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Highlights

Interagency contracting--using another agency's contracts or contracting services--can provide agencies with opportunities to streamline the procurement process and achieve savings. However, GAO designated the management of interagency contracting a high-risk area in 2005 due, in part, to a lack of reliable data on its use and of clarity regarding contract management responsibilities. In 2002, the Department of State (State) issued the State First policy, requiring domestic bureaus to obtain approval from State acquisition officials before paying other agencies for contract support services. Under the Comptroller General's authority to conduct evaluations on his own initiative, GAO evaluated State's 1) insight into its use of interagency contracts, 2) policies on deciding when to use assisted interagency contracts, and 3) ability to ensure oversight. GAO's work included reviewing regulations, analyzing interagency contracting data, and conducting 10 case studies of direct and assisted interagency contracts that represented a range of State bureaus and servicing agencies.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of State 1. To enable State to improve its management of interagency contracting, the Secretary of State should direct the Office of the Procurement Executive to develop, in consultation with the bureaus, a reliable means for tracking the use of interagency contracts so that the bureaus and acquisition officials can readily and reliably access data, such as the costs and associated fees. Analysis of such data could also be used to assess whether the State First process provides an accurate reflection of bureaus' use of assisted interagency contracting.
Closed - Implemented
In response to this recommendation, State Department acquisition officials created and now maintain a spreadsheet that tracks information about assisted interagency contract actions, including the costs and associated fees. A State Department official told us that this tracking spreadsheet is populated with information submitted by the bureaus.
Department of State 2. To enable State to improve its management of interagency contracting, the Secretary of State should direct the Office of the Procurement Executive to work with the Office of Acquisitions Management, in coordination with the bureaus that make the most use of assisted interagency contracts, to clarify and refine the State First policy, including existing exemptions, and provide additional guidance as needed regarding which actions need review under the policy.
Closed - Implemented
In response to this recommendation, the State Department has revised the State First policy to include certain types of previously excluded actions. A State Department official told us that the changes were approved by some of the bureaus which most frequently use interagency contracting. In addition, the acquisition office worked with the bureau which we found was implementing State First differently than other bureaus to identify and refine their use of interagency contracts. That bureau issued guidance in September 2009 that establishes uniform use and processes for interagency acquisition agreements.
Department of State 3. To enable State to improve its management of interagency contracting, the Secretary of State should direct the Office of the Procurement Executive to require bureaus seeking a State First waiver to identify in their request individual(s) who will be responsible for contract oversight and ensure they are trained to perform this key role.
Closed - Implemented
In response to this recommendation, the State Department revised the State First policy to require bureaus to identify a contracting officer's representative (COR) who will be responsible for providing technical oversight of interagency contract actions expected to exceed $100,000, and to include this information in State First waiver requests. Further, in July 2010, the State Department established training and certification requirements for CORs. The State Department has also developed an online database system that maintains a record of all CORs, past and present, as well as their training certifications. This system is available to all State Department personnel and procurement officials stated that verification of COR certification is always part of their review of State First waiver requests.

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