Information on the Cooperative Purchasing Program Under Section 1122 of
the 1994 National Defense Authorization Act (Correspondence, 03/03/2000,
GAO/GGD-00-74R).

Pursuant to a congressional request, GAO reviewed the General Services
Administration's (GSA) Cooperative Purchasing Program, which was
established under the 1994 National Defense Authorization Act to allow
state and local governments to purchase Department of Defense (DOD)
equipment for use in counter-drug activities, focusing on four program
issues: (1) sales data; (2) suitability of items sold; (3) alternative
supply sources; and (4) administrative fees charged.

GAO noted that: (1) for fiscal years 1998 and 1999, representatives from
18 states placed over 580 orders for one or more items, cumulatively
valued at over $5.3 million, from the Army, the Defense Logistics Agency
(DLA), and GSA; (2) these figures are not complete because beginning on
January 1, 1999, GSA allowed purchasers to buy some program equipment
directly from participating commercial vendors--bypassing GSA and
resulting in GSA's not tracking these purchases; (3) the act specifies
that equipment suitable for counter-drug activities may not include
equipment that DOD does not purchase for its own purposes; (4) according
to agency officials, only equipment approved by the Army has been sold
to state and local governments under the program; (5) GAO's review of
purchase orders showed that all of the equipment purchased through GSA
from the program's inception through the first quarter of fiscal year
1999 was approved and included such items as vehicles, mobile command
centers, and radios; (6) there is a variety of alternative sources of
equipment available to state and local governments, including DOD
Surplus Program and state and local procurement programs; (7) GSA
eliminated its additional 4-percent program administration fee in
January 1999, but it continues to charge a 1-percent fee on all items
purchased from its contract vendors; and (8) the Army and DLA reported
that they include program administrative costs in the price they charge
for program equipment.

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

 REPORTNUM:  GGD-00-74R
     TITLE:  Information on the Cooperative Purchasing Program Under
	     Section 1122 of the 1994 National Defense
	     Authorization Act
      DATE:  03/03/2000
   SUBJECT:  Surplus federal property
	     Law enforcement
	     State and local procurement
	     Drug trafficking
	     Federal/state relations
	     Federal supply systems
IDENTIFIER:  GSA Cooperative Purchasing Program
	     DOD Surplus Program

******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO report.  Delineations within the text indicating chapter **
** titles, headings, and bullets are preserved.                 **
**                                                              **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced.  Tables are included, but    **
** may not resemble those in the printed version.               **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
** A printed copy of this report may be obtained from the GAO   **
** Document Distribution Center.  For further details, please   **
** send an e-mail message to:                                   **
**                                                              **
**                                            **
**                                                              **
** with the message 'info' in the body.                         **
******************************************************************

United States General Accounting Office
GAO

GAO/GGD-00-74R

Ordering Copies of GAO Reports
The first copy of each GAO report and testimony
is free. Additional copies are $2 each. Orders
should be sent to the following address,
accompanied by a check or money order made out
to the Superintendent of Documents, when
necessary. VISA and MasterCard credit cards are
accepted, also. Orders for 100 or more copies to
be mailed to a single address are discounted 25
percent.
Order by mail:
U.S. General Accounting Office
P.O. Box 37050
Washington, DC 20013
or visit:
Room 1100
700 4th St. NW (corner of 4th and G Sts. NW)
U.S. General Accounting Office
Washington, DC
Orders may also be placed by calling (202) 512-
6000 or by using fax number (202) 512-6061, or
TDD (202) 512-2537.
Each day, GAO issues a list of newly available
reports and testimony. To receive facsimile
copies of the daily list or any list from the
past 30 days, please call (202) 512-6000 using a
touch-tone phone. A recorded menu will provide
information on how to obtain these lists.
Viewing GAO Reports on the Internet
For information on how to access GAO reports on
the INTERNET, send e-mail message with "info" in
the body to:
[email protected]
or visit GAO's World Wide Web Home Page at:
http://www.gao.gov

Reporting Fraud, Waste, and Abuse in Federal
Programs
To contact GAO FraudNET use:
Web site:
http://www.gao.gov/fraudnet/fraudnet.htm
E-Mail: [email protected]
Telephone: 1-800-424-5454 (automated answering
system)

United States
General Accounting Office
Washington, D.C. 20548-0001
Official Business
Penalty for Private Use $300
Address Correction Requested

                    Bulk Rate
               Postage & Fees Paid
                       GAO
                 Permit No. G100

(240371)

B-284797
Page 2    GAO/GGD-00-74R States' Use of Federal Supply Sources
B-284797

March 3, 2000

The Honorable James M. Inhofe
Chairman
The Honorable Charles S. Robb
Ranking Minority Member
Subcommittee on Readiness and Management Support
 Committee on Armed Services
United States Senate

Subject: Information on the Cooperative Purchasing Program
Under Section 1122 of the 1994 National Defense Authorization
Act

Enclosed are the slides that we used on February 25, 2000, to
brief your offices on the results of our review of the
cooperative purchasing program established under section 1122
of the 1994 National Defense Authorization Act (Public Law 103-
160). Section 1122 provides for state and local governments to
purchase law enforcement equipment suitable for counter-drug
activities through the Department of Defense (DOD). The
enclosed slides present the results of our work relating to
the four specific 1122 program issues you asked about-sales
data, suitability of items sold, alternative supply sources,
and administrative fees charged. In addition, the slides
provide program background information, describe how the
program works, and explain our methodology. As agreed with
your offices, this letter and the transmittal of the slides
represent the culmination of our work on this assignment.

Briefly, the slides show that for fiscal years 1998 and 1999,
representatives from 18 states placed over 580 orders for one
or more items, cumulatively valued at over $5.3 million, from
the Department of the Army (DA), the Defense Logistics Agency
(DLA), and the General Services Administration (GSA). These
figures are not complete because beginning on January 1, 1999,
GSA allowed purchasers to buy some program equipment directly
from participating commercial vendors-bypassing GSA and
resulting in GSA's not tracking these purchases.1 The act
specifies that equipment suitable for counter-drug activities
may not include equipment that DOD does not purchase for its
own purposes. According to agency officials, only equipment
approved by DA has been sold to state and local governments
under the program. Our review of purchase orders showed that
all of the equipment purchased through GSA from the program's
inception through the first quarter of fiscal year 1999 was
approved and included such items as vehicles, mobile command
centers, and radios. There is a variety of alternative sources
of equipment available to state and local governments,
including the DOD Surplus Program (Section 1033 of the
National Defense Authorization Act of 1997) and state and
local procurement programs. Finally, GSA eliminated its
additional 4-percent program administration fee in January
1999, but it continues to charge a 1-percent fee on all items
purchased from its contract vendors. DA and DLA reported that
they include program administrative costs in the price they
charge for program equipment.

We obtained and analyzed program sales data from the federal
agencies involved in the program. We discussed the program
with representative of 39 of the 41 states that had appointed
program representatives. We also obtained and considered
comments on a draft of the information contained in the slides
from representatives of the federal agencies involved in the
program. We performed our work from October 1999 to February
2000 in accordance with generally accepted government auditing
standards.

We are sending copies of this letter to Representative Herbert
Bateman, Chairman, and Representative Solomon Ortiz, Ranking
Minority Member, Subcommittee on Military Readiness, House
Committee on Armed Services. We are also sending copies to the
Honorable William Cohen, Secretary of Defense; the Honorable
Louis Caldera, Secretary of the Army; Lieutenant General Henry
Glisson, Director of DLA; the Honorable David Barram,
Administrator of GSA; and the Honorable Janet Reno, Attorney
General of the United States. We will make copies available to
others upon request.

Major contributors to this letter included Sherrill Johnson,
Dorothy Tejada, and Frederick Lyles. If you have any questions
about this letter or the enclosed slides, you may contact me
on (202) 512-8387.

Bernard L. Ungar

Director, Government Business
Operations Issues

_______________________________
1 Vehicles and mobile command centers accounted for over 70
percent of the dollar sales for the 2 fiscal years, and
purchases of these items were made directly through GSA for
the entire 2-year period.

Enclosure
States' Use of Federal Supply Sources
Page 10GAO/GGD-00-74R States' Use of Federal Suppl
y Sources

*** End of Document ***