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.

Matter for Congressional Consideration

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Matter: The Congress should place executive branch agencies under a mandatory deadline to implement the policy.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Administrator of OFPP should direct the major supply agencies to speed up the policy's implementation and consider implementing it on a commodity basis. The Secretary of Defense should integrate the efforts of Defense agencies and direct DLA to: implement the policy on a full-scale basis and stop stocking and distributing low-demand value items, and reevaluate the necessity for its commercial item support program. The Administrator of GSA should commit the agency to carrying out the commercial products policy. He should also: (1) define overall agency management responsibility for the policy and eliminate fragmented responsibility and interdivisional conflict; and (2) allocate funds and personnel necessary to develop and use the commercial item description system and decrease the funds and personnel devoted to maintaining the agency's duplicative Government acquisition and distribution system. The Administrator of Veterans Affairs should complete the implementation of the commercial products policy by conducting market research and analysis on all products procured with VA specifications.

    Agency Affected:


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