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
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GAO/GGD-00-74R
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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 ***