Pursuant to a congressional request, GAO discussed federal acquisition issues, focusing on: (1) the changing acquisition environment; (2) recent reform efforts; and (3) current and future challenges in this area.

GAO noted that: (1) federal spending for goods and services has changed significantly in recent years; (2) although the Department of Defense remains the dominant federal buyer, accounting for two-thirds of all federal acquisition spending last year, defense acquisition has declined from peak Cold War levels; (3) spending by civilian agencies has increased moderately; (4) the government as a whole now spends more on services--ranging from basic maintenance, to running computer systems, to operating the space shuttle--than on supplies and equipment; (5) the acquisition process has become more streamlined as new contract vehicles and techniques have allowed agencies to buy what they need much faster than in the past; (6) Congress and the administration have taken a number of steps recently to improve federal acquisition; (7) these efforts have focused largely on simplifying the process, particularly for buying commercial products and services, and on attempting to improve decisionmaking in acquiring information technology; (8) but despite recent reforms and the efforts of many dedicated people over the years, the government still does not have a world-class purchasing system; (9) all too often, many of the products and services the government buys cost more than expected, are delivered late, or fail to perform as anticipated; (10) no commercial business would remain viable for very long with results like these; (11) problems are particularly evident in the two areas where most of the dollars are spent: (a) weapons; and (b) information technology systems; (12) significant improvements in these areas--as well as in the skills of the acquisition workforce--are needed in order to produce better outcomes; and (13) GAO has made a number of recommendations over the years to improve acquisition outcomes, including the use by federal agencies of best commercial practices.