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.

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