As of May 2021, federal agencies had obligated billions of dollars in contracts for medical supplies and other pandemic-related goods and services. Most (88%) went to vendors with prior federal experience, but in 2020, the share of contracts going to vendors new to federal contracting was 5 times greater than in a typical year.
Contracting during an emergency can be challenging. For example, contracting officers had to buy things that their agencies don't usually buy, and faced pressure to award contracts quickly.
What GAO Found
As of May 31, 2021, agencies obligated $61.4 billion for contracts in response to the COVID-19 pandemic. Agencies cancelled $4 billion in obligations, in some cases due to contract terminations. The proportion of obligations to vendors with prior federal experience government-wide was 88 percent but varied by agency (see figure). In calendar year 2020, agencies awarded about 5 times as many contracts to vendors without prior federal contracting experience for COVID-19, as compared to contracts awarded overall in preceding calendar years.
COVID-19-Related Contract Obligations to Vendors with or without Prior Federal Contracting Experience for the Five Agencies with the Most Obligations, as of May 31, 2021
For the selected contracts GAO reviewed across four agencies—the Departments of Defense (DOD), Health and Human Services (HHS), Agriculture (USDA), and Homeland Security (DHS)—contracting officials identified a number of challenges, including:
- working with vendors new to federal contracting or vendors supplying products they had not previously provided;
- operating under limited time frames to make awards; and
- contracting for supplies and services the agency does not typically buy.
The four agencies are collecting and sharing lessons learned related to their COVID-19 response. However, HHS and DHS have not included contracting lessons learned, even though they identified contracting challenges. Collecting contracting lessons learned could inform future emergency response efforts. Furthermore, although interagency coordination was critical to the response, contracting lessons learned are at risk of not being reflected in formal interagency lessons learned efforts. Without a process to do so, federal agencies risk missing an opportunity to memorialize contracting and coordination practices that were successful, as well as those that were not, for future emergencies.
Why GAO Did This Study
In response to COVID-19, agencies awarded contracts for goods and services to vendors from a range of industries and with varying levels of federal contracting experience, but some vendors have been unable to deliver under those contracts.
The CARES Act included a provision for GAO to review COVID-19-related federal contracting under the act. This report addresses (1) COVID-19 contract obligations and characteristics of vendors, (2) contracting challenges, including with agency assessments of vendors, and (3) whether lessons learned efforts reflect those challenges.
GAO analyzed federal procurement data on agencies' reported COVID-19 contract obligations through May 31, 2021. GAO examined a nongeneralizable sample of 28 contracts with high dollar values or other characteristics from four agencies—DOD, HHS, USDA, and DHS. GAO interviewed officials, including Office of Management and Budget (OMB) officials about their emergency acquisition guidance.
GAO is making 10 recommendations, including that agencies establish processes to better collect and communicate contracting lessons learned during emergencies such as COVID-19. Agencies agreed with nine recommendations. OMB did not agree to establish time frames for updating its guidance. GAO continues to believe OMB should do so, as discussed in this report.
Recommendations for Executive Action
|Department of Health and Human Services||The Secretary of Health and Human Services should direct the Assistant Secretary for Preparedness and Response to review and fully communicate the resources available to contracting officers for assessing prospective vendors—including resources to assess financial capability. (Recommendation 1)|
|Department of Health and Human Services||The Secretary of Health and Human Services should direct the Assistant Secretary for Preparedness and Response to develop internal guidance that includes information for contracting officers related to contracting and assessing prospective vendors during emergencies. (Recommendation 2)|
|Department of Agriculture||The Secretary of Agriculture should direct the Administrator of the Agricultural Marketing Service to evaluate the contracting practices established to assess vendors and implement the Farmers to Families Food Box Program to determine what practices could be used for future emergency procurements and incorporate those practices into internal guidance. (Recommendation 3)|
|Office of Federal Procurement Policy||The Administrator of the Office of Federal Procurement Policy should revise the Emergency Acquisitions Guide, based on outreach to agencies involved in the COVID-19 response, to account for information on the obstacles contracting officers may face when assessing prospective vendors during an emergency and key practices or resources to address those obstacles, and communicate those revisions to agencies once complete. (Recommendation 4)|
|Office of Federal Procurement Policy||The Administrator of the Office of Federal Procurement Policy should establish a process and time frames for regularly updating the Emergency Acquisitions Guide to ensure resources and practices federal agencies can use when contracting during an emergency are current. (Recommendation 5)|
|Department of Health and Human Services||The Secretary of Health and Human Services should ensure that, as part of the Exercise, Evaluation and After Actions Division's ongoing after-action reporting and corrective action program, contracting lessons learned in response to COVID-19 and future emergency response efforts are collected, analyzed, validated, archived, and shared to inform HHS's contracting efforts in response to ongoing and future emergencies. (Recommendation 6)|
|Federal Emergency Management Agency||The Administrator of the Federal Emergency Management Agency should direct the Head of Contracting Activity to establish a formal process to (1) collect contracting lessons learned from COVID-19 and future emergency response efforts; and (2) ensure contracting lessons learned are shared with the Continuous Improvement Program for inclusion in FEMA's formal lessons learned process to inform FEMA's contracting efforts in response to ongoing and future emergencies. (Recommendation 7)|
|Department of Defense||The Secretary of Defense, in coordination with the Secretaries of Homeland Security and Health and Human Services, should ensure that input from contracting officials on interagency contracting lessons learned in response to COVID-19 is collected and shared as part of government-wide efforts to collect, analyze, and report on lessons learned. (Recommendation 8)|
|Department of Health and Human Services||The Secretary of Health and Human Services, in coordination with the Secretaries of Defense and Homeland Security, should ensure that input from contracting officials on interagency contracting lessons learned in response to COVID-19 is collected and shared as part of government-wide efforts to collect, analyze, and report on lessons learned. (Recommendation 9)|
|Department of Homeland Security||The Secretary of Homeland Security, in coordination with the Secretaries of Defense and Health and Human Services, should ensure that input from contracting officials on interagency contracting lessons learned in response to COVID-19 is collected and shared as part of government-wide efforts to collect, analyze, and report on lessons learned. (Recommendation 10)|