemented.

          Reliable information is critical to informed decision making and to oversight of the
          procurement system. FPDS has been the federal government’s central database of
          information on federal procurement actions since 1978. Congress and executive
          branch agencies rely on FPDS to assess the impact that governmentwide acquisition
          policies and processes are having on the system generally, as well as with respect to
          specific geographical areas, markets, and socio-economic goals.

          Yet despite the importance of the data, we continue to find that FPDS data are
          inaccurate and incomplete. Although we have not fully assessed the extent of
          reporting errors, we have found sufficient problems to warrant concern about the
          current reliability of FPDS information. We are pleased that the administration is
          moving forward with plans to modernize that system through FPDS-NG.

          The examples following reflect a few of the many instances in which we either have
          been unable to assess fully the implementation of procurement programs or have had
          to limit our reliance on FPDS data:

              •    In our 2003 review1 of the simplified acquisition procedures test program, we
                   found gross errors in the FPDS data. For example, use of the test program by
                   the reported three largest users in fiscal year 2001 was either overstated or
                   understated by millions of dollars. We found similar inaccuracies with the
                   Department of Defense’s data system, which feeds information into FPDS.

           U.S. General Accounting Office, Contract Management: No Reliable Data to Measure Benefits of the
          Simplified Acquisition Test Program, GAO-03-1068 (Washington D.C.: Sept. 30, 2003).
           The Department of Defense uses the Defense Contract Action Data System (DCADS) to supply data
          to FPDS.

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         Because of the unreliability of the data, we could not determine the extent to
         which executive branch agencies used the test program or assess the benefits

         In our 2001 review of the HUBZone program, we found that the value of
         contracts awarded to HUBZone firms could have been hundreds of millions of
         dollars different than reported. The FPDS categorized 1,034 contracts worth
         $325 million as HUBZone awards even though the Small Business
         Administration (SBA) had not certified the awardees of those contracts as
         HUBZone firms. Conversely, FPDS data did not report as HUBZone awards
         1,712 contracts worth $589 million with firms that may have been SBA-
         certified at time of contract award. Although the Federal Procurement Data
         Center (FPDC) caught some of these inconsistencies through edit checks,
         FPDC officials said that they had neither the knowledge to correct the data nor
         the authority to require agencies to correct them.

    •    In our 2003 review of task and delivery orders, 4 we found multiple orders
         reported as single transactions. For instance, an order reported as $11,443,000
         in FPDS should have been reported as 87 separate transactions at or over
         $25,000 and one cumulative transaction for contracts below $25,000.

As a result of numerous errors in these and other data elements of FPDS, we could
not determine the extent to which agencies had implemented regulations effectively,
nor could we assess the impact of acquisition policies governmentwide.

Our concerns about the reliability of FPDS data are not new. In 1980, we reported
that FPDS failed to alert users that the system contained known errors. In 1994, we
reported that the FPDC, which manages FPDS, did not have standards detailing the
appropriate levels of accuracy and completeness of FPDS data.5

Our work and that of agency inspectors general indicates that many of the errors in
FPDS are due to data entry mistakes by agency contracting personnel. In some
cases, those processing the data did not have a complete understanding of the
information requirements. In other cases, there was inadequate verification of the
information entered into agency feeder systems, which, in turn, was transferred into
FPDS. When we discussed these problems with agency officials during the course of
our reviews, they cited a lack of training, high personnel turnover, the complexity of
the agency systems, and frequent changes to FPDS data entry requirements as
reasons for the errors.

FPDS-NG became operational effective October 1, 2003. As we understand the
design of the system, FPDS-NG should, if implemented effectively, eliminate many of

 U.S. General Accounting Office, Small Business: HUBZone Program Suffers from Reporting and
Implementation Difficulties, GAO-02-57 (Washington D.C.: Oct. 26, 2001).
  U.S. General Accounting Office, Contract Management: Civilian Agency Compliance with Revised
Task and Deliver Order Regulations, GAO-03-983 (Washington D.C.: Aug. 29, 2003).
  U.S. General Accounting Office, The Federal Procurement Data System—Making It Work Better,
GAO/ PSAD-80-33 (Washington D.C.: Apr. 18, 1980); and U.S. General Accounting Office, FPDS
Improvements, GAO/AIMD-94-178R (Washington, D.C.; Aug. 19, 1994).

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the sources of the errors in the current FPDS. At the heart of the new system are
data entry methods that rely less on manual inputs and more on electronic “machine-
to-machine” approaches. For example, most agencies are expected to have
computerized contract writing systems that will allow for direct submission of data to
FPDS. Reliability of data is expected to improve because agency submissions to
FPDS-NG will be based on data already in the contract writing systems, reducing or
eliminating separate data entry requirements. The system provides for immediate
data verification to detect errors. If errors are detected, agency procurement officials
will have the opportunity to correct them immediately while the information is still
readily available.

Information in FPDS-NG can only be as reliable as the information agencies enter
through their own systems. In the long term, data reliability should improve as
agencies fund and implement electronic contract writing systems. But not all
agencies have done so. In the short term, as the transition to FPDS-NG occurs,
agencies that do not have contract writing systems capable of interfacing directly
with FPDS-NG need to review their procurement data feeder systems and take steps
to improve the reliability of the information contained in those systems.


We recommend that the Director of OMB:

   •     Ensure that agencies allocate the resources necessary to implement contract
         writing systems capable of electronic transfer of information to FPDS-NG,

   •     Require agencies that have not yet implemented electronic contract writing
         systems to report regularly to OMB on their plans to ensure reliability of the
         information reported to FPDS-NG.

   •     Request that major agencies, in consultation with GSA, conduct regular
         reviews of their procedures for collecting and reporting information to FPDS-
         NG. Agencies should conduct such reviews annually until a satisfactory level
         of reliability is achieved, and periodically thereafter.


We provided a draft of this letter to the Office of Management and Budget for
comment. An OMB official commented orally that OMB generally agreed with the
recommendations. We also sought comments from the General Services
Administration, which funds and manages the Federal Procurement Data Center. An
official from GSA told us by email that GSA concurred with the recommendations
and hoped they would lead to more accurate reporting of procurement information to

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The information in this letter is based on previous GAO reviews and additional work
conducted from June to November 2003, in accordance with generally accepted
government auditing standards. In conducting that work, we reviewed relevant GAO
workpapers and GAO and inspector general reports. We also held discussions with
officials at OMB and GSA and reviewed relevant documents concerning FPDS and
FPDS-Next Generation. We did not conduct an in-depth review of either FPDS or

This letter contains a recommendation to the Director of OMB. The head of a federal
agency is required under 31 U.S.C. 720 to submit a written statement of actions taken
on our recommendations to the Senate Committee on Governmental Affairs and the
House Committee on Government Reform not later than 60 days after the date of this
letter and to the Senate and House Committees on Appropriations with the agency’s
first request for appropriations made more than 60 days after the date of this letter.

We are sending copies of this letter to the Chairs and Ranking Members of the Senate
Governmental Affairs Committee, the House Government Reform Committee, and
other interested congressional committees, as well as to the Administrator of General
Services. We will provide copies to others upon request. This letter also will be
available on GAO’s home page at http://www.gao.gov. Please contact me at (202) 512-
8214 or Hilary Sullivan at (214) 777-5652 if you or your staff has questions. Major
contributors to this letter were Robert Ackley, Thomas Barger, William Bricking,
John Clary, Barbara Johnson, Ronald Salo, and Robert Swierczek.

Sincerely yours,

William T. Woods
Acquisition and Sourcing Management


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