Federal Contracting: Senior Leaders Should Use Leading Companies' Key Practices to Improve Performance
Fast Facts
The government buys a huge range of products and services, from military aircraft to common office supplies. We looked at how 7 leading companies manage procurement, and whether the federal government follows similar practices.
We found that successful companies:
- link performance metrics to broader strategic goals
- work with those using the products and services to develop these metrics
- use outcome-oriented metrics, like timeliness and quality
The agencies we looked at didn't consistently use the second and third practices. We recommended that the agencies use them to improve their operations.
Highlights
What GAO Found
Each year, federal agencies spend over $500 billion to buy a wide variety of products and services, ranging from cutting-edge military aircraft to common office supplies. Given the amount of federal funds spent and the missions these contracts support, it is critical that agencies' procurement leaders manage their organizations effectively. However, GAO found procurement leaders at six of the federal government's largest agencies did not consistently use key practices that leading companies use to improve the performance of their procurement organizations (see figure).
Procurement Leaders at the Federal Agencies GAO Reviewed Did Not Consistently Use Leading Companies' Key Practices to Improve Performance
Note: GAO's assessment of procurement leaders' collaboration when developing performance metrics reflects the extent to which they collaborated with end users.
Link performance metrics to strategic goals. Procurement leaders at all the agencies in GAO's review linked their performance metrics to their agencies' strategic goals. These leaders stated that doing so helps ensure acquisition personnel are focused on the right things to support their agency's mission. These statements are consistent with statements from procurement leaders at leading companies.
Collaborate with internal stakeholders, particularly end users, when developing performance metrics. When they were developing performance metrics, procurement leaders at all six of the agencies in GAO's review collaborated with other members of the procurement community. However, only the procurement leaders at the National Aeronautics and Space Administration (NASA) collaborated with end users, such as technical experts from installation centers. One procurement leader said he did not collaborate with end users when he developed performance metrics because too much end user influence could lead to suboptimal results, but leaders do not have to cede control when they collaborate with end users. End users can help procurement leaders increase the usefulness and use of performance information in program management and policy, and corporate procurement leaders told GAO that collaboration with end users during the development and implementation of performance metrics increases coordination and improves performance at the strategic level.
Use outcome-oriented performance metrics to manage procurement organizations. GAO found the leaders at all six of the agencies reviewed rely primarily on process-oriented metrics (such as small business utilization rates) when managing their procurement organizations. These leaders cited various reasons for not implementing metrics that are more outcome-oriented. For example, two leaders stated they did not use outcome-oriented performance metrics because of unreliable data. Three of the leaders, however, are working to improve data that can facilitate outcome-oriented assessments.
Additionally, procurement leaders at most of the agencies GAO reviewed have ongoing or planned efforts to use performance metrics to measure at least one of the four procurement outcomes identified as important by corporate procurement leaders. These outcomes include (1) cost savings/avoidance, (2) timeliness of deliveries, (3) quality of deliverables, and (4) end-user satisfaction. For example, the Air Force's senior procurement leader has used a cost savings/avoidance metric to manage the Air Force's procurement organizations, and as of March 2021, the Air Force leader had identified $2.38 billion in cost savings and avoidance. Additionally, the Army's senior procurement leader told GAO that she began to pursue outcome-oriented metrics in late 2020, after GAO provided her an interim assessment comparing Army practices to private sector practices.
GAO has previously reported that using a balanced set of performance measures, including both process- and outcome-oriented measures—and obtaining complete and reliable performance information—can help federal agencies identify improvement opportunities, set priorities, and allocate resources.
Why GAO Did This Study
Federal agencies face significant, long-standing procurement challenges that increase the risk of waste and mismanagement.
GAO was asked to review key procurement practices in the private sector and assess whether federal agencies could adopt them. This report examines key practices that leading companies use to improve the performance of their procurement organizations, and the extent to which procurement leaders at selected federal agencies use those practices.
GAO interviewed senior procurement leaders at seven leading companies, and experts from four professional associations and five academic institutions. GAO selected these individuals based on literature reviews and conversations with knowledgeable officials. GAO compared key practices they identified to those used at six federal agencies selected based on the dollar value and number of their procurement actions, among other factors. GAO analyzed documentation on each agency's procurement management practices, and interviewed the agencies' senior procurement leaders.
The federal government does not have generally accepted definitions for outcome-oriented and process-oriented metrics. For the purposes of this report, GAO defined outcome-oriented metrics as those metrics that measure the results of organizations' procurement activities. GAO defined process-oriented metrics as those metrics that measure the type or level of procurement activities conducted.
Recommendations
GAO is making a total of 11 recommendations to the six agencies reviewed. Specifically, GAO recommends that they (a) collaborate with end users to develop performance metrics, and (b) use a balanced set of performance metrics to manage their procurement organizations, including outcome-oriented metrics for (1) cost savings/avoidance, (2) timeliness of deliveries, (3) quality of deliverables, and (4) end-user satisfaction.
In total, the agencies concurred with seven of the recommendations, and did not concur with four. Three of the agencies concurred with the recommendation to collaborate with end users to develop performance metrics; two did not. Four of the agencies concurred with the recommendation to use a balanced set of performance metrics to manage their procurement organizations, including outcome-oriented metrics; two did not. GAO continues to believe that all of the recommendations are warranted, as discussed in the report.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of the Air Force | The Secretary of the Air Force should ensure the Deputy Assistant Secretary of the Air Force (Contracting) collaborates with end users to develop performance metrics for procurement organizations. (Recommendation 1) |
The Air Force concurred with this recommendation. In February 2024, the Air Force revised its performance metrics intended to be responsive to mission partner needs. In February 2025, Air Force officials stated that DOD's October 2024 update reflected the latest efforts in place to address our recommendation. DOD's October 2024 update notes that the Air Force has several outcome-oriented goals that are relevant to internal stakeholders and end-users. The Air Force is also planning to use a government-wide survey that would provide mission partners a way to provide feedback on the acquisition process, including timeliness, quality, and responsiveness. In order to close this recommendation, the Air Force would need to provide evidence on how it collaborated with end users to develop its performance metrics.
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| Department of the Army | The Secretary of the Army should ensure the Deputy Assistant Secretary of the Army (Procurement) collaborates with end users to develop performance metrics for procurement organizations. (Recommendation 2) |
The Army concurred with this recommendation. In November 2024, the Army provided documentation demonstrating the Services Senior Leader Dashboard is operational and reports contract data by categories, such as contract value, contract type, and contracting organization. The Army anticipates completing the dashboard by 2025. The Army did not provide documentation of end-user collaboration and noted that the dashboard was intended to enable visibility into services contracting data, rather than developing or monitoring against any specific metrics. However, the Army's efforts have the potential to address the recommendation and we are continuing to track the Army's progress in these areas.
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| Department of the Navy | The Secretary of the Navy should ensure the Deputy Assistant Secretary of the Navy (Procurement) collaborates with end users to develop performance metrics for procurement organizations. (Recommendation 3) |
The Navy did not concur with this recommendation. However, in 2021 the Navy established a mechanism for obtaining and using end-user feedback on an ongoing basis to make improvements to its procurement organizations. For example, in fiscal years 2021 and 2022, the Navy issued a formal customer survey to gauge how well the procurement organizations are supporting their customers or end-users. The collaboration with end users helped enable the Navy to identify areas where corrective actions may be warranted. In October 2024, the Navy issued a memorandum to continue its efforts on improving its procurement organizations into fiscal year 2025, which includes a formal customer survey. We believe that these efforts meet the intent of our recommendation.
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| Department of Homeland Security | The Secretary of Homeland Security should ensure the DHS Chief Procurement Officer collaborates with end users to develop performance metrics for procurement organizations. (Recommendation 4) |
DHS did not concur with this recommendation. However, in February 2024 Office of the Chief Procurement Officer (OCPO) officials stated that as part of an effort to help their office understand the preferences, priorities, and culture of the procurement community they were surveying procurement personnel and stakeholders, including end-users, to improve the procurement experience for their workforce and end users. OCPO officials provided a list of the survey questions and stated that if any performance gaps are identified, they will work to develop performance metrics for individual DHS components, as needed.
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| Department of Veterans Affairs | The Secretary of Veterans Affairs should ensure the VA Senior Procurement Executive (SPE) collaborates with end users to develop performance metrics for procurement organizations. (Recommendation 5) |
VA agreed with this recommendation. Senior Procurement Executive (SPE) officials provided evidence demonstrating that in 2021 and 2022 they engaged with end users to identify outcome-oriented metrics for the SPE and VA's procurement organization. In particular, the VA solicited feedback from end users in the development of an internal customer satisfaction survey.
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| Department of the Air Force |
Priority Rec.
The Secretary of the Air Force should ensure the Deputy Assistant Secretary of the Air Force (Contracting) uses a balanced set of performance metrics to manage the department's procurement organizations, including outcome-oriented metrics to measure (a) timeliness of deliveries, (b) quality of deliverables, and (c) end-user satisfaction. (Recommendation 6) |
The Air Force disagreed with this recommendation, but has since stated that it will collaborate with end-users to develop performance metrics. In February 2024, the Air Force revised its performance metrics intended to be responsive to mission partner needs. However, the revised metrics are not outcome-oriented metrics, which is needed to fully implement this recommendation. In February 2025, Air Force officials stated that DOD's October 2024 update reflected the latest efforts in place to address our recommendation. DOD's October 2024 update notes that while the Air Force has several processes in place to collaborate with their mission partners, it is also planning to use a government-wide survey that would provide mission partners a way to provide feedback on the acquisition process, including timeliness of deliveries, quality of deliverables, and end-user satisfaction. Using a balanced set of performance metrics, including both process- and outcome-oriented measures can help federal agencies identify improvement opportunities, set priorities, and allocate resources.
|
| Department of the Army |
Priority Rec.
The Secretary of the Army should ensure the Deputy Assistant Secretary of the Army (Procurement) uses a balanced set of performance metrics to manage the department's procurement organizations, including outcome-oriented metrics to measure (a) cost savings/avoidance, (b) timeliness of deliveries, (c) quality of deliverables, and (d) end-user satisfaction. (Recommendation 7) |
The Army concurred with this recommendation. In February 2025, DOD officials noted that the Army's November 2024 update reflected the latest efforts in place to address our recommendation. The November 2024 update noted its Army Contracting Enterprise strategic metrics provides various process-oriented metrics to measure cost, schedule, and performance, with a focus on customer service. For instance, the Army is measuring Procurement Administrative Lead Time, which measures the days between when a contract request is accepted to contract award. Further, the Army communicated that they are working on forthcoming category management metrics, which will measure cost savings and avoidance. The Army's estimated completion is the end of fiscal year 2025. The Army's efforts have the potential to address the recommendation, and we are continuing to track the Army's progress in these areas. To fully close this recommendation, the Army will need to provide evidence that it has implemented all the performance metrics to manage its procurement organizations. Using a balanced set of performance metrics, including both process- and outcome-oriented measures can help federal agencies identify improvement opportunities, set priorities, and allocate resources.
|
| Department of the Navy |
Priority Rec.
The Secretary of the Navy should ensure the Deputy Assistant Secretary of the Navy (Procurement) uses a balanced set of performance metrics to manage the department's procurement organizations, including outcome-oriented metrics to measure (a) cost savings/avoidance, (b) timeliness of deliveries, (c) quality of deliverables, and (d) end-user satisfaction. (Recommendation 8) |
The Navy concurred with the recommendation. In 2021, the Navy established a mechanism for obtaining and using end-user feedback to make improvements to its procurement organizations. For example, in fiscal years 2021 and 2022, the Navy issued a formal customer survey to gauge how well the procurement organizations are supporting their customers or end-users. The collaboration with end users helped enable the Navy to identify areas where corrective actions may be warranted. In October 2024, the Navy issued a memorandum to continue its efforts on improving its procurement organizations into fiscal year 2025, which includes a formal customer survey. Further, in October 2024, DOD communicated that the Navy is developing a Navy-wide enterprise solution which is in various stages of development with a planned completion date of fiscal year 2027. This effort would provide the Deputy Assistant Secretary of the Navy (Procurement) greater visibility and real-time access to existing metrics and data, and an ability to create new metrics across the Navy as needed. This enterprise solution will also be able to track program milestones for most of the Navy's major programs, and the Navy is considering tracking category management metrics for cost savings/ avoidance. To fully close this recommendation, the Navy will need to provide evidence that it has implemented a balanced set of performance metrics to manage the department's procurement organizations, including outcome-oriented metrics to measure (a) cost savings/avoidance, (b) timeliness of deliveries, (c) quality of deliverables. Using a balanced set of performance metrics, including both process- and outcome-oriented measures can help federal agencies identify improvement opportunities, set priorities, and allocate resources.
|
| Department of Homeland Security |
Priority Rec.
The Secretary of Homeland Security should ensure the DHS Chief Procurement Officer uses a balanced set of performance metrics to manage the department's procurement organizations, including outcome-oriented metrics to measure (a) cost savings/avoidance, (b) timeliness of deliveries, (c) quality of deliverables, and (d) end-user satisfaction. (Recommendation 9) |
DHS did not concur with the recommendation, stating that while the department supports the use of outcome-oriented metrics, it disagreed that the specific metrics included in our recommendation necessarily captured the most relevant aspects of procurement organizations' performance. However, DHS also stated the Office of the Chief Procurement Officer (OCPO) would review its current metrics to determine whether they appropriately measure outcomes. We agree DHS could identify additional outcome-oriented metrics that are tailored to its needs. We also continue to believe DHS should address the recommendation by using the four types of metrics we identified because the corporate procurement leaders we interviewed emphasized the importance of using these four types of outcome-oriented metrics. In June 2023, the OCPO provided evidence that that it was using an outcome-oriented metric to measure cost savings/avoidance achieved through category management activities, which are intended to improve how agencies procure common goods and services. DHS officials provided an update in December 2024 showing that in fiscal year 2024 the department used category management activities for about 86 percent of their common goods and services expenditures ($18.9 billion of $22.0 billion) and had tracked savings of $477 million. DHS also continues to exceed its annual goal for Best-In-Class solution utilization and achieved 28 percent of fiscal year 2024 common spend on these best-value solutions. To address the timeliness of deliveries and quality of deliverables metrics, in April 2024 the OCPO conducted analysis of marginal and unsatisfactory data from the Contractor Performance Reporting System. This analysis indicated that less than 5 percent of contractors were rated marginal or unsatisfactory, and OCPO determined timeliness of delivery and quality of deliverables were not significant issues. To address the end-user satisfaction metric, the OCPO stated it supplemented its Acquisition 360 data by surveying procurement personnel and stakeholders, including end-users, in order to improve the procurement experience for their workforce and end-users. OCPO officials stated that if performance gaps related to end-user experiences are identified, they will work to develop metrics, as needed. In order to fully close this recommendation, DHS will need to provide evidence that it has implemented all the performance metrics to manage the department's procurement organization. Using a balanced set of performance measures, including both process- and outcome-oriented measures can help federal agencies identify improvement opportunities, set priorities, and allocate resources.
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| National Aeronautics and Space Administration |
Priority Rec.
The Administrator of NASA should ensure the NASA SPE uses a balanced set of performance metrics to manage the agency's procurement organizations, including outcome-oriented metrics to measure (a) cost savings/avoidance, (b) timeliness of deliveries, (c) quality of deliverables, and (d) end-user satisfaction. (Recommendation 10) |
NASA agreed with the recommendation. In February 2022, the NASA Senior Procurement Executive shared plans to implement metrics in the future to measure (a) cost savings/avoidance, (b) timeliness of deliveries, and (c) quality of deliverables. In February 2023, NASA reported it created an E-Business Systems Office within the Office of Procurement (OP) that is responsible for defining and managing data and creating a Procurement Dashboard, metrics and analytical data tools, among other things. In May 2023, NASA provided evidence that it was using an outcome-oriented metric to measure end-user satisfaction, using among other sources of data, a quarterly procurement assessment by each of the NASA Centers. NASA's OP also provided an update on their efforts to collect data to measure cost savings/avoidance. In October 2024, the OP provided evidence that it began tracking costs savings/avoidance by calculating the differences between independent government cost estimates and the contract value by contract type and by NASA centers. For the timeliness of deliveries and the quality of deliverables metrics, OP also provided evidence that it was using the Procurement Dashboard to assist in tracking and analyzing data from the Contractor Performance Reporting System. In December 2024, the OP provided additional documentation of the performance metrics that it collects, in which it tracks the contractor's performance ratings, including quality of deliverables and schedule of deliveries. Using a balanced set of performance metrics, including both process- and outcome-oriented measures can help federal agencies identify improvement opportunities, set priorities, and allocate resources. To close the recommendation, the OP would need to provide data on the cost savings/avoidance achieved over the course of at least a year, and any actions taken or planned to use the outcome-oriented metrics to improve its procurement organization.
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| Department of Veterans Affairs |
Priority Rec.
The Secretary of Veterans Affairs should ensure the VA SPE uses a balanced set of performance metrics to manage the department's procurement organizations, including outcome-oriented metrics to measure (a) cost savings/avoidance, (b) timeliness of deliveries, (c) quality of deliverables, and (d) end-user satisfaction. (Recommendation 11) |
VA agreed with this recommendation. In February 2024, VA officials provided a copy of a survey that is intended to identify opportunities to improve the procurement experience for end-users. VA officials stated they piloted the survey in August 2023 and received data in September 2023, however, there were an insufficient number of respondents to establish accurate data. In July 2024, officials indicated that while they have identified users from major programs, the Office of Acquisition, Logistics, and Construction is still trying to find a systematic way to identify the larger universe of users and are focused on increasing the number of survey responses. In February 2025, VA officials stated they have redesigned the stakeholder survey to ensure the questions can be used to validate collected metrics. The survey is being piloted, and officials have used preliminary input to finalize the survey. In addition, officials told us that the survey will include questions related to timeliness and quality of deliverables, as well as end-user satisfaction metrics. Officials expect to issue the first survey by spring 2025. In addition, a new survey for program senior executives will be issued in spring 2025 and data will be incorporated into the metrics. In order to close this recommendation, the VA will need to provide evidence that it has implemented all the performance metrics to manage its procurement organizations. Using a balanced set of performance metrics, including both process- and outcome-oriented measures can help federal agencies identify improvement opportunities, set priorities, and allocate resources.
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