Key Issues > Duplication & Cost Savings > GAO's Action Tracker > Federal Supply Schedules (2016-19)
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General Government: Federal Supply Schedules (2016-19)

Agencies are paying insufficient attention to prices when using the Federal Supply Schedules program and may be missing opportunities for cost savings.

Action:

The Secretaries of Defense and Health and Human Services and the Administrator of the General Services Administration should issue guidance emphasizing the requirement to seek discounts and outlining effective strategies for negotiating discounts when using the Federal Supply Schedules (FSS) program.

Progress:

As of December 2017, Departments of Defense (DOD) and Health and Human Services (HHS) and the General Services Administration (GSA) had all issued guidance as recommended in GAO's 2015 report. On July 31, 2015, the Director of Defense Procurement and Acquisition Policy at DOD issued a memorandum emphasizing the requirement to seek discounts through the FSS program. In November 2015, GSA issued a procurement information notice reminding contracting officers of existing requirements and effective strategies for seeking discounts for all FSS orders. In December 2017, the HHS senior procurement executive issued a reminder to the heads of contracting at the agency’s components about the requirement to seek discounts. As a result, these agencies can better ensure that contracting officers do not miss opportunities for cost savings under the FSS program.

Implementing Entity:

Department of Defense, Department of Health and Human Services, General Services Administration

Action:

The Secretaries of Defense and Health and Human Services and the Administrator of the General Services Administration should issue guidance reminding contracting officials of the procedures they must follow with respect to purchasing open market items through the Federal Supply Schedules (FSS) program, including the requirement to perform a separate determination that the prices of these items are fair and reasonable. 

Progress:

As of December 2017, the Departments of Defense (DOD) and Health and Human Services (HHS) and the General Services Administration (GSA) had all issued guidance reminding contracting officials of procedures as recommended in GAO's 2015 report. On July 31, 2015, the Director of Defense Procurement and Acquisition Policy at DOD issued a memorandum reminding contracting officials of the procedures to follow with respect to purchasing open market items through the FSS program. In November 2015, GSA issued a procurement information notice reminding contracting officials of the procedures for including open market items on FSS orders and of the requirement to determine that the prices of open market items are fair and reasonable. In addition, the notice reminded contracting officials that open market items should be clearly labeled as items not on the FSS contract. In December 2017, the HHS senior procurement executive issued a reminder to the heads of contracting at the agency’s components about the procedures for purchasing open market items through the FSS program, including the need for a separate determination and finding of fair and reasonable pricing. As a result, these agencies can better ensure that contracting officers do not miss opportunities for cost savings under the FSS program.

Implementing Entity:

Department of Defense, Department of Health and Human Services, General Services Administration

Action:

The Secretaries of Defense and Health and Human Services and the Administrator of the General Services Administration should assess existing training programs to determine whether they are adequate to ensure that contracting officials are aware of the ordering procedures of the Federal Supply Schedules (FSS) program.

Progress:

As of March 2017, the Department of Defense (DOD), the General Services Administration (GSA), and the Department of Health and Human Services (HHS) had assessed their training programs, as recommended in GAO’s 2015 report. In March 2016, GSA completed its evaluation of its FSS training to be certain that the areas outlined in GAO’s recommendation were current per regulation and statute. The most current versions of the FSS curriculum include requirements for preparing justifications for noncompetitive awards, seeking discounts, and assessing prices for open market items included in FSS orders. DOD’s Defense Procurement and Acquisition Policy office collaborated with the Defense Acquisition University to identify training courses that covered FSS ordering procedures, and modify them as needed to reflect the findings of GAO’s 2015 report and DOD’s July 2015 policy memorandum on the proper use of the FSS program. The July 2015 memorandum also listed the relevant training available at the Defense Acquisition University and GSA.  In fiscal year 2016, HHS performed a high-level assessment and reviewed guidance and current training related to FSS from various sources. Based on this assessment, HHS determined that the current training is adequate; however, its workforce needs to be refreshed on its content. As a result, agencies can better ensure that contracting officers will not miss opportunities for cost savings available under the FSS program.

Implementing Entity:

Department of Defense, Department of Health and Human Services, General Services Administration
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    • Timothy J. DiNapoli
    • Director, Contracting and National Security Acquisitions
    • dinapolit@gao.gov
    • (202) 512-4841