Contract Overload: GAO finds continued problems with MACs

Audit agency calls for business cases to justify new multiple award contracts, and a database listing all existing contracts. Sen. McCaskill plans to hold...

By Jason Miller
Executive Editor
Federal News Radio

The proliferation of multiple award and governmentwide contracts are costing agencies millions of dollars and wasting time of contracting officers, according to a new report by the Government Accountability Office.

GAO looked at MACs, GWACs and schedule contracts over an 18 month period, ending in April 2010.

“Longstanding problems with the quality of Federal Procurement Data System-Next Generation data on these contracts and the lack of consistent governmentwide policy on the creation, use and costs of awarding and administering of some of these contracts are hampering the government’s ability to realize the strategic value of using these contracts,” auditors found.

GAO also found that agencies do not believe the General Services Administration’s schedule prices are as low as they could be and therefore create their own contracts.

“While GSA has established pricing provisions and tools to use to ensure that it obtains the best prices that vendors offer to their commercial customers and takes advantage of price decreases after it awards its MAS contracts, some of these tools are not applied effectively,” GAO writes. “Consequently, it is difficult for both GSA and federal agencies to know whether MAS prices truly achieve the program’s goal of providing best prices. Furthermore, the proposal to eliminate the most favored customer price objective and price reduction clause could further weaken GSA’s ability to negotiate best prices.”

Sens. Joseph Lieberman (I-Conn.), Susan Collins (R-Maine) and Claire McCaskill (D-Mo.) and Reps. Ed Towns (D-N.Y.) and Darrell Issa (R-Calif.) requested the report and all were disappointed in GAO’s findings.

“Interagency contracts were intended to increase government efficiency. Instead, on a daily basis, agencies duplicate each other’s contracting efforts, raising the cost of government,” Lieberman says in a release. “The Office of Federal Procurement Policy…needs to keep better track of interagency contracts and whether agencies are getting the lowest possible prices. And GSA needs to convince other agencies that it can strike better deals than anyone else.”

McCaskill is promising to ask tough questions at her second hearing on interagency contracting. She is the chairwoman of the Homeland Security and Governmental Affairs Ad Hoc Subcommittee on Contracting Oversight.

“Once again the GAO’s findings illustrate a woeful lack of transparency in interagency contracting, an area that represents billion of taxpayer dollars,” she says. “It’s time for the government to bring some accountability to this area.”

GAO’s findings come on the heels of Federal News Radio’s three-part series looking at the proliferation of MACs over the last 15 years.

Industry experts estimate it costs vendors $2 million to $4 million to bid on these duplicative MACs, and gets passed back to the agencies in terms of overhead costs.

OFPP also has been on a listening tour the last few months trying to better understand the impact of these sometime duplicative contracts on agencies and industry.

Dan Gordon, OFPP administrator, is expected to signal his approach with MACs before the end of May when he decides whether or not to renew the National Institutes of Health’s GWAC, CIO-SP2.

In their report, GAO makes five recommendations to improve GWACs and MACS, and eight recommendations for GSA to improve the schedules.

Among the recommendations GAO makes is OFPP should conduct a survey to identify how many MACs and GWACs exist, require agencies to input data into FPDS-NG to record the use of these contracts, establish a policy to establish, approve and report new MACs and GWACs and decide whether it makes sense to maintain a central database of these contracts.

GAO also calls for OFPP to require agencies to submit business case to justify the need for new MACs and GWACs.

The audit agency also called on GSA to have a more consistently use pre-award audits, collect transactional data on MAS orders and prices paid and establish more consistent performance measures across the MAS program, including measures for pricing.

(Copyright 2010 by All Rights Reserved.)

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