Acquisition Reform:

Obstacles to Implementing the Federal Acquisition Computer Network

NSIAD-97-26: Published: Jan 3, 1997. Publicly Released: Jan 3, 1997.

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GAO reviewed the federal government's progress in developing and implementing the Federal Acquisition Computer Network (FACNET), focusing on: (1) federal agencies' use of FACNET; (2) problems and benefits of using FACNET; (3) concerns relating to the Federal Acquisition Streamlining Act's (FASA) requirements for FACNET; and (4) management obstacles to effective governmentwide implementation of FACNET.

GAO found that: (1) overall, the federal government has executed relatively few procurement actions through FACNET; (2) the Department of Defense executed the vast majority of all FACNET procurement actions that federal agencies have reported; (3) difficulties doing business through FACNET have overshadowed the benefits of using it; (4) officials from at least 14 of the 18 agencies GAO contacted rated the lack of a sound FACNET infrastructure, effective engineering and operational management, and a well-populated and fully functional centralized contractor registration database as great or very great obstacles to effective FACNET implementation; (5) officials of many federal agencies said the current FACNET approach is out of step with new, cost-effective technologies and buying practices; (6) although FACNET has, in some instances, resulted in lower prices and expanded access to vendors, agency officials and vendors often said that FACNET is not producing the benefits expected; (7) agencies' analyses have concluded that using FACNET to award contracts of $25,000 or less often takes longer and requires more resources than traditional simplified purchasing methods for such awards; (8) as mandated by FASA, FACNET implementation has focused primarily on competitive contract awards, requiring agencies to exchange information with multiple, often unknown vendors; (9) organizations with the most success in using electronic data interchange technology for purchasing, however, typically use it to transmit high-volume, routine, and repetitive transactions with a small group of known suppliers; (10) federal officials have stated that FASA's requirement to focus FACNET's implementation principally on competitive contract awards may not have been a good approach and has contributed significantly to FACNET's problems; (11) agencies and vendors have consistently cited leadership and management shortcomings as major reasons for delays and unresolved problems in FACNET implementation; and (12) agency officials also expressed considerable uncertainty about what the governmentwide strategy for FACNET implementation is.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Office of Management and Budget implemented both recommendations. The Administration proposed statutory changes to FASA to eliminate requirements that were impeding implementation of governmentwide electronic commerce (EC). These changes were incorporated in Section 850 of the National Defense Authorization Act for Fiscal Year 1998. The President's Management Council also developed a strategic plan for governmentwide EC that integrates procurement and payment functions. This plan was submitted to the Congress in March 1998.

    Recommendation: The Director, Office of Management and Budget (OMB), should ensure that the Administrator for Federal Procurement Policy, in consultation with the Secretary of Defense, the Administrator, General Services Administration, the Administrator, National Aeronautics and Space Administration, and the heads of other major federal procuring agencies, develops a coherent and integrated federal strategy--and implementation approach--for using, where appropriate, various electronic commerce technologies and purchasing methods, including FACNET, for effectively and efficiently carrying out the agencies' requirements for the acquisition function. The strategy and approach should incorporate consideration of the need to achieve the single-face-to-industry goal.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  2. Status: Closed - Implemented

    Comments: The executive branch proposed legislative changes to repeal FASA's requirements mandating use of Federal Acquisition Computer Network (FACNET). On July 8, 1997, the Senate approved an amendment to the fiscal year 1998 National Defense authorization bill which would, among other things, (1) repeal language mandating the use of FACNET; (2) broaden the definition of EC to include electronic mail or messaging, World Wide Web technology, electronic bulletin boards, purchase cards, electronic funds transfer, and EDI; and (3) require agency notices of procurement opportunities to be provided in a form that allows convenient and universal user access through a single, governmentwide point of entry. The amendment calls for uniformity in federal EC implementation to the maximum extent that is practicable and cost-effective.

    Recommendation: If executive branch officials conclude that the statutory requirements to focus FACNET--such as focusing it on providing widespread public notice of contracting opportunities and exchanging information with multiple vendors--are impediments to the implementation of the governmentwide electronic commerce strategy, the Director, OMB, should seek legislative relief.

    Agency Affected: Executive Office of the President: Office of Management and Budget


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