Interagency Contracting:

Agency Actions Address Key Management Challenges, but Additional Steps Needed to Ensure Consistent Implementation of Policy Changes

GAO-13-133R: Published: Jan 29, 2013. Publicly Released: Jan 29, 2013.

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What GAO Found

Both OFPP and GSA have implemented corrective actions to address the key interagency contracting issues identified in our 2010 report regarding the creation, use, and oversight of interagency contracts. Specifically, OFPP has developed a policy framework for the establishment and oversight of interagency contract vehicles, which focuses on ensuring that new interagency contracts demonstrate value through a sound business case. In response to our concerns regarding the lack of data to leverage, manage, and oversee these contracts, OFPP has taken steps to enhance the functionality of a database that provides information on interagency contracts. These actions are intended to make it easier for agency buyers to perform market research and improve the information available to OFPP on the use of these contracts. GSA also has initiated several efforts to improve the availability and use of pricing data on its Multiple Award Schedules program, a key interagency contract vehicle, with the goal of improving the ability of GSA and its customers to get better prices.

Federal agencies have taken a variety of steps to implement recent policy changes related to the use of interagency contracts that require them to complete a best procurement approach determination and an interagency agreement. However, DOD's implementation of certain aspects of these policies was inconsistent on the orders we reviewed. At the governmentwide level, OFPP's analysis of reports from the 24 CFO Act agencies found that most had issued guidance, developed templates, and conducted internal reviews to reinforce these policy changes and strengthen the management of interagency acquisitions. Our review of efforts at DOD, GSA, and the Department of the Interior--the largest users and providers of interagency acquisition services--confirmed that these agencies have taken similar actions. At GSA and DOD, some actions are still in progress. GSA has not updated the ordering guides for all its interagency contract vehicles to include the requirement for its customers to make a best procurement approach determination despite internal direction to do so; DOD has not updated its acquisition regulation to reflect this requirement. We also assessed the implementation of these policy changes on recent contract actions at DOD. Most of the DOD orders we reviewed were supported by the required determinations. These determinations, which help ensure agencies make sound business decisions to support their use of an interagency contract, varied in the degree to which they addressed the factors cited in the FAR or OFPP guidance, although most determinations addressed most of the factors. These variations appear to be the result of differences between the FAR and OFPP guidance and DOD's acquisition regulation. In addition, for almost all of the DOD orders we reviewed, the department substantially complied with the requirement that agencies document roles and responsibilities in a written agreement. We are recommending that DOD and GSA take steps to update policies and guidance to ensure that recent interagency contracting policy changes are consistently implemented.

Why GAO Did This Study

Federal agencies collectively spend more than half a trillion dollars annually through contracts to acquire goods and services in support of their missions. One method for realizing efficiency in the procurement process is through the use of interagency contracting, where one agency either places an order directly against another agency's contract or uses the contracting services of another agency to obtain supplies or services. Interagency contracting can provide a number of benefits to agencies, helping them to streamline the procurement process, take advantage of unique expertise in a particular type of procurement, and achieve savings by leveraging the government's collective buying power. But these acquisitions also pose a variety of risks. We designated the management of interagency contracting as a high risk area in 2005, in part because of the need for stronger internal controls and clear definitions of agency roles and responsibilities. We subsequently reported on interagency contracting in 2010, and identified the need for governmentwide policies to govern the creation of interagency contract vehicles and better data to effectively oversee and manage them. Since then, key policy changes have been made to both guide the creation of new interagency contracts and strengthen the use of existing contract vehicles. For example, federal acquisition regulations have been revised and guidance has been created to require, among other things, that agencies formally document the roles and responsibilities in an interagency agreement for certain interagency acquisitions.

We performed this review under the authority of the Comptroller General as part of our ongoing efforts to support congressional oversight of GAO’s high-risk areas. We evaluated (1) progress made by the Office of Management and Budget’s (OMB) Office of Federal Procurement Policy (OFPP) and the General Services Administration (GSA) in addressing issues identified in our 2010 report on interagency contracting, and (2) progress made by federal agencies in implementing policy changes related to the use of interagency contracts.

What GAO recommends

To ensure that DOD organizations fully comply with interagency acquisition regulations, we recommend that the Secretary of Defense direct the Office of Defense Procurement and Acquisition Policy, as part of its ongoing interagency acquisition policy review, to ensure that its acquisition regulations, policies, and guidance on interagency contracting are updated to reflect new FAR rules, including those related to a best procurement approach determination.

To ensure that users of interagency contracts are aware of interagency acquisition requirements, we recommend that the Administrator of General Services direct the Federal Acquisition Service to fully implement the actions called for in its April 2011 instructional letter to update ordering guides for its governmentwide and multi-agency contracts as needed to reflect new FAR rules for interagency acquisitions.

For more information, contact William T. Woods at woodsw@gao.gov or (202) 512-4841.

Recommendations for Executive Action

  1. Status: Open

    Comments: The Department of Defense (DOD) continues its interagency acquisition policy review, which it initiated to ensure that DOD has a sound interagency acquisition policy that is consistent with statutory and regulatory requirements. DOD anticipates it will complete the review with final recommendations by the end of calendar year 2014.

    Recommendation: To ensure that DOD organizations fully comply with interagency acquisition regulations, the Secretary of Defense should direct the Office of Defense Procurement and Acquisition Policy, as part of its ongoing interagency acquisition policy review, to ensure that its acquisition regulations, policies, and guidance on interagency contracting are updated to reflect new Federal Acquisition Regulation (FAR) rules, including those related to a best procurement approach determination.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: GSA has taken steps to update ordering guides for its interagency contract vehicles to reflect new Federal Acquisition Regulation rules for interagency acquisitions. As of May 2013, the ordering guides for the interagency contract programs GAO cited in its report as lacking updated information on interagency acquisition requirements, specifically the need for a best procurement approach determination, (Alliant Small Business, 8(a) STARS II, and the VETS contracting programs) have been updated with this information.

    Recommendation: To ensure that users of interagency contracts are aware of interagency acquisition requirements, the Administrator of General Services should direct the Federal Acquisition Service to fully implement the actions called for in its April 2011 instructional letter to update ordering guides for its governmentwide and multi-agency contracts as needed to reflect new FAR rules for interagency acquisitions.

    Agency Affected: General Services Administration

 

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