United States General Accounting Office

GAO

Report to Congressional Committees

September 2003

CONTRACT
MANAGEMENT
No Reliable Data to
Measure Benefits of
the Simplified
Acquisition Test
Program

GAO-03-1068 


September 2003

CONTRACT MANAGEMENT

Highlights of GAO-03-1068, a report to the
Senate and House Committees on Armed
Services

In recent years, the federal
government has introduced new
ways to streamline the acquisition
process. One of those vehicles is
the simplified acquisition
procedures test program, which
removes some of the procedural
requirements for buying
commercial goods and services.
Using the test program, federal
procurement officials can make
purchases faster than they have in
the past for procurements not
exceeding $5 million.
Congress mandated that GAO
determine the extent to which
federal executive agencies—at a
minimum, the Department of
Defense (DOD)—have taken
advantage of the test program and
any benefits realized. One way to
measure use is to examine test
program data from the Federal
Procurement Data System (FPDS).
It is the central repository of
contracting information. In
addition to examining FPDS data,
GAO looked at data from DOD’s
data system.

Before Congress decides whether
to make the test program a
permanent contracting vehicle,
GAO recommends that DOD and
other selected federal executive
agencies ensure that reliable data
are available to make program
assessments. DOD agreed with
GAO’s recommendation, while the
other selected federal agencies had
no comments on the
recommendation.
www.gao.gov/cgi-bin/getrpt?GAO-GAO-03­
1068.
To view the full product, including the scope
and methodology, click on the link above.
For more information, contact David Cooper
at (202) 512-4125 or cooperd@gao.gov.

No Reliable Data to Measure Benefits of
the Simplified Acquisition Test Program

Because the Federal Procurement Data System contains unreliable data
about the simplified acquisition test program, GAO was unable to determine
the extent to which federal executive agencies—including DOD— have used
the test program and have realized any benefits. Specifically, the database
indicated that the Departments of Treasury, Defense, and Justice were the
three largest dollar-value users of the test program in fiscal year 2001 (the
latest year with complete data available). But GAO found that FPDS either
overstated or understated use of the test program by millions of dollars. The
table below shows examples of discrepancies at different buying
organizations within these three departments.
Examples of Discrepancies with FPDS’s Data
Value of test program
contracts, according to
Department’s
FPDS (fiscal year 2001)
buying organization
Department of the
$242 million
Treasury’s U.S. Mint
DOD’s Defense
$4 million
Logistics Agency
Department of
$118 million
Justice’s Federal
Prison Industries

What procurement officials said about
FPDS’s data
U.S. Mint said it did not use the test

program at all 

Defense Logistics Agency said it obligated 

$146 million in test program contracts

After reviewing portions of FPDS data, 

about $31 million in contract actions,

Federal Prison Industries said none of 

those items were purchased under the test
program

Sources: FPDS (data); GAO (analysis).

GAO also found data reliability problems with contract data in DOD’s own
data system—the Defense Contract Action Data System (DCADS)—which
feeds into FPDS on an ongoing basis. For example, for fiscal year 2002,
DCADS showed about $146 million in test program contract actions for two
buying organizations for the Naval Air Systems Command and the Defense
Intelligence Agency. After reviewing contract actions that had the highest
dollar value, procurement officials at these two DOD buying organizations
said that none of the entries were awarded through the test program. There
were also reliability problems at other buying commands.
The federal buying organizations we visited have not collected any other
data that would allow us to assess whether the test program is helping to
increase efficiency, improve contract prices, reduce administrative costs, or
improve the delivery of goods and services. Anecdotal evidence indicates
that the test program is getting favorable reviews. For example, nearly all
procurement officials with whom GAO spoke at the buying organizations
GAO visited indicated that the program’s primary benefit is the ability to
process a contract more efficiently.

Contents 


Letter

1
Results in Brief
Background
No Reliable Data Available to Assess Test Program
Conclusion
Recommendations for Executive Action
Agency Comments

2
2
4
6
7
7

Appendix I

Scope and Methodology

9

Appendix II 	

Comments from Department of Justice’s Federal
Bureau of Prisons

10

Table
Table 1: Examples of Discrepancies with FPDS’s Data

5

Abbreviations
DCADS
DOD
FAR
FPDS
GAO
OFPP

Defense Contract Action Data System 

Department of Defense 

Federal Acquisition Regulation 

Federal Procurement Data System 

General Accounting Office 

Office of Federal Procurement Policy 


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GAO-03-1068 Simplified Acquisition Test Procedures

United States General Accounting Office
Washington, DC 20548

September 30, 2003 

The Honorable John W. Warner 

Chairman 

The Honorable Carl Levin 

Ranking Minority Member 

Committee on Armed Services 

United States Senate 

The Honorable Duncan Hunter 

Chairman 

The Honorable Ike Skelton 

Ranking Minority Member 

Committee on Armed Services 

House of Representatives 

Acquisition reform has fundamentally changed the way the federal 

government procures billions of dollars worth of goods and services each

year. The procurement process is more streamlined than ever before. 

Government buyers can make their purchases with less turnaround time, 

they have less paperwork, and they can rely on a variety of tools to help 

them expedite the process. One tool is the simplified acquisition 

procedures test program, which reduces the procedural requirements for 

buying commercial goods and services not exceeding $5 million. 

Congress mandated that we report on the test program and address the (1) 

extent to which federal executive agencies—at a minimum, the 

Department of Defense (DOD)—have used the test program, (2) benefits 

realized through its use, and (3) impact that the program has had on 

contract competition.1

To satisfy these objectives, we obtained and analyzed test program data 

from the Federal Procurement Data System (FPDS) and DOD’s Defense 

Contract Action Data System (DCADS). We used these data to identify 

buying organizations that were among the largest total-dollar-value users 

of the test program and to review contract files at selected buying 


1

Our reporting mandate is found in the Bob Stump National Defense Authorization Act for
Fiscal Year 2003, Pub. L. No. 107-314, sec. 812, Dec. 2, 2002.

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GAO-03-1068 Simplified Acquisition Test Procedures

organizations to determine the accuracy of the data reported. We
interviewed procurement officials to determine whether use of the test
program has resulted in noticeable benefits or affected competition.

Results in Brief

Because the FPDS and DCADS databases contain unreliable test program
data, we were unable to determine the extent to which federal executive
agencies, including DOD, have taken advantage of the program. Neither
were we able to determine the test program’s benefits and impact on
competition.
The federal buying organizations we visited have not collected any other
data that would allow us to assess whether the test program is helping to
increase efficiency, improve contract prices, reduce administrative costs,
or improve the delivery of goods and services. Two years ago, we reported
that data were not being collected to provide a basis for measuring
whether the test program produced the desired results of maximizing
efficiency and economy and minimizing administrative burden and cost.
We recommended that data be collected to demonstrate the benefits of the
test program. In response to our recommendation, DOD said it planned to
convene an integrated process team to determine ways to measure the
benefits of the test program. However, DOD has not taken action to
measure the program’s benefits.
This report recommends that DOD and the Office of Federal Procurement
Policy (OFPP) develop evaluation mechanisms for measuring test program
benefits. It also recommends that the Departments of Treasury, Justice,
and Defense improve the reliability of test program data to make program
assessments. DOD partially concurred with the first recommendation and
agreed with the second. The other two federal executive agencies had no
comments on our recommendations.

Background

To streamline the federal procurement process, Congress in 1994
authorized the use of simplified acquisition procedures for purchases not
exceeding $100,000.2 Simplified procedures allow agency officials to
expedite the evaluation and selection processes and keep documentation
to a minimum.

2

Federal Acquisition Streamlining Act of 1994, Pub. L. No. 103-355, Oct. 13, 1994.

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GAO-03-1068 Simplified Acquisition Test Procedures

In 1996, Congress expanded the use of simplified acquisition procedures3
by authorizing a test program that allows government buyers to procure
commercial items not exceeding $5 million4 in order to maximize
efficiency and economy and minimize burden and administrative costs for
both the government and industry.5 For example, government buyers
may issue a combined synopsis and solicitation and may require
proposal submission in fewer than 45 days, as would otherwise be
required;
• 	 need not establish a formal evaluation plan or competitive range,
conduct discussions with vendors, or score quotations or offers; and
• 	 can minimize the documentation required to justify contract award
decisions.
•	

Under simplified acquisition procedures, the Federal Acquisition
Regulation (FAR) requires competition to the maximum extent
practicable.6
The test program, which expires on January 1, 2004, is only one of a
number of streamlined contracting vehicles that federal agencies use to
procure goods and services. Other options include purchase cards,
multiple award Federal Supply Schedule contracts, governmentwide
acquisition contracts, and multiple award task and delivery order
contracts. In one way or another, these options allow government buyers
to simplify and expedite the procurement process.
In 2001, to find out whether the test program was achieving desired
results, we evaluated DOD’s use of the program for commercial

3

Clinger-Cohen Act of 1996, Pub. L. No. 104-106, Div. D, Feb. 10, 1996 (short title changed
from Federal Acquisition Reform Act of 1996 to Clinger-Cohen Act of 1996, Pub. L. No. 104208, sec. 808, Sept. 30, 1996).

4

Federal Acquisition Regulation, Subpart 13.5.

5

Since then, there has been another effort to simplify procurement in special situations.
The Homeland Security Act of 2002 temporarily expands the use of simplified acquisition
procedures (Pub. L. No. 107-296, sec. 855(b), Nov. 25, 2002). The act authorizes executive
agencies to use simplified procedures in any procurement of property or services acquired
as part of the fight against terrorism and related threats.

6

FAR sec. 13.104.

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GAO-03-1068 Simplified Acquisition Test Procedures

purchases.7 We reported that data had not been collected to provide a
basis for measuring whether the test program was maximizing efficiency
and economy and minimizing administrative burden and cost. However,
our report summarized a 1999 OFPP survey showing that procurement
executives believed the program improved the federal procurement
process and that the test program should be made permanent. We asked
Congress to consider requiring the OFPP to develop a method for
demonstrating that the test program was producing desired results.
FPDS is the central repository of federal contracting information, and it
contains detailed data on contract actions exceeding $25,000. Although
federal agencies collect contract data using their own data systems, their
data must be transmitted to and consolidated in FPDS on an ongoing
basis. FPDS can assist procurement managers in making such decisions as
understanding the consequences of their purchasing decisions, projecting
future needs, or leveraging overall buying power.
FPDS was designed to provide basic contracting information, such as
whether the simplified acquisition test program was used. FPDS also was
designed to provide insight on small business participation and
competition, among other things. Federal officials can use the data to
perform oversight responsibilities. The General Services Administration,
through the Federal Procurement Data Center, operates and maintains
FPDS. DOD accumulates similar data on contract actions of over $25,000
in the DCADS database, and, like other federal agencies, transmits
contract information to FPDS.

No Reliable Data
Available to Assess
Test Program

We found significant data-reporting errors related to the test program in
both FPDS’s and DCADS’s databases. Because of unreliable data, we were
unable to determine the extent to which federal executive agencies have
used the simplified acquisition test program and what benefits they may
have realized from its use. We also could not determine the impact that the
test program has had on contract competition.
To verify FPDS’s data, we visited the Departments of Treasury, Defense,
and Justice—the three largest dollar-value users of the simplified

7

U.S. General Accounting Office, Contract Management: Benefits of Simplified
Acquisition Test Procedures Not Clearly Demonstrated, GAO-01-517 (Washington, D.C.:
Apr. 20, 2001).

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GAO-03-1068 Simplified Acquisition Test Procedures

acquisition test program in fiscal year 2001, as reported in FPDS. FPDS’s
data showed that the Departments of Treasury, Defense, and Justice had
test program contract actions worth about $303 million, $209 million, and
$157 million, respectively, in fiscal year 2001, the latest year with the most
complete data available. We found that these figures were either
overstated or understated by millions of dollars.
For example, as shown in table 1, FPDS’s data showed that the
Department of the Treasury’s U.S. Mint had about $242 million in test
program contract actions, making it the largest user of the test program in
fiscal year 2001. However, the U.S. Mint officials told us that they did not
use the program at all. We also found reporting errors with FPDS’s data for
DOD. An official at one of DOD’s buying commands—the Defense
Logistics Agency—said it had about $146 million in test program contract
actions, but FPDS’s data showed only $4 million. In the case of the
Department of Justice, FPDS’s data showed that the Federal Prison
Industries, which is a part of the Federal Bureau of Prisons, had about
$118 million in test program contract actions. Federal Prison Industries
officials told us they used the test program extensively, but when we
asked them to review a portion of FPDS’s data, about $31 million worth of
contract actions, they said that none of the contract actions listed were
part of the test program.
Table 1: Examples of Discrepancies with FPDS’s Data
Department’s
buying
organization
Department of the
Treasury’s U.S. Mint
DOD’s Defense
Logistics Agency 	
Department of
Justice’s Federal
Prison Industries

Value of test program
contracts, according to
FPDS (fiscal year 2001)

What procurement officials
said about FPDS’s data

$242 million

U.S. Mint said it did not use the
test program at all

$4 million

Defense Logistics Agency said
it obligated $146 million in test
program contracts

$118 million

After reviewing portions of
FPDS’s data, about $31 million
in contract actions, Federal
Prison Industries said none of
those items were purchased
under the test program

Sources: FPDS (data); GAO (analysis).

As with other federal agencies, DOD has its own database system to
collect contract data, and it transmits those data to FPDS on an ongoing
basis. We decided to take a closer look at DOD’s database—DCADS—for

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GAO-03-1068 Simplified Acquisition Test Procedures

fiscal year 2002, the latest year with the most complete data. As we found
with FPDS, there were reporting errors in DCADS. According to DCADS,
DOD had a total of $1.9 billion in test program contract actions. For
verification, we reviewed selected test program contract actions for DOD’s
buying organizations that were major dollar-value users of the test
program, according to DCADS. While we did find that one Air Force
buying organization correctly reported its test program contract actions,
other buying commands reported them incorrectly in DCADS. For
example, DCADS’s data showed that an organization within the Naval Air
Systems Command had about $122 million in test program contract
actions and that the Defense Intelligence Agency’s Virginia Contracting
Activity had $24 million. We asked procurement officials at DOD’s buying
organizations to review DCADS’s data for contract actions that had the
highest dollar value. They said that none of those listed were awarded
under the test program. Three other DOD buying organizations also had
reporting errors.
In addition to the data reliability problems we found with FPDS’s and
DCADS’s test program data, we also found that federal buying
organizations had not collected any other data to document whether the
test program is helping to increase efficiency, improve contract prices,
reduce administrative costs, or improve the delivery of goods and services.
However, indications are that the test program is well received. Nearly all
procurement officials with whom we spoke at selected buying
organizations view the test program favorably. They cite as the program’s
primary benefit the ability to process a contract more efficiently, and the
majority advocates making the test authority permanent.
In commenting on our 2001 report, DOD stated its intention to convene an
integrated process team to consider ways for measuring the benefits of the
test program. However, DOD has not acted on this initiative.
In discussing the results of this effort, DOD officials stated that they are
willing to assess the benefits of the test program. Justice and Treasury
Department officials stated that they would work to improve the reliability
of test program’s data.

Conclusion 	

The simplified acquisition test program, which streamlines the process for
buying commercial items that do not exceed $5 million, expires on
January 1, 2004. Most procurement officials with whom we spoke at
selected buying organizations said that they would like the test program to
be made permanent and that there are benefits associated with buying

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GAO-03-1068 Simplified Acquisition Test Procedures

commercial items using simplified procedures. However, anecdotal
information is not enough to determine this program’s overall impact and
benefits. Inherent in any test program is the expectation that federal
agencies establish evaluation mechanisms for assessing program results,
which includes ensuring that reliable data are collected and used for the
assessments. Our observations are that there is no reliable information for
measuring the test program’s benefits.

Recommendations for
Executive Action

Before Congress provides permanent authority for using simplified
procedures to acquire commercial items costing up to $5 million, we
recommend that DOD work with the Administrator of OFPP to develop
evaluation mechanisms for measuring test program benefits. In addition,
the Departments of Treasury, Justice, and Defense should independently
take appropriate actions to ensure that reliable FPDS test program data
are available to make program assessments.

Agency Comments

We asked OFPP and the Departments of Treasury, Justice, and Defense for
written comments on the draft report. OMB, which oversees OFPP, and
DOD provided oral comments. OMB did not comment on the specifics of
the report but made a general observation that the test program provides a
benefit if used correctly. It said the test program enables agencies to gain
timely access to the marketplace while still reaping the benefits of open
market competition. OMB further noted that the test program may be
especially beneficial as an alternative to the Federal Supply Schedule and
multiple or single award task and delivery order contracts, when
prenegotiated terms and conditions of these vehicles are not suitable to
meet an agency’s needs.
DOD partially concurred with our recommendation that it work with
OFPP to develop evaluation mechanisms for measuring test program
benefits. DOD stated that it would develop a methodology to evaluate the
benefits of the test program, on the basis of such metrics as procurement
lead-time, and share the results with OFPP. Using this methodology, the
benefits of the test program would be measured by sampling test program
contracts from the contract reporting system. DOD concurred with our
recommendation that it take appropriate actions to ensure that reliable
FPDS test program data are available to make program assessments. DOD
is planning to issue a memorandum to the military departments and
defense agencies emphasizing the need for all test program data to be
entered into the contract-reporting system accurately, so reliable data are
available to demonstrate the continuing need for this program.

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GAO-03-1068 Simplified Acquisition Test Procedures

The Department of Justice’s Federal Bureau of Prisons concurred with the
information reflected in the report; the bureau’s comments appear in
appendix II. The Department of the Treasury’s U.S. Mint agreed with our
finding that it did not use the test program.

We are sending copies of this report to other interested congressional 

committees and the Secretary of Defense; Secretary of the Air Force; 

Secretary of the Army; Secretary of the Navy; Director, Defense Logistics 

Agency; Director, Office of Management and Budget; Administrator, Office 

of Federal Procurement Policy; Administrator of General Services; 

Assistant Attorney General for Administration, Department of Justice; 

Secretary of the Treasury; and Director, U.S. Mint. We will also make 

copies available to others on request. In addition, this report will be 

available at no cost on the GAO Web site at http://www.gao.gov. 

If you have questions about this report, please contact me at (617) 788-

0500 or Ralph Dawn at (202) 512-4544. Key contributors to this assignment 

were Jeffrey Rose, Ralph Roffo, Marie Ahearn, Lily Chin, and Julia 

Kennon. 

Sincerely yours, 


David E. Cooper 

Director, Acquisition and Sourcing Management 


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GAO-03-1068 Simplified Acquisition Test Procedures

Appendix I: Scope and Methodology 


Our objectives were to determine the (1) extent to which federal executive
agencies used the simplified acquisition test authority, (2) benefits they
realized through its use, and (3) impact that the program has had on
contract competition. To satisfy these objectives, we obtained and
analyzed test program data from the Federal Procurement Data System
(FPDS) and the Department of Defense’s (DOD) Defense Contract Action
Data System (DCADS). Using the data, we identified buying organizations
that were among the largest dollar-value users of the test program, and we
reviewed contract files at selected buying organizations to determine the
accuracy of the data reported. We interviewed procurement officials from
the Office of Federal Procurement Policy and from the Departments of
Treasury, Defense, and Justice to obtain their views of the benefits from
using the test authority. In addition, we reviewed federal regulations and
available test program guidance.
We initially identified, using FPDS’s data, the major dollar-value users of
the test program during fiscal year 2001, the year of the most recent and
complete data we had available at the time of our review. According to the
data, the Departments of Treasury, Defense, and Justice were the largest
dollar-value users of the test program. We then used the data to identify
the buying organizations within each of these departments that were the
largest dollar-value users. We met with procurement officials at selected
buying organizations to verify the reliability of FPDS’s test program data
and to discuss the benefits realized.
We also reviewed the DCADS database to respond to our congressional
mandate’s minimum requirements. Using DCADS’s complete fiscal year
2002 data, we selected the buying organizations within DOD commands
that were major dollar-value users of the test authority. The selected
organizations were the (1) Air Force Air Mobility Command, (2) Air Force
21st Contracting Squadron, (3) Army Communications-Electronics
Command, (4) Naval Air Systems Command’s Naval Air Warfare Center,
(5) Defense Intelligence Agency’s Virginia Contracting Activity and (6)
Defense Logistics Agency’s Defense Supply Center Philadelphia. We
discussed with procurement officials at each of these buying organizations
the reliability of DCADS’s test program data and the program benefits
realized.
We conducted our work from March through August 2003 in accordance
with generally accepted government auditing standards.

Page 9

GAO-03-1068 Simplified Acquisition Test Procedures

Appendix II: Comments from Department of
Justice’s Federal Bureau of Prisons

(120216)

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GAO-03-1068 Simplified Acquisition Test Procedures

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