Improvements Needed to the Federal Procurement Data System-Next  
Generation (27-SEP-05, GAO-05-960R).				 
                                                                 
Federal government purchases of goods and services have grown to 
more than $300 billion annually. The Federal Procurement Data	 
System-Next Generation (FPDS-NG) is the only governmentwide	 
system for obtaining information on how these funds are being	 
spent. The FPDS-NG was intended to improve the prior FPDS system 
in several ways, including providing more timely and accurate	 
data; enabling users to generate their own reports; and providing
easier user access to data. The system was developed by Global	 
Computer Enterprises, Inc., (GCE) under contract with the General
Services Administration (GSA). The FPDS-NG is currently in a	 
transition period, which is scheduled to end by October 2005. We 
initiated a review to assess the extent to which FPDS-NG has	 
demonstrated the intended improvements, and to determine whether 
the FPDS-NG is currently capable of collecting and reporting on  
interagency contracting data. We reviewed documents related to	 
FPDS-NG; held discussions with officials from GSA, GCE, and the  
Office of Management and Budget (OMB), and with private sector	 
and government users. We also made numerous attempts to use the  
system to generate reports.					 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-960R					        
    ACCNO:   A38458						        
  TITLE:     Improvements Needed to the Federal Procurement Data      
System-Next Generation						 
     DATE:   09/27/2005 
  SUBJECT:   Data collection					 
	     Data integrity					 
	     Federal procurement				 
	     Interagency relations				 
	     Procurement planning				 
	     Procurement policy 				 
	     Procurement practices				 
	     Systems analysis					 
	     Systems evaluation 				 
	     GSA Federal Procurement Data System-Next		 
	     Generation 					 
                                                                 

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GAO-05-960R

United States Government Accountability Office Washington, DC 20548

September 27, 2005

The Honorable Joshua B. Bolten
Director, Office of Management and Budget

Subject: Improvements Needed to the Federal Procurement Data System-Next
Generation

Dear Mr. Bolten:

Federal government purchases of goods and services have grown to more than
$300 billion annually.1 The Federal Procurement Data System-Next
Generation (FPDS-NG) is the only governmentwide system for obtaining
information on how these funds are being spent. The FPDS-NG was intended
to improve the prior FPDS system in several ways, including providing more
timely and accurate data; enabling users to generate their own reports;
and providing easier user access to data. The system was developed by
Global Computer Enterprises, Inc., (GCE) under contract with the General
Services Administration (GSA). The FPDS-NG is currently in a transition
period, which is scheduled to end by October 2005.

We initiated a review to assess the extent to which FPDS-NG has
demonstrated the intended improvements, and to determine whether the
FPDS-NG is currently capable of collecting and reporting on interagency
contracting data. As discussed more fully in the scope and methodology
section of this letter, we reviewed documents related to FPDS-NG; held
discussions with officials from GSA, GCE, and the Office of Management and
Budget (OMB), and with private sector and government users. We also made
numerous attempts to use the system to generate reports.

Based on our review, we have concerns regarding whether the new system has
achieved the intended improvements in the areas of timeliness and accuracy
of data, as well as ease of use and access to data. We also are concerned
as to whether the FPDS-NG system has the flexibility to capture data on
interagency contracting transactions. Completion of the FPDS-NG transition
provides an opportunity for assessing the implementation of the system to
date and for considering needed adjustments as the contractor begins its
next period of performance.2 We are recommending actions to help achieve
the intended improvements for FPDS-NG, which should be considered as part
of that assessment.

BACKGROUND

The Office of Federal Procurement Policy Act of 1974 required that the
Administrator of the Office of Federal Procurement Policy (OFPP) within
OMB establish a system for collecting

1The total dollar value of contracting actions reported in the Federal
Procurement Data System-Next Generation exceeded $300 billion in fiscal
years 2003 and 2004.

2According to GSA, the FPDS-NG contract was for an initial 2-year and
5-month base period for development and maintenance. Additionally, the
contractor can receive up to five 1-year contract options based on
performance.

and developing information about federal procurement contracts.3
Subsequently, the FPDS was implemented in 1978. Since 1982, GSA has
administered the system on OFPP's behalf. The Congress, GAO, executive
branch agencies, and the public rely on FPDS data for information on
agency contracting actions, governmentwide procurement trends, and
achievement of goals related to small business.

Since 2000, efforts have been underway to modernize the FPDS. In April
2003, GSA awarded the FPDS-NG contract to GCE, Inc. The FPDS-NG became
operational in October 2003 and entered into a 2-year transition period
during which the contractor has worked with federal agencies to review and
transfer their data, and validate and connect their contract writing
systems to FPDS-NG.4 The FPDS-NG became available to the public in
December 2004.

GAO has reported on its concerns regarding the FPDS almost since the
system's beginning. 5 In December 2003, we reiterated our concerns
regarding long-standing inaccuracies and incomplete data in the system,
and made specific recommendations to OMB to help improve the successor
system, FPDS-NG, as it was being implemented.6 Subsequently, OMB issued a
memorandum requiring federal departments and agencies to take certain
steps to ensure

                                       7

their full participation in the FPDS-NG initiative.

KEY CONCERNS

Our review raised concerns regarding whether the FPDS-NG has achieved its
intended improvements. The following examples reflect our key areas of
concern regarding the new system:

o  	Timeliness and accuracy of data: Interviews with several users
indicate a lack of confidence in the system's ability to provide timely
and accurate data. The FPDS-NG vision included improving the timeliness
and accuracy of data by requiring agencies and departments to connect to
FPDS-NG via contract writing systems. These systems enable the real-time
electronic submission of data, thereby reducing the risk of errors by
eliminating or reducing manual rekeying into FPDS-NG. Although GSA and
contractor officials believe that roughly 90 percent of agencies with
contract writing systems have completed their connections to the FPDS-NG,
this is not the case for the Department of Defense (DOD)-by far the
largest contracting entity in the government. In fact, DOD has delayed its
time frames for connecting to the system at least

3Office of Federal Procurement Policy Act of 1974, Pub.L. No. 93-400
(1974).

4Contract writing systems are computer software that, among other things,
allows agencies to report their contracting data electronically to FPDS-NG
through a machine-to-machine interface. The Office of Management and
Budget (OMB) directed federal agency and department heads to identify and
allocate funds to ensure that their contract writing systems were capable
of electronically transferring data directly to FPDS-NG no later than the
end of fiscal year 2005. The reliability of data in FPDS-NG is expected to
improve because agency submissions to FPDS-NG will be based on data
already entered into the contract writing systems, reducing or eliminating
separate data entry requirements and providing contracting data in
real-time.

5See the enclosure for a list of related GAO products.

6GAO, Reliability of Federal Procurement Data, GAO-04-295R (Washington,
D.C.: Dec. 30, 2003).

7OMB memorandum: Timely and Accurate Procurement Data, August 25, 2004.

twice and currently estimates it will not be fully connected until
sometime in fiscal year 2006 given the complexity of its reporting needs
and other requirements.8 Given that DOD data represent about 60 percent of
the contracting actions that will be captured within FPDS-NG, this delay
significantly affects the ability of FPDS-NG to reflect timely and
accurate procurement data.

Additionally, prior to transferring data and connecting their contract
writing systems to FPDS-NG, agencies and departments were to review their
data and identify and correct any deficiencies, as well as to "certify"
the accuracy and completeness of their fiscal year 2004 data with the
FPDS-NG contractor. GSA officials informed us that the data review
process, including certification of accuracy and completeness of fiscal
year 2004 data, has been more rigorous than in prior years and that this
might become an annual process. Although GSA officials told us that many
agencies have reviewed and verified their data, GSA has not informed users
about the extent to which agencies' data are accurate and complete. This
lack of confirmation perpetuates a lack of confidence in the system's
ability to provide quality data.

o  	Ease of use and access to data: The FPDS-NG Web site provides users
the ability to generate reports at any time through standard report
templates or an "ad hoc" reporting tool. Although GAO analysts attended
contractor-provided training on these reporting tools, we did not find
either easy to use. 9 We repeatedly encountered significant performance
problems, including system time-outs and delays, when trying to generate
both kinds of reports. Additionally, while the ad hoc reporting capability
is a potentially useful new feature that allows users to create their own
reports, it takes time and effort to build a customized report query,
which then cannot be saved and must be rebuilt every time this feature is
utilized. With respect to access, our interviews with private sector
users, GSA officials, and the FPDS-NG contractor indicated that repeated
requests have been made for governmentwide procurement data and a summary
report, such as the prior FPDS Federal Procurement Report; however, such a
report is not currently available. GSA officials have indicated that they
are exploring ways to improve the ad hoc reporting tool and provide
governmentwide procurement reports, and they expect some of these
improvements to be implemented early in fiscal year 2006.

While FPDS-NG has enabled users to access government procurement data more
readily through its Web-based reporting features, some users have more

8DOD, Office of the Under Secretary of Defense memorandum, Transition to
the Federal Procurement Data System-Next Generation, July 8, 2004; DOD,
Office of the Under Secretary of Defense memoranda, Update on Transition
to the Federal Procurement Data System-Next Generation, Dec. 6, 2004; Jan.
24, 2005; and Aug. 1, 2005.

9There are three ways to access FPDS-NG data: (1) direct Web site access,
which includes a data query search tool, over 50 standard report
templates, and an ad hoc reporting capability; (2) downloading fiscal year
2004 and fiscal year 2005 data files archived on the Web site; and (3) Web
services access, which allows external systems to access data and
"real-time" data updates. Access to the raw data through option (2) or (3)
allows users to manipulate and present the data in different ways than
available through the FPDS-NG standard templates or ad hoc reporting
features. There is a one-time integration fee for the Web services option,
which is typically used by commercial companies.

10

complex data needs that require the ability to access and download raw
data. These users can access data through archived files from the FPDS-NG
Web site or through Web services, which provides an interface between
external systems and the FPDS-NG. In either case, FPDS-NG presents the
data in an XML format, which is a way to present data in a simple and
machine-readable

11

manner. However, our attempts to extract contracting data across multiple
government agencies using current XML-compliant software were
unsuccessful. Data had to be extracted separately for each agency from
multiple archived files, involving over 1,000 tables for fiscal year 2004
alone. Subsequent discussions with the FPDS-NG contractor indicated this
is the only means currently available for accessing the raw data.
Obtaining this data through multiple XML files involves a significant
increase in time and effort and does not facilitate user access to data to
meet information needs.

INTERAGENCY CONTRACTING TRANSACTIONS

The need for collecting and tracking data on interagency contracting
transactions has become increasingly important. In recent years, federal
agencies have been making greater use of existing contracts provided by
other agencies, such as multiple award schedules and governmentwide
acquisition contracts, as well as interagency acquisition services
provided through the use of franchise funds. However, total spending using
other agencies' contracting vehicles and services is unknown because there
is currently no system that tracks and reports this information.
Challenges associated with these acquisition vehicles and their management
led GAO to designate interagency contracting as a governmentwide high-risk

12

area in January 2005.

Over the last decade, Congress has repeatedly called for DOD to report on
certain types of interagency contracting and financial data. Recently, the
Senate Armed Services Committee conveyed its expectation that DOD business
systems have the capability to track basic information about interagency
transactions. This information includes the following: number and dollar
value of transactions under each interagency contracting vehicle; the
status of open transactions; the status of funds under interagency
transactions (including appropriation type and year, and fund balance
received, obligated, expended, and available); and the amount of any funds
returned or to be returned to DOD or to the Department of the Treasury.13
DOD officials have indicated that they plan to use FPDS-NG to track
interagency contracting data and to request changes to the system to
capture more specific information in this regard.

GSA documentation indicates that the vision for FPDS-NG included system
capability that was flexible enough to change as new data collection needs
arose, such as those related to interagency contracting activities. GSA
officials told us that some interagency contracting

10Raw data are data that have not been processed; the data appear in the
original format as entered into agencies' contract writing systems and
then reported electronically to FPDS-NG.

11XML (Extensible Markup Language) is a flexible way to create common
information formats and share both the format and the data on the World
Wide Web, intranets, and elsewhere. While XML has been successful as a
markup language for documents and data, the overhead associated with
generating, parsing, transmitting, storing, or accessing XML-based data
has hindered its use in some environments.

12GAO, High-Risk Series: An Update, GAO-05-207 (Washington, D.C.: January
2005).

13S. Rep. No. 109-69 at 352 (2005), accompanying S. 1042, 109th Cong.
(2005).

data are available in FPDS-NG. However, our efforts to obtain data and to
generate reports on interagency contracting transactions were
unsuccessful. GSA officials also expressed concerns that FPDS-NG may not
be the appropriate system to collect certain types of data on interagency
transactions. Given these circumstances, it is unclear whether FPDS-NG has
the flexibility to address these new data needs and whether it is the
appropriate system for this purpose.

CONCLUSION

The FPDS-NG is currently the only system providing information on over
$300 billion in annual government spending; however, concerns remain
regarding the timeliness, accuracy, accessibility, and ease of use of the
system. Additionally, the growth in interagency contracting and the
associated challenges heightens the need for data in this area to provide
sufficient oversight. Given that the FPDS-NG transition period is ending,
the opportunity exists to address key areas of concern as the system's
implementation to date is assessed.

RECOMMENDATIONS FOR EXECUTIVE ACTION

In order to help achieve the intended improvements for FPDS-NG, we
recommend that the Director of OMB take the following three actions:

o  	Work with DOD and any other agencies that have not yet moved to an
electronic data submission environment to connect to FPDS-NG via contract
writing systems as soon as possible, and provide confirmation of agencies'
review and verification of the accuracy and completeness of their data in
FPDS-NG.

o  	Develop a plan to improve ease of use and access to data, including
report generation, governmentwide reporting needs, and accessing raw data
through more efficient means.

o  	Determine whether the FPDS-NG currently has the capability to collect
and report on interagency contracting data and whether it is the
appropriate system to capture this data in the future.

AGENCY COMMENTS

We provided a draft of this letter to OMB and GSA for comment. OMB and GSA
officials commented orally that their respective agencies concurred with
the recommendations, and OMB stated that it would take into consideration
the findings of the report, including whether the use, access and
capability of FPDS-NG appropriately meets the government's needs.
Officials from both agencies indicated that ensuring DOD connects its
contracting writing systems to FPDS-NG as soon as possible is a top
priority. Additionally, GSA agreed that an overall statement about the
agencies' verification of the accuracy and completeness of the data in
FPDS-NG could be made now that most agencies have completed that process.
OMB and GSA officials stated that new software is expected to improve
reporting capability and that additional improvements are being explored
to improve ease of use of the system. GSA added that additional reports
and improved capability are planned for early in fiscal year 2006.

Regarding interagency contracting, OMB stated that currently FPDS-NG has a
limited role in identifying and reporting information on interagency
contracting transactions. GSA stated that FPDS-NG was not intended to
collect information on financial transactions between

government agencies and that OMB would need to decide whether FPDS-NG
should be modified so that the system could collect and report on this
type of information.

SCOPE AND METHODOLOGY

The information in this letter is based on previous GAO reviews and
limited additional work
conducted from February through August 2005, in accordance with generally
accepted
government auditing standards. In conducting our work, we reviewed
relevant GAO reports
and audit documentation. We also held discussions with officials at GSA,
OMB, GCE, and
with several private sector and government users. We attended training at
the GCE facility on
FPDS-NG report generation; we attempted to generate standard reports and
to build several
ad hoc report queries using the FPDS-NG system; and we reviewed relevant
documents
concerning FPDS and FPDS-NG.

We are sending copies of this letter to the Chairs and Ranking Members of
the Senate
Homeland Security and Governmental Affairs Committee, the House Government
Reform
Committee, and other interested congressional committees, as well as to
the Administrator of
General Services. We will provide copies to others upon request. This
letter will also be
available on GAO's home page at http://www.gao.gov. If you or your staff
has any questions
about this letter, please contact me at (202)-512-4841. Contact points for
our Offices of
Congressional Relations and Public Affairs may be found on the last page
of this report. This
letter was prepared under the direction of Bill Woods. GAO staff who made
contributions to
this letter were Amelia Shachoy, Assistant Director; Art James; Julia
Kennon; William
McPhail; Lisa Simon; Shannon Simpson; and Robert Swierczek.

Sincerely yours,

Katherine V. Schinasi
Managing Director
Acquisition and Sourcing Management

Enclosure

ENCLOSURE: Related GAO Products

GAO. Contract Management: Impact of Strategy to Mitigate Effects of
Contract Bundling on Small Business Is Uncertain. GAO-04-454. (Washington,
D.C.: May 27, 2004).

GAO. Reliability of Federal Procurement Data. GAO-04-295R. (Washington,
D.C.: Dec. 30, 2003).

GAO. Contract Management: No Reliable Data to Measure Benefits of the
Simplified Acquisition Test Program. GAO-03-1068. (Washington, D.C.: Sept.
30, 2003).

GAO. Contract Management: Civilian Agency Compliance with Revised Task and
Delivery Order Regulations. GAO-03-983. (Washington, D.C.: Aug. 29, 2003).

GAO. Small Business: HUBZone Program Suffers from Reporting and
Implementation Difficulties. GAO-02-57. (Washington, D.C.: Oct. 26, 2001).

GAO. OMB and GSA: FPDS Improvements. GAO/AIMD-94-178R. (Washington, D.C.:
Aug. 19, 1994).

GAO. The Federal Procurement Data System-Making It Work Better.
GAO/PSAD-80-33. (Washington, D.C.: Apr. 18, 1980).

GAO. The Federal Procurement Data System Could Be an Effective Tool for
Congressional Surveillance. GAO/PSAD-79-109. (Washington, D.C.: Oct. 12,
1979).

(120409)

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