Acquisition Reform

Obstacles to Implementing the Federal Acquisition Computer Network Gao ID: NSIAD-97-26 January 3, 1997

The Federal Acquisition Streamlining Act of 1994 mandated the creation of a Federal Acquisition Computer Network (FACNET) architecture to allow federal agencies and vendors to do business electronically in a standard way. FACNET is intended primarily for purchases valued at between $2,500 and $100,000. Federal officials and others expect many benefits from FACNET, including expanded contracting opportunities for small businesses, greater competition and lower prices for goods and services, shorter contract-processing times, simplified procurement processes, and greater federal productivity. This report discusses (1) federal agencies' use of FACNET, (2) benefits and drawbacks to using FACNET, (3) concerns about the act's requirements for FACNET, and (4) management obstacles to effective governmentwide implementation of FACNET.

GAO found that: (1) overall, the federal government has executed relatively few procurement actions through FACNET; (2) the Department of Defense executed the vast majority of all FACNET procurement actions that federal agencies have reported; (3) difficulties doing business through FACNET have overshadowed the benefits of using it; (4) officials from at least 14 of the 18 agencies GAO contacted rated the lack of a sound FACNET infrastructure, effective engineering and operational management, and a well-populated and fully functional centralized contractor registration database as great or very great obstacles to effective FACNET implementation; (5) officials of many federal agencies said the current FACNET approach is out of step with new, cost-effective technologies and buying practices; (6) although FACNET has, in some instances, resulted in lower prices and expanded access to vendors, agency officials and vendors often said that FACNET is not producing the benefits expected; (7) agencies' analyses have concluded that using FACNET to award contracts of $25,000 or less often takes longer and requires more resources than traditional simplified purchasing methods for such awards; (8) as mandated by FASA, FACNET implementation has focused primarily on competitive contract awards, requiring agencies to exchange information with multiple, often unknown vendors; (9) organizations with the most success in using electronic data interchange technology for purchasing, however, typically use it to transmit high-volume, routine, and repetitive transactions with a small group of known suppliers; (10) federal officials have stated that FASA's requirement to focus FACNET's implementation principally on competitive contract awards may not have been a good approach and has contributed significantly to FACNET's problems; (11) agencies and vendors have consistently cited leadership and management shortcomings as major reasons for delays and unresolved problems in FACNET implementation; and (12) agency officials also expressed considerable uncertainty about what the governmentwide strategy for FACNET implementation is.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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