Federal Procurement: Spending and Workforce Trends (30-APR-03,	 
GAO-03-443).							 
                                                                 
The federal government, comprised of more than 60 agencies and	 
nearly 1.7 million civilian workers, acquires most of its goods  
and services through contracts. Recent changes in what the	 
government buys, its contracting approaches and methods, and its 
acquisition workforce have combined to create a dynamic 	 
acquisition environment. Many of these recent changes enhance	 
contracting efficiency and offer a number of benefits, such as	 
reduced administrative burdens. However, GAO's past work has	 
found that if these changes are not accompanied by proper	 
training, guidance, and internal controls, agency procurements	 
may be at greater risk. While effectively managing contracts is  
always a key management responsibility, this responsibility is	 
more acute in those agencies that rely heavily on acquisitions to
accomplish their missions. The goal of this report is to identify
for Congress, the administration, and accountability		 
organizations those procurement-related trends and challenges	 
that may affect federal agencies. Specifically, GAO analyzed	 
recent federal procurement patterns, the use of various 	 
procurement methods, and changes in the acquisition workforce.	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-443 					        
    ACCNO:   A06735						        
  TITLE:     Federal Procurement: Spending and Workforce Trends       
     DATE:   04/30/2003 
  SUBJECT:   Federal procurement				 
	     Procurement policy 				 
	     Procurement practices				 
	     Labor force					 
	     Human resources utilization			 

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GAO-03-443

                                       A

Report to the Committee on Government Reform, House of Representatives,
and the Committee on Governmental Affairs, U. S. Senate

April 2003 FEDERAL PROCUREMENT Spending and Workforce Trends

GAO- 03- 443

Letter 1 Results in Brief 3 Trends in Federal Procurement Spending
Patterns 5 Emerging Trends in Procurement Methods and Approaches 10
Acquisition Workforce and Workload Trends 20 Conclusions 24 Agency
Comments and Our Evaluation 24

Appendixes

Appendix I: Scope and Methodology 26

Appendix II: Section 1* Department of Defense 32

Section 2* Department of the Air Force 42

Section 3* Department of the Army 51

Section 4* Department of the Navy 60

Appendix III: Department of Agriculture 69

Appendix IV: Department of Energy 79

Appendix V: Department of Health and Human Services 89

Appendix VI: Department of Justice 99

Appendix VII: Department of the Treasury 109

Appendix VIII: Department of Transportation 119

Appendix IX: Department of Veterans Affairs 129

Appendix X: General Services Administration 139

Appendix XI: National Aeronautics and Space Administration 149 Tables
Table 1: Agency Use of the Federal Supply Schedule Program 13

Table 2: Changes in the Extent Agencies Used FAR Part 12 to Acquire
Commercial Items, Fiscal Years 1997 through 2001 18 Table 3: Federal
Acquisition Personnel and Workload 21 Table 4: Information on Data
Elements 28

Figures Figure 1: Federal Contract Spending, Fiscal Year 2001 6 Figure 2:
Percent of Contract Dollars Spent on Services in Fiscal Year 2001 7

Figure 3: Acquisition of Goods and Services as a Percent of Agencies*
Discretionary Budget Resources, Fiscal Year 2001 9

Figure 4: Amount Spent Using the Federal Supply Schedule, Fiscal Year 1997
through Fiscal Year 2001 12 Figure 5: Governmentwide Use of Purchase Cards
15 Figure 6: Purchase Card Use in Fiscal Year 2001 16 Figure 7:
Performance- Based Service Contracting in Fiscal Year 2001 (by dollar
value) 19

Figure 8: Retirement Eligibility of Current Acquisition Workforce 23

Abbreviations

CPDF Central Personnel Data File DOD Department of Defense DOE Department
of Energy DOJ Department of Justice DOT Department of Transportation FAA
Federal Aviation Administration FAR Federal Acquisition Regulation FPDC
Federal Procurement Data Center FPDS Federal Procurement Data System FSS
Federal Supply Schedule GSA General Services Administration GWAC
governmentwide acquisition contract HHS Department of Health and Human
Services IT information technology NASA National Aeronautics and Space
Administration OMB Office of Management and Budget USDA Department of
Agriculture VA Department of Veterans Affairs

This is a work of the U. S. Government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. It may contain
copyrighted graphics, images or other materials. Permission from the
copyright holder may be necessary should you wish to reproduce copyrighted
materials separately from GAO*s product.

Letter

April 30, 2003 The Honorable Tom Davis Chairman The Honorable Henry A.
Waxman Ranking Minority Member Committee on Government Reform House of
Representatives

The Honorable Susan M. Collins Chairman The Honorable Joseph I. Lieberman
Ranking Minority Member Committee on Governmental Affairs United States
Senate

The federal government, one of the largest and most complex organizations
in the world, is comprised of more than 60 agencies and about 1.7 million
civilian workers. The fiscal year 2002 federal budget included more than
$1 trillion in discretionary budget resources, 1 which can be applied to
fund agency operations including the acquisition of goods and services.
Agencies acquire most of their goods and services through contracts that
specify the government*s needs or requirements, the cost or price agreed
upon by the government and the supplier, and other terms and conditions.

Beginning in the early 1990s, a number of factors emerged that created a
dynamic and challenging acquisition environment with ramifications that
are just beginning to be recognized. First, acquisition personnel

increasingly purchase services, such as information technology or
management support. Second, Congress passed several significant pieces of
reform legislation, including the Federal Acquisition Streamlining Act of

1 Discretionary budget resources reflect the budget amount that an agency
is appropriated for a current fiscal year plus the budget authority that
the agency carries over from prior fiscal years.

1994 2 and the Clinger- Cohen Act of 1996, 3 to provide agency procurement
officials with greater flexibility and tools to acquire goods and services
more efficiently. Third, the end of the Cold War and efforts to reduce the
size of government led to significant acquisition workforce reductions in
many agencies, most notably the Department of Defense (DOD). These
reductions, coupled with procurement reforms, have placed increasing
demands on the acquisition workforce. For example, contracting

specialists must have a greater knowledge of market conditions, industry
trends, and the technical details of the commodities and services they
procure.

This report is part of our effort to provide Congress, the administration,
and accountability organizations with insights into how these factors
contribute to the acquisition challenges federal agencies face. To do so,
we analyzed (1) recent federal procurement patterns, (2) the use of
various procurement approaches and methods, and (3) changes in the
acquisition workforce and contracting actions. Our analysis covers the 5-
year period that includes fiscal year 1997 through fiscal year 2001, the
latest year for which complete data were available, and focuses on the 10
federal agencies that spent the most on contracts during fiscal year 2001.

We compiled this information from various sources, including the General
Services Administration*s (GSA) Federal Procurement Data System (FPDS),
which is the government*s repository for federal contract information; the
Office of Management and Budget*s (OMB) MAX Budget Information System,
which is used to collect, validate, analyze, model, and publish federal
budget information; the Office of Personnel Management*s Central Personnel
Data File (CPDF), which is the government*s human

resources reporting system; agency officials; and Inspector General
reports. We did not verify these data independently. Unless otherwise
noted, all data in the report are reflected in constant fiscal year 2001 2
P. L. 103- 355, Oct. 13, 1994. The Federal Acquisition Streamlining Act of
1994 authorized,

among other things, federal agencies to enter into multiple award, task-
and delivery- order contracts for goods and services. These contracts
provide agencies with a great deal of flexibility in buying goods or
services while minimizing the burden on government contracting personnel
to negotiate and administer contracts.

3 P. L. 104- 106, Feb. 10, 1996. The Clinger- Cohen Act of 1996
authorized, among other things, the use of multiagency contracts and
governmentwide acquisition contracts to facilitate purchases of
information technology- related products and services such as network

maintenance and technical support, systems engineering, and integration
services.

dollars. More information on our scope and methodology may be found in
appendix I.

This report does not reflect changes in agency missions, organizational
structures, budgets, contracting actions, or personnel resulting from the
creation of the Department of Homeland Security. This department,
established on January 24, 2003, combined 22 federal agencies specializing
in various missions, such as law enforcement, border security, biological
research, computer security, and disaster mitigation. With an anticipated
budget of almost $40 billion and an estimated 170,000 employees, the
department is expected to be the third largest federal agency, with the
potential for some of the government*s most extensive acquisition
requirements.

Results in Brief Federal agencies procured more than $235 billion in goods
and services during fiscal year 2001, reflecting an 11 percent increase
over the amount

spent 5 years earlier. Additionally, federal agencies spent almost $14
billion using purchase cards in fiscal year 2001. Further growth in
contract spending, at least in the short term, is likely given the
President*s request for additional funds for defense and homeland
security, agencies* plans to update their information technology systems,
and other factors. Overall, contracting for goods and services accounted
for about 24 percent of the government*s discretionary resources in fiscal
year 2001; however, for the four agencies that spent the most, contracting
accounted for between 34 percent and 73 percent of discretionary
resources.

Federal agencies continue to take advantage of streamlined acquisition
processes, relying, for example, on contracts awarded by other federal
agencies to obtain goods and services. The use of one such acquisition
tool, GSA*s Federal Supply Schedule, more than tripled from fiscal years
1997 through 2001 to about $14.4 billion. This growth was driven largely
by purchases of information technology and professional, administrative,
and management support services. Similarly, agencies are using purchase
cards for many of their low dollar value procurements. Purchase card use
increased 160 percent during the 5- year period we studied, to $13.8
billion in fiscal year 2001. According to our recent reviews, agencies may
have missed opportunities to take full advantage of the benefits offered
by these

methods and other contracting approaches, such as performance- based
service contracting, because of inadequate guidance and training, a weak
internal control environment, limited performance measures, and data that
agencies can use to make informed decisions.

During the last decade, the federal acquisition workforce has had to adapt
to changes in staffing levels, workloads, and the need for new skill sets.
Governmentwide data indicate that the acquisition workforce has declined
by about 5 percent over the 5- year period we studied, 4 and changes in
the acquisition workforce have been accompanied by changes in the types of
actions being managed. The total number of contracting actions processed

in fiscal year 2001 decreased 6 percent from fiscal year 1997 levels. 5
Our analysis indicates that while most agencies are processing fewer
smaller actions* those valued under $25,000* most agencies are also
managing an increased number of larger actions.

Addressing human capital issues in acquisition is not just a matter of the
size of the workforce. Agencies must also have the right people with the
right skills to successfully meet the increasingly complex demands

expected in the future. Meeting this human capital challenge has become a
priority at most of the agencies we reviewed, and agencies have made
progress in their strategic planning efforts. The need for planning is

underscored by the fact that all agencies face the prospect of losing many
of their skilled acquisition personnel over the next 5 years* with a
significant portion of the government*s acquisition workforce becoming
eligible to retire by fiscal year 2008.

4 This decline continues a trend beginning in the early 1990s. Overall,
the acquisition workforce declined 22 percent from 1991 to 2001. 5 A
contract action is defined as any action to obtain supplies or services
from sources outside the federal government that obligates or de-
obligates funds, including the award of

the contract; an order against an existing indefinite- delivery contract,
basic ordering agreement, or federal schedule contract; or a modification
of a contract or order such as a funding action, a change order, a
termination, or a cancellation.

Trends in Federal Federal agencies spent more than $235 billion in fiscal
year 2001 to buy

Procurement Spending goods and services ranging from weapon systems and
medical equipment

to information technology services and the operation of government
Patterns

facilities. This is an 11 percent increase over the amount spent in 1997.
This growth is expected to continue as federal agencies address emerging
threats and acquire enhanced information technology.

The significance of contracting in the federal government is reflected by
the sheer magnitude and the degree to which contracting consumes agencies*
discretionary resources. Overall, contracting for goods and

services accounted for about 24 percent of the government*s discretionary
resources in fiscal year 2001. However, contract spending consumed between
34 percent and 73 percent of the discretionary resources available to the
four largest acquisition spending federal agencies.

Recent Growth in Federal Federal contracting increased by 11 percent
during the 5- year period we

Procurement studied, from about $213 billion in fiscal year 1997 to over
$235 billion in

fiscal year 2001. 6 As shown in figure 1, DOD is the largest agency in
terms of contracting dollars spent, accounting for about two- thirds of
the government*s total spending on goods and services. In fiscal year
2001, DOD contracted for more than $152.6 billion of goods and services,
or

more than twice the amount spent by the next nine largest federal agencies
combined. The three military departments* the Air Force, Army, and Navy*
individually spend more than the largest civilian agency, the Department
of Energy (DOE).

6 Federal agencies spent about $140 billion on services and about $81
billion on goods for contracts valued at more than $25,000. FPDS does not
provide similar information for contracts valued at $25, 000 or less.

Figure 1: Federal Contract Spending, Fiscal Year 2001

Agencies outside our review that also report to FPDS,



$12.5 billion

5% 30% 

Other nine agencies in our review, $70.1 billion

65% 

Department of Defense, $152.6 billion Source: FPDS and FAA.

Note: GAO analysis of data provided by FPDS and FAA.

From fiscal years 1997 through 2001, purchases of goods increased by 17
percent. This was due in large measure to DOD*s increased spending on
weapon systems and other defense- related items. Overall, however,
agencies continued to purchase far more services than goods. Purchases of
services grew by about 11 percent, as agencies modernized their
information systems and obtained various professional, administrative, and
management support services. Nine of the 10 agencies we reviewed

increased their spending on services. The other agency, the National
Aeronautics and Space Administration (NASA), experienced a 4 percent
decrease, reflecting significant reductions in spending for research and
development and for professional, administrative, and management

support services. As shown in figure 2, agencies varied in the degree to
which they contracted for services. For example, DOE spent more than 98
percent of its contract dollars on services in fiscal year 2001, while the

Department of Agriculture*s (USDA) spending for services accounted for
only about 30 percent of its acquisition spending. 7

7 These figures represent total contracting actions over $25,000.

Figure 2: Percent of Contract Dollars Spent on Services in Fiscal Year
2001 USDA

VA DOD Treasury

DOJ GSA

DOT NASA

HHS DOE

020 40 60 80100

Source: FPDS and FAA. Note: GAO analysis of data provided by FPDS and FAA
for actions exceeding $25,000.

The degree to which individual agencies contract for services underscores
the importance of ensuring that service acquisitions are managed properly.
For example, we noted in May 2001 that some service procurements were not
being conducted efficiently, putting taxpayer dollars at risk. 8 Last
year, we reported that leading commercial companies had taken a strategic
approach to acquiring services, which in turn resulted in significant cost

savings and service improvements. 9 Taking a strategic approach involves a
range of activities* from developing a better picture of what the company
is spending on services, to taking an enterprisewide approach to procuring
services, to developing new ways of doing business. Based in part on our

8 Contract Management: Trends and Challenges in Acquiring Services, GAO-
01- 753T (Washington, D. C.: May 22, 2001). 9 Best Practices: Taking a
Strategic Approach Could Improve DOD*s Acquisition of Services, GAO- 02-
230 (Washington, D. C.: Jan. 18, 2002).

report, the National Defense Authorization Act For Fiscal Year 2002
required that DOD develop enhanced data collection and management
processes for services acquisitions. 10 Additionally, as will be discussed
in greater detail in the next section, Congress and the administration are
encouraging the use of performance- based approaches to acquiring services
as a way of improving the acquisition of services.

Acquisition Activity Varies Agencies rely to various degrees on private
vendors to provide the

by Agency goods and services needed to carry out their missions and
support their

operations. Overall, contracting for goods and services accounted for 24
percent of the government*s discretionary resources in fiscal year 2001.
For four agencies included in our review* DOE, NASA, GSA, and DOD* the
acquisition function is central to accomplishing their mission- related
goals. About 76 percent of DOE*s funds, for example, are spent on the
management and operation of over 30 government- owned laboratories and
other nuclear facilities. NASA contracts account for about 72 percent of
its

discretionary budget resources, and one of GSA*s primary missions is to
help federal agencies procure goods and services. However, spending on
contracts accounted for less than 23 percent at each of the other six
agencies in our review, as shown in figure 3.

10 P. L. 107- 107, section 801, Dec. 28, 2001.

Figure 3: Acquisition of Goods and Services as a Percent of Agencies*
Discretionary Budget Resources, Fiscal Year 2001

DOE NASA

GSA DOD Governmentwide

VA Treasury

DOJ USDA

DOT HHS

020 40 60 80100

Source: FPDS, OMB, and FAA. Note: GAO analysis of data provided by FPDS,
OMB, and FAA.

Further Growth in Contract Further growth in contract spending, at least
in the short term, is likely

Spending Is Likely given the President*s request for additional funds for
defense and

homeland security, agencies* plans to update their information technology
systems, and other factors. For example, the President*s fiscal year 2004
budget request reflects steady increases in DOD*s discretionary budget
authority, as well as increases in the budgets of other agencies involved
in homeland security. Additionally, the President*s budget request
reflects increased investment in information technology both for new
systems and for related support.

Further, the administration*s emphasis on competitive sourcing could
increase agencies* reliance on services provided by the private sector.
Competitive sourcing in the federal government is conducted under

guidance provided in OMB Circular A- 76, which outlines procedures for

determining whether to perform a commercial activity with government
employees or by contract. Additionally, the circular provides policy for
standardizing how and when an agency competes a commercial activity with
the private sector. OMB*s current 2- year goal is to compete 15 percent of
the federal government*s commercial- type positions. This effort could
result in significant increases in the number of service contracts, given
that in the past the private sector has won over half of the competitions.

Emerging Trends in The past decade has seen the emergence of several
procurement trends

Procurement Methods that have changed the way the government acquires
goods and services, as Congress and the administration have sought ways to
simplify the

and Approaches acquisition process, shorten procurement times, reduce
administrative

burdens and costs, and improve acquisition outcomes. In particular,
federal agencies are increasingly relying on contracts awarded by other
federal agencies to obtain goods and services and have turned to using
government purchase cards for many of their low dollar value procurements.
The

growth in these procurement methods has been dramatic, and is apparent in
nearly every agency we reviewed. Additionally, agencies have begun to
increase their use of commercial contracting methods and performancebased

acquisition approaches. As we have reported previously, taking full
advantage of these methods and approaches requires that agencies have
adequate guidance and training, a strong internal control environment, and
data that can be used by agency management to make informed decisions. 11
Our work at selected agencies has found that these conditions have not
always been present, thereby contributing to agencies missing
opportunities to achieve savings, reduce administrative burdens, and
improve acquisition outcomes.

11 Reports discussing challenges faced by individual agencies can be found
in section V of appendixes II through XI. Procurement reports specific to
purchase cards and the use of the federal supply schedule can be found in
section V of appendix X (GSA).

Agencies* Use of Contracts Federal agencies are increasingly using
contracts and acquisition services

Awarded by Other Agencies offered by other agencies, a fact that is most
notably demonstrated in the

growth of GSA*s Federal Supply Schedule and governmentwide acquisition
contracts (GWAC). These interagency contracts are being used in a variety
of situations, from those in which a single agency provides limited
contracting assistance to a more comprehensive approach in which the
provider agency*s contracting officer handles all aspects of the
procurement. Agencies charge users of these contracts a fee to cover
administrative expenses. GSA*s schedule program enables federal agencies
to quickly acquire goods and services, thereby helping them to, among

other objectives, reduce lead times and lower administrative costs. GSA
does this by awarding contracts to vendors and making these contracts
available for use by other agencies. 12 GWACs are intended to facilitate
purchases of information technology- related products and services, such
as network maintenance and technical support, systems engineering, and
integration services. 13

12 GSA does not require contractors to compete against one another to
receive schedule contracts. Rather, GSA negotiates contracts, including
pricing and other terms, with all contractors who meet the qualification
standards for the schedule. Generally, contracting officers may place
orders for products against the schedule without having to solicit
competitive quotes or determine fair and reasonable prices, thereby
allowing them to fulfill their agencies* needs quickly and easily.
However, for purchases above a certain threshold, it

is advantageous for the ordering office to seek a price reduction and
consider additional contractors. Further, for service contracts that are
valued at more than $2,500 and require a statement of work, GSA
established special ordering procedures under the schedules program that
require agency personnel to solicit quotes from at least three contractors
and evaluate the mix and price of the labor categories being offered,
among other things.

13 The sponsoring agency awards the contract, and other agencies order
from it. GWACs have been operated at the Departments of Commerce and
Transportation and at NASA, GSA, and the National Institutes of Health.
See Contract Management: Interagency Contract Program Fees Need More
Oversight, GAO- 02- 734 (Washington, D. C.: July 25, 2002). However, as of
2002, the Department of Transportation no longer sponsors a GWAC.

As shown in figure 4, sales under the schedule program have more than
tripled over the past 5 years, increasing from $4.3 billion in fiscal year
1997 to about $14.4 billion in fiscal year 2001. Agency officials at each
of the

agencies we reviewed reported increases in their use of the schedules
program over the past 5 years, driven largely by increased purchases of
information technology and professional, administrative, and management

support services.

Figure 4: Amount Spent Using the Federal Supply Schedule, Fiscal Year 1997
through Fiscal Year 2001

16 Dollars in billions

12 8 4 0

1997 1998 1999 2000 2001

Fiscal year

Total Goods Services

Source: FPDS and FAA. Note: GAO analysis of data provided by FPDS and FAA
for actions exceeding $25,000.

As shown in table 1, DOD and GSA, the largest users of the schedules
program, accounted for about 75 percent of schedule sales in fiscal year
2001. GSA*s increased share is largely attributable to the growth of GSA*s

Federal Technology Service, which places orders under the schedule for
information technology services and equipment on behalf of other federal
agencies. However, orders placed by the Federal Technology Service are
counted as spending by GSA, rather than as spending by the federal agency
that will ultimately receive the service or equipment.

Table 1: Agency Use of the Federal Supply Schedule Program Fiscal year

Change Agency 1997 2001 (percent)

DOD $1,853 $6,489 250 GSA 498 4,274 758 VA a 783 668 -15 DOJ 234 470 101
Treasury 94 324 245 DOT 167 242 45 NASA 32 179 459 HHS 42 159 279 DOE 41
136 232 USDA 38 129 239 Governmentwide 4, 324 14, 436 234 Source: FPDS and
FAA. Notes: GAO analysis of data provided by FPDS and FAA for actions
exceeding $25, 000. Dollars in millions, shown in constant fiscal year
2001 dollars. a VA officials noted that in addition to figures reflected
in table 1, VA*s prime vendors for

pharmaceuticals and medical/ surgical supplies make extensive use of the
schedule program to satisfy VA*s requirements.

Agency officials also reported that their use of GWACs increased
considerably over the 5- year period between fiscal years 1997 and 2001.
For example, USDA reported an increase from about $5.1 million to $44
million, and Treasury reported an increase from $92 million to $155
million. Officials at the other eight agencies we reviewed reported that
they also increased their use of GWACs; however, they could not provide
detailed GWAC information because this spending was not an integral part
of their management information systems. While GSA officials indicated
that they

have not modified the FPDS to collect specific information on GWAC
spending, several officials at other agencies stated that they either are
collecting or will begin to collect additional information on their
agencies* GWAC use.

While use of these interagency contracting methods can allow agencies to
meet their needs quickly, our past work has shown that agencies are not
adequately adhering to guidelines on competition. 14 Further, recent
agency Inspector General reports noted that DOD, VA, and NASA personnel
did not consistently follow procedures intended to promote competition or
ensure fair and reasonable prices when using these interagency contract
methods to acquire information technology services, medical equipment, or
research

and development projects. 15 Purchase Cards Purchase card spending has
increased significantly governmentwide.

This program provides federal agencies a low- cost and efficient means for
quickly obtaining goods and services directly from vendors.

Under the Federal Acquisition Regulation, the commercial purchase card is
now the preferred method of paying for micropurchases. 16 The purchase
card may also be authorized to be used in greater dollar amounts and may
be used to make payments under existing contracts.

14 Contract Management: Not Following Procedures Undermines Best Pricing
Under GSA*s Schedule, GAO- 01- 125 (Washington, D. C.: Nov. 28, 2000). 15
For more information, see DOD*s Inspector General reports Multiple Award
Contracts for Services, Report No. D- 2001- 189 (Washington, D. C.: Sept.
30, 2001) and Acquisition: Contract Actions Awarded to Small Businesses,
Report No. D- 2003- 029 (Washington, D. C.: Nov. 25, 2002); VA*s Inspector
General report Evaluation of the Department of Veterans Affairs Purchasing
Practices, 01- 01855- 75 (Washington, D. C.: May 15, 2001); NASA*s
Inspector General report Multiple- Award Contracts, IG- 01- 040
(Washington, D. C.:

Sept. 28, 2001). 16 The Federal Acquisition Streamlining Act of 1994
established a micropurchase threshold of $2, 500.

As figure 5 shows, governmentwide purchase card use increased from $5.3
billion in fiscal year 1997 to $13.8 billion in fiscal year 2001* a 160
percent rise. Increases in purchase card use in the agencies we reviewed
ranged from 45 percent to 344 percent.

Figure 5: Governmentwide Use of Purchase Cards 15

Dollars in billions 10

5 0

1997 1998 1999 2000 2001 Fiscal year

Source: FPDS. Note: GAO analysis of FPDS data.

As figure 6 shows, agencies used purchase cards to varying degrees. DOD
was the largest user of purchase cards, spending about $6.1 billion in
fiscal year 2001. VA was the largest civilian agency user of the purchase
card program, spending about $3.8 billion. VA officials noted

that due to VA*s organizational structure 17 and its continuous need for
disposable medical and surgical supplies, purchase cards are one of VA*s
key procurement techniques and are used extensively as a payment
mechanism. Figure 6: Purchase Card Use in Fiscal Year 2001

7 Dollars in billions

6 5 4 3 2 1 0

NASA GSA

Treasury DOE

HHS DOT

DOJ USDA

VA DOD

Source: FPDS and FAA. Note: GAO analysis of data provided by FPDS and FAA.

17 In 2002, VA planned to spend about $22 billion to provide approximately
4.2 million veterans and family members with health care through 163 VA
hospitals and more than 850 outpatient clinics nationwide.

During the past 2 years, we found that significant internal control
weaknesses in several agency purchase card programs allowed cardholders to
make fraudulent, improper, abusive, or questionable

purchases that resulted in lost, missing, or misused government property.
18 Agencies are responding to the recommendations that we and others have
made regarding internal control weaknesses. For example, the Navy has
reduced the number of cardholders by more than 50 percent, from 59,000 in
June 2001 to 25,000 by March 2002, thus improving the likelihood of
effective program management. 19 Additionally, DOD has begun

implementing new training and approval processes. For example, DOD
implemented automated controls during fiscal year 2002 to help with
monitoring credit limits, cardholder reconciliation, and approving
officials*

review of monthly statements. Further, OMB requires that agencies provide
quarterly reports on their efforts to improve the management oversight of
government- issued purchase and travel cards.

Use of Streamlined In recent years, there has been a significant increase
in agencies* use of

Procedures to Acquire streamlined procedures to acquire commercial items.
Many procurement

Commercial Items reform advocates have recommended that federal agencies
purchase commercial items to save money and reduce acquisition time,
rather than pay companies to develop unique items for the government*s
use. The

Federal Acquisition Streamlining Act established a preference for the
acquisition of commercial items. 20 Because commercial items are subject
to competitive market forces, they may be acquired using streamlined
solicitation and evaluation procedures generally provided for under part
12

of the Federal Acquisition Regulation (FAR). 21 For example, contracting
officers may reduce the time needed to solicit bids and award contracts by
combining certain steps in the solicitation process, using streamlined

evaluation techniques, and eliminating certain administrative
requirements. 18 Government Purchase Cards: Control Weaknesses Expose
Agencies to Fraud and Abuse,

GAO- 02- 676T (Washington, D. C.: May 1, 2002). 19 Purchase Cards: Navy
Vulnerable to Fraud and Abuse but Is Taking Action to Resolve Control
Weaknesses, GAO- 03- 154T (Washington, D. C.: Oct. 8, 2002). 20 P. L. 103-
355, sections 8104 and 8203, Oct. 13, 1994.

21 Agencies also acquire commercial items using other procurement methods,
such as the Federal Supply Schedule program and purchase cards, or they
may use other simplified procedures provided for under the FAR.

In fiscal year 2001, the purchase of commercial items using FAR part 12
procedures accounted for 19 percent of the spending for goods and services
by federal agencies, up from 9 percent 5 years earlier. From fiscal year
1997 through fiscal year 2001, governmentwide use of part 12 procedures
increased by 148 percent. As shown in table 2, 9 of the 10 agencies in our
review increased their use of part 12 procedures by at least 100 percent.

Table 2: Changes in the Extent Agencies Used FAR Part 12 to Acquire
Commercial Items, Fiscal Years 1997 through 2001

Dollars in millions

Fiscal year Change Agency 1997 2001 (percent)

DOE $33 $273 727 VA 491 2,796 469 Treasury 177 981 454 DOT 297 1,595 437
DOJ 234 1,187 407 HHS 85 418 392 NASA 225 794 253 DOD 11,597 26,378 127
GSA 2, 121 4,301 103 USDA a 768 311 -60 Governmentwide 16,704 41,417 148
Source: FPDS and FAA. Note: All dollar figures have been converted to
constant 2001 dollars. a USDA officials indicated that this decrease was a
result of reclassifying certain items

as noncommercial.

Performance- Based Service Significant growth in service contracts has led
Congress and the

Contracting administration to encourage greater use of performance- based
service

contracting to achieve greater cost savings and better outcomes. Under
performance- based approaches, the contracting agency specifies the
outcome or result it desires and lets the contractor decide how best to
achieve the desired outcome. Performance- based contracts offer
significant benefits, such as encouraging contractors to innovate and find
cost- effective ways of delivering services. In fiscal year 2001, agencies

reported that 24 percent of their eligible service contracts, by dollar
value, were considered performance based.

There was wide variation in the extent to which agencies used performance-
based contracts. As figure 7 shows, 3 of the 10 agencies in our review
fell short of OMB*s goal that 10 percent of their eligible service
contracts be performance based in fiscal year 2001. 22

Figure 7: Performance- Based Service Contracting in Fiscal Year 2001 (by
dollar value)

70

Percent of eligible contracts considered performance based

60 50 40 30

FY 2001 Goal

20 10

0 a

b a

NASA DOE

DOD DOT

HHS DOJ

GSA USDA

Treasury VA

Governmentwide

Source: FPDS. Note: GAO analysis of data provided by FPDS for actions over
$25,000. a DOE and VA officials stated that their internal data systems
report a higher use of performance- based contracting in fiscal year 2001
than the data in FPDS. For example, DOE officials believed 77 percent

of their eligible contracts were performance based, while VA officials
believed their agency*s figure should be about 11 percent. b Figure
reflects data for DOT only; FAA could not provide performance- based
service contracting data

because it was not an integral part of its management information systems.

22 For fiscal year 2002, OMB established a goal that 20 percent, by dollar
value, of eligible service contracts over $25,000 be performance based.

We recently found that some agencies achieved only mixed success in
incorporating four basic performance- based attributes into their
contracts. 23 These attributes include describing desired outcomes rather
than how the services should be performed, setting measurable performance
standards, describing how the contractor*s performance will be evaluated,
and establishing positive and negative incentives, as appropriate. Our
review raised questions as to whether agencies have an adequate
understanding of performance- based contracting and how to take full
advantage of this approach. Agency officials themselves pointed to the

need for better guidance on performance- based contracting and better
criteria for identifying which contracts should be called *performance
based.* In response to our recommendations, the Office of Federal
Procurement Policy is developing new guidance to help agencies improve
their use of performance- based contracting.

Acquisition Workforce Over the last decade, the federal acquisition
workforce has had to adapt

and Workload Trends to changes in staffing levels, workloads, and the need
for new skill sets.

Procurement reforms have placed unprecedented demands on the acquisition
workforce. For example, contracting specialists are required to have a
greater knowledge of market conditions, industry trends, and the technical
details of the commodities and services they procure.

Governmentwide data indicate that in fiscal year 2001 both the number of
acquisition workforce employees 24 and the number of contract actions
declined slightly from fiscal year 1997 levels. However, the extent to
which these changes occurred varied from agency to agency. Ensuring that
agencies will have the right people with the right skills to successfully
meet

the increasingly complex demands expected in the future has become a
priority at most of the agencies we reviewed. While agencies still face
many hurdles, our recent work has found that most agencies have taken
steps to address their strategic human capital planning challenges. 25

23 Contract Management: Guidance Needed for Using Performance- Based
Service Contracting, GAO- 02- 1049 (Washington, D. C.: Sept. 23, 2002). 24
There is no widely accepted definition of what constitutes the federal
acquisition workforce, and agency definitions vary greatly. For this
report, GAO defined the acquisition workforce as agency personnel in 14
occupation codes, which include contracting officers, purchasing officers,
and procurement clerical support. The occupation codes we used to define
the acquisition workforce may be found in appendix I.

25 Acquisition Workforce: Status of Agency Efforts to Address Future
Needs, GAO- 03- 55 (Washington, D. C.: Dec. 18, 2002).

Current Acquisition As of September 2001, the federal acquisition
workforce included about

Workforce 103,000 individuals, reflecting an overall 5 percent decline
from 1997 levels.

As shown in table 3, changes in the acquisition workforce varied by
agency; for example, 6 of the 10 agencies we reviewed lost between 2
percent and 9 percent of their acquisition workforces, while the other 4
agencies increased their acquisition workforces by between 8 percent and
11 percent. DOD experienced the largest personnel decrease in its
acquisition workforce, declining by 9 percent to just over 68,500
personnel.

Table 3: Federal Acquisition Personnel and Workload Acquisition workforce
Changes in contract actions, fiscal years 1997 through 2001

Percent change in

Change in total Change in contract

Change in contract Total

workforce since contract actions

actions exceeding actions $25, 000

Agency Sept. 2001 fiscal year 1997

(percent) $25,000 (percent)

or less (percent)

Governmentwide 103, 053 -5 -6 26 -7 DOD 68,513 -9 5 27 4 USDA 5,703 -6 -79
25 -81 DOE 1, 449 10 4 19 -3 GSA 2, 743 11 -75 68 -82 HHS 2,490 9 -29 44
-31 DOJ 1, 457 -2 -11 26 -13 NASA 1,246 -4 -38 -12 -50 DOT 1, 514 -7 -37
27 -48 Treasury 2,561 8 12 15 11 VA 2,562 -6 29 -12 30 Source: OPM, FPDS,
and FAA.

Changes in the acquisition workforce have been accompanied by changes in
the types of actions being managed. The total number of contract actions
processed in fiscal year 2001 decreased 6 percent from fiscal year 1997
levels. As shown in table 3, our analysis indicates that while most
agencies are processing fewer smaller actions* those valued at less than
$25,000*

most agencies are also managing an increased number of larger actions.
Agencies have made far greater use of purchase cards for making their
smaller dollar purchases, which accounts for the declining rate of smaller
dollar actions. While we have not evaluated how these changes have
affected federal agencies as a whole, the DOD Inspector General noted

in 2000 that the increased contract workload was adversely affecting
contract oversight by creating imbalances and backlogs in closing out
completed contracts.

Agencies Showing Progress The changes in staffing levels and workload come
at a time when the role in Strategic Human Capital

of the government*s acquisition staff is changing considerably. Federal
Planning Efforts

agency officials expect their acquisition personnel to analyze business
problems and help develop strategies in the early stages of the
acquisition process. Industry and government experts recognize that a key
to making a successful transformation toward a more sophisticated
acquisition

environment is having the right people with the right skills. To
accomplish this, leading public organizations in the United States and
abroad have found that strategic human capital management must be the
centerpiece of any serious change management initiative. 26 Strategic
management of human capital is a key governmentwide initiative in the
President*s Management Agenda.

One aspect of strategic human capital planning is succession planning,
where an agency identifies its future needs in terms of workforce skills
and numbers. Our prior work has shown that when workforce reductions do
not consider future needs* such as a staff reduction at DOD during the
1990s* the result is a workforce that is not balanced with regard to
experience and skill sets. 27 The need for planning is underscored by the
fact that, similar to human capital challenges across a variety of
occupation categories, all agencies face the prospect of losing many of
their skilled

acquisition personnel over the next 5 years. As shown in figure 8, about
38 percent of acquisition personnel governmentwide are either already
eligible to retire or will be eligible by September 30, 2007. At DOD and
DOE* the two largest contracting agencies in our review* 39 percent of the
acquisition workforce will be eligible to retire by fiscal year 2008; at
the other eight agencies, between 30 to 36 percent of their current
workforces will be eligible to retire.

26 For additional information, see Exposure Draft: A Model of Strategic
Human Capital Management, GAO- 02- 373SP (Washington, D. C.: Mar. 15,
2002) and OPM*s Workforce Planning Model (http:// www. opm. gov/
worforceplanning/ wpfmodel. htm).

27 See Contract Management: Trends and Challenges in Acquiring Services,
GAO- 01- 753T (Washington, D. C.: May 22, 2001) and Human Capital: Major
Human Capital Challenges at the Departments of Defense and State, GAO- 01-
565T (Washington, D. C.: Mar. 29, 2001).

Figure 8: Retirement Eligibility of Current Acquisition Workforce 38% 43%



Currently eligible or eligible



by FY 2008

20%  Eligible FY 2008 through FY 2011

Eligible after FY 2011 Source: OPM.

Notes: GAO analysis of data from OPM*s Central Personnel Data File.
Percentages do not add to 100 due to rounding.

Our recent reviews of how agencies are addressing their future acquisition
workforce needs found that all of the agencies we reviewed have made
progress. 28 For example, the agencies have either published or drafted

human capital strategic plans for their overall workforces or for their
acquisition workforces, and some are revamping training, recruitment, and
retention programs to address future workforce needs. However, these
agencies have encountered challenges, in part due to shifting priorities,
missions, and budgets that make it difficult to predict with any certainty
the specific skills and competencies their acquisition workforces will
need. Further, many agencies simply lack good data on their workforces,
such as size and location, knowledge and skills, and attrition and
retirement rates. This information is critical to mapping out the current
condition of the workforce and deciding what needs to be done to ensure
that each agency has the right mix of skills and talent for the future.

28 Acquisition Workforce: Status of Agency Efforts to Address Future
Needs, GAO- 03- 55 (Washington, D. C.: Dec. 18, 2002) and Acquisition
Workforce: Department of Defense*s Plans to Address Workforce Size and
Structure Challenges, GAO- 02- 630 (Washington, D. C.: Apr. 30, 2002).

Conclusions Effectively managing federal contracts is essential to
ensuring that the more than $235 billion spent annually through contracts
provides highquality

goods and services that meet the users* needs in a timely fashion. While
managing spending effectively is always a key management responsibility,
the need for effective management is more acute in agencies that rely
heavily on acquiring goods and services to carry out their missions or
support their operations.

Changes in what the government buys, its contracting approaches and
methods, and its acquisition workforce combine to create a dynamic
acquisition environment. The purpose of introducing or expanding
streamlined purchase methods, such as GWACs, purchase cards, and

supply schedules, was to enhance contracting efficiency, reduce
administrative burdens, lower transaction costs, and shorten procurement
times. However, our work has found that the lack of proper training,
guidance, and internal controls can increase an agency*s procurement risk
and lead to reduced public confidence. While agencies are taking
corrective actions to address these concerns, many actions remain in the
early stages of implementation.

Agency Comments and We requested comments on a draft of this report from
each of the agencies

Our Evaluation we reviewed, as well as from the Office of Federal
Procurement Policy. Each agency provided comments, generally via
electronic mail. Agency officials concurred with our analyses and provided
technical comments,

which we incorporated as appropriate. Some agencies noted that their
internal data systems contained procurement data that differed from that
contained in the Federal Procurement Data System or contained workforce
data that differed from that reflected in the Central Personnel Data File.
For example, DOE and VA officials noted that their systems indicated
higher use of performancebased

contracting than the data contained in Federal Procurement Data System. We
have noted these differences where appropriate in the report.
Additionally, HHS and DOT officials noted that their definitions of their
acquisition workforces differed from what we used. Because there is no
commonly accepted definition of the acquisition workforce, we elected to
use a consistent definition, as discussed in our scope and methodology, to

better enable cross- agency comparisons.

We are sending copies of this report to the Director, Office of Management
and Budget; the Administrator, Office of Federal Procurement Policy; the
Secretaries of Agriculture, Defense, Energy, Health and Human Services,
Transportation, Treasury, and Veterans Affairs; the Administrator of
General Services; the Administrator, National Aeronautics and Space
Administration; the Attorney General; and interested congressional
committees. We will also provide copies to others on request. This report
will also be available at no charge on GAO*s Web site at http:// www. gao.
gov.

Major contributors to this report were Don Bumgardner, Chad Holmes, Kevin
Heinz, Robert L. Ackley, Julia Kennon, Gary Middleton, John W. Mingus,
Jr., John Van Schaik, Greg Wilmoth, and Suzanne Melancon.

If you have any questions about this report, please contact me at (202)
512- 4841 or Timothy J. DiNapoli at (202) 512- 3665.

William T. Woods Director, Acquisition and Sourcing Management

Appendi Appendi xes x I

Scope and Methodology To identify spending, procurement methods, and
acquisition workforce trends, we judgmentally selected 15 data elements.
These elements are not intended to be all- inclusive or exhaustive;
rather, they reflect data relevant to key issues and trends identified in
prior GAO reports or that provide basic information valuable to
understanding an agency*s procurement function and approach. We reviewed
these elements with senior procurement officials at each of the agencies
we reviewed; these officials generally agreed that such elements provided
useful and relevant information for gauging their agencies* procurement
activities.

We obtained data on these elements from the General Services
Administration*s Federal Procurement Data Center (FPDC), agency officials,
and the Office of Management and Budget (OMB). FPDC administers the
Federal Procurement Data System (FPDS), which is the federal government*s
central database on contracting actions. FPDS contains detailed
information on contracting actions over $25,000, including contract type,
amount obligated, the types of goods or services purchased, and various
vendor characteristics. FPDS contains less detailed information on actions
of $25,000 or less. Because FPDC relies on federal agencies for
procurement information, these data are only as reliable, accurate, and
complete as the information reported by the agencies. We did

not independently verify the information contained in the database.
However, in 1998, FPDC conducted an accuracy audit, which showed that the
average rate of accurate reporting in the FPDS database was 96 percent.
GAO used data from FPDS that covered the 5- year period fiscal year 1997
through fiscal year 2001, the last year for which complete data

were available. We subsequently adjusted the data provided by DOD to FPDS
to correct for a fiscal year 2001 reporting error.

We obtained additional information from agency procurement officials for
certain data elements that were not readily available from FPDS, such as
their agency*s use of governmentwide acquisition contracts. Additionally,
we obtained data from the Federal Aviation Administration, which is not
required to submit information to the FPDC. 1 We reflected this data in
the governmentwide analyses, as well as in the Department of
Transportation*s profile. We also asked each agency to provide a
description of its key

1 The FPDC collects procurement data from approximately 60 executive
branch agencies. The Federal Aviation Administration, the U. S. Postal
Service, the legislative and judicial branches, and several other
government entities are not required to report their procurement
activities to the FPDC.

procurement initiatives undertaken during the past 2 years. We did not
independently verify the information provided or assess the degree to
which agency- reported initiatives achieved their objectives.

We collected information on each agency*s discretionary resources from the
Office of Management and Budget*s MAX Budget Information System, which is
used to collect, validate, analyze, model, and publish federal budget
information. Discretionary budget resources reflect the budget amount that
the agency is appropriated for a current fiscal year plus the budget
authority that the agency carries over from prior fiscal years. Unless
otherwise noted, all figures were adjusted for inflation and

represent constant fiscal year 2001 dollars. To determine trends in the
acquisition workforce, we analyzed data obtained from the Office of
Personnel Management*s Central Personnel Data File (CPDF), which is the
governmentwide human resources

reporting system. The data we used reflect information on permanent
employees reported to the CPDF as of September 30 of the particular year.
The CPDF relies on agencies to ensure that the data are timely, accurate,
complete, and edited in accordance with OPM standards. There is no
standard definition of what constitutes an agency*s acquisition workforce,
and agencies have defined their workforces in various ways. To provide

consistency and comparability among agencies, we defined the acquisition
workforce as those individuals serving in the following 14 occupation
series:

1. GS- 246: Industrial relations 2. GS- 346: Logistics management 3. GS-
511: Auditors 4. GS- 1101: General business 5. GS- 1102: Contracting
series 6. GS- 1103: Industrial property manager 7. GS- 1104: Property
disposal 8. GS- 1105: Purchasing officer

9. GS- 1106: Procurement clerical support 10. GS- 1150: Industrial
specialists 11. GS- 1152: Production control 12. GS- 1910: Quality
assurance 13. GS- 2003: Supply management 14. GS- 2010: Inventory
management Table 4 provides additional information on the data elements we
included in each agency*s profile.

Table 4: Information on Data Elements Category/ Description Notes/
Comments Acquisition spending

Figure 1: Procurement*s Relationship to To determine the extent that the
agency*s discretionary budget resources could be

Discretionary Spending, Fiscal Years 1997 accounted for by contracting, we
divided the agency*s total contract obligations by through 2001

the agency*s discretionary resources available for that year. We excluded
the amount that the agency spent through purchase cards because we were
unable to account for the extent that purchase cards were used to make
payments on contracts. Excluding purchase card use provides a conservative
estimate of the agency*s total contract

spending and reduces the likelihood of double- counting. Discretionary
budget resources reflect the budget amount that the agency is appropriated
for a current fiscal year plus the budget authority that the agency
carries over from prior fiscal years. These data exclude contract actions
of $25,000 or less and purchase card data.

Figure 2: Spending on Goods and Services, To determine the total amount
spent on goods and services, we obtained the

Fiscal Years 1997 through 2001 total amount spent for contracts over
$25,000 on goods and services from fiscal year 1997 through fiscal year
2001. Services consisted of the 21 service categories identified in FPDS,
as well as construction and research and development. Goods reflected all
other FPDS- required reporting categories.

These data exclude contract actions of $25,000 or less and purchase card
data. Figure 3: Principal Types of Goods and To determine the principal
types of goods and services contracted for by each agency, we Services in
Fiscal Year 2001 used FPDS- reported data that identified how much each
agency spent on specific goods

and services in fiscal years 1997 and 2001. We identified the three types
of goods and services that the agencies spent the most on during fiscal
year 2001.

These data exclude contract actions of $25,000 or less and purchase card
data.

(Continued From Previous Page)

Category/ Description Notes/ Comments

Figure 4: Vendor Type, Fiscal Year 2001 To determine the contracts awarded
to various types of vendors, we obtained FPDS data for fiscal year 2001
for six groups:  Small disadvantaged business  Other small business 
Large business  Javits- Wagner- O*Day (JWOD) and nonprofit organizations.
The JWOD program provides employment opportunities for Americans who are
blind or have other severe disabilities.  State/ local government 
Other, which includes hospitals, foreign contractors, domestic contractors
working outside the United States, educational institutions, and
historically black colleges and

universities and minority institutions. In addition, we used FPDS data to
determine the percentage of contracts awarded to women- owned businesses.

These data exclude contract actions of $25,000 or less and purchase card
data. Figure 5: Top Five Vendors, Fiscal Year 2001 Agency officials
provided us with data on the five vendors they contracted with the most,

by dollar value, in fiscal year 2001.

Procurement methods

Figure 6: Principal Contract Types Employed To determine the contract
types used, we obtained FPDS data for four principal types in Fiscal Year
2001 of contracts used in fiscal year 2001. These types are: (1) firm
fixed- price contracts;

(2) other fixed- price contracts, which include fixed- price
redetermination, fixed- priceeconomic price adjustment, and fixed- price
incentive; (3) cost- type, which include costplus award fee, cost- no fee,
cost sharing, cost- plus fixed fee, and cost- plus incentive fee; and (4)
labor hours/ time and materials contracts.

Cost- type contracts provide for payment of allowable incurred costs, to
the extent prescribed in the contract. These contracts establish an
estimate of total cost for the purpose of obligating funds and establish a
ceiling that the contractor may not exceed (except at its own risk)
without the approval of the contracting officer.

These data exclude contract actions of $25,000 or less and purchase card
data. Figure 7: Competition, Fiscal Year 2001 To determine the extent that
agency officials competed their contracts over $25,000,

we used FPDS data for fiscal year 2001. We graphically illustrated two
categories: (a) competed contracts and (b) contracts that were not
competed. The latter category included the following four groups: 
Contracts that were follow- ons to a competed action, which are those
subsequent actions awarded to a particular contractor who had previously
been awarded the initial contract under competitive procedures;

 Contracts not available for competition, which include utilities,
contracts authorized or required by statute to be awarded to a designated
source, sole source contracts awarded to certain small disadvantaged
businesses, or actions where the agency has determined that there is no
opportunity for competition, among other things;  Other, which includes
actions for which data on competition were missing or not required to be
entered, such as contracts awarded to Federal Prison Industries. 
Contracts that were eligible to be competed but which the agency chose not
to compete.

These data exclude contract actions of $25,000 or less and purchase card
data.

(Continued From Previous Page)

Category/ Description Notes/ Comments

Figure 8: Degree of Competition for To determine the degree of competition
for competed contracts, we calculated the value

Competed Contracts, Fiscal Years 1997 of contracts for which one offer was
received and the value of contracts for which two or

through 2001 more offers were received.

These data exclude contract actions of $25,000 or less and purchase card
data. Figure 9: Extent the Federal Supply Schedule To determine the extent
the federal supply schedule is used to purchase goods and Is Used to
Purchase Goods and Services,

services, we obtained FPDS data on orders and modifications under the
federal supply Fiscal Years 1997 through 2001

schedule. These data exclude contract actions of $25,000 or less and
purchase card data. Figure 10: Amount Spent Using Purchase

To determine the amount spent using purchase cards, we used the summary
purchase Cards, Fiscal Years 1997 through 2001 card data included in FPDS
annual reports. These reports also included data on the

number of cards authorized by each agency. Figure 11: Commercial Item
Purchases Using To determine the extent that agencies used FAR part 12
procedures to acquire FAR Part 12 Procedures, Fiscal Years 1997

commercial items, we obtained data from FPDS. through 2001

These data exclude contract actions of $25,000 or less and purchase card
data. Figure 12: Extent That Eligible Contracts are To determine the
extent that agencies used performance- based contracting, we obtained
Performance Based, Fiscal Year 2001 (by

fiscal year 2001 data from FPDS regarding contracts the agencies
identified as dollar value)

performance based. We then compared the reported value of performance-
based contracts with the total value of contracts eligible for
performance- based contracting. According to FAR part 37. 102,
performance- based methods are to be used to the maximum extent
practicable for all services, except for: (1) construction, (2) utilities,
(3) architect and engineering, or (4) services that are incidental to
supply purchases. Eligible contracts exclude contracts for the services
listed above and reflect contracts with a value of more than $25, 000.
Data for performance- based service contracts were available only for
fiscal year 2001. These data exclude contract actions of $25,000 or less
and purchase card data. Figure 13: Workforce Trends, Fiscal Years

To determine workforce trends, we obtained data from OPM's Central
Personnel Data 1997 through 2001 File on all civilian full- time employees
for the federal agencies that we reviewed. We used

this data to identify the changes in the size of the total and acquisition
workforces in the 10 agencies we reviewed. We defined the acquisition
workforce using the 14 occupation series described previously in this
section. Figure 14: Acquisition Workforce by Years of

To determine the acquisition workforce years of federal service, we
obtained data as Federal Service reported to CPDF by September 2000. This
data was displayed in increments of:  Fewer than 5 years  5 to 10 years
 10 to 20 years  20 years or more

(Continued From Previous Page)

Category/ Description Notes/ Comments

Figure 15: Acquisition Workforce Retirement To determine the acquisition
workforce retirement eligibility, we obtained data as reported Eligibility
to CPDF by September 2000. This data was displayed in increments of:

 Before fiscal year 2002  Fiscal years 2002 through 2007  Fiscal years
2008 through 2011  After fiscal year 2011 Source: GAO.

We reviewed each agency profile with senior agency procurement officials
and incorporated their comments where appropriate.

We conducted this work between September 2002 and March 2003 in accordance
with generally accepted government auditing standards.

Appendix II: Section 1* Department of Defense Agency Overview and
Highlights

Mission: To support and defend the Constitution of the United States;
provide for the common defense of the nation, its citizens, and its
allies; and protect and advance U. S. interests around the world.

Significant departments

The following departments combine for the majority of Department of
Defense*s (DOD) fiscal year 2001 total discretionary budget resources: 
The Army accounted for 25 percent.  The Air Force accounted for 23
percent.  The Navy accounted for 21 percent.  Other defense agencies 1
account for 31 percent.

Spending

DOD*s discretionary resources increased by 10 percent from fiscal year
1997 through fiscal year 2001 and totaled $446. 3 billion in fiscal year
2001. Over the 5- year period, the proportion of DOD*s discretionary
resources spent under contracts remained stable at 34 percent.  DOD*s
purchases of goods have increased by 23 percent and totaled $66. 1 billion
in fiscal year 2001.

Purchases of services for contracts over $25, 000 increased by 7 percent
over the 5- year period, accounting for more than 54 percent of DOD*s
contracts, or about $77.0 billion, in fiscal year 2001.  Over the 5- year
period, DOD*s service spending was driven by increased spending for
information

technology (46 percent); professional, administrative, and management
support (21 percent); and medical services (22 percent).  Although
slightly declining since fiscal year 1997, research and development
contracts accounted for about 28 percent, or $21.5 billion, of DOD*s total
service spending in fiscal year 2001.

 Over the 5- year period, spending changed on the following goods: ships
(128 percent) and aircraft (42 percent).

Procurement methods

DOD spent about $143. 1 billion on contracts over $25,000 in fiscal year
2001, with firm fixed- price and other kinds of fixed- price contracts
accounting for over 63 percent of DOD*s contract dollars.  Since fiscal
year 1997, the amount of contract dollars awarded under competitive
procedures was about

58 percent of DOD*s total contract dollars over $25,000.  Purchase card
use has increased by 169 percent over the 5- year period, totaling $6. 1
billion in fiscal year

2001. In fiscal year 2001, DOD authorized the use of 230,646 purchase
cards.  In fiscal year 2001, about 23 percent of DOD*s eligible contracts
were performance based.

Workforce

DOD*s total workforce and acquisition workforce have declined by 9 percent
since fiscal year 1997, continuing a decade- long decline that began in
the early 1990s. DOD*s total workforce decreased to about 629,000 and the
acquisition workforce decreased to about 69, 000 in fiscal year 2001. 
Over 90 percent of DOD*s acquisition workforce has at least 10 years of
federal service; by fiscal year 2008,

39 percent will be eligible to retire. 1 (1) Defense Advanced Research
Projects Agency, (2) Defense Commissary Agency, (3) Defense Contract Audit
Agency, (4) Defense Security Service, (5) Defense Threat Reduction Agency,
(6) Missile Defense Agency, (7) National Imagery and Mapping Agency, (8)
Pentagon Force Protection Agency, (9) Defense Contract Management Agency,
(10) Defense Finance and Accounting Service, (11) Defense Information
Systems Agency, (12) Defense Intelligence Agency, (13) Defense Legal
Services Agency, (14) Defense Logistics Agency, (15) Defense Security
Cooperation Agency, (16) National Security Agency, and (17) Army Corps of
Engineers.

I. Spending

Figure 1: Procurement*s Relationship to Discretionary Budget Resources,
Fiscal Years 1997 through 2001

500 Dollars in billions

400 300 200 100

0 1997 1998 1999 2000 2001 Fiscal year

Total discretionary budget resources Total contract obligations

Source: FPDS and OMB. Notes: Discretionary budget resources reflect the
budget amount that an agency is appropriated for a current fiscal year
plus the budget authority that the agency carries over from prior fiscal
years.

Total contract obligations exclude purchase card use. All dollar figures
have been converted to constant 2001 dollars.

Figure 2: Spending on Goods and Services, Fiscal Years 1997 through 2001
90

Dollars in billions 60 30

0 1997 1998 1999 2000 2001 Fiscal year

Services Goods

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 3: Principal Types of Goods and Services in Fiscal Year 2001

Dollars in millions

Fiscal year Change Goods 2001 1997

(percent)

Aircraft and airframe structural components $14, 759.8 $10, 368. 4 42
Ships, small craft, pontoons, and floating docks 8, 296.8 3, 631. 8 128

Communication and detection equipment 4, 326.8 4, 880. 2 -11 Other goods
38, 747.6 34,853. 6 11

Total goods $66, 131.0 $53, 734. 0 23 Services

Research and development 21, 541.1 21,665. 6 -1 Professional,
administrative, and management support 11, 428.1 9, 411. 5 21

Construction of structures and facilities 6, 656.2 6, 893. 8 -3 Other
services 37, 385.1 34,006. 3 10

Total services $77, 010.5 $71, 977. 2 7 Total goods and services $143,
141.5 $125,711. 2 14

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 4: Vendor Type, Fiscal Year 2001 2%

JWOD/ Nonprofit

5%

Small disadvantaged business

10%

Other

12%

Other small business 71%

Large business Source: FPDS. Notes: 2 percent of DOD*s vendors are women-
owned businesses. Other includes hospitals, foreign contractors, domestic
contractors working outside the United States, and educational
institutions, including historically black colleges and universities and
minority institutions.

These figures include only orders and contracts for more than $25,000;
contracts for $25, 000 or less and purchase cards are excluded.

Figure 5: Top Five Vendors, Fiscal Year 2001

Dollars in billions

Goods and services Amount

Vendor provided

awarded

1. Lockheed Martin Weapons systems integration and IT $14.7

2. Boeing Aircraft, electronics, and IT $13.3 3. Newport News Shipbuilding
Ship building and repair $5.9 4. Raytheon Company Guided missile systems,
electronics, and IT $5.6

5. Northrop Grumman Aircraft, electronics, and IT $5.1 Source: DOD.

II. Procurement Methods

Figure 6: Principal Contract Types Employed in Fiscal Year 2001

Dollars in billions

Amount Percent of total

Contract type spent

amount spent

Firm fixed- price $73. 1 51. 0 Other fixed- price $17. 5 12. 2 Cost- type
$41. 3 28. 9 Labor hours/ time and materials $4. 9 3. 4 Source: FPDS.
Note: These figures include only orders and contracts for more than
$25,000; contracts for $25,000 or less and purchase cards are excluded.

Percentages do not add to 100 as information on the number of offers was
either missing or not required to be reported.

Figure 7: Competition, Fiscal Year 2001 4%

Not available for competition a

4%

Other b

6%

Follow- on to competed action c

28%

Not competed 58% Competed Competed Not competed

Source: FPDS. a Contracts not available for competition are for utilities,
contracts authorized or required by statute to be awarded to a designated
source, sole source contracts awarded to certain small disadvantaged
businesses, or actions where the agency has determined that there is no
opportunity for competition, among other things.

b Other includes actions for which data on competition were missing or not
required to be entered, such as contracts awarded to Federal Prison
Industries. c Contracts that were follow- on to a competed action are
those subsequent actions awarded to the particular contractor who had
previously been awarded the initial contract under competitive procedures.

Note: These figures include only orders and contracts for more than
$25,000; contracts for $25,000 or less and purchase cards are excluded.

Figure 8: Degree of Competition for Competed Contracts, Fiscal Years 1997
through 2001

Dollars in billions

Amount spent on One offer

More than one Fiscal year

competed contracts (percent)

offer (percent)

1997 $70. 9 7. 3 90.1 1998 $71. 9 8. 3 88.5 1999 $77. 0 8. 9 89.3 2000
$80. 0 8. 1 90.1 2001 $82. 7 10. 3 86.8 Source: FPDS. Notes: These figures
include only orders and contracts for more than $25,000; contracts for
$25,000 or less and purchase cards are excluded.

Percentages do not add to 100 as information on the number of offers was
either missing or not required to be reported.

All dollar figures have been converted to constant 2001 dollars.

Figure 9: Extent the Federal Supply Schedule is Used to Purchase Goods and
Services, Fiscal Years 1997 through 2001 8

Dollars in billions 6 4 2 0

1997 1998 1999 2000 2001 Fiscal year

Total Services Goods

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 10: Amount Spent Using Purchase Cards, Fiscal Years 1997 through
2001 8

Dollars in billions 6 4 2 0

1997 1998 1999 2000 2001 Fiscal year

Source: FPDS. Notes: In fiscal year 2001, DOD authorized the use of
230,646 purchase cards. All dollar figures have been converted to constant
2001 dollars.

Figure 11: Commercial Item Purchases Using FAR Part 12 Procedures, Fiscal
Years 1997 through 2001

30 Dollars in billions

25 20 15 10

5 0

1997 1998 1999 2000 2001 Fiscal year

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 12: Extent That Eligible Contracts Are Performance Based, Fiscal
Year 2001 (by dollar value)

23%

Performance based

77%

Not performance based Source: FPDS. Notes: Based on FAR 37.102,
performance- based methods should be used to the maximum extent
practicable for all services, except for construction, utilities,
architect and engineering, or services that are incidental to supply
purchases.

These figures include only orders and contracts for more than $25,000;
contracts for $25, 000 or less and purchase cards are excluded.

III. Workforce

Figure 13: Workforce Trends, Fiscal Years 1997 through 2001 Tot al

Acquisition Fiscal year

workforce workforce Percent

1997 691,931 74, 890 10.8 1998 664,563 71, 949 10.8 1999 645,990 69, 408
10.7 2000 632,523 68, 450 10.8 2001 628,915 68, 513 10.9 Source: CPDF.

Figure 14: Acquisition Workforce by Years of Federal Service 4%

5 to 10 years

6%

Fewer than 5 years

31%

10 to 20 years

59%

20 years or more Source: CPDF.

Figure 15: Acquisition Workforce Retirement Eligibility 10%

Before fiscal year 2002

20%

Fiscal years 2008 through 2011

41% 29%

Fiscal years 2002 through 2007 After fiscal year 2011 Source: CPDF.

IV. Key Procurement Initiatives as Reported by Agency Officials Improve
the credibility and effectiveness of the acquisition and logistics support
process.

 Change budgeting, procurement, program management, and logistics
processes and policies to support implementation of evolutionary
acquisition and reduce cycle time.  Improve logistics responsiveness and
supply chain integration to make DOD*s logistics system

more efficient.  Implement reforms to increase efficiency and
effectiveness in the acquisition of services and improve

support of socioeconomic programs.

Revitalize the quality and morale of the DOD acquisition workforce.

 Improve training and education by building a new learning environment
designed to empower each DOD acquisition workforce member with more
control over learning needs.  Establish a life- cycle workforce
management approach to the civilian workforce, including human capital

strategic planning.  Use new outreach and communication strategies to
create better awareness and knowledge of acquisition

initiatives. Improve the health of the defense industrial base.

 Establish a strategic approach to adopt commercial acquisition
processes.

V. Key Procurement Reports General Accounting Office

Sourcing and Acquisition: Challenges Facing the Department of Defense.
GAO- 03- 574T. Washington, D. C.: March 19, 2003.

Major Management Challenges and Program Risks: Department of Defense. GAO-
03- 98. Washington, D. C.: January 2003.

Purchase Cards: Control Weaknesses Leave Army Vulnerable to Fraud, Waste,
and Abuse. GAO- 02- 732. Washington, D. C.: June 27, 2002.

Acquisition Workforce: Department of Defense*s Plans to Address Workforce
Size and Structure Challenges.

GAO- 02- 630. Washington, D. C.: April 30, 2002.

Contract Management: DOD Needs Better Guidance on Granting Waivers for
Certified Cost or Pricing Data. GAO- 02- 502. Washington, D. C.: April 22,
2002.

Purchase Cards: Continued Control Weaknesses Leave Two Navy Units
Vulnerable to Fraud and Abuse.

GAO- 02- 506T. Washington, D. C.: March 13, 2002.

Best Practices: Taking A Strategic Approach Could Improve DOD*s
Acquisition of Services. GAO- 02- 230. Washington, D. C.: January 18,
2002.

DOD Systems Modernization: Continued Investment in the Standard
Procurement System Has Not Been Justified. GAO- 01- 682. Washington, D.
C.: July 31, 2001.

Contract Management: Not Following Procedures Undermines Best Pricing
Under GSA*s Schedule.

GAO- 01- 125. Washington, D. C.: November 28, 2000.

Acquisition Reform: DOD*s Guidance on Using Section 845 Agreements Could
Be Improved.

GAO/ NSIAD- 00- 33. Washington, D. C.: April 7, 2000.

Contract Management: Few Competing Proposals for Large DOD Information
Technology Orders.

GAO/ NSIAD- 00- 56. Washington, D. C.: March 20, 2000.

Inspector General

Report Number D- 2002- 075* Controls Over the DOD Purchase Card Program,
March 29, 2002. Report Number D- 2000- 100* Contracts for Professional,
Administrative, and Management Support Services, March 10, 2000.

Report Number D- 2000- 088* DOD Acquisition Workforce Reduction Trends and
Impacts, February 29, 2000.

Appendix II: Section 2* Department of the Air Force Agency Overview and
Highlights

Spending

The Air Force*s total discretionary budget resources, after declining
between fiscal years 1997 and 1999, increased by 8 percent between fiscal
years 2000 and 2001 and totaled $101. 1 billion in fiscal year 2001. Over
the 5- year period, the proportion of the Air Force*s discretionary
resources spent through contracts increased

from 36 percent to about 40 percent.  Since fiscal year 1997, Air Force
spending has been driven by a 16 percent increase in the purchases of

goods. In fiscal year 2001, service contracts remained steady at $20.9
billion, or about 53 percent of Air Force*s contracts over $25,000. 
Research and development contracts decreased by 7 percent during the 5-
year period, totaling $8.9 billion in

fiscal year 2001.  The Air Force increased its combined purchases of
aircraft components and related parts by 64 percent*

spending about $13.0 billion on these items in fiscal year 2001. In
addition, the Air Force changed its spending in other categories:
information technology services (94 percent); aircraft engines and related
parts (71 percent); professional, administrative, and management support
(15 percent); and repair of

equipment (- 41 percent).

Procurement methods

The Air Force spent about $40 billion through contracts over $25, 000 in
fiscal year 2001, with firm fixed- price and other kinds of fixed- price
contracts accounting for about 62 percent of the Air Force*s total
contract dollars.

 About 24 percent of the Air Force*s eligible service contracts are
performance based.  Purchase card spending increased by almost 200
percent over the 5- year period. In fiscal year 2001,

the Air Force authorized the use of 79, 762 purchase cards.  The Air
Force*s significant increase in its use of the federal supply schedule has
been driven by purchases

of services.

Workforce

The Air Force*s total workforce and acquisition workforce decreased by 9
percent from fiscal year 1999 through fiscal year 2001.  By fiscal year
2008, about 38 percent of the current acquisition workforce will be
eligible to retire.

I. Spending

Figure 1: Procurement*s Relationship to Discretionary Budget Resources,
Fiscal Years 1997 through 2001

150 Dollars in billions

100 50

0 1997 1998 1999 2000 2001 Fiscal year

Total discretionary budget resources Total contract obligations

Source: FPDS, OMB, and DOD. Notes: Discretionary budget resources reflect
the budget amount that an agency is appropriated for a current fiscal year
plus the budget authority that the agency carries over from prior fiscal
years.

Total contract obligations exclude purchase card use. All dollar figures
have been converted to constant 2001 dollars.

Figure 2: Spending on Goods and Services, Fiscal Years 1997 through 2001
30

Dollars in billions 20 10

0 1997 1998 1999 2000 2001 Fiscal year

Services Goods

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 3: Principal Types of Goods and Services in Fiscal Year 2001

Dollars in millions

Fiscal year Change Goods 2001 1997

(percent)

Aircraft and airframe structural components $9,978.5 $6,259.9 59 Aircraft
engines and related parts 2,205.7 1, 292.7 71 Aircraft components and
accessories 938.7 447.1 110

Other goods 5,515.1 8, 068.3 -32

Total goods $18,638.0 $16, 068.0 16 Services

Research and development 8, 901. 4 9,599.3 -7 Professional,
administrative, and management support 2,887.8 2, 509.5 15

Maintenance, repair, and rebuilding of equipment 1,599.0 2, 709.0 -41
Other services 7,532.4 6, 535.8 15

Total services $20,920.6 $21, 353.6 -2 Total goods and services $39,558.6
$37, 421.6 6

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 4: Vendor Type, Fiscal Year 2001 3%

JWOD/ Nonprofit

4%

Small disadvantaged business

8%

Other

8%

Other small business 77%

Large business Source: FPDS. Notes: 1 percent of the Air Force*s vendors
are women- owned businesses. Other includes hospitals, foreign
contractors, domestic contractors working outside the United States, and
educational institutions, including historically black colleges and
universities and minority institutions.

These figures include only orders and contracts for more than $25,000;
contracts for $25, 000 or less and purchase cards are excluded.

Figure 5: Top Five Vendors, Fiscal Year 2001

Dollars in millions

Goods and services Amount

Vendor provided

awarded

1. Lockheed Martin Aircraft, space systems, and IT $9, 533.0 2. Boeing
Aircraft, space systems, and IT $6, 950.0 3. Northrop Grumman Aircraft,
electronics, and IT $1, 910.5 4. United Technologies Corporation Gas
turbines and jet

engines $1, 803.3 5. Raytheon Company Guided missiles and

electronics $1, 767.8 Source: DOD.

II. Procurement Methods

Figure 6: Principal Contract Types Employed in Fiscal Year 2001

Dollars in billions

Amount Percent of total

Contract type spent

amount spent

Firm fixed- price $21. 2 53. 5 Other fixed- price $3. 3 8. 3 Cost- type
$11. 4 28. 7 Labor hours/ time and materials $1. 7 4. 2 Source: FPDS.
Note: These figures include only orders and contracts for more than
$25,000; contracts for $25,000 or less and purchase cards are excluded.

Percentages do not add to 100 as information on the number of offers for
some data was either missing or not required to be reported.

Figure 7: Competition, Fiscal Year 2001 3%

Not available for competition a

5%

Other b

13%

Follow- on to competed action c

54% 25%

Not competed Competed Competed Not competed

Source: FPDS. a Contracts not available for competition are for utilities,
contracts authorized or required by statute to be awarded to a designated
source, sole source contracts awarded to certain small disadvantaged
businesses, or actions where the agency has determined that there is no
opportunity for competition, among other things.

b Other includes actions for which data on competition were missing or not
required to be entered, such as contracts awarded to Federal Prison
Industries. c Contracts that were follow- on to a competed action are
those subsequent actions awarded to the particular contractor who had
previously been awarded the initial contract under competitive

procedures. Note: These figures include only orders and contracts for more
than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

Figure 8: Degree of Competition for Competed Contracts, Fiscal Years 1997
through 2001

Dollars in billions

Amount spent on One offer

More than one Fiscal year

competed contracts (percent)

offer (percent)

1997 $18. 7 8. 5 88.0 1998 $19. 4 8. 5 87.0 1999 $20. 2 8. 4 90.2 2000
$20. 1 7. 4 91.6 2001 $21. 1 7. 5 90.9 Source: FPDS. Notes: These figures
include only orders and contracts for more than $25,000; contracts for
$25,000 or less and purchase cards are excluded.

Percentages do not add to 100 as information on the number of offers was
either missing or not required to be reported.

All dollar figures have been converted to constant 2001 dollars.

Figure 9: Extent the Federal Supply Schedule Is Used to Purchase Goods and
Services, Fiscal Years 1997 through 2001 2.0

Dollars in billions 1.5 1.0 0.5

0 1997 1998 1999 2000 2001 Fiscal year

Total Services Goods

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 10: Amount Spent Using Purchase Cards, Fiscal Years 1997 through
2001 1.5

Dollars in billions 1.0 0.5

0 1997 1998 1999 2000 2001 Fiscal year

Source: FPDS. Notes: In fiscal year 2001, the Air Force authorized the use
of 79,762 purchase cards. All dollar figures have been converted to
constant 2001 dollars.

Figure 11: Commercial Item Purchases Using FAR Part 12 Procedures, Fiscal
Years 1997 through 2001

9 Dollars in billions

6 3 0

1997 1998 1999 2000 2001 Fiscal year

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 12: Extent That Eligible Contracts Are Performance Based, Fiscal
Year 2001 (by dollar value)

24%

Performance based

76%

Not performance based Source: FPDS. Notes: Based on FAR 37.102,
performance- based methods should be used to the maximum extent
practicable for all services, except for construction, utilities,
architect and engineering, or services that are incidental to supply
purchases.

These figures include only orders and contracts for more than $25,000;
contracts for $25, 000 or less and purchase cards are excluded.

III. Workforce

Figure 13: Workforce Trends, Fiscal Years 1997 through 2001 Tot al

Acquisition Fiscal year

workforce workforce Percent

1997 159,686 18, 608 11.7 1998 154,379 17, 854 11.6 1999 150,563 17, 480
11.6 2000 145,560 17, 101 11.8 2001 145,197 16, 885 11.6 Source: CPDF.

Figure 14: Acquisition Workforce by Years of Federal Service 6%

5 to 10 years

6%

Fewer than 5 years

56% 32%

10 to 20 years 20 years or more Source: CPDF.

Figure 15: Acquisition Workforce Retirement Eligibility 10%

Before fiscal year 2002

19%

Fiscal years 2008 through 2011

43% 28%

Fiscal years 2002 through 2007 After fiscal year 2011 Source: CPDF.

Appendix II: Section 3* Department of the Army Agency Overview and
Highlights

Spending

The Army*s total discretionary budget resources decreased 4 percent from
fiscal year 1997 to fiscal year 2001 and totaled $113.1 billion in fiscal
year 2001. The amount spent through contracts accounted for more than one-
third of the Army*s discretionary resources in fiscal year 2001. 
Spending on goods increased by about 29 percent over fiscal year 1997
levels. In particular, the Army nearly

tripled its spending on aircraft and increased its spending on ground
vehicles by 66 percent.  Spending on services increased by about 15
percent over the 1997 level, driven by a 55 percent increase in

spending for professional, administrative, and management support
contracts. Such contracts now account for 16 percent of the Army*s service
contract spending, up from less than 12 percent in fiscal year 1997.  The
Army*s spending for research and development increased by about 8 percent
over fiscal year

1997 levels.

Procurement methods

Of the $37 billion the Army spent on contracts over $25,000 in fiscal year
2001, $21.7 billion, or 59 percent, was spent using firm fixed- price
contracts.  Between fiscal years 1997 and 2001, purchase card use
increased 139 percent, to $2. 5 billion in fiscal year

2001. In fiscal year 2001, the Army authorized the use of 109,446 purchase
cards.  During the 5- year period, about 59 percent of the Army*s
contract dollars were spent on competitively

awarded contracts.  In fiscal year 2001, 25 percent of the Army*s service
contracts were performance based.  The Army*s use of the federal supply
schedule program increased by more than 190 percent over the 5- year
period. This increase was driven primarily by the increased purchases of
services, which rose from about $604 million in fiscal year 1997 to over
$1. 7 billion in fiscal year 2001.

Workforce

From fiscal year 1997 through fiscal year 2001, the Army*s total workforce
and acquisition workforce decreased by 6 and 7 percent, respectively.
Throughout this period, the acquisition workforce accounted for about 8
percent of the total workforce.  In fiscal year 2001, 61 percent of the
acquisition workforce had 20 years or more of federal service, while

4 percent had fewer than 5 years of federal service.  By fiscal year
2008, 40 percent of the current acquisition workforce will be eligible to
retire.

I. Spending

Figure 1: Procurement*s Relationship to Discretionary Budget Resources,
Fiscal Years 1997 through 2001

150 150

Dollars in billions 100 100

50 50

0 0

1997 1998 1999 2000 2001 Fiscal year

Total discretionary budget resources Total contract obligations

Source: FPDS, OMB, and DOD. Notes: Discretionary budget resources reflect
the budget amount that an agency is appropriated for a current fiscal year
plus the budget authority that the agency carries over from prior fiscal
years.

Total contract obligations exclude purchase card use. All dollar figures
have been converted to constant 2001 dollars.

Figure 2: Spending on Goods and Services, Fiscal Years 1997 through 2001
30

Dollars in billions 20 10

0 1997 1998 1999 2000 2001 Fiscal year

Services Goods

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 3: Principal Types of Goods and Services in Fiscal Year 2001

Dollars in millions

Fiscal year Change Goods 2001 1997

(percent)

Ground effect vehicles, motor vehicles, trailers and cycles $2,923.4
$1,757.6 66

Communication and detection equipment 1, 852. 3 2,091.0 -11

Aircraft and airframe structural components 1,507.0 549. 8 174

Other goods 8, 270. 3 6,881.7 20

Total goods $14,553.0 $11,280.1 29 Services

Research, development, test, and evaluation 5, 848. 6 5,417.3 8
Professional, administrative, and management support 3, 608. 3 2,332.7 55
Construction 3,097.0 3, 426. 0 -10 Other services 9,924.4 8, 455. 3 17

Total services $22,478.3 $19,631.3 15 Total goods and services $37,031.3
$30,911.4 20

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 4: Vendor Type, Fiscal Year 2001 2%

JWOD/ Nonprofit

7%

Small disadvantaged business

13%

Other small business

60% 18%

Other Large business

Source: FPDS. Notes: 3 percent of Army*s vendors are women- owned
businesses. Other includes hospitals, foreign contractors, domestic
contractors working outside the United States, and educational
institutions, including historically black colleges and universities and
minority institutions.

These figures include only orders and contracts for more than $25,000;
contracts for $25,000 or less and purchase cards are excluded.

Figure 5: Top Five Vendors, Fiscal Year 2001

Dollars in millions

Goods and services Amount Vendor

provided awarded

1. General Dynamics Combat vehicles and IT $1,940. 9 2. Lockheed Martin
Weapons systems

integration, missiles, and IT $1,754. 5 3. Raytheon Company Guided
missiles, electronics,

and IT $1,440. 3 4. Boeing Aircraft, electronics, and IT $1,299. 2 5. The
Carlyle Group Combat vehicles and

weapons $943. 2 Source: DOD.

II. Procurement Methods

Figure 6: Principal Contract Types Employed in Fiscal Year 2001

Dollars in billions

Percent of total Contract type Amount spent

amount spent

Firm fixed- price $21. 7 58.7 Other fixed- price $1.4 3. 8 Cost- type $9.1
24.7 Labor hours/ time and materials $1.7 4. 6 Source: FPDS. Note: These
figures include only orders and contracts for more than $25, 000;
contracts for $25,000 or less and purchase cards are excluded.

Percentages do not add to 100 as information on the number of offers was
either missing or not required to be reported.

Figure 7: Competition, Fiscal Year 2001 5%

Not available for competition a

6%

Follow- on to competed action b

8%

Other c

58% 23%

Not competed Competed Competed Not competed

Source: FPDS. a Contracts not available for competition are for utilities,
contracts authorized or required by statute to be awarded to a designated
source, sole source contracts awarded to certain small disadvantaged
businesses, or actions where the agency has determined that there is no
opportunity for competition, among other things. b Contracts that were
follow- on to a competed action are those subsequent actions awarded to
the particular contractor who had previously been awarded the initial
contract under competitive procedures. c Other includes actions for which
data on competition were missing or not required to be entered, such as
contracts awarded to Federal Prison Industries. Note: These figures
include only orders and contracts for more than $25, 000; contracts for
$25,000 or less and purchase cards are excluded.

Figure 8: Degree of Competition for Competed Contracts, Fiscal Years 1997
through 2001

Dollars in billions

Amount spent on One offer

More than one Fiscal year

competed contracts (percent)

offer (percent)

1997 $18.1 4. 9 92. 8 1998 $18.1 8. 0 90. 1 1999 $19.3 9. 7 88. 8 2000
$21.6 7. 1 91. 3 2001 $21.4 9. 4 87. 7 Source: FPDS. Notes: These figures
include only orders and contracts for more than $25,000; contracts for
$25,000 or less and purchase cards are excluded.

Percentages do not add to 100 as information on the number of offers was
either missing or not required to be reported.

All dollar figures have been converted to constant 2001 dollars.

Figure 9: Extent the Federal Supply Schedule Is Used to Purchase Goods and
Services, Fiscal Years 1997 through 2001

2.0 Dollars in billions

1.5 1.0 0.5

0 1997 1998 1999 2000 2001 Fiscal year

Total Services Goods

Source: FPDS. Note: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 10: Amount Spent Using Purchase Cards, Fiscal Years 1997 through
2001 3

Dollars in billions 2 1 0

1997 1998 1999 2000 2001 Fiscal year

Source: FPDS. Notes: In fiscal year 2001, the Army authorized the use of
109,446 purchase cards. All dollar figures have been converted to constant
2001 dollars.

Figure 11: Commercial Item Purchases Using FAR Part 12 Procedures, Fiscal
Years 1997 through 2001

8 Dollars in billions

6 4 2 0

1997 1998 1999 2000 2001 Fiscal year

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 12: Extent That Eligible Contracts Are Performance Based, Fiscal
Year 2001 (by dollar value)

25%

Performance based

75%

Not performance based Source: FPDS. Notes: Based on FAR 37.102,
performance- based methods should be used to the maximum extent
practicable for all services, except for construction, utilities,
architect and engineering, or services that are incidental to supply
purchases.

These figures include only orders and contracts for more than $25,000;
contracts for $25,000 or less and purchase cards are excluded.

III. Workforce

Figure 13: Acquisition Workforce, Fiscal Year 1997 through Fiscal Year
2001 Tot al

Acquisition Fiscal year

workforce workforce Percent

1997 226, 457 18,025 8. 0 1998 218, 601 17,391 8. 0 1999 212, 816 16,780
8. 0 2000 211, 516 16,690 8. 0 2001 212, 046 16,731 8. 0 Source: CPDF.

Figure 14: Acquisition Workforce by Years of Federal Service 4%

Fewer than 5 years

5%

5 to 10 years

30%

10 to 20 years

61%

20 years or more Source: CPDF.

Figure 15: Acquisition Workforce Retirement Eligibility 10%

Before fiscal year 2002

39% 21%

Fiscal years 2008 through 2011

30%

Fiscal years 2002 through 2007 After fiscal year 2011 Source: CPDF.

Appendix II: Section 4* Department of the Navy Agency Overview and
Highlights

Spending

The Navy*s total discretionary budget resources increased 12 percent from
fiscal year 1997 to fiscal year 2001 and totaled $95.3 billion in fiscal
year 2001. The proportion of the Navy*s discretionary resources spent
through contracts was about 45 percent in fiscal year 2001.  From fiscal
years 1997 through 2001, a 25 percent increase in spending for goods,
coupled with a 6 percent decline in spending on services, resulted in the
Navy spending nearly as much on goods as on services in

fiscal year 2001. The principal causes of this shift were significant
increases in spending on ships (up 133 percent) and decreased spending on
research and development (down 17 percent).

Procurement methods

The Navy relies on a mix of fixed- price and cost- type contracts to
achieve its mission. For example, in fiscal year 2001, firm fixed and
other kinds of fixed- price contracts accounted for more than 53 percent
of the Navy*s total contract dollars, while another 42 percent was spent
under cost- type contracts.

 In fiscal year 2001, more than half of the Navy*s contract dollars were
awarded under noncompeted contracts. Further, 16 percent of the Navy*s
competitively awarded dollars were made on contracts in which only 1 offer
was received.

 The Navy*s use of the federal supply schedule program increased by more
than 227 percent over the 5- year period. This increase was driven
primarily by the increased purchases of services, which rose from about
$132 million in fiscal year 1997 to over $1. 1 billion in fiscal year
2001.  Purchase card use has increased by 185 percent over the 5- year
period. In fiscal year 2001, the Navy spent

about $1.8 billion with 27, 926 purchase cards.  About 15 percent of
Navy*s eligible service contracts were considered performance based in

fiscal year 2001.

Workforce

Since fiscal year 1997, both the Navy*s total workforce and its
acquisition workforce have declined by about 10 percent, to about 176,000
and 15, 000, respectively.  In fiscal year 2001, more than 60 percent of
the Navy*s acquisition workforce had 20 years or more of service;
conversely, only 11 percent had fewer than 10 years of service.

 By fiscal year 2008, about 40 percent of the Navy*s acquisition
workforce will be eligible to retire.

I. Spending

Figure 1: Procurement*s Relationship to Discretionary Budget Resources for
Fiscal Years 1997 through 2001

150 Dollars in billions

100 50

0 1997 1998 1999 2000 2001 Fiscal year

Total discretionary budget resources Total contract obligations

Source: FPDS, OMB, and DOD. Notes: Discretionary budget resources reflect
the budget amount that an agency is appropriated for a current fiscal year
plus the budget authority that the agency carries over from prior fiscal
years.

Total contract obligations exclude purchase card use. All dollar figures
have been converted to constant 2001 dollars.

Figure 2: Spending on Goods and Services, Fiscal Years 1997 through 2001
30

Dollars in billions 20 10

0 1997 1998 1999 2000 2001 Fiscal year

Services Goods

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 3: Principal Types of Goods and Services in Fiscal Year 2001

Dollars in millions

Fiscal year Change Goods 2001 1997

(percent)

Ships, small craft, pontoons, and floating docks $8,245. 7 $3, 544.1 133

Aircraft and airframe structural components 3, 068. 2 3, 415.5 -10 Guided
missiles 1, 357. 7 1, 918.9 -29 Other goods 7,482. 5 7, 254.9 3

Total goods $20,154. 1 $16, 133.4 25 Services

Research, development, testing, and evaluation 4, 545. 6 5, 471.1 -17

Professional, administrative, and management support 4,133. 9 4, 330.1 -5

Equipment maintenance and repair 3,187. 5 2, 734.3 17 Other services
9,479. 4 10, 244.1 -7

Total services $21,346. 4 $22, 779.6 -6 Total goods and services $41,500.
5 $38, 913.0 7

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 4: Vendor Type, Fiscal Year 2001 2%

JWOD/ Nonprofit

5%

Small disadvantaged business

6%

Other

11%

Other small business 76%

Large business Source: FPDS. Notes: 2 percent of Navy*s vendors are women-
owned businesses. Other includes hospitals, foreign contractors, domestic
contractors working outside the United States, and educational
institutions, including historically black colleges and universities and
minority institutions.

These figures include only orders and contracts for more than $25,000;
contracts for $25, 000 or less and purchase cards are excluded.

Figure 5: Top Five Vendors, Fiscal Year 2001

Dollars in millions

Goods and services Amount

Vendor provided awarded

1. Newport News Shipbuilding Shipbuilding and repair $5, 889.3 2. Boeing
Aircraft, electronics, and IT $3, 617.0 3. Lockheed Martin IT and systems
integration $3, 134.4 4. General Dynamics Submarines and ships $2, 535.1
5. Northrop Grumman Aircraft, electronics, and IT $2, 484.3 Source: DOD.

II. Procurement Methods

Figure 6: Principal Contract Types Employed in Fiscal Year 2001

Dollars in billions

Amount Percent of total

Contract type spent

amount spent

Firm fixed- price $15.4 37. 3 Other fixed- price $6.6 15. 8 Cost- type
$17. 5 42.1 Labor hours/ time and materials $0.9 2. 2 Source: FPDS. Note:
These figures include only orders and contracts for more than $25,000;
contracts for $25,000 or less and purchase cards are excluded.

Percentages do not add to 100 as information on the number of offers was
either missing or not required to be reported.

Figure 7: Competition, Fiscal Year 2001 2%

Follow- on to competed action a

3%

Not available for competition b

3%

Other c

46% 46%

Not competed Competed Competed Not competed

Source: FPDS. a Contracts that were follow- on to a competed action are
those subsequent actions awarded to the particular contractor who had
previously been awarded the initial contract under competitive procedures.
b Contracts not available for competition are for utilities, contracts
authorized or required by statute to be awarded to a designated source,
sole source contracts awarded to certain small disadvantaged businesses,
or actions where the agency has determined that there is no opportunity
for competition, among other things.

c Other includes actions for which data on competition were missing or not
required to be entered, such as contracts awarded to Federal Prison
Industries. Note: These figures include only orders and contracts for more
than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

Figure 8: Degree of Competition for Competed Contracts, Fiscal Years 1997
through 2001

Dollars in billions

Amount spent on One offer

More than one Fiscal year

competed contracts (percent)

offer (percent)

1997 $19.3 10.5 87.9 1998 $19.0 9. 8 87.0 1999 $20.7 12.0 87.0 2000 $21.3
13.0 85.2 2001 $19.4 16.0 81.7 Source: FPDS. Notes: These figures include
only orders and contracts for more than $25,000; contracts for $25,000 or
less and purchase cards are excluded.

Percentages do not add to 100 as information on the number of offers was
either missing or not required to be reported.

All dollar figures have been converted to constant 2001 dollars.

Figure 9: Extent the Federal Supply Schedule is Used to Purchase Goods and
Services, Fiscal Years 1997 through 2001 2000

Dollars in millions 1600 1200

800 400

0 1997 1998 1999 2000 2001 Fiscal year

Total Services Goods

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 10: Amount Spent Using Purchase Cards, Fiscal Years 1997 through
2001 2.0

Dollars in billions 1.5 1.0 0.5

0 1997 1998 1999 2000 2001 Fiscal year

Source: FPDS. Notes: In fiscal year 2001, the Navy authorized the use of
27,926 purchase cards. All dollar figures have been converted to constant
2001 dollars.

Figure 11: Commercial Item Purchases Using FAR Part 12 Procedures, Fiscal
Years 1997 through 2001

6 Dollars in billions

4 2 0 0

1997 1998 1999 2000 2001 Fiscal year

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 12: Extent That Eligible Contracts Are Performance Based, Fiscal
Year 2001 (by dollar value)

15%

Performance based

85%

Not performance based Source: FPDS. Notes: Based on FAR 37.102,
performance- based methods should be used to the maximum extent
practicable for all services, except for construction, utilities,
architect and engineering, or services that are incidental to supply
purchases.

These figures include only orders and contracts for more than $25,000;
contracts for $25, 000 or less and purchase cards are excluded.

III. Workforce

Figure 13: Acquisition Workforce, Fiscal Year 1997 through Fiscal Year
2001 Tot al

Acquisition Fiscal year

workforce workforce Percent

1997 195,809 16, 933 8. 6 1998 188,251 16, 157 8. 6 1999 182,694 15, 542
8. 5 2000 177,819 15, 051 8. 5 2001 176,242 15, 161 8. 6 Source: CPDF.

Figure 14: Acquisition Workforce by Years of Federal Service 5%

5 to 10 years

6%

Fewer than 5 years

28%

10 to 20 years

61%

20 years or more Source: CPDF.

Figure 15: Acquisition Workforce Retirement Eligibility 10%

Before fiscal year 2002

39% 21%

Fiscal years 2008 through 2011

30%

Fiscal years 2002 through 2007 After fiscal year 2011 Source: CPDF.

Appendix III: Department of Agriculture Agency Overview and Highlights

Mission: To support agriculture production by ensuring a safe, affordable,
nutritious, and accessible food supply; caring for agricultural, forest,
and range lands; supporting sound development of rural communities;
providing economic opportunities for farm and rural residents; expanding
global markets for agricultural and forest products and services; and
working to reduce hunger in America and throughout the world.

Significant components

The following components account for the majority of the Department of
Agriculture*s (USDA) fiscal year 2001 total discretionary budget
resources:  The Forest Service manages public lands in national forests
and grasslands. In fiscal year 2001, the Forest

Service accounted for 21 percent of USDA*s discretionary resources.  Food
and Nutrition Service provides better access to food and a more healthful
diet through its food assistance programs and comprehensive nutrition
education efforts. In fiscal year 2001, the Food and Nutrition Service
accounted for 20 percent of USDA*s discretionary resources.

 Other key components, which combined to account for about 21 percent of
USDA*s discretionary resources, include the Farm Service, the Rural
Housing Service, and the Rural Development Service.

Spending

USDA*s discretionary resources increased by 18 percent between fiscal
years 1997 and 2001 and totaled $23.5 billion in fiscal year 2001. Over
the 5- year period, the proportion of USDA*s discretionary resources spent
through contracts increased from 14 percent to about 16 percent. About 70
percent of USDA*s contract spending went for purchases of goods, while
about 30 percent was spent on services.  For contracts valued over $25,
000, spending on goods increased by 53 percent from fiscal year 1997
through

fiscal year 2001. This increase was driven by purchases of food- related
products and nonmetallic crude materials, such as cereal grains. Overall,
purchases of food accounted for nearly half of USDA*s contract spending.

 Similarly, spending on services increased by 44 percent over the same
period, primarily as a result of increased purchases of services related
to natural resources and conservation and property maintenance and
construction.  Since fiscal year 1997, USDA*s spending has increased
significantly in the following categories: natural

resources and conservation (152 percent), nonmetallic crude materials (145
percent), construction (43 percent), and food (40 percent).

Procurement methods

USDA spent about $3.7 billion through contracts in fiscal year 2001, with
firm fixed- price and other kinds of fixed- price contracts accounting for
about 99 percent of USDA*s contract dollars.  Purchase card spending
between fiscal years 1997 and 2001 quadrupled, rising from $140. 2 million
to

$564. 2 million. In fiscal year 2001, USDA authorized the use of 22, 865
purchase cards.  Spending on commercial items using FAR part 12
procedures increased by about 93 percent from

fiscal years 1997 through 1999, but decreased by 79 percent from fiscal
years 1999 through 2001. USDA officials indicated that this decrease was a
result of USDA reclassifying certain items as noncommercial.  In fiscal
year 2001, 93 percent of USDA*s contracts over $25, 000 were competed.

Workforce

USDA*s total workforce in fiscal year 2001 was slightly higher than its
fiscal year 1997 level. Over the same period, its acquisition workforce
decreased by about 6 percent, to about 5,700 personnel.  By fiscal year
2008, 29 percent of USDA*s current acquisition workforce will be eligible
to retire.

I. Spending

Figure 1: Procurement*s Relationship to Discretionary Budget Resources,
Fiscal Years 1997 through 2001

25 Dollars in billions

20 15 10

5 0

1997 1998 1999 2000 2001 Fiscal year

Total discretionary budget resources Total contract obligations

Source: FPDS and OMB. Notes: Discretionary budget resources reflect the
budget amount that an agency is appropriated for a current fiscal year
plus the budget authority that the agency carries over from prior fiscal
years.

Total contract obligations exclude purchase card use. All dollar figures
have been converted to constant 2001 dollars.

Figure 2: Spending on Goods and Services, Fiscal Years 1997 through 2001 3

Dollars in billions 2 1 0

1997 1998 1999 2000 2001 Fiscal year

Goods Services

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 3: Principal Types of Goods and Services in Fiscal Year 2001

Dollars in millions

Fiscal year Change Goods 2001 1997

(percent)

Food $1,840. 7 $1,317.0 40 Nonmetallic crude materials 464. 3 189.2 145 IT
equipment 132. 2 101.5 30 Other goods 148. 8 84. 5 76

Total goods $2,586. 0 $1,692.2 53 Services

Natural resources and conservation 267. 4 106.2 152 Maintenance, repair,
or alteration of real property 174. 2 110.9 57

Construction 147. 2 210.5 -31 Other services 509. 6 333.7 53

Total services $1,098. 4 $761.3 44 Total goods and services $3,684. 4
$2,453.5 50

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 4: Vendor Type, Fiscal Year 2001 1%

JWOD/ Nonprofit

9%

Small disadvantaged business

51% 39%

Other small business Large business Source: FPDS. Notes: 4 percent of
USDA*s vendors are women- owned businesses. These figures include only
orders and contracts for more than $25,000; contracts for $25,000 or less
and purchase cards are excluded.

Figure 5: Top Five Vendors, Fiscal Year 2001

Dollars in millions

Goods and Amount

Vendor services provided

awarded

1. Archer Daniels Midland Grain and flour $136. 5 2. IBM IT services and

equipment $112. 1 3. Cal Western Packaging Corp. Food oils $104. 5 4.
Cargill, Inc. Grain $102. 9 5. Kalam Export Co. Grain $73. 2 Source: USDA.

II. Procurement Methods

Figure 6: Principal Contract Types Employed in Fiscal Year 2001

Dollars in billions

Percent of total Contract type Amount spent

amount spent

Firm fixed- price $3.2 86.0 Other fixed- price $0.5 13.0 Cost- type <$ 0.1
0. 6 Labor hours/ time and materials <$ 0. 1 0.4 Source: FPDS. Note: These
figures include only orders and contracts for more than $25, 000;
contracts for $25,000 or less and purchase cards are excluded.

Figure 7: Competition, Fiscal Year 2001 1%

Not competed

5%

Not available for competition a

94%

Competed Competed Not competed Source: FPDS. Notes: These figures include
only orders and contracts for more than $25,000; contracts for $25,000 or
less and purchase cards are excluded. a Contracts not available for
competition are for utilities, contracts authorized or required by statute
to be awarded to a designated source, sole source contracts awarded to
certain small disadvantaged businesses, or actions where the agency has
determined that there is no opportunity for competition, among other
things.

Figure 8: Degree of Competition for Competed Contracts, Fiscal Years 1997
through 2001

Dollars in billions

Amount spent on One offer

More than one Fiscal year

competed contracts (percent)

offer (percent)

1997 $2. 3 3. 2 86. 1 1998 $2. 7 3. 4 82. 5 1999 $3. 2 2. 8 86. 1 2000 $3.
1 2. 1 95. 3 2001 $3. 4 3. 5 93. 8 Source: FPDS. Notes: These figures
include only orders and contracts for more than $25,000; contracts for
$25,000 or less and purchase cards are excluded.

Percentages do not add to 100 as information on the number of offers was
either missing or not required to be reported.

All dollar figures have been converted to constant 2001 dollars.

Figure 9: Extent the Federal Supply Schedule is Used to Purchase Goods and
Services, Fiscal Years 1997 through 2001

150 Dollars in millions

120 90 60 30

0 0

1997 1998 1999 2000 2001 Fiscal year

Total Services Goods

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 10: Amount Spent Using Purchase Cards, Fiscal Years 1997 through
2001 600

Dollars in millions 450 300 150

0 1997 1998 1999 2000 2001 Fiscal year

Source: FPDS. Note: In fiscal year 2001, USDA authorized the use of 22,
865 purchase cards. All dollar figures have been converted to constant
2001 dollars.

Figure 11: Commercial Item Purchases Using FAR Part 12 Procedures, Fiscal
Years 1997 through 2001

2.0 Dollars in billions

1.5 1.0 0.5

0 1997 1998 1999 2000 2001 Fiscal year

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 12: Extent That Eligible Contracts Are Performance Based, Fiscal
Year 2001 (by dollar value)

9%

Performance based

91%

Not performance based Source: FPDS. Notes: Based on FAR 37.102,
performance- based methods should be used to the maximum extent
practicable for all services, except for construction, utilities,
architect and engineering, or services that are incidental to supply
purchases.

These figures include only orders and contracts for more than $25,000;
contracts for $25,000 or less and purchase cards are excluded.

III. Workforce

Figure 13: Workforce Trends, Fiscal Years 1997 through 2001 Tot al

Acquisition Fiscal year

workforce workforce Percent

1997 87,993 6,095 6. 9 1998 86,260 5,796 6. 7 1999 85,798 5,690 6. 6 2000
85,921 5,685 6. 6 2001 88,897 5,703 6. 4 Source: CPDF.

Figure 14: Acquisition Workforce by Years of Federal Service 9%

Fewer than 5 years

10%

5 to 10 years

42% 39%

10 to 20 years 20 years or more

Source: CPDF.

Figure 15: Acquisition Workforce Retirement Eligibility 7%

Before fiscal year 2002

19%

Fiscal years 2008 through 2011

52% 22%

Fiscal years 2002 through 2007 After fiscal year 2011 Source: CPDF.

IV. Key Procurement Initiatives as Reported by Agency Officials Purchase
Card Oversight: To strengthen its oversight of purchase card transactions,
USDA officials reported that they are:

 scanning the USDA Purchase Card Management System database for
questionable transactions and requesting USDA agencies to justify these
transactions as appropriate;  issuing revised regulations to tighten card
use and oversight procedures* for example, employees who fail

to reconcile their accounts within 60 days will have their cards
deactivated; and  forming an interagency working group to define criteria
for both automated alerts and preformatted reports

for agency use in identifying questionable transactions.

Performance- Based Service Contracting: USDA is emphasizing the use of
performance- based service contracting procedures by using a monthly
*report card,* which is furnished to senior management in each contracting
activity*s headquarters. This report card addresses how well each USDA
agency is doing in meeting established goals. In fiscal year 2002, USDA
reported that more than 20 percent of its eligible service

contracts were performance based, exceeding the governmentwide goal.

Integrated Acquisition System: USDA is working to deploy its first
corporate procurement automation system to support electronic
requisitioning and contract document generation. The system is expected to
interface with USDA*s corporate financial system and help improve the
timeliness and accuracy of USDA*s financial statements. The system is
currently undergoing pilot testing in locations within two USDA agencies.

Workforce: To deal with the potential retirement of a large percentage of
its skilled procurement workforce over the next few years, USDA is
developing new regulations addressing classroom training, on- the- job
experience, and education requirements for its acquisition workforce. USDA
also recently added information on training resources and on- line classes
to its procurement Web site*s home page.

V. Key Procurement Reports General Accounting Office

Major Management Challenges and Program Risks: Department of Agriculture.
GAO- 03- 96. Washington, D. C.: January 2003.

Appendix IV: Department of Energy Agency Overview and Highlights

Mission: To foster a secure and reliable energy system that is
environmentally and economically sustainable; to be a responsible steward
of the nation*s nuclear weapons and nuclear materials; to clean up the
department*s facilities; to lead in the physical sciences and advance the
biological, environmental, and computational sciences; and to provide
scientific instruments important to the Department of Energy (DOE).

Significant components

DOE groups its activities into three areas, which together comprised more
than 90 percent of its fiscal year 2001 total discretionary budget
resources.  National Nuclear Security Administration (NNSA) maintains and
enhances the safety, reliability, and

performance of the U. S. nuclear weapons stockpile, including the ability
to design, produce, and test weapons, to meet national security
requirements. NNSA also engages in nonproliferation activities and the
operation of Navy reactors. In fiscal year 2001, NNSA accounted for 35
percent of DOE*s discretionary resources.

 Energy Programs include nondefense environmental management, scientific
research and development regarding renewable energy resources and nuclear
energy, the remediation and maintenance of uranium facilities, and nuclear
waste disposal. In fiscal year 2001, Energy Programs accounted for 31
percent of DOE*s discretionary resources.  Environmental and other
defense activities include defense- related environmental restoration and

waste management, nuclear waste disposal, facilities closure projects, and
environmental management privatization. In fiscal year 2001, these
activities accounted for 29 percent of DOE*s discretionary resources.

Spending

DOE*s discretionary resources rose by about 6 percent from fiscal year
1997 through fiscal year 2001 and totaled $25.5 billion in fiscal year
2001. DOE relies heavily on contracting to support its mission. For
example, during the 5- year period, an average of 73 percent of its
discretionary resources were spent on contracts.  In fiscal year 2001,
about 98 percent of DOE*s contracts over $25,000 were spent on services,
of which threequarters went to the management and operation of over 30
government- owned laboratories and nuclear

facilities.  DOE*s spending on natural resources and conservation
services rose from $331. 7 million in fiscal year 1997 to $1. 35 billion
in fiscal year 2001, a 306 percent increase. This increase was mostly
driven by three large contracts for the cleanup, removal, and disposal of
hazardous substances.

 DOE ranks as one of the largest agencies in research and development
contracting, spending almost $1. 1 billion in fiscal year 2001.

Procurement methods

DOE has historically relied on cost- type contracts as its primary
contracting vehicle. In fiscal year 2001, $17.4 billion of the $18.6
billion* or 93 percent* that DOE spent on contracts over $25,000 was spent
on cost- type contracts. Nearly all of DOE*s contracts for managing and
operating its laboratories and facilities were cost- type.  DOE continues
to increase the amount awarded under competed contracts. For example, in
fiscal year

2001, 64 percent of DOE*s contracts were competed.  The use of purchase
cards grew by an average of 12 percent annually from fiscal year 1997
through fiscal year 2001, and totaled approximately $220 million in fiscal
year 2001. In fiscal year 2001, DOE authorized the

use of 6, 250 purchase cards.

Workforce

DOE*s total workforce, as well as its acquisition workforce, remained
relatively stable from fiscal year 1997 through fiscal year 2001. In
fiscal year 2001, DOE*s total workforce was 15, 997, with 1, 449, or 9
percent, in the acquisition workforce.  In fiscal year 2001, 57 percent
of the acquisition workforce had 20 years or more of federal service,
while

7 percent had fewer than 5 years of federal service.

I. Spending

Figure 1: Procurement*s Relationship to Discretionary Budget Resources,
Fiscal Years 1997 through 2001

30 Dollars in billions

20 10

0 1997 1998 1999 2000 2001 Fiscal year

Total discretionary budget resources Total contract obligations

Source: FPDS and OMB. Notes: Discretionary budget resources reflect the
budget amount that an agency is appropriated for a current fiscal year
plus the budget authority that the agency carries over from prior fiscal
years.

Total contract obligations exclude purchase card use. All dollar figures
have been converted to constant 2001 dollars.

Figure 2: Spending on Goods and Services, Fiscal Years 1997 through 2001
20

Dollars in billions 15 10

5 0

1997 1998 1999 2000 2001 Fiscal year

Services Goods

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 3: Principal Types of Goods and Services in Fiscal Year 2001

Dollars in millions

Fiscal year Change Goods 2001 1997

(percent)

Nuclear reactor- related equipment $194.8 $275. 1 -29 Containers,
packaging, and packing supplies 18.3 0 NA

IT equipment 14.6 35. 4 -59 Other goods 58.8 52. 0 13

Total goods $286.5 $362. 5 -21 Services

Operation of government- owned facilities 13,955.4 13,702. 6 2

Natural resources and conservation 1,347.4 331. 7 306 Research and
development 1, 096.5 912. 8 20 Other services 1,896.1 1, 697. 3 12

Total services $18,295.4 $16,644. 4 10 Total goods and services $18, 581.9
$17, 006. 9 9

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 4: Vendor Type, Fiscal Year 2001 1%

Small disadvantaged business

2%

Other small business

11%

JWOD/ Nonprofit

25%

Other

61%

Large business Source: FPDS. Notes: Less than 1 percent of DOE*s vendors
are women- owned businesses. Other includes hospitals, foreign
contractors, domestic contractors working outside the United States, and
educational institutions, including historically black colleges and
universities and minority institutions.

These figures include only orders and contracts for more than $25,000;
contracts for $25,000 or less and purchase cards are excluded.

Figure 5: Top Five Vendors, Fiscal Year 2001

Dollars in millions

Goods and services Amount Vendor

provided awarded

1. University of California Management of national laboratories/ research
$3,916. 9 2. Bechtel Management of national laboratories and

environmental restoration site/ design, construction and decontamination/
decommissioning studies $2,406. 4

3. Westinghouse Management of national laboratories and waste isolation
sites/ research $1,727. 6 4. Lockheed Martin Management of national
laboratories/ technical and

research support $1,356. 0 5. Battelle Management of national
laboratories/ compliance

studies $1,105. 4 Source: DOE.

II. Procurement Methods

Figure 6: Principal Contract Types Employed in Fiscal Year 2001

Dollars in billions

Amount Percent of total

Contract type spent

amount spent

Firm fixed- price $0.4 2. 2 Other fixed- price $0.5 2. 6 Cost- type $17.4
93.5 Labor hours/ time and materials $0.3 1. 6 Source: FPDS. Note: These
figures include only orders and contracts for more than $25, 000;
contracts for $25,000 or less and purchase cards are excluded.

Percentages may not equal 100 due to rounding.

Figure 7: Competition, Fiscal Year 2001 4%

Follow- on to competed action a

10%

Not available for competition b

23%

Not competed

64%

Competed Competed Not competed Source: FPDS. a Contracts that were follow-
on to a competed action are those subsequent actions awarded to the
particular contractor who had previously been awarded the initial contract
under competitive procedures. b Contracts not available for competition
are for utilities, contracts authorized or required by statute to be
awarded to a designated source, sole source contracts awarded to certain
small disadvantaged businesses, or actions where the agency has determined
that there is no opportunity for competition, among other things.

Notes: These figures include only orders and contracts for more than
$25,000; contracts for $25,000 or less and purchase cards are excluded.

Percentages may not equal 100 due to rounding.

Figure 8: Degree of Competition for Competed Contracts, Fiscal Years 1997
through 2001

Dollars in billions

Amount spent on One offer

More than one Fiscal year

competed contracts (percent)

offer (percent)

1997 $9.3 20.1 67. 6 1998 $8.9 19.0 71. 3 1999 $9.6 16.6 70. 6 2000 $10.3
16.6 76. 8 2001 $11.9 22.0 80. 2 Source: FPDS. Notes: These figures
include only orders and contracts for more than $25,000; contracts for
$25,000 or less and purchase cards are excluded.

Values for 2001 exceed 100 percent due to an adjustment of $260 million on
existing contracts. Percentages do not add to 100 as information on the
number of offers was either missing or not required to be reported.

All dollar figures have been converted to constant 2001 dollars.

Figure 9: Extent Federal Supply Schedule is Used to Purchase Goods and
Services, Fiscal Years 1997 through 2001

160 Dollars in millions

120 80 40

0 1997 1998 1999 2000 2001 Fiscal year

Total Services Goods

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 10: Amount Spent Using Purchase Cards, Fiscal Years 1997 through
2001 320

Dollars in millions 240 160

80 0 0 1997 1998 1999 2000 2001 Fiscal year

Source: FPDS. Note: In fiscal year 2001, DOE authorized the use of 6,250
purchase cards. All dollar figures have been converted to constant 2001
dollars.

Figure 11: Commercial Item Purchases Using FAR Part 12 Procedures, Fiscal
Years 1997 through 2001

300 Dollars in millions

250 200 150 100

50 0

1997 1998 1999 2000 2001 Fiscal year

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 12: Extent that Eligible Contracts Are Performance Based, Fiscal
Year 2001 (by dollar value)

24%

Performance based

76%

Not performance based Source: FPDS. Notes: Based on FAR 37.102,
performance- based methods should be used to the maximum extent
practicable for all services, except for construction, utilities,
architect and engineering, or services that are incidental to supply
purchases.

DOE officials noted that their internal procurement data system reported a
significantly higher rate of performance- based contracting (77 percent)
in fiscal year 2000. These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

III. Workforce

Figure 13: Workforce Trends, Fiscal Year 1997 through Fiscal Year 2001 Tot
al

Acquisition Fiscal year

workforce workforce Percent

1997 16,752 1,319 7. 9 1998 15,826 1,286 8. 1 1999 15,498 1,315 8. 5 2000
15,367 1,328 8. 6 2001 15,997 1,449 9. 1 Source: CPDF.

Figure 14: Acquisition Workforce by Years of Federal Service 5%

5 to 10 years

7%

Fewer than 5 years

57% 31%

10 to 20 years 20 years or more Source: CPDF.

Figure 15: Acquisition Workforce Retirement Eligibility 10%

Before fiscal year 2002

18%

Fiscal years 2008 through 2011

43% 29%

Fiscal years 2002 through 2007 After fiscal year 2011 Source: CPDF.

IV. Key Procurement Initiatives as Reported by Agency Officials Contract
Management: To address both pre- award and post- award contract
administration issues, a Contract Administration Division was formed to
provide guidance and seek out and resolve contract administration issues.
During fiscal year 2002, the division conducted a review of over 50
internal DOE

directives. As a result of this review, a significant number of directives
will be revised, canceled, or consolidated in an effort to be more
consistent with performance- based management principles.

Acquisition Career Development Program: To ensure that workforce skills
stay current, DOE adopted the requirement for 80 hours of continuous
learning every two years. As of the first quarter of 2002, 88 percent of
the covered workforce met the certification requirements.

Electronic Procurement: To streamline and eliminate redundant processes
and develop paperless solutions, DOE developed DOE/ C- Web, a Web- based
electronic small purchase system, and the Industry Interactive Procurement
System (IIPS), a Web- based system for large contracts (over $100, 000) to
issue solicitations, receive proposals, conduct negotiations, and make
awards via the Internet. The systems have allowed DOE to achieve the
following results:  100 percent of all synopses and notices requiring
posting in FedBizOpps were posted electronically through IIPS. The number
of solicitations posted on IIPS increased from 88 in fiscal year 1999 to

approximately 900 in fiscal year 2002.  The number of transactions
conducted via DOE/ C- Web increased from approximately 1, 800 in fiscal
year 1998 to 2,743 in fiscal year 2002.

V. Key Procurement Reports General Accounting Office

Department of Energy: Status of Contract and Project Management Reforms.
GAO- 03- 570T. Washington, D. C.: March 20, 2003.

Major Management Challenges and Program Risks: Department of Energy. GAO-
03- 100. Washington, D. C.: January 2003.

Contract Reform: DOE Has Made Progress, but Actions Needed to Ensure
Initiatives Have Improved Results. GAO- 02- 798. Washington, D. C.:
September 13, 2002.

Department of Energy: Contractor Litigation Costs. GAO- 02- 418R.
Washington, D. C.: March 8, 2002.

Inspector General

IG- 0538* Management Challenges at the Department of Energy, December 21,
2001. IG- 0510* Use of Performance- Based Incentives at Selected
Departmental Sites, July 9, 2001. IG- 0509* Integrated Planning,
Accountability, and Budgeting System- Information System, June 28, 2001.

Appendix V: Department of Health and Human Services Agency Overview and
Highlights

Mission: The Department of Health and Human Services (HHS) is the United
States government*s principal agency for protecting the health and welfare
of all Americans.

Significant bureaus

The following bureaus account for the majority of HHS* fiscal year 2001
discretionary budget resources:  National Institutes of Health (NIH) is
responsible for conducting scientific research regarding the nature

and behavior of living systems to extend healthy life and reduce the
burdens of illness and disability. In fiscal year 2001, NIH accounted for
36 percent of HHS* discretionary resources.  Administration for Children
and Families is responsible for promoting the economic and social

well being of families, children, individuals, and communities. In fiscal
year 2001, the administration accounted for 21 percent of HHS*
discretionary resources.  Other key bureaus: Food and Drug
Administration, Centers for Medicare and Medicaid Services,

Centers for Disease Control and Prevention, and Indian Health Service.

Spending

HHS* discretionary budget increased by 47 percent from fiscal year 1997
through fiscal year 2001, and totaled $61 billion in fiscal year 2001.
Over the 5- year period, the proportion of HHS* discretionary resources
spent under contracts decreased slightly, dropping from more than 9
percent in fiscal year 1997 to 8 percent in fiscal year 2001.  HHS relied
heavily on services from fiscal years 1997 through 2001. Although HHS*
spending on goods

increased 127 percent, from $159 million to $360 million during the 5-
year period, spending on services increased 19 percent, from $3. 3 billion
to $3. 9 billion, between fiscal years 1997 and 2001.  HHS spent about
$1.1 billion on research and development projects in fiscal year 2001, or
about 27 percent of total contract spending. The amount spent on these
projects remained relatively stable during the 5- year

period.  From fiscal years 1997 through 2001, HHS experienced significant
spending increases in three categories:

medical, dental, and veterinary equipment (363 percent); professional,
administrative, and management support (123 percent); and IT services (115
percent).

Procurement methods

HHS spent about $4.3 billion through contracts over $25,000 in fiscal year
2001. HHS relies on cost- type contracts as its primary contracting
vehicle, accounting for 66 percent of these contract dollars.  Purchase
card spending increased by 258 percent over the 5- year period, from $95.
2 million in fiscal year

1997 to $341. 2 million in fiscal year 2001.  HHS* significant increase
in its use of the federal supply schedule has been driven by purchases of
services,

which increased from about $6 million to over $98 million, during the 5-
year period.

Workforce

The total HHS workforce has been increasing, particularly at NIH and the
Food and Drug Administration, due to bio- defense initiatives. This trend
is expected to continue, given the current focus on combating the threat
of biological or chemical terrorism.  In fiscal year 2002, more than 80
percent of the acquisition workforce had more than 10 years of federal

service; the majority has 20 years or more of service.  By fiscal year
2008, about 33 percent of the current acquisition workforce will be
eligible to retire.

I. Spending

Figure 1: Procurement*s Relationship to Discretionary Budget Resources,
Fiscal Years 1997 through 2001

75 Dollars in billions

50 25

0 1997 1998 1999 2000 2001 Fiscal year

Total discretionary budget resources Total contract obligations

Source: FPDS and OMB. Notes: Discretionary budget resources reflect the
budget amount that an agency is appropriated for a current fiscal year
plus the budget authority that the agency carries over from prior fiscal
years.

Total contract obligations exclude purchase card use. All dollar figures
have been converted to constant 2001 dollars.

Figure 2: Spending on Goods and Services, Fiscal Years 1997 through 2001 5

Dollars in billions 4 3 2 1 0

1997 1998 1999 2000 2001 Fiscal year

Services Goods

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 3: Principal Types of Goods and Services in Fiscal Year 2001

Dollars in millions

Fiscal year Change Goods 2001 1997

(percent)

IT equipment $109. 0 $81.6 34 Medical, dental and veterinary equipment,
and supplies 87. 0 18.8 363

Instruments and laboratory equipment 52. 0 13.4 288 Other goods 112. 1
45.2 148

Total goods $360. 1 $159.0 127 Services

Research and development 1, 157. 5 1,133.2 2 Professional, administrative,
and management support 957. 8 428.6 123

IT services 790. 1 366.8 115 Other services 1,027. 4 1,368.0 -25

Total services $3,932. 7 $3, 296.6 19 Total goods and services $4,292. 8
$3, 455.6 24

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 4: Vendor Type, Fiscal Year 2001 2%

State/ local government

9%

JWOD/ Nonprofit

11%

Small disadvantaged

47%

business

14%

Other

17%

Other small business Large business Source: FPDS. Notes: 6 percent of HHS*
vendors are women- owned businesses. Other includes hospitals, foreign
contractors, domestic contractors working outside the United States, and
educational institutions, including historically black colleges and
universities and minority institutions.

These figures include only orders and contracts for more than $25,000;
contracts for $25,000 or less and purchase cards are excluded.

Figure 5: Top Five Vendors, Fiscal Year 2001

Dollars in millions

Goods and services Amount Vendor

Provided awarded

1. SAIC Frederick, Inc. Operations and technical support services $192. 9

2. Westat Research and development in physical, engineering, and life
sciences $187. 9

3. McCarthy Construction Construction of infectious

Company, Inc. disease lab $106. 3

4. Research Triangle Institute Research and development in the social
sciences and humanities $85. 7

5. ACAMBIS Smallpox vaccine $2. 0 Source: HHS.

II. Procurement Methods

Figure 6: Principal Contract Types Employed in Fiscal Year 2001

Dollars in billions

Percent of total Contract type Amount spent

amount spent

Firm fixed- price $1.2 28.3 Other fixed- price $0.1 2. 2 Cost- type $2.8
65.7 Labor hours/ time and materials $0.2 3. 5 Source: FPDS. Note: These
figures include only orders and contracts for more than $25, 000;
contracts for $25,000 or less and purchase cards are excluded.

Percentages may not add to 100 due to rounding.

Figure 7: Competition, Fiscal Year 2001 1%

Follow- on to competed action a

7%

Not available for competition b

10%

Not competed

82%

Competed Competed Not competed Source: FPDS. a Contracts that were follow-
on to a competed action are those subsequent actions awarded to a
particular contractor who had previously been awarded the initial contract
under competitive procedures. b Contracts not available for competition
are for utilities, contracts authorized or required by statute

to be awarded to a designated source, sole source contracts awarded to
certain small disadvantaged businesses, or actions where the agency has
determined that there is no opportunity for competition, among other
things.

Note: These figures include only orders and contracts for more than $25,
000; contracts for $25,000 or less and purchase cards are excluded.

Figure 8: Degree of Competition for Competed Contracts, Fiscal Years 1997
through 2001 Amount spent on

One offer More than one

Fiscal year competed contracts

(percent) offer (percent)

1997 $2.2 25.6 73. 7 1998 $2.5 23.1 74. 2 1999 $3.1 22.1 69. 4 2000 $3.1
20.9 77. 7 2001 $3.5 30.3 66. 9 Source: FPDS. Notes: These figures include
only orders and contracts for more than $25,000; contracts for $25,000 or
less and purchase cards are excluded.

All dollar figures have been converted to constant 2001 dollars.
Percentages do not add to 100 as information on the number of offers was
either missing or not required to be reported.

Figure 9: Extent the Federal Supply Schedule is Used to Purchase Goods and
Services, Fiscal Years 1997 through 2001

200 Dollars in millions

150 100

50 0

1997 1998 1999 2000 2001 Fiscal year

Total Services Goods

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 10: Amount Spent Using Purchase Cards, Fiscal Years 1997 through
2001 400

Dollars in millions 300 200 100

0 1997 1998 1999 2000 2001 Fiscal year

Source: FPDS. Note: In fiscal year 2001, HHS authorized the use of 7,468
purchase cards. All dollar figures have been converted to constant 2001
dollars.

Figure 11: Commercial Item Purchases Using FAR Part 12 Procedures, Fiscal
Years 1997 through 2001

500 Dollars in millions

400 300 200 100

0 1997 1998 1999 2000 2001 Fiscal year

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 12: Extent That Eligible Contracts Are Performance Based, Fiscal
Year 2001 (by dollar value)

16%

Performance based

84%

Not performance based Source: FPDS. Notes: Based on FAR 37.102,
performance- based methods should be used to the maximum extent
practicable for all services, except for construction, utilities,
architect and engineering, or services that are incidental to supply
purchases.

These figures include only orders and contracts for more than $25,000;
contracts for $25,000 or less and purchase cards are excluded.

III. Workforce

Figure 13: Workforce Trends, Fiscal Years 1997 through 2001 Tot al

Acquisition Fiscal year

workforce workforce Percent

1997 48,817 a 2,281 4. 7 1998 49,329 a 2,248 4. 6 1999 50,512 a 2,395 4. 8
2000 51,443 a 2,443 4. 7 2001 52,534 a 2,490 4. 7 Source: CPDF. a HHS
officials reported a total workforce of over 64,000 in fiscal year 2001.
In part, the difference reflects CPDF's exclusion of more than 6, 000
members of the United States Public Health Service

Commissioned Corps, who provide health expertise in times of national and
international emergencies. HHS did not provide data for fiscal years 1997
through 2000.

Figure 14: Acquisition Workforce by Years of Federal Service 12%

Fewer than 5 years

7%

5 to 10 years

33%

10 to 20 years

48%

20 years or more Source: CPDF.

Figure 15: Acquisition Workforce Retirement Eligibility 11%

Before fiscal year 2002

14%

Fiscal years 2008 through 2011

53% 22%

Fiscal years 2002 through 2007 After fiscal year 2011 Source: CPDF.

IV. Key Procurement Initiatives as Reported by Agency Officials Reverse
auctioning: Reverse auctioning is a process that allows many sellers to
compete for the business of a single buyer. However, unlike a traditional
auction, bid prices go down. HHS claimed cost savings of more

than $1. 3 million from fiscal year 2000 through 2001 using reverse
auctioning techniques.

Performance- based service contracting: HHS officials reported significant
increases in their use of performance- based contracting, including
contracts with Medicare intermediaries and carriers.

V. Key Procurement Reports General Accounting Office

Major Management Challenges and Program Risks: Department of Health and
Human Services.

GAO- 03- 101. Washington, D. C.: January 2003.

Medicare: Comments on HHS* Claims Administration Contracting Reform
Proposal. GAO- 01- 1046R. Washington, D. C.: August 17, 2001.

Medicare Contracting Reform: Opportunities and Challenges in Contracting
for Claims Administration Services. GAO- 01- 918T. Washington, D. C.: June
28, 2001.

Medicare: Opportunities and Challenges in Contracting for Program
Safeguards. GAO- 01- 616. Washington, D. C.: May 18, 2001.

Inspector General

Inspector General Report Number A- 04- 99- 05561*- Audit of Medicare
Administrative Costs Claimed by Blue Cross Blue Shield of Florida for
Fiscal Years 1995 through 1998, July 31, 2002.

Appendix VI: Department of Justice Agency Overview and Highlights

Mission: Enforcing laws in the public interest and protecting the public
from criminal activity.

Significant bureaus

The following bureaus account for the majority of the Department of
Justice*s (DOJ) fiscal year 2001 total discretionary budget resources: 
Office of Justice Programs develops programs that improve law
enforcement*s ability to prevent and

control crime, improve the criminal and juvenile justice systems, increase
knowledge about crime and related issues, and assist crime victims. In
fiscal year 2001, the office accounted for 24 percent of DOJ*s
discretionary resources.  Federal Bureau of Prisons seeks to provide
safe, efficient, and humane correctional services and

programs. In fiscal year 2001, the bureau accounted for 18 percent of
DOJ*s discretionary resources.  Federal Bureau of Investigation (FBI)
conducts investigations and enforces federal laws. In fiscal year

2001, the FBI accounted for 16 percent of DOJ*s discretionary resources. 
Other key bureaus: Immigration and Naturalization Service, Drug
Enforcement Administration, and the

U. S. Marshals Service.

Spending

DOJ*s discretionary resources increased 16 percent from fiscal year 1997
through fiscal year 2001 and totaled $26.4 billion in fiscal year 2001.
Over the 5- year period, the proportion of DOJ*s discretionary resources
spent under contracts increased slightly, rising from 15 percent in fiscal
year 1997 to 17 percent in fiscal year 2001.  For contracts valued over
$25, 000, spending on services increased 64 percent from fiscal year 1997
through

fiscal year 2001. This growth was driven by increases in the following
services: professional, administrative and management support services
(128 percent); building construction (125 percent); information technology
services (64 percent).

Procurement methods

DOJ spent about $3.9 billion on contracts over $25,000 in fiscal year
2001. DOJ relied on firm fixed- price and other kinds of fixed- price
contracts as the agency*s primary contracting vehicles. On average from
fiscal year 1997 through fiscal year 2001, fixed- price contracts
accounted for 85 percent of DOJ*s contract dollars.

 DOJ*s use of the federal supply schedule and contracts awarded by other
agencies increased considerably during the 5- year period. For example,
DOJ spent $234 million in fiscal year 1997 using the federal supply
schedule; in fiscal year 2001, it had spent $470 million.  Purchase card
spending increased by 179 percent over the 5- year period, from $190.9
million in

fiscal year 1997 to $533. 4 million in fiscal year 2001. In fiscal year
2001, DOJ authorized the use of 16, 073 purchase cards.  DOJ*s use of FAR
part 12 to purchase commercial items grew more than 400 percent over the
last 5 years.

This increase was due to DOJ*s increased emphasis on (1) commercial
purchases, and (2) more accurate reporting of data to FPDS.

Workforce

 From fiscal year 1997 through fiscal year 2001, DOJ*s total workforce
increased by 11 percent* growing from about 110,000 to 123,000. However,
DOJ*s acquisition workforce remained relatively stable, decreasing 2
percent over the 5- year period.

 In fiscal year 2002, more than 85 percent of the acquisition workforce
had 10 years or more of federal service.  By fiscal year 2008, about 30
percent of the current acquisition workforce will be eligible to retire.

I. Spending

Figure 1: Procurement*s Relationship to Discretionary Budget Resources,
Fiscal Years 1997 through 2001

30 Dollars in billions

20 10

0 1997 1998 1999 2000 2001 Fiscal year

Total discretionary budget resources Total contract obligations

Source: FPDS and OMB. Notes: Discretionary budget resources reflect the
budget amount that an agency is appropriated for a current fiscal year
plus the budget authority that the agency carries over from prior fiscal
years.

Total contract obligations exclude purchase card use. All dollar figures
have been converted to constant 2001 dollars.

Figure 2: Spending on Goods and Services, Fiscal Years 1997 through 2001 4

Dollars in billions 3 2 1 0

1997 1998 1999 2000 2001 Fiscal year

Services Goods

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 3: Principal Types of Goods and Services in Fiscal Year 2001

Dollars in millions

Fiscal year Change Goods 2001 1997

(percent)

IT equipment $495.0 $390.1 27 Furniture 121. 3 128.4 -6 Communication and
detection equipment 65. 7 100.3 -34 Other goods 337. 2 458.7 -26

Total goods $1,019.2 $1, 077.5 -5 Services

IT services 723.0 441. 7 64 Construction 568.6 252. 9 125 Professional,
administrative, and management support 537. 2 235.2 128

Other services 1,066.2 835. 8 28

Total services $2,895.0 $1, 765.6 64 Total goods and services $3,914.2 $2,
843.1 38

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 4: Vendor Type, Fiscal Year 2001 1%

Other

1%

State/ local government

2%

JWOD/ Nonprofit

12%

Small disadvantaged business

17%

Other small business 67% Large business Source: FPDS. Notes: 4 percent of
DOJ*s vendors are women- owned businesses. Other includes hospitals,
foreign contractors, domestic contractors working outside the United
States, and educational institutions, including historically black
colleges and universities and minority institutions.

These figures include only orders and contracts for more than $25,000;
contracts for $25,000 or less and purchase cards are excluded.

Figure 5: Top Five Vendors, Fiscal Year 2001

Dollars in millions

Goods and services Amount

Vendor provided

awarded

1. Hensel Phelps Construction Design and build correction facilities $441.
8

2. Akal Security Services Guard services $348. 4 3. Wackenhut Corrections
Private jail service, management and operation $297. 4

4. SAIC IT system development, maintenance, and administrative services
$222. 1

5. Dyncorp IT administrative support $179. 8 Source: DOJ.

II. Procurement Methods

Figure 6: Principal Contract Types Employed in Fiscal Year 2001

Dollars in billions

Amount Percent of total

Contract type spent

amount spent

Firm fixed- price $2. 9 74.2 Other fixed- price $0.4 11. 2 Cost- type $0.
3 7.6 Labor hours/ time and materials $0. 3 6. 8 Source: FPDS. Note: These
figures include only orders and contracts for more than $25, 000;
contracts for $25,000 or less and purchase cards are excluded.

Percentages may not add to 100 due to rounding.

Figure 7: Competition, Fiscal Year 2001 2%

Not competed

11%

Not available for competition a

87%

Competed Competed Not competed Source: FPDS. a Contracts not available for
competition are for utilities, contracts authorized or required by statute
to be awarded to a designated source, sole source contracts awarded to
certain small disadvantaged businesses, or actions where the agency has
determined that there is no opportunity for competition, among other
things.

Note: These figures include only orders and contracts for $25,000 or more;
contracts under $25,000 and purchase cards are excluded.

Figure 8: Degree of Competition for Competed Contracts, Fiscal Years 1997
through 2001 Amount spent on

One offer More than one

Fiscal year competed contracts

(percent) offer (percent)

1997 $2.4 9. 8 89. 1 1998 $2.5 8. 2 90. 7 1999 $2.8 6. 9 92. 1 2000 $2.6
11.3 87. 6 2001 $3.4 8. 2 91. 0 Source: FPDS. Notes: These figures include
only orders and contracts for more than $25,000; contracts for $25,000 or
less and purchase cards are excluded.

All dollar figures have been converted to constant 2001 dollars.
Percentages do not add to 100 as information on the number of offers was
either missing or not required to be reported.

Figure 9: Extent the Federal Supply Schedule is Used to Purchase Goods and
Services, Fiscal Years 1997 through 2001

500 Dollars in millions

400 300 200 100

0 1997 1998 1999 2000 2001 Fiscal year

Total Services Goods

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 10: Amount Spent Using Purchase Cards, Fiscal Years 1997 through
2001 600

Dollars in millions 450 300 150

0 1997 1998 1999 2000 2001 Fiscal year

Source: FPDS. Notes: In fiscal year 2001, DOJ authorized the use of 16,073
purchase cards. All dollar figures have been converted to constant 2001
dollars.

Figure 11: Commercial Item Purchases Using FAR Part 12 Procedures, Fiscal
Years 1997 through 2001

1.5 Dollars in billions

1.0 0.5

0 1997 1998 1999 2000 2001 Fiscal year

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 12: Extent That Eligible Contracts Are Performance Based, Fiscal
Year 2001 (by dollar value)

13%

Performance based

87%

Not performance based Source: FPDS. Notes: Based on FAR 37.102,
performance- based methods should be used to the maximum extent
practicable for all services, except for construction, utilities,
architect and engineering, or services that are incidental to supply
purchases.

These figures include only orders and contracts for more than $25,000;
contracts for $25,000 or less and purchase cards are excluded.

III. Workforce

Figure 13: Workforce Trends, Fiscal Years 1997 through 2001 Tot al

Acquisition Fiscal year

workforce workforce Percent

1997 110, 448 1,485 1. 3 1998 117, 380 1,529 1. 3 1999 120, 288 1,515 1. 3
2000 121, 272 1,496 1. 2 2001 123, 096 1,457 1. 2 Source: CPDF.

Figure 14: Acquisition Workforce by Years of Federal Service 4%

Fewer than 5 years

9%

5 to 10 years

53% 34% 20 years or more 10 to 20 years

Source: CPDF.

Figure 15: Acquisition Workforce Retirement Eligibility 6%

Before fiscal year 2002

21%

Fiscal years 2008 through 2011

49% 24%

Fiscal years 2002 through 2007 After fiscal year 2011 Source: CPDF.

IV. Key Procurement Initiatives as Reported by Agency Officials
Acquisition- related electronic government initiatives: Since October
2000, DOJ has implemented several e- government programs to improve its
procurement processes. These programs include:

 Federal Business Opportunities, which is a GSA- managed Web- based
system that provides for electronic notice of agency requirements and
solicitations for contract opportunities. This system has been deployed
departmentwide, and all DOJ synopses for contracts over $25,000 are now
posted to that site.

 Central Contractor Registration is a Web- based governmentwide database
of vendor information.

DOJ is the administrator for two programs used to track contractor
performance:

 Contractor Past Performance System: an electronic federal report card
collection system that is used to collect and record past performance
information for subsequent use in determining contractor eligibility and
selection.  Past Performance Information Retrieval System: A Web- enabled
application that allows the retrieval

of contractor past performance information from various databases.

Departmentwide guidelines for evaluating candidates for GS- 1102 contract
specialist positions: Over the last 5 years, guidelines were issued to
bureau personnel officers for evaluating candidates for GS- 1102 contract
specialist positions. Key elements include new education standards and
certification processes.

V. Key Procurement Reports General Accounting Office

Major Management Challenges and Program Risks: Department of Justice. GAO-
03- 105. Washington, D. C.: January 2003.

Information Technology: INS Needs to Strengthen Its Investment Management
Capability. GAO- 01- 146. Washington, D. C.: December 29, 2000.

Border Patrol: Procurement of MD 600N Helicopters Should Be Reassessed.
GGD- 00- 201. Washington, D. C.: September 29, 2000.

Inspector General

Report Number 02- 32* Federal Bureau of Prisons Management of Construction
Contracts, August 2002. Report Number 01- 16* Justice*s Reliance on
Private Contractors for Prison Services, July 31, 2002.

Appendix VII: Department of the Treasury Agency Overview and Highlights

Mission: To promote a stable economy, manage the government*s finances,
and safeguard federal financial systems and our nation*s leaders.

Significant bureaus

The following bureaus account for the majority of Treasury*s fiscal year
2001 total discretionary budget resources:  Internal Revenue Service
(IRS)* responsible for determining, assessing, and collecting tax revenue
in

the United States. In fiscal year 2001, the IRS accounted for 51 percent
of Treasury*s total discretionary budget resources.  U. S. Customs
Service* responsible for enforcing laws to safeguard U. S. borders against
the illegal entry

of goods and of regulating legitimate commercial activity. In fiscal year
2001, Customs accounted for 20 percent of Treasury*s total discretionary
budget resources.  Other key bureaus* the U. S. Mint, the Secret Service,
and the Bureau of Alcohol, Tobacco, and Firearms.

Spending

Treasury*s total discretionary budget resources increased by 32 percent
from fiscal year 1997 through fiscal year 2001 and totaled $19.7 billion
in fiscal year 2001. Over the same period, the amount spent through
contracts increased slightly, both in real terms and as a share of
Treasury*s discretionary resources. For example, in fiscal year 1997,
contract obligations accounted for about 14 percent of Treasury*s
discretionary resources; by fiscal year 2001, contract obligations
accounted for 17 percent.

 For contracts valued over $25, 000, spending on services increased by 71
percent from fiscal year 1997 through fiscal year 2001, while spending on
goods increased by 44 percent. Treasury*s spending on goods increased
significantly during fiscal year 1999; this was attributed to (1) the U.
S. Mint*s development of the *state quarters* program, (2) the Secret
Service*s upgrade in hand weapons, and (3) preparation for Y2K- related
incidents.  Since fiscal year 1997, Treasury experienced significant
spending increases in four categories: information

technology (IT) equipment (181 percent), communication detection equipment
(144 percent), administrative and management support services (138
percent), and IT services (81 percent).

Procurement methods

Treasury has changed its procurement approach in several key areas since
fiscal year 1997:  Treasury*s use of contracts awarded or administered by
other agencies has doubled over this period and

accounted for about 16 percent of Treasury*s contract obligations in
fiscal year 2001.  After increasing by about 53 percent from fiscal years
1997 through 1999, purchase card use remained relatively stable through
fiscal year 2001. In fiscal year 2001, Treasury authorized the use of 16,
558 purchase cards.

Workforce

Treasury*s workforce size has remained relatively stable over the 5- year
period. Between fiscal years 1997 through 2001, Treasury*s total workforce
grew about 2 percent from about 156,000 employees to almost 159,000.
Treasury*s acquisition workforce represents about 1.5 percent of its total
workforce.  In fiscal year 2001, 47 percent of the acquisition workforce
had 20 years or more of federal service, while

only 4 percent of the workforce had fewer than 5 years of service.  By
fiscal year 2008, approximately 30 percent of Treasury*s acquisition
workforce will be eligible to retire.

I. Spending

Figure 1: Procurement*s Relationship to Discretionary Budget Resources,
Fiscal Years 1997 through 2001

24 Dollars in billions

18 12

6 0

1997 1998 1999 2000 2001 Fiscal year

Total discretionary budget resources Total contract obligations

Source: FPDS and OMB. Notes: Discretionary budget resources reflect the
budget amount that an agency is appropriated for a current fiscal year
plus the budget authority that the agency carries over from prior fiscal
years.

Total contract obligations exclude purchase card use. All dollar figures
have been converted to constant 2001 dollars.

Figure 2: Spending on Goods and Services, Fiscal Years 1997 through 2001
2.0

Dollars in billions 1.5 1.0 0.5

0 1997 1998 1999 2000 2001 Fiscal year

Services Goods

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 3: Principal Types of Goods and Services in Fiscal Year 2001

Dollars in millions

Fiscal year Change Goods 2001 1997

(percent)

IT equipment $619.5 $220.5 181 Ores and minerals 189.5 363. 3 -48
Communication and detection equipment 148.2 60.6 144 Other goods 434. 7
323.4 34

Total goods $1,391.9 $967.8 44 Services

IT & telecommunications 851. 2 469. 2 81 Professional, administrative, and
management support 416. 5 174.7 138

Maintenance, repair, and rebuilding of equipment 87.4 137. 3 -36

Other services 377.5 234. 2 61

Total services $1,732.6 $1, 015.4 71 Total goods and services $3,124.4 $1,
983.2 57

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 4: Vendor Type, Fiscal Year 2001 1%

Other

2%

JWOD/ Nonprofit

11%

Small disadvantaged business

19%

Other small business 67%

Large business Source: FPDS. Notes: 5 percent of Treasury*s vendors are
women- owned businesses. Other includes hospitals, foreign contractors,
domestic contractors working outside the United States, and educational
institutions, including historically black colleges and universities and
minority institutions.

These figures include only orders and contracts for more than $25,000;
contracts for $25,000 or less and purchase cards are excluded.

Figure 5: Top Five Vendors, Fiscal Year 2001

Dollars in millions

Goods and services Amount

Vendor provided

awarded

1. Computer Sciences Corporation IT systems development $217. 3 2. TRW IT
services $144. 3 3. IBM IT and telecommunication services $76. 5

4. Lockheed Martin Aircraft components and engine services $72. 8

5. Olin Brass Non- ferrous metal $70. 5 Source: Department of the
Treasury.

II. Procurement Methods

Figure 6: Principal Contract Types Employed in Fiscal Year 2001

Dollars in billions

Amount Percent of total

Contract type spent

amount spent

Firm fixed- price $2.1 68.5 Other fixed- price $0.3 8. 9 Cost- type $0. 6
18.2 Labor hours/ time and materials $0.1 4. 2 Source: FPDS. Note: These
figures include only orders and contracts for more than $25, 000;
contracts for $25,000 or less and purchase cards are excluded.

Totals may not add to 100 due to rounding.

Figure 7: Competition, Fiscal Year 2001 1%

Follow- on to competed action a

5%

Not available for competition b

8%

Not competed

86%

Competed Competed Not competed

Source: FPDS. a Contracts that were follow- on to a competed action are
those subsequent actions awarded to the particular contractor who had
previously been awarded the initial contract under competitive procedures.
b Contracts not available for competition are for utilities, contracts
authorized or required by statute to be awarded to a designated source,
sole source contracts awarded to certain small disadvantaged businesses,
or actions where the agency has determined that there is no opportunity
for competition, among other things.

Note: These figures include only orders and contracts for more than $25,
000; contracts for $25,000 or less and purchase cards are excluded.

Figure 8: Degree of Competition for Competed Contracts, Fiscal Years 1997
through 2001

Dollars in billions

Amount spent on One offer

More than one Fiscal year

competed contracts (percent)

offer (percent)

1997 $1. 5 3. 5 75. 6 1998 $2. 3 4. 1 62. 7 1999 $2. 8 8. 4 58. 1 2000 $2.
4 6. 6 68. 8 2001 $2.7 10.8 74.1 Source: FPDS. Note: These figures include
only orders and contracts for more than $25,000; contracts for $25,000 or
less and purchase cards are excluded.

Percentages do not add to 100 as information on the number of offers was
either missing or not required to be reported.

All dollar figures have been converted to constant 2001 dollars.

Figure 9: Extent the Federal Supply Schedule Is Used to Purchase Goods and
Services, Fiscal Years 1997 through 2001

350 Dollars in millions

300 250 200 150 100

50 0

1997 1998 1999 2000 2001 Fiscal year

Total Goods Services

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 10: Amount Spent Using Purchase Cards, Fiscal Years 1997 through
2001 200

Dollars in millions 150 100

50 0

1997 1998 1999 2000 2001 Fiscal year

Source: FPDS. Notes: In fiscal year 2001, Treasury authorized the use of
16,558 purchase cards. All dollar figures have been converted to constant
2001 dollars.

Figure 11: Commercial Item Purchases Using FAR Part 12 Procedures, Fiscal
Years 1997 through 2001

1.5 Dollars in billions

1.0 0.5

0 1997 1998 1999 2000 2001 Fiscal year

Source: FPDS. Note: These figures include only orders and contracts for
more than $25, 000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 12: Extent That Eligible Contracts Are Performance Based, Fiscal
Year 2001 (by dollar value)

7%

Performance based

93%

Not performance based Source: FPDS. Notes: Based on FAR 37.102,
performance- based methods should be used to the maximum extent
practicable for all services, except for construction, utilities,
architect and engineering, or services that are incidental to supply
purchases.

These figures include only orders and contracts for more than $25,000;
contracts for $25,000 or less and purchase cards are excluded.

III. Workforce

Figure 13: Workforce Trends, Fiscal Years 1997 through 2001 Tot al

Acquisition Fiscal year

workforce workforce Percent

1997 155, 916 2,374 1. 5 1998 153, 603 2,400 1. 6 1999 155, 137 2,378 1. 5
2000 156, 694 2,412 1. 5 2001 158, 660 2,561 1. 6 Source: CPDF.

Figure 14: Acquisition Workforce by Years of Federal Service 4%

Fewer than 5 years

5%

5 to 10 Years

47% 44%

10 to 20 Years 20 years or more Source: CPDF.

Figure 15: Acquisition Workforce Retirement Eligibility 7%

Before fiscal year 2002

18%

Fiscal years 2008 through 2011

52% 23%

Fiscal years 2002 through 2007 After fiscal year 2011 Source: CPDF.

IV. Key Procurement Initiatives as Reported by Agency Officials
Performance- based Service Contracting (PBSC): To increase its use of PBSC
methods, Treasury developed PBSC training and a handbook, presented
information on PBSC to all bureaus, and worked with bureaus on individual
procurements. Procurement officials at Treasury stated that these efforts
resulted in

increasing Treasury*s use of performance- based contracts to 20 percent in
fiscal year 2002.

Improving procurement system reviews: Treasury developed the Acquisition
Management Assistance Review program to assess three key areas (people,
process, and tools) to determine the health of Treasury*s procurement
systems.

Procurement Intern Program: Because its acquisition workforce is aging,
Treasury developed a procurement intern program to identify and develop
new talent for the bureaus.

V. Key Procurement Reports General Accounting Office

Major Management Challenges and Program Risks: Department of the Treasury.
GAO- 03- 109. Washington, D. C.: January 2003.

Acquisition Workforce: Status of Agency Efforts to Address Future Needs.
GAO- 03- 55. Washington, D. C.: December 18, 2002.

IRS Contracting: New Procedure Adds Price or Cost as a Selection Factor
for Task Order Awards. GAO- 03- 218. Washington, D. C.: December 10, 2002.

Business Systems Modernization: IRS Needs to Better Balance Management
Capacity with System Acquisition Workload. GAO- 02- 356. Washington, D.
C.: February 28, 2002.

Inspector General

OIG- 02- 074* General Management: The Mint Leased Excessive Space For Its
Headquarters Operation,

March 29, 2002.

Appendix VIII: Department of Transportation Agency Overview and Highlights

Mission: To ensure a fast, safe, efficient, accessible, and convenient
transportation system that meets our vital national interests and enhances
the quality of life of the American people, today and into the future.

Significant administrations

Two administrations account for the majority of the Department of
Transportation*s (DOT) fiscal year 2001 total discretionary budget
resources: The Federal Aviation Administration (FAA) regulates civil
aviation to promote safety and fulfill the

requirements of national defense; encourages and develops civil
aeronautics, including new aviation technology; operates a common system
of air traffic control and navigation for both civil and military
aircraft; implements programs to control aircraft noise and other
environmental effects of civil aviation; and regulates U. S. commercial
space transportation. In fiscal year 2001, the FAA accounted for 41
percent of DOT*s total discretionary budget resources. The United States
Coast Guard (USCG) is responsible for maritime search and rescue,
recreational

boating safety, vessel traffic management, at- sea enforcement of living
marine resource laws and treaty obligations, at- sea drug and illegal
migrant interdiction, and port security. In fiscal year 2001, the USCG
accounted for 15 percent of DOT*s total discretionary budget resources.

 Other key organizations: Federal Transit Administration and Federal
Highway Administration.

Spending

DOT*s discretionary resources decreased 28 percent from $51. 8 billion in
fiscal year 1997 to $37.3 billion in fiscal year 2001. This was due
largely to changes brought about by the Transportation Equity Act for the
21st Century (TEA- 21). 1 TEA- 21, which was enacted in June 1998, shifted
a significant amount of discretionary funds to mandatory spending
categories. While discretionary resources decreased during the 5- year
period, the amount spent through contracts increased by 26 percent. In
fiscal year 2001, the DOT spent almost $5.6 billion, or 15 percent of its
discretionary resources, through contracting.

 Spending on goods decreased by 29 percent from fiscal year 1997 to
fiscal year 2001, while spending on services increased 49 percent. In
fiscal year 2001, 85 percent of the amount spent through contracts over
$25,000 was for services.

Procurement methods

DOT relies on a mix of contract types to achieve its mission; slightly
more than half of DOT*s fiscal year 2001 contracts were fixed- price,
while more than a quarter were cost- type. Another 14 percent were labor
hours or time and materials contracts.  In fiscal year 2001, 19 percent
of DOT*s service contracts were performance based.  In fiscal year 2001,
DOT authorized the use of 21, 728 purchase cards.  The amount spent using
FAR part 12 procedures increased from $297 million in fiscal year 1997 to

$1. 6 billion in fiscal year 2001, a 437 percent increase.

Workforce

In fiscal year 2001, DOT*s total workforce was 64,509, a 2 percent
increase from fiscal year 1997. About 2 percent of the total workforce was
made up of the acquisition workforce, which decreased by 7 percent during
the 5- year period, from 1,634 in fiscal year 1997 to 1,514 in fiscal year
2001.  In fiscal year 2001, 56 percent of the acquisition workforce had
20 years or more of federal service, while

5 percent had fewer than 5 years of service.  By fiscal year 2008,
approximately 36 percent of DOT*s acquisition workforce will be eligible
to retire.

1 P. L. 105- 178, June 9, 1998.

I. Spending

Figure 1: Procurement*s Relationship to Discretionary Budget Resources,
Fiscal Years 1997 through 2001

60 Dollars in billions

45 30 15

0 1997 1998 1999 2000 2001 Fiscal year

Total discretionary budget resources Total contract obligations

Source: FPDS, OMB, and FAA. Notes: Discretionary budget resources reflect
the budget amount that an agency is appropriated for a current fiscal year
plus the budget authority that the agency carries over from prior fiscal
years.

Total contract obligations exclude purchase card use. All dollar figures
have been converted to constant 2001 dollars.

Figure 2: Spending on Goods and Services, Fiscal Years 1997 through 2001
6.0

Dollars in billions 4.5 3.0 1.5

0 1997 1998 1999 2000 2001 Fiscal year

Services Goods

Source: FPDS and FAA. Notes: These figures include only orders and
contracts for more than $25,000; contracts for $25,000 or less and
purchase cards are excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 3: Principal Types of Goods and Services in Fiscal Year 2001

Dollars in millions

Fiscal year Change Goods 2001 1997

(percent)

Ships, small craft, pontoons, and floating docks $183. 9 $214.4 -14

Communication and detection equipment 97. 6 203.0 -52 IT equipment 69. 3
355.0 -80 Other goods 438. 8 332.4 32

Total goods $789. 6 $1, 104.8 -29 Services

Professional, administrative, and management support 1, 093. 8 1,004.9 9
IT Services 597. 7 455.1 31 Construction of structures and facilities 490.
1 330.9 48 Other services 2,285. 8 1,213.0 88

Total services $4,467. 4 $3, 003.9 49 Total goods and services $5,257. 0
$4, 108.7 28

Source: FPDS and FAA. Notes: These figures include only orders and
contracts for more than $25,000; contracts for $25,000 or less and
purchase cards are excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 4: Vendor Type, Fiscal Year 2001 1%

Other

1%

JWOD/ Nonprofit

2%

State/ local government

15%

Small disadvantaged business

57% 24%

Other small business Large business Source: FPDS and FAA. Notes: 5 percent
of DOT*s vendors are women- owned businesses. Other includes hospitals,
foreign contractors, domestic contractors working outside the United
States, and educational institutions, including historically black
colleges and universities and minority institutions.

These figures include only orders and contracts for more than $25,000;
contracts for $25,000 or less and purchase cards are excluded.

Figure 5: Top Five Vendors, Fiscal Year 2001

Dollars in millions

Goods and services Amount Vendor

provided awarded

1. Lockheed Martin Planning and integration of air traffic control systems
and IT support services $472. 6 2. Raytheon Air traffic management

systems $299. 4 3. Invision Technologies Explosives detection

systems $240. 0 4. Huntleigh USA Corp. Airport security and

screening services $158. 0 5. Globe Aviation Services Corp. Aviation,
security, terminal and ground- support functions $151. 9

Source: DOT and FAA.

II. Procurement Methods

Figure 6: Principal Contract Types Employed in Fiscal Year 2001

Dollars in billions

Amount Percent of total

Contract type spent

amount spent

Firm fixed- price $2.8 53.3 Other fixed- price $0.3 4. 9 Cost- type $1.4
26.6 Labor hours/ time and materials $0.7 13.7 Source: FPDS and FAA. Note:
These figures include only orders and contracts for more than $25, 000;
contracts for $25,000 or less and purchase cards are excluded.

Percentages do not add to 100 as information on the number of offers was
either missing or not required to be reported.

Figure 7: Competition, Fiscal Year 2001 1%

Follow- on to competed action a

7%

Not available for competition b

19%

Not competed

73%

Competed Competed Not competed Source: FPDS and FAA. a Contracts that were
follow- on to a competed action are those subsequent actions awarded to
the particular contractor who had previously been awarded the initial
contract under competitive procedures. b Contracts not available for
competition are for utilities, contracts authorized or required by statute
to be awarded to a designated source, sole source contracts awarded to
certain small disadvantaged businesses, or actions where the agency has
determined that there is no opportunity for competition, among other
things.

Notes: These figures include only orders and contracts for more than
$25,000; contracts for $25,000 or less and purchase cards are excluded.

Figure 8: Degree of Competition for Competed Contracts, Fiscal Years 1997
through 2001

Dollars in billions

Amount spent on One offer

More than one Fiscal year

competed contracts (percent)

offer (percent)

1997 $1. 5 8. 9 84. 4 1998 $1. 5 5. 8 92. 3 1999 $1. 4 5. 6 92. 4 2000 $1.
5 4. 7 93. 0 2001 $1. 8 8. 6 88. 6 Source: FPDS. Notes: These figures
include only orders and contracts for more than $25,000; contracts for
$25,000 or less and purchase cards are excluded.

FAA could not provide data for the number of offers on competed contracts
and is not represented in this chart. Percentages do not add to 100 as
information on the number of offers was either missing or not required to
be reported.

All dollar figures have been converted to constant 2001 dollars.

Figure 9: Extent the Federal Supply Schedule is Used for Purchases of
Goods and Services, Fiscal Years 1997 through 2001

400 Dollars in millions

300 200 100

0 1997 1998 1999 2000 2001 Fiscal year

Total Services Goods

Source: FPDS and FAA. Notes: These figures include only orders and
contracts for more than $25,000; contracts for $25,000 or less and
purchase cards are excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 10: Amount Spent Using Purchase Cards, Fiscal Years 1997 through
2001 400

Dollars in millions 300 200 100

0 1997 1998 1999 2000 2001 Fiscal year

Source: FPDS. Notes: In fiscal year 2001, DOT authorized the use of 21,728
purchase cards. All dollar figures have been converted to constant 2001
dollars.

Figure 11: Commercial Item Purchases Using FAR Part 12 Procedures, Fiscal
Years 1997 through 2001

2.0 Dollars in billions

1.5 1.0 0.5

0 1997 1998 1999 2000 2001 Fiscal year

Source: FPDS and FAA. Notes: These figures include only orders and
contracts for more than $25,000; contracts for $25,000 or less and
purchase cards are excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 12: Extent That Eligible Contracts Are Performance Based, Fiscal
Year 2001 (by dollar value)

19%

Performance based

81%

Not performance based Source: FPDS. Notes: Based on FAR 37.102,
performance- based methods should be used to the maximum extent
practicable for all services, except for construction, utilities,
architect and engineering, or services that are incidental to supply
purchases.

FAA could not provide the amount spent on performance- based service
contracting because this data was not an integral part of its management
information systems.

These figures include only orders and contracts for more than $25,000;
contracts for $25,000 or less and purchase cards are excluded.

III. Workforce

Figure 13: Workforce Trends, Fiscal Years 1997 through 2001 Tot al

Acquisition Fiscal year

workforce workforce Percent

1997 63,110 1,634 2. 6 1998 63,745 1,572 2. 5 1999 63,051 1,470 2. 3 2000
62,520 1,458 2. 3 2001 64,509 1,514 2. 3 Source: CPDF.

Figure 14: Acquisition Workforce by Years of Federal Service 5%

Fewer than 5 years

5%

5 to 10 Years

56% 34%

10 to 20 Years 20 Years or more Source: CPDF.

Figure 15: Acquisition Workforce Retirement Eligibility 10%

Before fiscal year 2002

19%

Fiscal years 2008 through 2011

45% 26%

Fiscal years 2002 through 2007 After fiscal year 2011

Source: CPDF.

IV. Key Procurement Initiatives as Reported by Agency Officials Security:
To support the current security crisis within our country after September
11, 2001, DOT: (1) helped stand up the Transportation Security
Administration (TSA) by assisting in creating a TSA Acquisition Management
System, developing a standard set of TSA contract provisions and clauses,
and providing operational support in the solicitation and award of TSA
contracts; and (2) continues to address security issues relating to
controlling access to sensitive information and background checks on
contractor personnel in positions where sensitive information or national
security interests are present.

Procurement Performance Management System: DOT continues its major
initiative to improve procurement performance by implementing DOT*s
procurement performance management program. This program assists managers
in targeting areas for improvement based on the results of specified
metrics chosen for their importance to the administration, DOT management,
or DOT customers.

V. Key Procurement Reports General Accounting Office

Major Management Challenges and Program Risks: Department of
Transportation. GAO- 03- 108. Washington, D. C.: January 2003.

National Airspace System: Status of FAA*s Standard Terminal Automation
Replacement System.

GAO- 02- 1071. Washington, D. C.: September 17, 2002.

National Airspace System: FAA*s Approach to Its New Communications System
Appears Prudent, but Challenges Remain. GAO- 02- 710. Washington, D. C.:
July 15, 2002.

FAA Alaska: Weak Controls Resulted in Improper and Wasteful Purchases.
GAO- 02- 606. Washington, D. C.: May 30, 2002.

Coast Guard: Budget and Management Challenges for 2003 and Beyond. GAO-
02- 538T. Washington, D. C.: March 19, 2002.

Coast Guard: Progress Being Made on Deepwater Project, but Risks Remain.
GAO- 01- 564. Washington, D. C.: May 2, 2001.

National Airspace System: Persistent Problems in FAA*s New Navigation
System Highlight Need for Periodic Re- evaluation. GAO/ RCED/ AIMD- 00-
130. Washington, D. C.: June 12, 2000.

Inspector General

FI- 2002- 092* FAA Oversight of Cost Reimbursable Contracts, May 8, 2002.
FI- 2002- 089* DOT*s Information Technology Omnibus Procurement Program
(ITOP), April 15, 2002. FI- 2001- 057* FRA E- Mail System Replacement
Contracts, May 3, 2001. FI- 2000- 125* Inactive Obligations on Contracts,
September 25, 2000. AV- 2000- 127* Technical Support Services Contract:
Better Management Oversight and Sound Business Practices Are Needed,
September 28, 2000.

Appendix IX: Department of Veterans Affairs Agency Overview and Highlights

Mission: To restore the capability of those who suffered harm during their
military service; to ensure a smooth transition as veterans return to
civilian life in their communities; to honor and serve all veterans for
the sacrifices they made on behalf of the nation; to contribute to the
public health, socioeconomic well being, and history of the nation.

Significant administrations

The following administrations account for nearly all of the Department of
Veterans Affairs* (VA) fiscal year 2001 total discretionary budget
resources.  Veterans Health Administration is responsible for medical
care, education, and research, and serves as medical backup to the
Department of Defense. In fiscal year 2001, VHA accounted for 89 percent
of VA*s discretionary resources.

 Veterans Benefits Administration provides benefits and services to
veterans and their dependents, including compensation and pensions,
education benefits, loan guarantees, and insurance.  National Cemetery
Administration provides burial benefits to veterans and eligible
dependents and

Presidential Memorial Certificates to deceased veterans* next of kin.

Spending

VA*s discretionary resources rose by about 20 percent from fiscal years
1997 through fiscal year 2001 and totaled $26. 5 billion in fiscal year
2001. In fiscal year 2001, contract obligations accounted for 22 percent,
or $5. 9 billion, of VA*s discretionary resources.  VA spends almost half
of its contract dollars on medical and dental equipment and supplies.
Since

fiscal year 1997, spending for these supplies has grown by 92 percent due
in large part to an increase in patient workload.  Spending on services
grew by about 14 percent, largely driven by increased spending for
information technology (226 percent) and medical services (24 percent).

Procurement methods

VA relies heavily on firm fixed- price contracts. In fiscal year 2001,
$3.9 billion* or 91 percent* of the $4. 3 billion that VA obligated for
contracts over $25,000 was obligated on firm fixed- price contracts. 
Purchase card spending increased from $855 million in fiscal year 1997 to
$3. 8 billion in fiscal year 2001,

a 344 percent increase. In fiscal year 2001, VA authorized the use of 34,
090 purchase cards.  VA spent $3. 4 billion, 79 percent of total
contracting dollars, on competed contracts in fiscal year 2001. VA
typically received two or more offers on more than 90 percent of its
competed contracts.

Workforce

At 202,414 personnel in fiscal year 2001, VA*s total workforce was about
the same level as fiscal year 1997. VA*s acquisition workforce decreased
by 6 percent from its fiscal year 1997 level and totaled about 2, 562
personnel in fiscal year 2001.  In fiscal year 2001, 52 percent of the
acquisition workforce had 20 years or more of federal service, while

5 percent had fewer than 5 years of federal service.

I. Spending

Figure 1: Procurement*s Relationship to Discretionary Budget Resources,
Fiscal Years 1997 through 2001

30 Dollars in billions

20 10

0 1997 1998 1999 2000 2001 Fiscal year

Total discretionary budget resources Total contract obligations

Source: FPDS and OMB. Notes: Discretionary budget resources reflect the
budget amount that an agency is appropriated for a current fiscal year
plus the budget authority that the agency carries over from prior fiscal
years.

Total contract obligations exclude purchase card use. All dollar figures
have been converted to constant 2001 dollars.

Figure 2: Spending on Goods and Services, Fiscal Years 1997 through 2001
2.5

Dollars in billions 2.0 1.5 1.0 0.5

0 1997 1998 1999 2000 2001 Fiscal year

Services Goods

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 3: Principal Types of Goods and Services in Fiscal Year 2001

Dollars in millions

Fiscal year Change Goods 2001 1997

(percent)

Medical, dental and veterinary equipment, and supplies $2,130.8 $1, 109.9
92

IT equipment 185. 8 245.0 -24 Food 18. 1 17. 9 1 Other goods 132. 7 191.8
-31

Total goods $2,467.4 $1, 564.6 58 Services

Medical services 522. 7 420. 3 24 IT services 326.6 100. 1 226 Utilities
and housekeeping services 271.5 250. 7 8 Other services 707.7 830. 4 -15

Total services $1,828.5 $1, 601.5 14 Total goods and services $4,295.9 $3,
166.0 36

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 4: Vendor Type, Fiscal Year 2001 1%

JWOD/ Nonprofit

1%

State/ local government

3%

Other

10%

Small disadvantaged business

15%

Other small business 70%

Large business Source: FPDS. Notes: 5 percent of VA*s vendors are women-
owned businesses. Other includes hospitals, foreign contractors, domestic
contractors working outside the United States, and educational
institutions, including historically black colleges and universities and
minority institutions.

These figures include only orders and contracts for more than $25,000;
contracts for $25,000 or less and purchase cards are excluded.

Figure 5: Top Five Vendors, Fiscal Year 2001

Dollars in millions

Goods and services Amount

Vendor provided

awarded

1. Amerisource Corp. Health care products $1,600. 0 2. Datatrack
Information Services IT services $68. 1 3. General Electric Co. Health
care equipment $49. 8 4. Integic Corp. IT services $46. 1 5. GRC
International, Inc. IT services $31. 9 Source: Department of Veterans
Affairs.

II. Procurement Methods

Figure 6: Principal Contract Types Employed in Fiscal Year 2001

Dollars in billions

Amount Percent of total

Contract type spent

amount spent

Firm fixed- price $3.9 90.7 Other fixed- price $0.4 9. 1 Cost- type <$ 0.1
0.1 Labor hours/ time and materials <$ 0. 1 0.1 Source: FPDS. Note: These
figures include only orders and contracts for more than $25, 000;
contracts for $25,000 or less and purchase cards are excluded.

Figure 7: Competition, Fiscal Year 2001 4%

Not available for competition a

17%

Not competed

79%

Competed Competed Not competed Source: FPDS. Notes: These figures include
only orders and contracts for more than $25,000; contracts for $25,000 or
less and purchase cards are excluded. a Contracts not available for
competition are for utilities, contracts authorized or required by statute

to be awarded to a designated source, sole source contracts awarded to
certain small disadvantaged businesses, or actions where the agency has
determined that there is no opportunity for competition, among other
things.

Figure 8: Degree of Competition for Competed Contracts, Fiscal Years 1997
through 2001

Dollars in billions

Amount spent on One offer

More than one Fiscal Year

competed contracts (percent)

offer (percent)

1997 $2. 3 7. 6 91. 1 1998 $2. 1 5. 9 92. 2 1999 $2. 0 4. 7 93. 8 2000 $3.
1 7. 0 91. 7 2001 $3. 4 5. 3 93. 1 Source: FPDS. Notes: These figures
include only orders and contracts for more than $25,000; contracts for
$25,000 or less and purchase cards are excluded.

Percentages do not add to 100 as information on the number of offers was
either missing or not required to be reported.

All dollar figures have been converted to constant 2001 dollars.

Figure 9: Extent the Federal Supply Schedule is Used to Purchase Goods and
Services, Fiscal Years 1997 through 2001

1000 Dollars in millions

750 500 250

0 1997 1998 1999 2000 2001 Fiscal year

Total Services Goods

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 10: Amount Spent Using Purchase Cards, Fiscal Years 1997 through
2001 4

Dollars in billions 3 2 1 0

1997 1998 1999 2000 2001 Fiscal year

Source: FPDS. Notes: in fiscal year 2001, VA authorized the use of 34,090
purchase cards. All dollar figures have been converted to constant 2001
dollars.

Figure 11: Commercial Item Purchases Using FAR Part 12 Procedures, Fiscal
Years 1997 through 2001

3 Dollars in billions

2 1 0

1997 1998 1999 2000 2001 Fiscal year

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 12: Extent That Eligible Contracts Are Performance Based, Fiscal
Year 2001 (by dollar value)

0.1%

Performance based

99.9%

Not performance based Source: FPDS. Notes: Based on FAR 37.102,
performance- based methods should be used to the maximum extent
practicable for all services, except for construction, utilities,
architect and engineering, or services that are incidental to supply
purchases.

These figures include only orders and contracts for more than $25,000;
contracts for $25,000 or less and purchase cards are excluded.

VA officials stated that their internal data system reported a higher use
of performance- based contracting in fiscal year 2001. These officials
believed their agency's figure should be about 11 percent.

III. Workforce

Figure 13: Workforce Trends, Fiscal Years 1997 through 2001 Tot al

Acquisition Fiscal year

workforce workforce Percent

1997 202, 414 2,737 1. 4 1998 198, 890 2,610 1. 3 1999 195, 847 2,574 1. 3
2000 196, 643 2,488 1. 3 2001 202, 041 2,562 1. 3 Source: CPDF.

Figure 14: Acquisition Workforce by Years of Federal Service 5%

Fewer than 5 years

8%

5 to 10 years

52% 35%

10 to 20 years 20 years or more Source: CPDF.

Figure 15: Acquisition Workforce Retirement Eligibility 7%

Before fiscal year 2002

23%

Fiscal years 2008 through 2011

42% 28%

Fiscal years 2002 through 2007 After fiscal year 2011 Source: CPDF.

IV. Key Procurement Initiatives as Reported by Agency Officials Computer,
hardware and software procurement: VA requires that computer hardware and
software vendors offer products to VA at a cost equal to or lower than
those offered any other customers. Prices that are found to be too high
are required to be lowered before they are accepted. According to VA
officials, this

initiative resulted in savings of $33 million in the period of June
through October 2002. The prices paid by VA over this time period average
21.6 percent below the vendors* GSA Federal Supply Schedule prices for the
same items.

Vocational rehabilitation and employment service national acquisition
strategy: To address concerns related to contracting for services in the
field, a task force developed the National Acquisition Strategy to provide
uniform prices and services at the 58 Veterans Benefit Administration
regional offices. In September 2002 VA awarded 249 performance- based
service contracts using a uniform format. According to VA officials, over
95 percent of the awards went to small businesses, veteran- owned
businesses, and service- disabled, veteran- owned businesses.

Joint contracting between VA and DOD: In March 2001 VA had 34 joint
contracts for pharmaceuticals between VA and DOD. In November 2002, that
number more than doubled, to 76. In addition, there are 18 pending joint
contracts for pharmaceuticals, vital sign monitors, and radiation therapy
equipment.

VA Federal Supply Schedule Program: The VA Federal Supply Schedule Program
was expanded in late 2000, to include professional health care services.
This schedule is open to all federal agencies and provides for temporary
contract services of surgeons, specialists, nurses, radiologists,
pharmacists, and dentists. Recently, allied health services (nursing
assistants, pharmacy technicians, and dental assistants) were added to
this schedule.

V. Key Procurement Reports General Accounting Office

Major Management Challenges and Program Risks: Department of Veterans
Affairs. GAO- 03- 110. Washington, D. C.: January 2003.

VA and DOD Health Care: Factors Contributing to Reduced Pharmacy Costs and
Continuing Challenges.

GAO- 02- 969T. Washington, D. C.: July 22, 2002.

VA and Defense Health Care: Potential Exists for Savings through Joint
Purchasing of Medical and Surgical Supplies. GAO- 02- 872T. Washington, D.
C.: June 26, 2002.

DOD and VA Pharmacy: Progress and Remaining Challenges in Jointly Buying
and Mailing Out Drugs.

GAO- 01- 588. Washington, D. C.: May 25, 2001.

VA Laundry Service: Consolidations and Competitive Sourcing Could Save
Millions. GAO- 01- 61. Washington, D. C.: November 30, 2000.

Inspector General

01- 00504- 9* Summary Report* Combined Assessment Program Reviews at
Veterans Health Administration Medical Facilities (January 1999* March
2001), October 10, 2001.

01- 01855- 75* Evaluation of the Department of Veterans Affairs Purchasing
Practices, May 15, 2001. 9R3- E99- 037* Audit Of The Department Of
Veterans Affairs Purchase Card Program, February 12, 1999. 8D2- E01- 002*
Audit of VA Procurement Initiatives For Computer Hardware, Software, and
Services (PCHS/ PAIRS) and Selected Information Technology Investments,
January 22, 1998.

Appendix X: General Services Administration Agency Overview and Highlights

Mission: To provide policy leadership and expertly managed space,
products, services, and solutions, at the best value, to enable federal
agencies to accomplish their missions.

Significant services

The following services account for the majority of the General Services
Administration*s (GSA) fiscal year 2001 total discretionary budget
resources.  Federal Technology Service (FTS) provides information
technology solutions and network services to

support federal agencies. In fiscal year 2001, FTS accounted for 46
percent of GSA*s total discretionary budget resources. The Public
Building Service (PBS) oversees the construction, development, and
maintenance of federal

buildings and manages the leasing of commercial office space. In fiscal
year 2001, PBS accounted for 51 percent of GSA*s total discretionary
budget resources.  Federal Supply Service (FSS) provides agencies with
numerous supplies and services, including

commercial products, professional services, vehicle acquisition and
leasing, and travel and transportation services. FSS manages the Federal
Supply Schedule program, which provides federal agencies with access to
more than 4 million products and services and coordinates the
governmentwide travel and purchase card programs. The FSS accounts for
none of GSA*s discretionary resources, because the service is financed by
a

revolving fund. With a revolving fund, the FSS obtains most of its funding
from the fees paid by other agencies to buy from the FSS program.

Spending

GSA*s discretionary resources increased by 38 percent from fiscal year
1997 through fiscal year 2001 and totaled $19.3 billion in fiscal year
2001. Over the 5- year period, the proportion of GSA*s discretionary
resources spent under contracts increased from 59 percent to about 64
percent. GSA relies heavily on service contracts, which accounted for more
than 80 percent of all contracts over $25,000 in fiscal year 2001.  For
contracts valued over $25, 000, spending on services increased by 75
percent from fiscal year 1997 through fiscal year 2001. Spending on goods
increased by 13 percent.

 The increase in service spending was driven by increased purchases of IT
services, which grew from $594. 0 million in fiscal year 1997 to $4. 7
billion in fiscal year 2001. GSA*s increased share is largely attributable
to the growth of GSA*s Federal Technology Service. However, orders placed
by the Federal Technology Service are counted as spending by GSA, rather
than spending by the federal agency that will ultimately receive the
service or equipment.  Since fiscal year 1997, GSA*s spending has
undergone significant increases in the following categories:

IT and telecommunication services (691 percent), motor vehicles (24
percent), IT equipment (19 percent), and lease of facilities (17 percent).

Procurement methods

GSA spent about $11.7 billion through contracts in fiscal year 2001, with
firm fixed- price and other kinds of fixed- price contracts accounting for
over 90 percent of GSA*s contract dollars.  Purchase card spending
doubled since fiscal year 1997, and totaled nearly $160 million in fiscal
year 2001. In

fiscal year 2001, GSA authorized the use of 3, 776 purchase cards.

Workforce

GSA*s total workforce has remained relatively stable over the 5- year
period, at about 14, 100. Over this same period, its acquisition workforce
has increased by more than 10 percent.  More than 91 percent of GSA*s
acquisition workforce has more than 10 years of federal service; by fiscal
year 2008, 34 percent will be eligible to retire.

I. Spending

Figure 1: Procurement*s Relationship to Discretionary Budget Resources,
Fiscal Years 1997 through 2001

25 Dollars in billions

20 15 10

5 0

1997 1998 1999 2000 2001 Fiscal year

Total discretionary budget resources Total contract obligations

Source: FPDS and OMB. Notes: Discretionary budget resources reflect the
budget amount that an agency is appropriated for a current fiscal year
plus the budget authority that the agency carries over from prior fiscal
years.

Total contract obligations exclude purchase card use. All dollar figures
have been converted to constant 2001 dollars.

Figure 2: Spending on Goods and Services, Fiscal Years 1997 through 2001
12

Dollars in billions 8 4 0

1997 1998 1999 2000 2001 Fiscal year

Services Goods

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 3: Principal Types of Goods and Services in Fiscal Year 2001

Dollars in millions

Fiscal year Change Goods 2001 1997

(percent)

IT equipment $876.6 $734.3 19 Motor vehicles 850.0 688.2 24 Furniture
206.7 182.1 14 Other goods 372.8 441.4 -16

Total goods $2,306.1 $2, 046.0 13 Services

IT & telecommunications 4,697.4 594.0 691 Lease of facilities 2,199.4 1,
873.4 17 Utilities and housekeeping 816.5 1, 218.3 -33 Other services
1,633.1 1, 649.6 -1

Total services $9,346.4 $5, 335.3 75 Total goods and services $11, 652.5
$7, 381.3 58

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 4: Vendor Type, Fiscal Year 2001 2%

JWOD/ Nonprofit

12%

Small disadvantaged business

25%

Other small business 61% Large business Source: FPDS. Notes: 4 percent of
GSA*s vendors are women- owned businesses. These figures include only
orders and contracts for more than $25,000; contracts for $25,000 or less
and purchase cards are excluded.

Figure 5: Top Five Vendors, Fiscal Year 2001

Dollars in millions

Goods and services Amount

Vendor provided

awarded

1. American Management Systems IT and management services $1,479. 8

2. Leers Weinzapfel Associated Architectural design $690. 2 3. SAIC IT
$326. 3 4. DaimlerChrysler Corporation Automobiles and parts/

supplies $320. 7 5. Ben Fitzgerald Real Estate Rental estate services
$204. 0 Source: GSA.

II. Procurement Methods

Figure 6: Principal Contract Types Employed in Fiscal Year 2001

Dollars in billions

Percent of total Contract type Amount spent

amount spent

Firm fixed- price $7.4 63.7 Other fixed- price $3.2 27.1 Cost- type $0.5
3. 4 Labor hours/ time and materials $0.7 5. 7 Source: FPDS. Note: These
figures include only orders and contracts for more than $25, 000;
contracts for $25,000 or less and purchase cards are excluded.

Percentages may not add to 100 due to rounding.

Figure 7: Competition, Fiscal Year 2001 2%

Not competed

6%

Not available for competition a

92%

Competed Competed Not competed

Source: FPDS. a Contracts not available for competition are for utilities,
contracts authorized or required by statute to be awarded to a designated
source, sole source contracts awarded to certain small disadvantaged
businesses, or actions where the agency has determined that there is no
opportunity for competition, among other things.

Note: These figures include only orders and contracts for more than $25,
000; contracts for $25,000 or less and purchase cards are excluded.

Figure 8: Degree of Competition for Competed Contracts, Fiscal Years 1997
through 2001 Amount spent on

One offer More than one

Fiscal year competed contracts

(percent) offer (percent)

1997 $6.3 27. 2 71. 4 1998 $6.9 28. 9 70. 0 1999 $6.5 25. 7 72. 1 2000
$8.8 4. 5 94. 1 2001 $10.6 2. 8 95. 5 Source: FPDS. Notes: These figures
include only orders and contracts for more than $25,000; contracts for
$25,000 or less and purchase cards are excluded.

Percentages do not add to 100 as information on the number of offers was
either missing or not required to be reported.

All dollar figures have been converted to constant 2001 dollars.

Figure 9: Extent the Federal Supply Schedule Is Used to Purchase Goods and
Services, Fiscal Years 1997 through 2001

5 Dollars in billions

4 3 2 1 0

1997 1998 1999 2000 2001 Fiscal year

Total Services Goods

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 10: Amount Spent Using Purchase Cards, Fiscal Years 1997 through
2001 200

Dollars in millions 160 120

80 40

0 1997 1998 1999 2000 2001 Fiscal year

Source: FPDS. Notes: In fiscal year 2001, GSA authorized the use of 3,776
purchase cards. All dollar figures have been converted to constant 2001
dollars.

Figure 11: Commercial Item Purchases Using FAR Part 12 Procedures, Fiscal
Years 1997 through 2001

6 Dollars in billions

4 2 0 0

1997 1998 1999 2000 2001 Fiscal year

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 12: Extent That Eligible Contracts Are Performance Based, Fiscal
Year 2001 (by dollar value)

11%

Performance based

89%

Not performance based Source: FPDS. Notes: Based on FAR 37.102,
performance- based methods should be used to the maximum extent
practicable for all services, except for construction, utilities,
architect and engineering, or services that are incidental to supply
purchases.

These figures include only orders and contracts for more than $25,000;
contracts for $25,000 or less and purchase cards are excluded.

III. Workforce

Figure 13: Workforce Trends, Fiscal Years 1997 through 2001 Tot al

Acquisition Fiscal year

workforce workforce Percent

1997 14,148 2,475 17. 5 1998 14,064 2,489 17. 7 1999 14,021 2,631 18. 8
2000 14,081 2,732 19. 4 2001 14,102 2,743 19. 5 Source: CPDF.

Figure 14: Acquisition Workforce by Years of Federal Service 4%

5 to 10 years

5%

Fewer than 5 years

50% 41%

10 to 20 years 20 years or more

Source: CPDF.

Figure 15: Acquisition Workforce Retirement Eligibility 9%

Before fiscal year 2002

18%

Fiscal years 2008 through 2011

48% 25%

Fiscal years 2002 through 2007 After fiscal year 2011 Source: CPDF.

IV. Key Procurement Initiatives as Reported by Agency Officials
Construction Brain Trust. The Construction Brain Trust was implemented in
fiscal year 2001 to reduce the time, cost and complexity of the
construction contracting process. The membership consists of
representatives from GSA policy offices, GSA regions, and construction-
related associations, surety companies, and law firms.

Agency- wide performance- based contracting program. To improve GSA*s use
of performance- based contracts, it established a Web site and developed
additional training materials, such as the Seven Steps to Performance-
based Service Acquisition Guide, for use by its acquisition personnel.

Applied Learning Center. This initiative was implemented in 2001. The
long- term goal of the center is to assist acquisition professionals
perform their jobs, identify skill gaps, and broaden the knowledge base of
acquisition professionals into areas such as budget, finance, and program
management.

V. Key Procurement Reports General Accounting Office

Contract Management: Government Faces Challenges in Gathering
Socioeconomic Data on Purchase Card Merchants. GAO- 03- 56. Washington, D.
C.: December 13, 2002.

Acquisition Workforce: Status of Agency Efforts to Address Future Needs.
GAO- 03- 55. Washington, D. C.: December 18, 2002.

Acquisition Workforce: Agencies Need to Better Define and Track the
Training of Their Employees.

GAO- 02- 737. Washington, D. C.: July 29, 2002.

Contract Management: Interagency Contract Program Fees Need More
Oversight. GAO- 02- 734. Washington, D. C.: July 25, 2002.

Contract Management: Roles and Responsibilities of the Federal Supply
Service and Federal Technology Service. GAO- 02- 821R. Washington, D. C.:
June 7, 2002.

Telecommunications: GSA Action Needed to Realize Benefits of Metropolitan
Area Acquisition Program.

GAO- 02- 325. Washington, D. C.: April 4, 2002.

Contract Management: Not Following Procedures Undermines Best Pricing
Under GSA*s Schedule.

GAO- 01- 125. Washington, D. C.: November 28, 2000.

Inspector General

Special Report on FSS*s Multiple Award Schedule Pricing Practices, August
24, 2001. Report Number A995288* Audit of Federal Technology Service*s Use
of Multiple Award Indefinite Delivery Indefinite Quantity Contracts,
September 19, 2000.

Report Number A995175* Audit of the Federal Protective Service*s Contract
Guard Program, March 28, 2000.

Appendix XI: National Aeronautics and Space Administration Agency Overview
and Highlights

Mission: To develop human exploration of space, advance and communicate
scientific knowledge, and research and develop aeronautics and space
technologies.

Significant components

Two accounts account for the majority of the National Aeronautics and
Space Administration*s (NASA) fiscal year 2001 total discretionary budget
resources:  Science, Aeronautics and Technology (SAT) provides funds for
research and development in the offices

of Space Science, Earth Science, Biological and Physical Research, and
Aerospace Technology, respectively. SAT also funds academic programs that
NASA has established in elementary and secondary schools, as well as
research conducted at more than 100 universities in the United States. In
fiscal year 2001, SAT accounted for 44 percent of NASA*s discretionary
resources.  Human Space Flight (HSF) primarily provides funds for the
construction and operation of the

international space station and the operation of the space shuttle
program. Other programs include developing expendable launch vehicles,
improving space communications and data systems, and providing safety and
mission support. HSF also provides for the design, repair, rehabilitation,
and modification of facilities and construction of new facilities. In
fiscal year 2001, HSF accounted for 45 percent of NASA*s discretionary
resources.

Spending

NASA*s discretionary resources decreased by about 6 percent from fiscal
year 1997 through fiscal year 2001, totaling $15. 8 billion in fiscal year
2001. The amount spent through contracts decreased slightly, both in real
terms and as a share of NASA*s discretionary resources. Nevertheless, NASA
relies on contracts to achieve its mission to a greater extent than most
federal agencies.  NASA contracts primarily for services. Of NASA*s $11
billion spent on contracts over $25,000 in fiscal year

2001, about $9. 6 billion* or 86 percent* were for services, including
operating various government- owned facilities, providing professional and
administrative support, and conducting research and development
activities. Overall, NASA*s spending for services declined by 7 percent
between fiscal years 1997 and 2001,

though there were significant variations in individual service categories.

Procurement methods

NASA uses a variety of methods in carrying out its procurement functions.
 Due to the nature of the items and services needed to carry out its
mission, NASA relies heavily on cost- type contracts; 83 percent of
contract obligations over $25,000 for fiscal year 2001 were made

under cost- type contracts.  NASA spent slightly more than half of its
contracts over $25,000 on competed contracts, a relatively lower

percentage than other federal agencies. For those contracts it competes,
NASA receives two or more bids nearly 90 percent of the time.  NASA
reports that 64 percent of eligible service contracts were performance
based in fiscal year 2001.  NASA*s use of purchase cards grew since
fiscal year 1997, but accounts for a small percentage of its budget

resources.  While NASA generally acquires government- unique items, it
increased its purchases using FAR part 12

procedures from $225 million in fiscal year 1997 to about $794 million in
fiscal year 2001.

Workforce

The size of NASA*s workforce remained relatively stable from fiscal year
1997 through fiscal year 2001, decreasing by about 4 percent. NASA*s
acquisition workforce, which represented about 7 percent of its total
workforce, experienced a similar trend.  In fiscal year 2001, 56 percent
of the acquisition workforce had 20 years or more of federal service,
while

only 3 percent had fewer than 5 years of service.  By fiscal year 2008,
approximately 33 percent of NASA*s acquisition workforce will be eligible
to retire.

I. Spending

Figure 1: Procurement*s Relationship to Discretionary Budget Resources,
Fiscal Years 1997 through 2001

20 Dollars in billions

15 10

5 0

1997 1998 1999 2000 2001 Fiscal year

Total discretionary budget resources Total contract obligations

Source: OMB and FPDS. Notes: Discretionary budget resources reflect the
budget amount that an agency is appropriated for a current fiscal year
plus the budget authority that the agency carries over from prior fiscal
years.

Total contract obligations exclude purchase card use. All dollar figures
have been converted to constant 2001 dollars.

Figure 2: Spending on Goods and Services, Fiscal Years 1997 through 2001
12

Dollars in billions 9 6 3 0

1997 1998 1999 2000 2001 Fiscal year

Services Goods

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 3: Principal Types of Goods and Services in Fiscal Year 2001

Dollars in millions

Fiscal year Change Goods 2001 1997

(percent)

Space vehicles $1,158. 6 $1, 080. 6 7 IT equipment 110. 0 245. 8 -55
Engines, turbines, and components 43. 0 81. 7 -47 Other goods 223. 7 516.
9 -57

Total goods $1,535. 3 $1, 925. 0 -20 Services

Research, development, testing, and evaluation 2, 738. 0 3,669. 0 -25
Professional, administrative, and management support 2,716. 1 3,157. 8 -14
Operation of government- owned facilities 1,989. 2 1,432. 9 39 Other
services 2,182. 5 1,811. 4 20

Total services $9,625. 8 $10,071. 1 -4 Total goods and services $11,161. 0
$11,996. 1 -7

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

Totals may not add due to rounding. All dollar figures have been converted
to constant 2001 dollars.

Figure 4: Vendor Type, Fiscal Year 2001 2%

JWOD/ Nonprofit

7%

Small disadvantaged business

7%

Other small business

17%

Other

67%

Large business Source: FPDS. Notes: 3 percent of NASA*s vendors are women-
owned businesses. Other includes hospitals, foreign contractors, domestic
contractors working outside the United States, and educational
institutions, including historically black colleges and universities and
minority institutions.

These figures include only orders and contracts for more than $25,000;
contracts for $25,000 or less and purchase cards are excluded.

Figure 5: Top Five Vendors, Fiscal Year 2001

Dollars in millions

Goods and services Amount

Vendor provided

awarded

1. United Space Alliance Operation and maintenance of multi- purpose space
systems $1,658.6

2. Boeing Space shuttle orbiter production, modification and operation
$951. 7

3. Lockheed Martin Aeronautics, space systems, systems integration and
technology services $608. 3 4. Lockheed Martin Space

Space- related support Operations

services including project management, systems engineering and
integration, and IT $493. 6

5. Thiokol Corp. Propulsion motors $377. 7 Source: NASA.

II. Procurement Methods

Figure 6: Principal Contract Types Employed in Fiscal Year 2001

Dollars in billions

Amount Percent of total

Contract type spent

amount spent

Firm fixed- price $1.6 14.6 Other fixed- price $0.3 2. 6 Cost- type $9.2
82.6 Labor hours/ time and materials <$ 0. 1 0.2 Source: FPDS. Notes:
These figures include only orders and contracts for more than $25,000;
contracts for $25,000 or less and purchase cards are excluded.

Figure 7: Competition, Fiscal Year 2001 2%

Not available for competition a

4%

Follow- on to competed action b

50% 44%

Not competed Competed Competed Not competed

Source: FPDS. a Contracts not available for competition are for utilities,
contracts authorized or required by statute to be awarded to a designated
source, sole source contracts awarded to certain small disadvantaged
businesses, or actions where the agency has determined that there is no
opportunity for competition, among other things. b Contracts that were
follow- on to a competed action are those subsequent actions awarded to
the particular contractor who had previously been awarded the initial
contract under competitive procedures.

Notes: These figures include only orders and contracts for more than
$25,000; contracts for $25,000 or less and purchase cards are excluded.

Figure 8: Degree of Competition for Competed Contracts, Fiscal Years 1997
through 2001

Dollars in billions

Amount spent on One offer

More than one Fiscal year

competed contracts (percent)

offer (percent)

1997 $5.7 10. 5 84. 3 1998 $5.4 10. 0 85. 6 1999 $5.6 8. 0 90. 0 2000 $5.4
7. 2 90. 5 2001 $5.6 8. 2 89. 4 Source: FPDS. Notes: These figures include
only orders and contracts for more than $25,000; contracts for $25,000 or
less and purchase cards are excluded.

Percentages do not add to 100 as information on the number of offers was
either missing or not required to be reported.

All dollar figures have been converted to constant 2001 dollars.

Figure 9: Extent the Federal Supply Schedule is Used to Purchase Goods and
Services, Fiscal Years 1997 through 2001

200 Dollars in millions

150 100

50 0

1997 1998 1999 2000 2001 Fiscal year

Total Services Goods

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 10: Amount Spent Using Purchase Cards, Fiscal Years 1997 through
2001 100

Dollars in millions 75 50 25

0 1997 1998 1999 2000 2001 Fiscal year

Source: FPDS. Notes: In fiscal year 2001, NASA authorized the use of 4,258
purchase cards. All dollar figures have been converted to constant 2001
dollars.

Figure 11: Commercial Item Purchases Using FAR Part 12 Procedures, Fiscal
Years 1997 through 2001

1000 Dollars in millions

750 500 250

0 1997 1998 1999 2000 2001 Fiscal year

Source: FPDS. Notes: These figures include only orders and contracts for
more than $25,000; contracts for $25,000 or less and purchase cards are
excluded.

All dollar figures have been converted to constant 2001 dollars.

Figure 12: Extent That Eligible Contracts Are Performance Based, Fiscal
Year 2001 (by dollar value)

36%

Performance based

64%

Not performance based Source: FPDS. Notes: Based on FAR 37.102,
performance- based methods should be used to the maximum extent
practicable for all services, except for construction, utilities,
architect and engineering, or services that are incidental to supply
purchases.

These figures include only orders and contracts for more than $25,000;
contracts for $25,000 or less and purchase cards are excluded.

III. Workforce

Figure 13: Workforce Trends, Fiscal Years 1997 through 2001 Tot al

Acquisition Fiscal year

workforce workforce Percent

1997 19,614 1,293 6. 6 1998 18,505 1,228 6. 6 1999 18,055 1,177 6. 5 2000
18,670 1,241 6. 6 2001 18,879 1,246 6. 6 Source: CPDF.

Figure 14: Acquisition Workforce by Years of Federal Service 3%

Fewer than 5 years

4%

5 to 10 years

37%

10 to 20 years

56%

20 years or more Source: CPDF.

Figure 15: Acquisition Workforce Retirement Eligibility 8%

Before fiscal year 2002

19%

Fiscal years 2008 through 2011

48% 25%

Fiscal years 2002 through 2007 After fiscal year 2011 Source: CPDF.

IV. Key Procurement Initiatives as Reported by Agency Officials Risk-
based acquisition management: To reduce the incidence and severity of
impacts arising from unforeseen programmatic events, NASA recently
developed this process to integrate risk principles when developing the
acquisition strategy, selecting sources, choosing contract type,
structuring fee incentives, and

conducting contractor surveillance.

Award term contracting: NASA is using this approach to reward contractor
performance by enabling contract extension for excellent performance and
reduced costs. In addition to profit, a continuing relationship becomes a
prime motivator for the contractor.

Evaluate and Improve Performance- Based Service Contracting: NASA has
initiated an agencywide awareness program and training sessions for
government and contractor employees relating to performance- based service
contracting.

V. Key Procurement Reports General Accounting Office

Major Management Challenges and Program Risks: National Aeronautics and
Space Administration.

GAO- 03- 114. Washington, D. C.: January 2003.

Space Station: Actions Under Way to Manage Cost, but Significant
Challenges Remain. GAO- 02- 735. Washington, D. C.: July 17, 2002.

NASA: Compliance With Cost Limits Cannot Be Verified. GAO- 02- 504R.
Washington, D. C.: April 10, 2002.

Inspector General

IG- 03- 003* NASA Contracts for Professional, Administrative, and
Management Support Services,

October 16, 2002. IG- 02- 027* NASA*s Contract Audit Follow- up System,
September 30, 2002. IG- 02- 011* Review of Performance- Based Service
Contract Quality Assurance Surveillance Plans,

June 24, 2002. IG- 02- 011* International Space Station Spare Parts Costs,
March 22, 2002. IG- 02- 002* Restructuring of the International Space
Station Contract, November 8, 2001.

IG- 01- 027* Acquisition of the Space Station Propulsion Module, May 21,
2001.

(120150)

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U. S. General Accounting Office, 441 G Street NW, Room 7149 Washington, D.
C. 20548

a

GAO United States General Accounting Office

Federal agencies procured more than $235 billion in goods and services
during fiscal year 2001, reflecting an 11 percent increase over the amount
spent 5 years earlier. Further growth in contract spending, at least in
the short term, is likely to increase given the President*s request for
additional funds for defense and homeland security, agencies* plans to
update their information technology systems, and other factors. Overall,
contracting for goods and services accounted for about 24 percent of the
government*s discretionary resources in fiscal year 2001. As shown in the
figure below, acquisition is central to the missions of several agencies.

Federal agencies are taking advantage of the streamlined acquisition
processes that were developed in the 1990s, including relying on contracts
awarded by other federal agencies to obtain goods and services. The
increase in the use of this acquisition method is driven largely by
purchases of information technology and by professional, administrative,
and management support services. Similarly, agencies are increasingly
using purchase cards for many of their low dollar value procurements.

Over the last decade, the federal acquisition workforce has had to adapt
to changes in staffing levels, workloads, and the need for new skill sets.
Procurement reforms have required contracting specialists to have a
greater knowledge of market conditions, industry trends, and the technical
details of the commodities and services they procure. A priority at most
agencies we reviewed was attracting and retaining the right people with
the right skills to successfully address the increasingly complex actions
expected in the future. Many agencies have made progress with strategic
human capital planning efforts.

We reviewed 10 agencies that represent over 90 percent of the federal
government*s acquisition spending. All agencies provided comments on our
report and concurred with our analyses.

Acquisition of Goods and Services as a Percent of Agencies* Discretionary
Budget Resources, Fiscal Year 2001

The federal government, comprised of more than 60 agencies and nearly 1.7
million civilian workers, acquires most of its goods and services through
contracts. Recent changes in what the government buys, its contracting
approaches and methods, and its acquisition

workforce have combined to create a dynamic acquisition environment. Many
of these recent changes enhance contracting efficiency and offer a number
of benefits, such as reduced administrative burdens.

However, GAO*s past work has found that if these changes are not
accompanied by proper training, guidance, and internal controls, agency
procurements may be at greater risk.

While effectively managing contracts is always a key management
responsibility, this responsibility is more acute in those agencies that
rely heavily on acquisitions to accomplish

their missions. The goal of this report is to identify for Congress, the
administration, and accountability organizations those procurementrelated

trends and challenges that may affect federal agencies. Specifically, GAO
analyzed recent federal procurement patterns, the use of various
procurement

methods, and changes in the acquisition workforce.

www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 443. To view the full report,
including the scope and methodology, click on the link above. For more
information, contact Bill Woods at (202) 512- 4841. Highlights of GAO- 03-
443, a report to

the Committee on Government Reform, House of Representatives, and the
Committee on Governmental Affairs, U. S. Senate

April 2003

FEDERAL PROCUREMENT

Spending and Workforce Trends

Page i GAO- 03- 443 Spending and Workforce Trends

Contents

Contents

Page ii GAO- 03- 443 Spending and Workforce Trends

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Accounting Office

Washington, D. C. 20548 Page 1 GAO- 03- 443 Spending and Workforce Trends

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Page 25 GAO- 03- 443 Spending and Workforce Trends

Page 26 GAO- 03- 443 Spending and Workforce Trends

Appendix I

Appendix I Scope and Methodology

Page 27 GAO- 03- 443 Spending and Workforce Trends

Appendix I Scope and Methodology

Page 28 GAO- 03- 443 Spending and Workforce Trends

Appendix I Scope and Methodology

Page 29 GAO- 03- 443 Spending and Workforce Trends

Appendix I Scope and Methodology

Page 30 GAO- 03- 443 Spending and Workforce Trends

Appendix I Scope and Methodology

Page 31 GAO- 03- 443 Spending and Workforce Trends

32 GAO- 03- 443 Federal Procurement

33 GAO- 03- 443 Federal Procurement Appendix II: Section 1* Department of
Defense

34 GAO- 03- 443 Federal Procurement Appendix II: Section 1* Department of
Defense

35 GAO- 03- 443 Federal Procurement Appendix II: Section 1* Department of
Defense

36 GAO- 03- 443 Federal Procurement Appendix II: Section 1* Department of
Defense

37 GAO- 03- 443 Federal Procurement Appendix II: Section 1* Department of
Defense

38 GAO- 03- 443 Federal Procurement Appendix II: Section 1* Department of
Defense

39 GAO- 03- 443 Federal Procurement Appendix II: Section 1* Department of
Defense

40 GAO- 03- 443 Federal Procurement Appendix II: Section 1* Department of
Defense

41 GAO- 03- 443 Federal Procurement Appendix II: Section 1* Department of
Defense

42 GAO- 03- 443 Federal Procurement

43 GAO- 03- 443 Federal Procurement Appendix II: Section 2* Department of
the Air Force

44 GAO- 03- 443 Federal Procurement Appendix II: Section 2* Department of
the Air Force

45 GAO- 03- 443 Federal Procurement Appendix II: Section 2* Department of
the Air Force

46 GAO- 03- 443 Federal Procurement Appendix II: Section 2* Department of
the Air Force

47 GAO- 03- 443 Federal Procurement Appendix II: Section 2* Department of
the Air Force

48 GAO- 03- 443 Federal Procurement Appendix II: Section 2* Department of
the Air Force

49 GAO- 03- 443 Federal Procurement Appendix II: Section 2* Department of
the Air Force

50 GAO- 03- 443 Federal Procurement Appendix II: Section 2* Department of
the Air Force

51 GAO- 03- 443 Federal Procurement

52 GAO- 03- 443 Federal Procurement Appendix II: Section 3* Department of
the Army

53 GAO- 03- 443 Federal Procurement Appendix II: Section 3* Department of
the Army

54 GAO- 03- 443 Federal Procurement Appendix II: Section 3* Department of
the Army

55 GAO- 03- 443 Federal Procurement Appendix II: Section 3* Department of
the Army

56 GAO- 03- 443 Federal Procurement Appendix II: Section 3* Department of
the Army

57 GAO- 03- 443 Federal Procurement Appendix II: Section 3* Department of
the Army

58 GAO- 03- 443 Federal Procurement Appendix II: Section 3* Department of
the Army

59 GAO- 03- 443 Federal Procurement Appendix II: Section 3* Department of
the Army

60 GAO- 03- 443 Federal Procurement

61 GAO- 03- 443 Federal Procurement Appendix II: Section 4* Department of
the Navy

62 GAO- 03- 443 Federal Procurement Appendix II: Section 4* Department of
the Navy

63 GAO- 03- 443 Federal Procurement Appendix II: Section 4* Department of
the Navy

64 GAO- 03- 443 Federal Procurement Appendix II: Section 4* Department of
the Navy

65 GAO- 03- 443 Federal Procurement Appendix II: Section 4* Department of
the Navy

66 GAO- 03- 443 Federal Procurement Appendix II: Section 4* Department of
the Navy

67 GAO- 03- 443 Federal Procurement Appendix II: Section 4* Department of
the Navy

68 GAO- 03- 443 Federal Procurement Appendix II: Section 4* Department of
the Navy

69 GAO- 03- 443 Federal Procurement

70 GAO- 03- 443 Federal Procurement Appendix III: Department of
Agriculture

71 GAO- 03- 443 Federal Procurement Appendix III: Department of
Agriculture

72 GAO- 03- 443 Federal Procurement Appendix III: Department of
Agriculture

73 GAO- 03- 443 Federal Procurement Appendix III: Department of
Agriculture

74 GAO- 03- 443 Federal Procurement Appendix III: Department of
Agriculture

75 GAO- 03- 443 Federal Procurement Appendix III: Department of
Agriculture

76 GAO- 03- 443 Federal Procurement Appendix III: Department of
Agriculture

77 GAO- 03- 443 Federal Procurement Appendix III: Department of
Agriculture

78 GAO- 03- 443 Federal Procurement Appendix III: Department of
Agriculture

79 GAO- 03- 443 Federal Procurement

80 GAO- 03- 443 Federal Procurement Appendix IV: Department of Energy

81 GAO- 03- 443 Federal Procurement Appendix IV: Department of Energy

82 GAO- 03- 443 Federal Procurement Appendix IV: Department of Energy

83 GAO- 03- 443 Federal Procurement Appendix IV: Department of Energy

84 GAO- 03- 443 Federal Procurement Appendix IV: Department of Energy

85 GAO- 03- 443 Federal Procurement Appendix IV: Department of Energy

86 GAO- 03- 443 Federal Procurement Appendix IV: Department of Energy

87 GAO- 03- 443 Federal Procurement Appendix IV: Department of Energy

88 GAO- 03- 443 Federal Procurement Appendix IV: Department of Energy

89 GAO- 03- 443 Federal Procurement

90 GAO- 03- 443 Federal Procurement Appendix V: Department of Health and
Human Services

91 GAO- 03- 443 Federal Procurement Appendix V: Department of Health and
Human Services

92 GAO- 03- 443 Federal Procurement Appendix V: Department of Health and
Human Services

93 GAO- 03- 443 Federal Procurement Appendix V: Department of Health and
Human Services

94 GAO- 03- 443 Federal Procurement Appendix V: Department of Health and
Human Services

95 GAO- 03- 443 Federal Procurement Appendix V: Department of Health and
Human Services

96 GAO- 03- 443 Federal Procurement Appendix V: Department of Health and
Human Services

97 GAO- 03- 443 Federal Procurement Appendix V: Department of Health and
Human Services

98 GAO- 03- 443 Federal Procurement Appendix V: Department of Health and
Human Services

99 GAO- 03- 443 Federal Procurement

100 GAO- 03- 443 Federal Procurement Appendix VI: Department of Justice

101 GAO- 03- 443 Federal Procurement Appendix VI: Department of Justice

102 GAO- 03- 443 Federal Procurement Appendix VI: Department of Justice

103 GAO- 03- 443 Federal Procurement Appendix VI: Department of Justice

104 GAO- 03- 443 Federal Procurement Appendix VI: Department of Justice

105 GAO- 03- 443 Federal Procurement Appendix VI: Department of Justice

106 GAO- 03- 443 Federal Procurement Appendix VI: Department of Justice

107 GAO- 03- 443 Federal Procurement Appendix VI: Department of Justice

108 GAO- 03- 443 Federal Procurement Appendix VI: Department of Justice

109 GAO- 03- 443 Federal Procurement

110 GAO- 03- 443 Federal Procurement Appendix VII: Department of the
Treasury

111 GAO- 03- 443 Federal Procurement Appendix VII: Department of the
Treasury

112 GAO- 03- 443 Federal Procurement Appendix VII: Department of the
Treasury

113 GAO- 03- 443 Federal Procurement Appendix VII: Department of the
Treasury

114 GAO- 03- 443 Federal Procurement Appendix VII: Department of the
Treasury

115 GAO- 03- 443 Federal Procurement Appendix VII: Department of the
Treasury

116 GAO- 03- 443 Federal Procurement Appendix VII: Department of the
Treasury

117 GAO- 03- 443 Federal Procurement Appendix VII: Department of the
Treasury

118 GAO- 03- 443 Federal Procurement Appendix VII: Department of the
Treasury

119 GAO- 03- 443 Federal Procurement

120 GAO- 03- 443 Federal Procurement Appendix VIII: Department of
Transportation

121 GAO- 03- 443 Federal Procurement Appendix VIII: Department of
Transportation

122 GAO- 03- 443 Federal Procurement Appendix VIII: Department of
Transportation

123 GAO- 03- 443 Federal Procurement Appendix VIII: Department of
Transportation

124 GAO- 03- 443 Federal Procurement Appendix VIII: Department of
Transportation

125 GAO- 03- 443 Federal Procurement Appendix VIII: Department of
Transportation

126 GAO- 03- 443 Federal Procurement Appendix VIII: Department of
Transportation

127 GAO- 03- 443 Federal Procurement Appendix VIII: Department of
Transportation

128 GAO- 03- 443 Federal Procurement Appendix VIII: Department of
Transportation

129 GAO- 03- 443 Federal Procurement

130 GAO- 03- 443 Federal Procurement Appendix IX: Department of Veterans
Affairs

131 GAO- 03- 443 Federal Procurement Appendix IX: Department of Veterans
Affairs

132 GAO- 03- 443 Federal Procurement Appendix IX: Department of Veterans
Affairs

133 GAO- 03- 443 Federal Procurement Appendix IX: Department of Veterans
Affairs

134 GAO- 03- 443 Federal Procurement Appendix IX: Department of Veterans
Affairs

135 GAO- 03- 443 Federal Procurement Appendix IX: Department of Veterans
Affairs

136 GAO- 03- 443 Federal Procurement Appendix IX: Department of Veterans
Affairs

137 GAO- 03- 443 Federal Procurement Appendix IX: Department of Veterans
Affairs

138 GAO- 03- 443 Federal Procurement Appendix IX: Department of Veterans
Affairs

139 GAO- 03- 443 Federal Procurement

140 GAO- 03- 443 Federal Procurement Appendix X: General Services
Administration

141 GAO- 03- 443 Federal Procurement Appendix X: General Services
Administration

142 GAO- 03- 443 Federal Procurement Appendix X: General Services
Administration

143 GAO- 03- 443 Federal Procurement Appendix X: General Services
Administration

144 GAO- 03- 443 Federal Procurement Appendix X: General Services
Administration

145 GAO- 03- 443 Federal Procurement Appendix X: General Services
Administration

146 GAO- 03- 443 Federal Procurement Appendix X: General Services
Administration

147 GAO- 03- 443 Federal Procurement Appendix X: General Services
Administration

148 GAO- 03- 443 Federal Procurement Appendix X: General Services
Administration

149 GAO- 03- 443 Federal Procurement

150 GAO- 03- 443 Federal Procurement Appendix XI: National Aeronautics and
Space Administration

151 GAO- 03- 443 Federal Procurement Appendix XI: National Aeronautics and
Space Administration

152 GAO- 03- 443 Federal Procurement Appendix XI: National Aeronautics and
Space Administration

153 GAO- 03- 443 Federal Procurement Appendix XI: National Aeronautics and
Space Administration

154 GAO- 03- 443 Federal Procurement Appendix XI: National Aeronautics and
Space Administration

155 GAO- 03- 443 Federal Procurement Appendix XI: National Aeronautics and
Space Administration

156 GAO- 03- 443 Federal Procurement Appendix XI: National Aeronautics and
Space Administration

157 GAO- 03- 443 Federal Procurement Appendix XI: National Aeronautics and
Space Administration

158 GAO- 03- 443 Federal Procurement Appendix XI: National Aeronautics and
Space Administration

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