GAO and the Federal Procurement System Presentation to the Department of Commerce 4 May 2011 For more information, contact Bill Woods,

Page 2 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

Page 3 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 WorkBid Protests

Page 4 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 SP) 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 WorkBid Protests

Page 5 Overview of Federal Procurement $200 $335 Introduction to GAO GAO’s Federal Procurement WorkBid Protests Total Obligations of Civilian and Defense Products and Services FY 2010 (Dollars, in Billions) Total ObligationsTotal Obligations, by Products and Services

Page 6 Core Principles in Federal Procurement Best practices in weapons acquisitions, as outlined in Using a Knowledge-Based Approach to Improve Weapons Acquisitions (GAO SP): Resources and needs match Product design is stable Production processes are mature Framework for Assessing the Acquisition Function (GAO G) 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 WorkBid Protests

Page 7 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 WorkBid Protests

Page 8 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 WorkBid Protests

Page 9 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 ) 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 WorkBid Protests

Page 10 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 WorkBid Protests

Page 11 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 Unlike GAO’s other work, bid protests are triggered by company complaints Introduction to GAO GAO’s Federal Procurement WorkBid Protests

Page 12 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 WorkBid Protests

Page 13 Key Bid Protest Statistics Fiscal Year 2010 Cases Filed2,229 Merit (Sustain + Deny) Decisions441 Number of Sustains82 Sustain Rate19% Effectiveness Rate42% Alternative Dispute Resolution (ADR) Cases Used159 ADR Success Rate80% Hearings61 cases (10%) Introduction to GAO GAO’s Federal Procurement WorkBid Protests

Page 14 GAO on the Web Web site: Contact Chuck Young, Managing Director, Public Affairs, (202) , U.S. Government Accountability Office 441 G Street NW, Room 7149, Washington, D.C. Copyright This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately. For more information, contact Bill Woods,