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Acquisition Reform: Implementation of Key Aspects of the Federal Acquisition Streamlining Act of 1994 (Letter Report, 03/09/98, GAO/NSIAD-98-81).

Pursuant to a legislative requirement, GAO reviewed the effectiveness of
actions taken to implement the Federal Acquisition Streamlining Act
(FASA) of 1994, focusing on whether selected federal organizations were:
(1) reducing unique purchasing requirements; (2) increasing the use of
simplified acquisition procedures; and (3) obtaining goods and services
faster while reducing in-house procedures.

GAO noted that: (1) no uniform procurement data were being collected
centrally to adequately assess whether FASA's purposes were being
achieved; (2) data for each measure were not always available for the
eight federal organizations; (3) accordingly, GAO's analyses had
variations; (4) certain organizations had introduced acquisition
streamlining initiatives before FASA's implementation, and they had
several years of data available for some measures; (5) for other
measures, only one year of data was available, and that provides a
baseline for comparing subsequent years' data; (6) despite limitations,
GAO's measures indicate that the organizations it reviewed were working
toward achieving key FASA purposes; (7) to reach more meaningful
conclusions on the extent to which these key FASA purposes are being
achieved, additional data would have to be collected and examined for
subsequent fiscal years; and (8) the following is a summary of results
linked to key FASA purposes: (a) reduce unique purchasing requirements;
(b) requests for submission of cost or pricing data decreased at two of
three Department of Defense (DOD) locations, while little change was
noted DOD-wide; (c) sufficient information was not available to
determine whether acquisition of commercial items had increased; (d)
increase use of simplified acquisition procedures; (e) use of simplified
acquisition procedures, including the use of purchase cards, increased
at most locations; (f) obtain goods and services faster and reduce
in-house purchasing cost; (g) the number of bid protests declined at
most locations; (h) the time needed to award a contract had generally
decreased, thereby expediting the purchases of goods and services; (i)
sufficient data were not available to make a definitive observation
regarding in-house purchasing costs; and (j) additional data would have
to be available and examined for subsequent fiscal years.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-98-81
     TITLE:  Acquisition Reform: Implementation of Key Aspects of the 
             Federal Acquisition Streamlining Act of 1994
      DATE:  03/09/98
   SUBJECT:  Procurement regulation
             Federal procurement
             Procurement practices
             Procurement records
             Cost analysis
             Data collection
             Cost effectiveness analysis
IDENTIFIER:  DOD Contract Action Data System
             
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Cover
================================================================ COVER


Report to Congressional Committees

March 1998

ACQUISITION REFORM -
IMPLEMENTATION OF KEY ASPECTS OF
THE FEDERAL ACQUISITION
STREAMLINING ACT OF 1994

GAO/NSIAD-98-81

Acquisition Reform

(707171)


Abbreviations
=============================================================== ABBREV

  ASC - Aeronautical Systems Center
  DAWIA - Defense Acquisition Workforce Improvement Act of 1990
  DOD - Department of Defense
  DOE - Department of Energy
  DSCC - Defense Supply Center, Columbus
  EPA - Environmental Protection Agency
  FASA - Federal Acquisition Streamlining Act of 1994
  GSA - General Services Administration
  MICOM - Missile Command
  MSFC - Marshall Space Flight Center
  NASA - National Aeronautics and Space Administration
  NAVAIR - Naval Air Systems Command

Letter
=============================================================== LETTER


B-274611

March 9, 1998

Congressional Committees

The Federal Acquisition Streamlining Act of 1994 (FASA) contained
more than 200 sections changing the laws that govern how federal
agencies annually acquire almost $200 billion in goods and services. 
The act required us to evaluate the effectiveness of actions taken to
implement FASA.  To address this mandate, we determined whether
selected federal organizations were (1) reducing unique purchasing
requirements, (2) increasing the use of simplified acquisition
procedures, and (3) obtaining goods and services faster while
reducing in-house purchasing cost. 


   BACKGROUND
------------------------------------------------------------ Letter :1

FASA provided the executive branch with tools to improve the process
for acquiring goods and services.  FASA's changes were implemented in
revisions to federal acquisition regulations, directives, and
instructions.  All changes directed by FASA were to apply to
government acquisitions by October 1, 1995.  To determine the extent
that selected FASA key purposes were being achieved, we selected
procurement measures that, for the most part, had been identified by
the Office of the Secretary of Defense's Acquisition Reform
Benchmarking Group and the Procurement Executives' Working Group of
the President's Management Council as indicators of the progress in
streamlining the government's acquisition system.  We discussed the
use of our selected measures with congressional staff, agency and
service officials, and experts in the field of government
procurement. 

To determine whether selected federal organizations were taking
actions to implement FASA purposes, we collected procurement data for
seven measures.  Figure 1 shows the linkage of these measures to
selected key FASA purposes. 

   Figure 1:  Selected Key FASA
   Purposes and Related
   Procurement Measures

   (See figure in printed
   edition.)

We collected procurement data at eight selected federal organizations
to determine their status in achieving key FASA purposes.  Also, for
several measures, we added overall Department of Defense (DOD) data
for comparative purposes.  See appendix I for additional details. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :2

No uniform procurement data were being collected centrally to
adequately assess whether FASA's purposes were being achieved.  Data
for each measure were not always available for the eight federal
organizations.  Accordingly, our analyses had variations.  Certain
organizations had introduced acquisition streamlining initiatives
before FASA's implementation, and they had several years of data
available for some measures.  For other measures, only 1 year of data
was available, and that provides a baseline for comparing subsequent
years' data. 

Despite data limitations, our measures indicate that the
organizations we reviewed were working toward achieving key FASA
purposes.  To reach more meaningful conclusions on the extent to
which these key FASA purposes are being achieved, additional data
would have to be collected and examined for subsequent fiscal years. 
The following is a summary of results linked to key FASA purposes. 

Reduce unique purchasing requirements: 

  -- Requests for submission of cost or pricing data decreased at two
     of three defense locations, while little change was noted
     DOD-wide. 

  -- Sufficient information was not available to determine whether
     acquisition of commercial items had increased. 

Increase use of simplified acquisition procedures: 

  -- Use of simplified acquisition procedures, including the use of
     purchase cards, increased at most locations. 

Obtain goods and services faster and reduce in-house purchasing cost: 

  -- The number of bid protests declined at most locations. 

  -- The time needed to award a contract had generally decreased,
     thereby expediting the purchases of goods and services. 

  -- Sufficient data were not available to make a definitive
     observation regarding in-house purchasing costs.  Additional
     data would have to be available and examined for subsequent
     fiscal years. 


   REDUCE UNIQUE PURCHASING
   REQUIREMENTS
------------------------------------------------------------ Letter :3

To determine whether selected federal organizations had reduced the
use of unique purchasing requirements, we collected information on
requests for cost and pricing data and the acquisition of commercial
items at three defense organizations.  Requests for cost or pricing
data decreased from fiscal year 1991 to 1996 at two of the
organizations, while little change was noted at the other
organization.  DOD-wide statistics, which we have included for
comparative purposes, also show relatively little change.  Sufficient
information was not available to determine whether acquisition of
commercial items had increased.  Therefore, our data show only
baseline information.  Increasing government purchases of commercial
items has been a major acquisition reform effort that is expected to
streamline and reduce government unique requirements.  However,
defense organizations only began reporting data on commercial item
acquisitions in fiscal year 1996.  Civilian organizations started
reporting such data the following year. 


      CERTIFIED COST OR PRICING
      DATA
---------------------------------------------------------- Letter :3.1

In the absence of adequate price competition, certified cost or
pricing data can help ensure that the government receives a fair and
reasonable price.  Because production and maintenance of such data
can be costly, FASA sought to limit the circumstances under which
this data would be required.  In fiscal year 1991, the threshold for
obtaining certified cost or pricing data was increased to $500,000
for DOD, the Coast Guard, and the National Aeronautics and Space
Administration (NASA), but remained at $100,000 for civilian
organizations.  FASA raised the threshold to $500,000 governmentwide
and promoted the use of alternatives to cost or pricing data for
determining whether a price is reasonable.  The act emphasized that
cost or pricing data should not be requested if specific exemptions
apply--such as the presence of adequate price competition. 

We did not include civilian organizations in our analysis, as none of
the selected sites in our review collected information on cost or
pricing data.  Also, we excluded the Defense Supply Center, Columbus
(DSCC) from our analysis because less than 1 percent of its actions
exceeded $500,000.  Figure 2 shows the percent of the
actions--definitive contracts and certain modifications--over
$500,000 for which cost or pricing data were reported to have been
required. 

   Figure 2:  Certified Cost or
   Pricing Data for Contract
   Actions Over $500,000 (fiscal
   years 1991-96)

   (See figure in printed
   edition.)

\a MICOM is now the Aviation and Missile Command. 

The percent of contracting actions for which cost or pricing data
were obtained decreased from fiscal year 1991 to 1996 at the Naval
Air Systems Command (NAVAIR) and the Aeronautical Systems Center
(ASC), while little material change was noted at the Missile Command
(MICOM).  DOD-wide statistics, which we have included for comparative
purposes, also show relatively little change. 


      COMMERCIAL ITEM ACQUISITIONS
---------------------------------------------------------- Letter :3.2

The purchase of commercial items eliminates the need to use detailed
government specifications and standards and allows the government to
obtain state-of-the-art commercial technology.  Advocates of
commercial item acquisitions claim substantial savings are possible. 

FASA stated a preference for the procurement of commercial items. 
Defense organizations began reporting information on the procurement
of commercial items in fiscal year 1996.  Figure 3 contains
information on the procurement of commercial items at three of the
four defense organizations we visited.  For comparative purposes, we
have also included data for DOD.  We excluded DSCC, since only 1.6
percent of its total actions--commercial and noncommercial--were over
$25,000 for fiscal year 1996.  The Department of Energy (DOE), the
Environmental Protection Agency (EPA), the General Services
Administration (GSA), and the Marshall Space Flight Center (MSFC)
were not included in our analysis because they did not begin
reporting commercial item acquisitions until fiscal year 1997. 

   Figure 3:  Acquisition of
   Commercial Items Costing Over
   $25,000 (fiscal year 1996)

   (See figure in printed
   edition.)

Because agencies were only beginning to collect data on commercial
item acquisitions, data were not available to measure whether the
procurement of such items has increased. 


   INCREASE USE OF SIMPLIFIED
   ACQUISITION PROCEDURES
------------------------------------------------------------ Letter :4

Use of simplified acquisition procedures, including the use of
purchase cards, increased at most selected federal organizations.\1


--------------------
\1 Simplified acquisition procedures also include the use of blanket
purchase agreements, that can be used like charge accounts, and
pocket-size purchase order forms for over-the-counter purchases. 


      SIMPLIFIED ACQUISITION
      PROCEDURE ACTIONS
---------------------------------------------------------- Letter :4.1

FASA expanded the use of simplified acquisition procedures to
acquisitions costing between $25,000 and $100,000 when it established
a simplified acquisition threshold of $100,000.  Prior to enactment
of FASA, the threshold had been set at $25,000.  Simplified
acquisition procedures permit streamlined competition with less
paperwork and reduced processing times. 

Figure 4 shows the number of times simplified acquisition procedures
were used in acquisitions ranging from $25,000 to $100,000.  For
comparative purposes, data for DOD is also shown.  No statistics are
shown for EPA, as data were not available for fiscal year 1996. 

   Figure 4:  Use of Simplified
   Acquisition Procedures (fiscal
   year 1996)

   (See figure in printed
   edition.)

Without the increased threshold, acquisitions illustrated in figure 4
would have required the use of more complex procedures.  DOD's 26,800
simplified acquisition procedure actions represent 17 percent of all
its actions between $25,000 and $100,000.  Data for 1 full year under
the increased threshold should serve as a baseline for comparing
subsequent years' data. 


      PURCHASE CARD ACTIONS
---------------------------------------------------------- Letter :4.2

The use of a government purchase card is one of the simplest forms of
a simplified acquisition procedure.  In December 1994, a FASA
implementing regulation made using these cards the preferred buying
method for micro-purchases--procurement actions valued at $2,500 or
less.  Figure 5 shows the number of purchase card actions during
fiscal years 1995-96. 

   Figure 5:  Purchase Card
   Actions (fiscal years 1995-96)

   (See figure in printed
   edition.)

\a According to a headquarters Defense Logistics Agency official,
DSCC data are primarily base support actions.  Most micro-purchase
actions are excluded as they are processed through an automatic
disbursement system that makes payments through electronic fund
transfers. 

\b ASC data include all actions from Wright-Patterson Air Force Base. 

\c DOE totals include actions by the Department's management and
operating contractors as well as by DOE. 

The number of purchase card actions increased at most activities we
visited.  This increase is an indication of progress being made in
simplifying the acquisition process for selected procurement actions. 


   OBTAIN ITEMS FASTER AND REDUCE
   IN-HOUSE PURCHASING COST
------------------------------------------------------------ Letter :5

The number of bid protests declined at most selected procuring
organizations.  Also, the time needed to award a contract generally
decreased, thus expediting the purchase of goods and services for our
selected federal organizations.  Sufficient data were not available
to make definitive observations regarding in-house purchasing costs
at these organizations. 


      NUMBER OF BID PROTESTS
---------------------------------------------------------- Letter :5.1

Formal bid protests may be filed with the soliciting agency, federal
courts, and GAO.\2 Adjudication of formal bid protests can be costly
and time-consuming.  FASA sought to reduce the number of protests by
establishing a more meaningful debriefing process for explaining to
vendors why they were not selected for the award of a contract. 

Figure 6 shows the annual number of bid protests filed during fiscal
years 1993-96 for the sites we visited.  Protest data should not be
compared among organizations, as complete data were not readily
available at each site.  Figure 7 shows, for all government
organizations, the number of bid protests filed annually with GAO
during fiscal years 1993-97. 

   Figure 6:  Bid Protests at
   Selected Procuring Activities
   (fiscal years 1993-96)

   (See figure in printed
   edition.)

\a Fiscal year 1993 totals do not include protests filed with the
agency as such records were not available. 

\b According to GSA, fiscal year 1995 protest data are incomplete. 
Annual protest statistics for the remaining years include all data
that were readily available at GSA headquarters. 

The number of bid protests declined at most selected procuring
organizations. 

   Figure 7:  Bid Protests Filed
   With GAO (fiscal years 1993-97)

   (See figure in printed
   edition.)

The number of bid protests filed with GAO declined significantly from
fiscal year 1993 to 1997. 


--------------------
\2 Until recently, protests on information technology acquisitions
could also be filed with the General Services Administration Board of
Contract Appeals. 


      PROCUREMENT ADMINISTRATIVE
      LEAD TIME
---------------------------------------------------------- Letter :5.2

This measure is used by defense and civilian agencies to determine
the responsiveness of their procurement organizations.  In
determining the extent to which our selected organizations had
streamlined their response time, we noted that the procurement
administrative lead time was being measured in a variety of ways. 
Therefore, direct comparisons should not be made among the
organizations shown in figure 8.  EPA data were excluded, as these
data were incomplete.  DOE did not collect procurement administrative
lead time data. 

Figure 8 shows procurement administrative lead time during fiscal
years 1993-96 at six of the sites we visited. 

   Figure 8:  Procurement
   Administrative Lead Time
   (fiscal years 1993-96)

   (See figure in printed
   edition.)

\a NAVAIR totals are the average of totals for research, development,
test, and evaluation; other services; and supplies and equipment. 

\b GSA totals are the average of the individual services and the
supplies and equipment commodity codes with the greatest activity at
the Federal Supply Service. 

\c MICOM totals are only for spares and repair parts.  The fiscal
year 1993 total is based on
11 months of data. 

\d ASC totals are based on all contractual actions from ASC systems
at Wright-Patterson and Eglin Air Force Bases and research and
development contracts at Wright Laboratory. 

\e MSFC totals are based on data from contracts, grants, cooperative
agreements, purchase orders, charge account orders, purchase card
orders, and delivery orders, but not modifications. 

\f DSCC totals are based on stocked items and direct vendor delivery
items. 

Procurement administrative lead times were reduced for the goods and
services covered at five of the sites. 


      IN-HOUSE PURCHASING COST
---------------------------------------------------------- Letter :5.3

We computed an in-house purchasing cost for selected DOD
organizations by dividing the personnel cost of the professional
acquisition workforce by the value of contract actions over $25,000,
less research, development, testing, and evaluation costs.\3 The DOD
professional acquisition workforce is defined by the Defense
Acquisition Workforce Improvement Act of 1990 (DAWIA).\4 We limited
our analysis to DOD organizations, as the act does not apply to
civilian agencies.\5

Figure 9 shows the in-house purchasing cost in cents per contract
dollar, and figure 10 shows the number of professional acquisition
personnel. 

   Figure 9:  In-house Purchasing
   Cost (fiscal years 1993-96)

   (See figure in printed
   edition.)

When assessing the government's in-house purchasing cost, it is
important to separately examine changes in the actual number of DAWIA
personnel, as shown in figure 10.  For example, NAVAIR's in-house
purchasing cost increased from fiscal year 1993 to 1996, but its
actual number of DAWIA personnel declined.  Additional data would
have to be examined for subsequent years to draw meaningful
observations regarding the in-house purchasing cost. 

DAWIA defined the types of positions that are included in the
professional acquisition workforce.  Each employee within this
workforce must meet specific experience, training, and education
requirements.  Figure 10 shows the number of DAWIA personnel for whom
we obtained personnel costs. 

   Figure 10:  DAWIA Acquisition
   Personnel (fiscal years
   1993-96)

   (See figure in printed
   edition.)

From fiscal year 1993 to 1996, the number of DAWIA employees declined
at NAVAIR and at MICOM.  The number of DAWIA employees increased at
the DSCC, primarily due to the merger of the Defense Logistics
Agency's Defense Electronics Supply Center in Dayton with the DSCC. 


--------------------
\3 Our analysis was based on contract actions over $25,000 as these
data were readily available from the Defense Contract Action Data
System.  We excluded research, development, testing, and evaluation
costs, as DOD had used this approach in its cost analyses.  However,
even when we included this cost, we found that the in-house
purchasing cost from fiscal year 1993 to 1996 still increased at two
of these sites, while there was no material change at the remaining
site.  We recognize that other methods for computing in-house cost
exist. 

\4 DAWIA required the Secretary of Defense to designate professional
acquisition personnel occupational categories.  The categories in
this professional workforce include accountants, budget analysts,
computer specialists, engineers, and contracting officers.  About 20
percent of the employees in defense acquisition organizations have
been designated as the professional workforce. 

\5 The Clinger-Cohen Act of 1996 expanded requirements similar to
those in DAWIA to civilian agencies' acquisition workforces. 


   CONCLUSIONS
------------------------------------------------------------ Letter :6

As FASA did not have to be fully implemented until fiscal year 1996,
only limited data were available for our analyses.  Using these data,
our analyses show a snapshot of the extent to which selected key FASA
purposes were being achieved at selected organizations at the end of
fiscal year 1996.  To reach more meaningful conclusions on the extent
to which these key FASA purposes are being achieved, additional data
would have to be collected and examined for subsequent fiscal years. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :7

We asked the Departments of Defense and Energy, EPA, GSA, and NASA to
review and comment on a draft of this report.  At our exit
conference, DOD officials stated that they concurred with the views
expressed in our draft report concerning the summary of results
linked to key FASA purposes.  They noted, however, that results from
their Enterprise Acquisition and Technology Metrics showed
"significant baseline progress" being made in the acquisition reform
arena.  They stated that these results, including some fiscal year
1997 procurement data, could be found on the Department's Acquisition
Reform internet homepage--www.acq.osd.mil/ar.  Although the website
referred to by DOD does contain graphical displays of data, including
some with fiscal year 1997 information, we located only four measures
similar to the ones in our report.  As of February 26, 1998, none of
these four measures contained fiscal year 1997 data. 

DOE, GSA, and NASA each commented favorably on our report and also
offered several technical suggestions for clarifying data in the
report.  Their comments, which are reprinted in appendixes III, IV,
and V, respectively, were addressed by adding several footnotes to
the final report.  EPA did not comment on our draft report. 


---------------------------------------------------------- Letter :7.1

Appendix I describes our objective, scope, and methodology, and
appendix II describes the eight organizations from which we obtained
data for this report. 

We are sending copies of this report to the Secretaries of Defense,
the Army, the Navy, the Air Force, and Energy; the Administrator of
the National Aeronautics and Space Administration; the Director,
Defense Logistics Agency; the Administrators of the General Services
Administration and the Environmental Protection Agency; and the
Director, Office of Management and Budget.  We will also provide
copies to other interested parties upon request. 

Please contact me or my Assistant Director, Ralph C.  Dawn, at (202)
512-4841 if you or your staff have any questions concerning this
report.  Major contributors to this report are listed in appendix VI. 

David E.  Cooper
Associate Director
Defense Acquisitions Issues


List of Congressional Committees

The Honorable Fred Thompson
Chairman
The Honorable John Glenn
Ranking Minority Member
Committee on Governmental Affairs
United States Senate

The Honorable Strom Thurmond
Chairman
The Honorable Carl Levin
Ranking Minority Member
Committee on Armed Services
United States Senate

The Honorable Christopher S.  Bond
Chairman
The Honorable John F.  Kerry
Ranking Minority Member
Committee on Small Business
United States Senate

The Honorable Dan Burton
Chairman
The Honorable Henry A.  Waxman
Ranking Minority Member
Committee on Government Reform and Oversight
House of Representatives

The Honorable Floyd Spence
Chairman
The Honorable Ike Skelton
Ranking Minority Member
Committee on National Security
House of Representatives

The Honorable James M.  Talent
Chairman
The Honorable Nydia M.  Velazquez
Ranking Minority Member
Committee on Small Business
House of Representatives


OBJECTIVE, SCOPE, AND METHODOLOGY
=========================================================== Appendix I

The Federal Acquisition Streamlining Act of 1994 (FASA) mandated that
we evaluate and report on the effectiveness of actions taken to
implement the act.  To address this mandate, we determined whether
the selected federal organizations were (1) reducing unique
purchasing requirements, (2) increasing use of simplified acquisition
procedures, and (3) obtaining goods and services faster while
reducing in-house purchasing cost. 

To determine the extent the three FASA purposes were being achieved,
we selected procurement measures that, for the most part, had been
identified by the Office of the Secretary of Defense's Acquisition
Reform Benchmarking Group and the Procurement Executives' Working
Group of the President's Management Council as indicators of the
progress in streamlining the government's acquisition system.  We
discussed the use of our selected measures with congressional staff,
agency and service officials, and experts in the field of government
procurement.  Our analysis was based on seven measures, which are
linked to three key FASA purposes discussed in this report (see fig. 
I.1). 

   Figure I.1:  Selected Key FASA
   Purposes and Related
   Procurement Measures

   (See figure in printed
   edition.)

As uniform procurement data were not being collected centrally to
fully assess FASA's effectiveness, we collected and analyzed data at
five procuring organizations that annually reported large amounts of
contract dollars.  These organizations, along with their parent
organizations, are the Aeronautical Systems Center (Air Force); the
Defense Supply Center, Columbus (Defense Logistics Agency); the
Marshall Space Flight Center (National Aeronautics and Space
Administration); the Missile Command (Army);\1 and the Naval Air
Systems Command (Navy).  At these five sites, we interviewed
officials involved in procurement and collected documents and
procurement data.  To provide additional civilian agency coverage, we
performed limited work at three departments and agencies.  We
interviewed headquarters acquisition officials and analyzed
agencywide procurement data for a limited number of measures at the
Department of Energy (DOE), the Environmental Protection Agency
(EPA), and the General Services Administration (GSA).  In addition,
we also collected some overall procurement data from the Department
of Defense (DOD). 

To assess the validity of computerized data from our selected
organizations' automated systems, we obtained information on internal
controls over data input; processing; and output, such as built-in
automated edit checks; and on external reviews of the systems.  We
did not verify these data to original source documents. 

We issued written requests for procurement data to agency and service
officials.  In addition to site data, we also obtained procurement
data from the Defense Contract Action Data System and the Federal
Procurement Data System\2 and personnel data from the Defense
Manpower Data Center and the Office of Personnel Management.  We
discussed our data collection and subsequent analyses with
acquisition officials at each site and made revisions to our approach
in response to their comments. 

Data presented in our report should serve only as indicators of
trends and baselines, since the information was gathered from a
limited number of locations.  These data should not be projected to a
larger universe.  In addition, as executive agencies had introduced
acquisition streamlining initiatives before FASA implementation, it
was not possible to determine the extent to which FASA alone was
responsible for changes in acquisition at the selected federal
organizations. 

We performed our review between June 1996 and February 1998 in
accordance with generally accepted government auditing standards. 


--------------------
\1 Effective October 1, 1997, the Army's Aviation and Troop Command
was merged into the Missile Command, with the latter now designated
as the Aviation and Missile Command.  All Army data in our report
pertain solely to the former Missile Command. 

\2 As of February 23, 1998, fiscal year 1997 procurement data was not
available from either of these two data systems. 


ORGANIZATIONS THAT PROVIDED DATA
========================================================== Appendix II


   ARMY MISSILE COMMAND
-------------------------------------------------------- Appendix II:1

The Army Missile Command (MICOM), located in Huntsville, Alabama, is
one of five major commodity commands of the Army Materiel Command. 
MICOM's primary mission is to integrate systems acquisitions and
commodity management of missile and rocket systems and other assigned
materiel.  It also serves as the worldwide distributor of parts and
components for all of the Army's missile systems.  The Command
manages a number of combat optics systems and combat laser systems
and executes the Security Assistance and Logistics Assistance
Programs.  MICOM obligated approximately $3.1 billion for goods and
services in fiscal year 1996.  In October 1997, the Army Aviation and
Troop Command was consolidated at Huntsville, with MICOM, to form the
Aviation and Missile Command.  The new Command currently employs
about 6,700 people, including about 1,750 contractor personnel. 


   NAVAL AIR SYSTEMS COMMAND
-------------------------------------------------------- Appendix II:2

The Naval Air Systems Command (NAVAIR), one of seven major buying
commands in the Navy, is headquartered in Patuxent River, Maryland. 
The Command's mission is to acquire and support air weapon systems
that meet Navy and Marine requirements.  These systems include
aircraft, air-launched missiles, avionics, air-launched sonar and
mine-sweeping equipment, unmanned strike weapons, aerial vehicle and
target systems, and a joint program for the next generation fighter. 

The Command employs about 32,000 military and civilian personnel and
had procurement obligations of nearly $9.9 billion in fiscal year
1996. 


   AERONAUTICAL SYSTEMS CENTER
-------------------------------------------------------- Appendix II:3

The Aeronautical Systems Center (ASC), an Air Force Materiel Command
organization, is headquartered at Wright-Patterson Air Force Base,
Ohio, and consists of three components.  The first is the Air Force's
research, development, and acquisition operations for aeronautical
systems such as the F-15 and F-22 fighters, the B-1B and B-2 bombers,
and the C-17 cargo plane.  The second is the 88th Air Base Wing,
which is responsible for airfield operations and other services,
including maintenance of the 8,000- plus acres and nearly 1,600
buildings at Wright-Patterson.  The third is the 74th medical group,
which operates the Wright-Patterson medical center. 

The Center has a workforce of more than 9,000 military and civilian
employees and obligated over $16 billion in procurement actions in
fiscal year 1996. 


   DEFENSE SUPPLY CENTER, COLUMBUS
-------------------------------------------------------- Appendix II:4

The Defense Supply Center, Columbus (DSCC), a Defense Logistics
Agency organization, is one of the largest supply management and
procurement activities for spare parts in DOD.  The Center, located
in Columbus, Ohio, was created in 1996 when the former Defense
Electronics Supply Center in Dayton, Ohio, was merged with the former
Defense Construction Supply Center in Columbus. 

The Center's primary mission is to purchase spare parts used on
weapon systems such as planes, tanks, missile systems, and ships.  It
also purchases construction material, such as lumber, pipe, and
fencing.  In total, its employees manage over 1.8 million spare
parts.  The Center's managed items are shipped directly from
contractor facilities to customers or are stored at Defense Logistics
Agency distribution depots until requisitioned by customers. 

The Center employs about 3,000 people and had procurement obligations
of $788 million in fiscal year 1996. 


   MARSHALL SPACE FLIGHT CENTER
-------------------------------------------------------- Appendix II:5

The Marshall Space Flight Center (MSFC), located in Huntsville,
Alabama, is 1 of 10 National Aeronautics and Space Administration
(NASA) field installations or centers.  As a civilian agency, NASA is
responsible for maintaining and developing the government's space
transportation and propulsion systems.  The Center manages such NASA
projects as the space shuttle propulsion system program and the
reusable launch vehicle technology program.  Approximately 6,800
workers, including nearly 3,900 contractor employees, are currently
employed at MSFC.  The Center obligated about $2.2 billion for goods
and services in fiscal year 1996. 


   DEPARTMENT OF ENERGY
-------------------------------------------------------- Appendix II:6

The Department of Energy (DOE), headquartered in Washington, D.C., is
responsible for fostering a secure and reliable energy system for
this country and serving as a responsible steward of its nuclear
weapons.  In addition, the Department supports our country's
continued leadership in science and technology.  DOE employs about
15,000 federal workers, excluding the Federal Energy Regulatory
Commission.  In addition, about 105,000 workers are employed by DOE
management and operating contractors in government-owned,
contractor-operated facilities.  The Department obligated $17.8
billion for goods and services in fiscal year 1996, with about $13.1
billion being used to manage and operate the government-owned,
contractor-operated facilities. 


   ENVIRONMENTAL PROTECTION AGENCY
-------------------------------------------------------- Appendix II:7

The Environmental Protection Agency is headquartered in Washington,
D.C., and its mission is to protect human health and safeguard the
natural environment.  It works to clean the air, land, and water and
to prevent and reduce pollution nationally and globally by enforcing
environmental laws and working in partnership with state and local
governments, industry, and other organizations.  The Agency employs
over 17,000 people and obligated $1.1 billion for goods and services
in fiscal year 1996. 


   GENERAL SERVICES ADMINISTRATION
-------------------------------------------------------- Appendix II:8

The General Services Administration, headquartered in Washington,
D.C., is one of three central management agencies in the federal
government.  Its mission is to provide supplies, services, and
managed space to other federal departments and agencies.  In
addition, it manages the government's fleet of motor vehicles.  The
Administration employs over 14,000 workers nationwide and obligated
$6.3 billion for goods and services in fiscal year 1996. 




(See figure in printed edition.)Appendix III
COMMENTS FROM THE DEPARTMENT OF
ENERGY
========================================================== Appendix II




(See figure in printed edition.)Appendix IV
COMMENTS FROM THE GENERAL SERVICES
ADMINISTRATION
========================================================== Appendix II



(See figure in printed edition.)




(See figure in printed edition.)Appendix V
COMMENTS FROM THE NATIONAL
AERONAUTICS AND SPACE
ADMINISTRATION
========================================================== Appendix II


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix VI

NATIONAL SECURITY AND
INTERNATIONAL AFFAIRS DIVISION,
WASHINGTON, D.  C. 

Ralph C.  Dawn
Anne W.  Howe
Roy B.  Karadbil
Julia M.  Kennon
William M.  McPhail
Minette D.  Richardson

OFFICE OF GENERAL COUNSEL

John A.  Carter

CHICAGO FIELD OFFICE

Daniel J.  Hauser

ATLANTA FIELD OFFICE

Reginia S.  Grider

*** End of document. ***



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