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Information Technology: Selected Federal Agencies Need to Take Additional Actions to Reduce Contract Duplication

GAO-20-567 Published: Sep 30, 2020. Publicly Released: Sep 30, 2020.
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Fast Facts

The federal government spends over $90 billion a year on information technology. Earlier, we found that agencies sometimes award contracts for duplicative IT services—like awarding 2 contracts to the same vendor for the same services. Eliminating duplication could save money.

Agencies could help reduce duplication by

Using existing contracts for categories of similar goods and services—a.k.a. category management—as the Office of Management and Budget suggests

Analyzing IT spending to find duplication

The 7 agencies we reviewed fully or partially took these and other steps. We made 20 recommendations aimed at reducing IT contract duplication.

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Highlights

What GAO Found

Selected agencies varied in their efforts to implement five Office of Management and Budget (OMB) category management activities that contribute to preventing, identifying, and reducing duplicative information technology (IT) contracts. For example, most of the seven selected agencies had fully implemented the activities associated with identifying a Senior Accountable Official and training their workforces. In contrast, about half the agencies had fully implemented the activity associated with sharing contract information (see figure). Agencies cited several reasons for their varied implementation, including that they were still defining how to best integrate category management into the agency.

Extent to Which Seven Selected Federal Agencies Implemented Five Category Management Activities That Contribute to Reducing Information Technology (IT) Contract Duplication

Extent to Which Seven Selected Federal Agencies Implemented Five Category Management Activities That Contribute to Reducing Information Technology (IT) Contract Duplication

aThis refers to spending on contracts that are not aligned with the Office of Management and Budget's criteria for agency-wide, multi-agency or government-wide, and “Best in Class” contracts.

bThis activity applies to sharing information with officials for agency-wide, government-wide, and “Best in Class” IT contracts, that are owned by the agency. Since nearly all of the Department of State's IT contracts were owned by other agencies, GAO determined that this activity was not applicable.

Four of the seven agencies had fully or partially implemented the activity to regularly use a spend analysis to identify potential contract duplication. Each of these four agencies had fully implemented the activity to develop and implement strategies to address the identified duplication, which, according to agency officials, resulted in millions of dollars in savings. The remaining three agencies had not implemented either of the two spend analysis activities. Until agencies ensure that their efforts to prevent, identify, and reduce duplicative IT contracts are fully aligned with category management principles and practices, and are informed by spend analyses, they will be at increased risk of wasteful spending. In addition, they will likely miss opportunities to identify and realize savings of potentially hundreds of millions of dollars.

Why GAO Did This Study

Given that the federal government spends over $90 billion annually on IT, it is important that agencies avoid spending on duplicative contracts. Such duplication can occur, for example, when an agency awards two or more contracts to the same vendor for the same services. Category management—in which spending is managed by categories such as IT—and analyses of agency spending on products and services (called spend analyses) have been recognized as effective practices for identifying duplicative contracts.

GAO was asked to review agencies' efforts to reduce IT contract duplication. GAO determined the extent to which (1) selected agencies' efforts to prevent, identify, and reduce duplicative or wasteful IT contracts were consistent with OMB guidance; and (2) these efforts were informed by spend analyses.

GAO compared relevant documentation from seven federal agencies with the most IT spending and new contracts to five activities identified in OMB guidance and two spend analyses activities identified in guidance. GAO rated each agency as having fully, partially, or not implemented each activity.

Recommendations

GAO is making 20 recommendations to six agencies to fully implement the category management and spend analyses activities. The agencies generally concurred. Two agencies provided additional evidence that led GAO to withdraw one recommendation and modify one other.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Agriculture The Secretary of Agriculture should ensure that the agency fully implements the category management activity to reduce unaligned IT spending, by performing an analysis of alternatives to justify the agency's unaligned IT contracts. (Recommendation 1)
Closed – Implemented
As of February 2022, the Department of Agriculture provided documentation that it had implemented the recommendation. Specifically, in January 2022, the agency provided its category management instructions issued in February 2021, which called for an analysis of alternatives to be performed for all applicable contracts. In February 2022, the agency provided documentation that showed that it did not have any applicable contracts in fiscal year 2021 that would require an analysis of alternatives as called for by the Office of Management and Budget. Nevertheless, by issuing its category management instructions, the agency has increased the likelihood that it will perform an analysis of alternatives for any future applicable contracts. Thus, Agriculture has met the intent of the recommendation which is to identify opportunities to reduce IT contract duplication.
Department of Agriculture The Secretary of Agriculture should ensure that the agency fully implements the category management activity to develop and implement vendor management strategies, by implementing the strategies it had developed. (Recommendation 2)
Closed – Implemented
In September 2021, the Department of Agriculture (USDA) provided evidence that it had implemented vendor management strategies. For example, USDA held an industry day and conducted market research outreach with multiple vendors. In addition, the agency developed a vendor communication plan that further identified strategies to promote vendor engagement. As a result of its actions, USDA has increased its capability to develop relationships with vendors that could lead to better contract outcomes, including reducing duplication and costs.
Department of Agriculture The Secretary of Agriculture should ensure that the agency fully implements the category management activity to share prices paid, terms, and conditions for purchased IT goods and services. (Recommendation 3)
Closed – Implemented
In February 2022, the Department of Agriculture provided evidence that it had shared prices paid on the Acquisition Gateway. In addition, in August 2022, the department provided evidence that it had shared terms and conditions on the Gateway. As a result of these actions, USDA has helped ensure that other agencies have data to make informed acquisition decisions, including identifying opportunities to reduce IT contract duplication.
Department of Agriculture The Secretary of Agriculture should ensure that the agency finishes implementing its process to analyze IT contract data. (Recommendation 4)
Closed – Implemented
In February 2022, the Department of Agriculture provided evidence of steps it had taken to improve its process for IT consolidation and procurement. In addition, in August 2022, the agency provided examples of spend analyses it had performed, which resulted in identifying opportunities to consolidate contracts. As a result of these actions, the agency has improved its ability to identify opportunities to reduce IT contract duplication and reduced its risk of wasteful spending.
Department of Agriculture The Secretary of Agriculture should ensure that the agency develops and implements strategies to address duplication identified through the use of spend analyses. (Recommendation 5)
Closed – Implemented
In December 2021, the agency provided evidence of steps it had taken to avoid duplicative IT spending. In addition, in August 2022 the agency provided evidence that it had consolidated contracts to address duplication identified through the use of spend analyses. As a result, the agency has reduced its risk of wasteful spending.
Department of Defense The Secretary of Defense should ensure that the agency fully implements the category management activity to reduce unaligned IT spending. (Recommendation 6)
Closed – Implemented
The Department of Defense (DOD) concurred with the recommendation. In December 2020, DOD officials reported that the department has taken steps to reduce unaligned IT spending. For example, the officials stated that, in November 2020, the department established a Category Management Governance Working group to focus on governance, including category management policy and enterprise buying. In addition, the officials stated that the Chief Information Officer issued guidance on IT category management hardware purchasing solutions, and plans to issue additional guidance on IT category management in June 2021. In November 2022, DOD officials provided documentation showing that the agency had reduced its unaligned IT spending from fiscal year 2020 to fiscal year 2022. As a result, DOD has lowered its risk of investing in duplicative IT contracts.
Department of Defense The Secretary of Defense should ensure that the agency documents its annual spend analyses used to identify opportunities to reduce IT contract duplication. (Recommendation 7)
Closed – Implemented
The Department of Defense (DOD) concurred with the recommendation. In December 2020, DOD officials stated that department planned to issue standard operating procedures for its spend analyses in March 2021. In May 2021, DOD provided its Annual Spend Documentation and IT Contract Reduction Standard Operating Procedures for performing spend analyses. According to the procedures, DOD plans to analyze its IT spend after each fiscal quarter. In July 2022, the department provided documentation demonstrating that it had performed a spend plan analysis that identifies potential opportunities to reduce IT contract duplication. As a result, DOD has improved its ability to identify opportunities to reduce IT contract duplication and reduced its risk of wasteful spending.
Department of Health and Human Services The Secretary of Health and Human Services should ensure that the agency uses a spend analysis on a regular basis to identify IT contract duplication. (Recommendation 8)
Open – Partially Addressed
In March 2021, HHS reported that its activities to implement this recommendation were delayed due to other priorities related to COVID-19, and that it anticipated resuming these activities in the future. In March 2023, the agency provided documentation showing that it had identified opportunities to reduce IT contract duplication. In addition, the agency stated that it planned to complete a spend analysis by the end of 2023. In January 2024, we followed up with officials to obtain evidence that the agency had used a spend analysis to identify IT contract duplication. As of February 2024, we were still waiting for a response. We will continue to monitor the agency's efforts to address our recommendation.
Department of Justice The Attorney General should ensure that the Department of Justice fully implements the category management activity to reduce unaligned IT spending, by performing an analysis of alternatives to justify the agency's unaligned IT contracts. (Recommendation 9)
Closed – Implemented
In December 2023, the department provided evidence that it had developed a process for performing an analysis of alternatives for its unaligned IT contracts. In addition, the department had performed an analysis of alternatives for fiscal years 2023 and 2024. As a result, the agency has greater assurance that it is not missing opportunities to reduce IT contract duplication.
Department of Justice The Attorney General should ensure that the Department of Justice fully implements the category management activity to share prices paid, terms and conditions for purchased IT goods and services. (Recommendation 10)
Closed – Implemented
In July 2021, the department provided documentation showing that it had shared terms and conditions for IT contracts on the Acquisition Gateway. In January 2022, the department provided documentation showing that it had shared prices paid information for IT contracts on the gateway. As a result, the agency has shared data that other agencies can use to make informed acquisition decisions, including identifying opportunities to reduce IT contract duplication.
Department of Justice The Attorney General should ensure that the Department of Justice fully implements the category management activity to engage the workforce in training regarding category management principles and practices, by tracking its workforce's attendance in the training. (Recommendation 11)
Closed – Implemented
In November 2020, Department of Justice (DOJ) officials stated that the department monitors category management training provided by the Federal Acquisition Institute. In addition, the officials provided supporting documentation, including a report that showed the number of DOJ staff that had completed category management training in fiscal year 2020. As a result, the department has increased its ability to assess whether its workforce is acquiring the knowledge on category management principles and practices that could contribute to reducing duplicative contracts.
Department of Justice The Attorney General should ensure that the Department of Justice uses a spend analysis to identify opportunities to reduce IT contract duplication. (Recommendation 12)
Closed – Implemented
In January 2024, the department provided evidence that it had used a spend analysis to identify opportunities to reduce IT contract duplication. Specifically, the department analyzed its spending on its most widely used software contracts during fiscal year 2023. The department identified several contracts that exhibited characteristics suggesting potential contract duplication or redundancy. As a result, the department has lowered its risk of investing in duplicative IT contracts.
Department of Justice The Attorney General should ensure that the Department of Justice develops and implements strategies to address duplication identified through the use of spend analyses. (Recommendation 13)
Open – Partially Addressed
In January 2024, the department provided evidence that it had used a spend analysis to identify opportunities to reduce IT contract duplication. In addition, the department identified strategies for addressing the duplication. In addition, the department developed strategies to address the duplication. However, it did not provide evidence that it had implemented the strategies. We will continue to monitor the agency's efforts to address our recommendation.
Department of State The Secretary of State should ensure that the agency fully implements the category management activity to develop and implement vendor relationship management strategies, by executing its vendor management plan. (Recommendation 14)
Closed – Implemented
In April 2021, the Department of State reported that it had implemented strategies identified in its vendor management plan. For example, the agency stated that it had participated in industry events, including hosting an IT vendor day in February 2021. In December 2021, the agency provided documentation showing that it had taken steps to implement its vendor management plan. For example, in May 2021, the agency held a meeting with multiple vendors to share information on the agency's IT acquisitions and to obtain feedback. As a result of its actions, State has increased its capability to develop relationships with vendors that could lead to better contract outcomes, including reducing duplication and costs.
Department of Veterans Affairs The Secretary of Veterans Affairs should ensure that the agency fully implements the category management activity to develop processes and policies for implementing the agency's category management efforts. (Recommendation 15)
Closed – Implemented
In April 2021, VA reported that it had drafted guidance for its category management efforts, and that the guidance was undergoing review. In January 2023, VA provided its category management policy, which defined the agency's processes for implementing category management. As a result of these processes, the agency is better positioned to implement category management principles and practices that contribute to reducing IT contract duplication.
Department of Veterans Affairs The Secretary of Veterans Affairs should ensure that the agency fully implements the category management activity to reduce unaligned IT spending, by performing an analysis of alternatives to justify the agency's unaligned IT contracts. (Recommendation 16)
Open – Partially Addressed
In November 2021 and January 2023, the agency provided documentation showing that it had continued to reduce unaligned IT spending. In January 2023, the agency provided evidence that it had developed procedures for performing an analysis of alternatives to justify the agency's unaligned IT contracts. However, as of February 2024, the agency had not provided documentation showing that it had performed the analysis. We will continue to monitor the agency's efforts to address our recommendation.
Department of Veterans Affairs The Secretary of Veterans Affairs should ensure that the agency fully implements the category management activity to develop and implement vendor relationship management strategies. (Recommendation 17)
Closed – Implemented
In April 2021, VA issued a vendor management strategy for its Office of Information and Technology. In the strategy, the agency identified efforts intended to build ongoing relationships with vendors and suppliers, and to increase the value the agency derived from them. In October 2021, the agency stated that it had implemented vendor management strategies, such as briefings with vendors, and health check meetings with its top suppliers. In addition, the agency provided documentation of a vendor briefing; however, the agency had not provided evidence that it had implemented other strategies. In August 2022, the agency provided evidence that it had implemented other vendor management strategies, including conducting vendor outreach. As a result of its actions, VA has increased its capability to develop relationships with vendors that could lead to better contract outcomes, including reducing duplication and costs.
Department of Veterans Affairs The Secretary of Veterans Affairs should ensure that the agency fully implements the category management activity to share prices paid, terms and conditions for purchased IT goods and services. (Recommendation 18)
Open – Partially Addressed
In January 2023, VA provided evidence that it had shared contract-related information on its IT contracts. However, according to agency officials, they had not shared prices paid for the agency's IT contracts on the Acquisition Gateway. In January 2024, we requested an update on the agency's status. However, as of February 2024 we have not received a response. We will continue to monitor the agency's efforts to address our recommendation.
Department of Veterans Affairs The Secretary of Veterans Affairs should ensure that the agency uses a spend analysis to identify opportunities to reduce IT contract duplication. (Recommendation 19)
Closed – Implemented
In September 2021, the agency reported that it established an IT Investment Board that evaluates the agency's IT investment portfolio. In addition, in August 2022, the agency reported that it had implemented several efforts to reduce contract duplication. For example, the agency stated that it had conducted a spend analysis which concluded a contract consolidation would reduce duplication. In October 2022, the agency provided evidence of the spend analysis. As a result, the agency has improved its ability to identify opportunities to reduce IT contract duplication and reduced its risk of wasteful spending.
Department of Veterans Affairs The Secretary of Veterans Affairs should ensure that the agency develops and implements strategies to address duplication identified through the use of spend analyses. (Recommendation 20)
Closed – Implemented
In October 2022, the Department of Veterans Affairs provided evidence that it had developed strategies to address duplication identified through the use of spend analyses. Further, in January 2023, the agency provided evidence that it had taken steps to implement the strategies. As a result of these actions, the agency has reduced its risk of wasteful spending.

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Cost savingsFederal agenciesFederal procurementIT acquisitionsInformation technologyRedundancyStrategic sourcingHealth careInformation sharingAnalysis of alternatives