Implementation of Federal Policy on Acquiring and Distributing Commercial Products Is Faltering Badly

PSAD-80-13: Published: Jan 14, 1980. Publicly Released: Jan 14, 1980.

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Federal supply agencies purchase, stock, and distribute each year billions of dollars worth of products. In May 1976 the Office of Procurement Policy (OFPP) established a policy requiring Federal agencies to rely on commercial off-the-shelf products to satisfy their needs as opposed to products manufactured to meet Government specifications. They were also to rely on commercial distribution systems rather than stocking the products.

It is an established Government policy to rely on the commercial marketplace for products and services, and interagency committees working with single commodity areas have achieved several benefits of the policy, including substantial cost reductions, an increase in supply sources, and improved product quality. The supply agencies recognize the potential savings and benefits of the policy, yet none has pursued them aggressively. Implementation is faltering so badly that successful achievement of policy objectives is doubtful. GAO found that: the Department of Defense's (DOD) implementation is fragmented; the Defense Logistics Agency (DLA) continues to purchase, stock, and distribute low-demand value products, and its policies, procedures, practices, and methods are biased against the commercial products policy; the General Services Administration's (GSA) implementation has failed due to a lack of commitment and leadership from top management; and the Veterans Administration (VA) conducted a meaningless survey and concluded that its supply system complied with policy concepts.

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