Ineffective Management of GSA's Multiple Award Schedule Program--A Costly, Serious, and Longstanding Problem

PSAD-79-71: Published: May 2, 1979. Publicly Released: May 2, 1979.

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The General Services Administration (GSA), through its Federal Supply Service (FSS), makes common-use items available to federal agencies through three basic buying programs: stores, nonstores, and Federal Supply Schedules. The multiple award program is the largest FSS program, with 53 percent of total FSS sales. Under the multiple award program, a number of commercial firms are awarded indefinite quantity contracts for a particular product category. Prices are based on a negotiated minimum discount off the vendors commercial prices. Agencies select the particular product that best meets their needs and order directly from the vendor. The purpose of the multiple award program is to decrease agency open market purchases by offering a wide selection of commercial products at prices lower than available through open market purchases, and make commercial items available when it is impractical to draft adequate specifications for bids.

The GSA multiple award schedule program cannot be effectively managed in its present form. It is intended to make a wide variety of commercial products available to federal agencies, but there are too many items on the schedules, too many suppliers of similar items, and GSA does not have the capability to make sure that the government's interests are protected. In addition, there is little or no price competition in the negotiations or monitoring of items ordered by the agencies, and little or no assurance that suppliers offer items at prices that reflect the government's volume purchases. GAO found that the government sometimes pays more for identical items, and gets less favorable warranty and payment terms than other purchasers. Studies have focused on the problems since 1971. However, GSA management has not taken any substantive corrective actions. GAO believes this inaction has been due to: (1) the GSA traditional view that it is only a service organization to provide what the users want; (2) GSA management's reluctance to become involved in controversy with industry and trade associations; and (3) federal agencies who want to maintain the existing noncompetitive process of awarding contracts, as well as the numerous products offered through the program.

Matter for Congressional Consideration

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Matter: Congress should enact legislation which would put GSA under a mandatory timeframe for accomplishing management improvements. The posture of GSA should be strengthened as a primary supplier of products to federal agencies.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Administrator, GSA, should take the following actions: (1) reconsider the GSA service-oriented approach of trying to satisfy the unique needs of federal agencies; (2) develop criteria for use of multiple award schedules; (3) review all multiple award items and eliminate those not meeting the established criteria; (4) intensify efforts to identify products which can be competed, develop commercial item descriptions for these products, and apply market research techniques to determine acquisition strategy; (5) define overall management responsibility for the multiple award schedule program; (6) improve training of contracting officers; (7) refine existing management information systems to provide better data by product; and (8) increase the emphasis on the GSA audits of vendors.

    Agency Affected:

 

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