GAO and the Federal Procurement System

Presentation to the Department of Commerce

4 May 2011

For more information, contact Bill Woods, WoodsW@gao.gov

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Agenda

• Introduction to GAO• Who We Are• How We Get Our Work

• Illustrations of GAO’s Work on the Federal Procurement System • Core Principles in Federal Procurement• Best Management Practices• Contract Competition• High-Risk Program

• Bid Protests and GAO• Overview• Why Do We Have Bid Protests?• Key Statistics

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Who We Are

• About Us:

• U.S. Government Accountability Office (GAO) is an independent, nonpartisan agency that works for Congress

• Head of GAO: Comptroller General of the United States; appointed to a 15-year term

• Mission: GAO exists to support the Congress in meeting its constitutional responsibilities

• Core Values: Accountability, Integrity, and Reliability

Introduction to GAO GAO’s Federal Procurement Work Bid Protests

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How We Get Our Work

• Congressional Requests and Mandates: 95 percent of our work in FY2010. Includes requests from Congressional Committees and legislative mandates

• Example: (GAO-11-233SP) Defense Acquisitions: Assessments of Selected Weapon Programs. Review includes assessments of 98 major defense acquisition programs

• Comptroller General Authority: 5 percent of our work in FY2010. Generally used to address broad-based interests to the Congress

• Example: Iraq and Afghanistan

Introduction to GAO GAO’s Federal Procurement Work Bid Protests

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Overview of Federal Procurement

$134

$34

$201

$165

Services

Products

Civilian

Defense

$200

$335

$16831%

$36769%

Civilian

Defense

Introduction to GAO GAO’s Federal Procurement Work Bid Protests

Total Obligations of Civilian and Defense Products and Services

FY 2010 (Dollars, in Billions)

Total Obligations Total Obligations, by Products and Services

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Core Principles in Federal Procurement

• Best practices in weapons acquisitions, as outlined in Using a Knowledge-Based Approach to Improve Weapons Acquisitions (GAO-04-386SP):

• Resources and needs match• Product design is stable• Production processes are mature

• Framework for Assessing the Acquisition Function (GAO-05-218G) provides guidance on assessing key cornerstones of effective acquisition functions:

• Organizational alignment and leadership• Policies and processes • Human capital• Knowledge and information management

Introduction to GAO GAO’s Federal Procurement Work Bid Protests

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Best Management Practices for Weapon Systems

• Issue: DOD plans to invest $343 billion over 5 years on major defense programs

• GAO Findings:• Major defense programs continue to be over cost and behind

schedule and deliver fewer quantities• DOD does not adequately match needs and resources• Programs begin with too many unknowns--unstable requirements,

immature technologies, and unrealistic cost and schedule estimates

• Actions Needed: Employing best management practices; establishing and sustaining realistic, knowledge-based program baselines; and strong leadership could achieve significant cost savings

Introduction to GAO GAO’s Federal Procurement Work Bid Protests

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Contract Competition

• Issue: • Agencies spend more than $500 billion annually on contracts • Competition could save money, improve contractor performance,

and promote accountability for results

• GAO Findings:• Approximately one-third of agency contracts awarded non-

competitively each year• A significant number of competitions result in only one bidder• Agencies often do not utilize multiple-award BPAs and do not

compete BPA calls when they do

• Actions Needed: Agency officials must seek deeper discounts and reduce the use of high risk contracting approaches.

Introduction to GAO GAO’s Federal Procurement Work Bid Protests

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High-Risk Program Overview

• GAO created the High-Risk Program in 1990 to bring additional focus to problem areas in government.

• The first report was issued in 1993, and updates are released every two years. Most recent update issued in February 2011: High Risk Series: Update (GAO-11-278)

• GAO identified 30 areas that are at high risk for waste, fraud, abuse, or mismanagement or are in need of broad reform

Introduction to GAO GAO’s Federal Procurement Work Bid Protests

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High-Risk Program and Procurement

• Of the 30 identified High-Risk areas, 5 are related to procurement:

• Weapons Systems Acquisition • Department of Defense Contract Management• Department of Energy Contract Management for the National

Nuclear Security Administration and Office of Environmental Management

• National Aeronautics and Space Administration Acquisition Management

• Management of Interagency Contracting

Introduction to GAO GAO’s Federal Procurement Work Bid Protests

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Bid Protest System and GAO Overview

• Companies seeking federal contracts can file protests with GAO when they believe that a government contract has been or is about to be awarded in violation of the laws and regulations that govern government contracting

• GAO reviews the protest and issues a decision within 100 days on whether the federal agency has complied with statutes and regulations.

• GAO has been deciding protests since 1925. Unlike GAO’s other work, bid protests are triggered by company complaints

Introduction to GAO GAO’s Federal Procurement Work Bid Protests

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Why Do We Have Bid Protests?

Bid protests:• Provide a forum to hear complaints by and grant relief to

interested parties

• Promote transparency into how the procurement system works

• Enhance accountability (including competition)

• Protect the integrity of the procurement system

Introduction to GAO GAO’s Federal Procurement Work Bid Protests

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Key Bid Protest Statistics

Fiscal Year 2010

Cases Filed 2,229

Merit (Sustain + Deny) Decisions 441

Number of Sustains 82

Sustain Rate 19%

Effectiveness Rate 42%

Alternative Dispute Resolution (ADR) Cases Used 159

ADR Success Rate 80%

Hearings 61 cases (10%)

Introduction to GAO GAO’s Federal Procurement Work Bid Protests

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GAO on the WebWeb site: http://www.gao.gov/ 

ContactChuck Young, Managing Director, Public Affairs, youngc1@gao.gov(202) 512-4800, U.S. Government Accountability Office441 G Street NW, Room 7149, Washington, D.C. 20548

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For more information, contact Bill Woods, WoodsW@gao.gov