Acquisition Reform: NASA's Internet Service Improves Access to
Contracting Information (Letter Report, 02/09/99, GAO/NSIAD-99-37).
Pursuant to a legislative requirement, GAO reviewed the National
Aeronautics and Space Administration's (NASA) Acquisition Internet
Service (NAIS), focusing on: (1) whether NAIS is an effective mechanism
for disseminating procurement information to industry, including small
businesses; and (2) the status of efforts to develop a governmentwide
electronic procurement information system similar to NAIS.
GAO noted that: (1) NAIS is a simple, effective, and user-friendly
system for disseminating information on contract opportunities; (2) NAIS
has contributed to the development of a more standardized and
streamlined acquisition process at NASA and provides a central
electronic source of procurement information from NASA's decentralized
facilities; (3) it allows businesses to obtain procurement information
immediately, without waiting for mail delivery of printed information;
(4) vendors especially like the electronic mail notification service
that automatically sends announcements about procurements of interest to
them; (5) vendor feedback about NAIS came primarily from small
businesses and was generally positive; (6) procurement data showed that
offers and awards to small businesses did not change significantly after
NAIS implementation; (7) NASA noted that data limitations made it
difficult to quantify other NAIS benefits; (8) NASA, the General
Services Administration, and other federal agencies are working together
to develop a single, governmentwide Internet entry point for information
on federal procurement opportunities; (9) but a number of steps must
still be taken and many obstacles remain; (10) even if the new system is
successfully developed and implemented governmentwide, current statutory
requirements for publication of procurement notices and minimum waiting
periods for mail delivery may continue to limit the potential benefits
of an electronic procurement information system; and (11) the same
legislation that encouraged NASA and others to work together also
requires the Office of Federal Procurement Policy to submit to Congress
annual reports assessing compliance with the requirement to provide
direct access to procurement information through a single governmentwide
electronic point of entry.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: NSIAD-99-37
TITLE: Acquisition Reform: NASA's Internet Service Improves Access
to Contracting Information
DATE: 02/09/99
SUBJECT: Electronic mail
Advertised procurement
Federal procurement policy
Federal procurement
Computer networks
Information resources management
Electronic data interchange
Small business contractors
IDENTIFIER: NASA Acquisition Internet Service
NASA Midrange Pilot Program
NASA Electronic Posting System
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Cover
================================================================ COVER
Report to Congressional Committees
February 1999
ACQUISITION REFORM - NASA'S
INTERNET SERVICE IMPROVES ACCESS
TO CONTRACTING INFORMATION
GAO/NSIAD-99-37
Acquisition Reform
(707346)
Abbreviations
=============================================================== ABBREV
CBD - Commerce Business Daily
EPS - Electronic Posting System
FACNET - Federal Acquisition Computer Network
FASA - Federal Acquisition Streamlining Act
FTE - full-time equivalent
GSA - General Services Administration
NAIS - NASA Acquisition Internet Service
NASA - National Aeronautics and Space Administration
OFPP - Office of Federal Procurement Policy
Letter
=============================================================== LETTER
B-280239
February 9, 1999
Congressional Committees
In response to the Federal Acquisition Streamlining Act (FASA) of
1994, we reviewed the National Aeronautics and Space Administration's
(NASA) Acquisition Internet Service (NAIS).\1 Specifically, we
determined whether NAIS was an effective mechanism for disseminating
procurement information to industry, including small businesses. In
addition, we identified the status of efforts to develop a
governmentwide electronic procurement information system similar to
NAIS.
In 1993, NASA began an initiative called the Midrange Pilot Program
for procurements between $25,000 and $500,000.\2 The purpose of the
program was to test new processes and tools to streamline the
acquisition process while maintaining or improving the quality of
procurements. A key objective of the program was to develop and test
an alternative to paper documents as the primary means of
communicating procurement information to prospective contractors.
After researching available options, NASA chose to implement an
Internet-based electronic procurement notice and publication system,
which ultimately became NAIS.
In December 1996, the Department of Commerce, in partnership with the
Government Printing Office, introduced CBDNet, an Internet version of
the Commerce Business Daily (CBD),\3 which is available to the public
free of charge. Many other agencies have developed a variety of
other electronic posting systems to help improve access to, and the
visibility of, their contracting opportunities.
--------------------
\1 P.L. 103-355, section 5062, authorized NASA to conduct a test of
electronic notice and publication for procurements and requires GAO
to report on the results of NASA's test.
\2 In fiscal year 1997, NASA increased the threshold to $2 million.
NASA officials estimate that 80 to 90 percent of all NASA's annual
contract awards are in the midrange category.
\3 The CBD gives a brief description (or synopsis) of federal
acquisitions over $25,000. The primary purposes of CBD notices are
to improve small businesses' access to acquisition information and
enhance competition by identifying contracting and subcontracting
opportunities.
RESULTS IN BRIEF
------------------------------------------------------------ Letter :1
NAIS is a simple, effective, and user-friendly system for
disseminating information on contract opportunities. NAIS has
contributed to the development of a more standardized and streamlined
acquisition process at NASA and provides a central electronic source
of procurement information from NASA's decentralized facilities. It
allows businesses to obtain procurement information immediately,
without waiting for mail delivery of printed information. Vendors
especially like the electronic mail (e-mail) notification service
that automatically sends announcements about procurements of interest
to them. Vendor feedback about NAIS came primarily from small
businesses and was generally positive. Procurement data showed that
offers and awards to small businesses did not change significantly
after NAIS implementation. NASA noted that data limitations made it
difficult to quantify other NAIS benefits.
NASA, the General Services Administration (GSA), and other federal
agencies are working together to develop a single, governmentwide
Internet entry point for information on federal procurement
opportunities. But a number of steps must still be taken and many
obstacles remain. Even if the new system is successfully developed
and implemented governmentwide, current statutory requirements for
publication of procurement notices and minimum waiting periods for
mail delivery may continue to limit the potential benefits of an
electronic procurement information system. The same legislation that
encouraged NASA and others to work together also requires the Office
of Federal Procurement Policy to submit to Congress annual reports
assessing compliance with the requirement to provide direct access to
procurement information through a single governmentwide electronic
entry point.
BACKGROUND
------------------------------------------------------------ Letter :2
In the early 1990s, federal agencies and Congress recognized that
doing business electronically could save resources, streamline the
procurement process, and improve the private sector's access to
federal contracting opportunities. NASA first used NAIS at its
Marshall Space Flight Center in 1994 to post midrange procurement
opportunities on the Internet. NAIS services and features expanded
rapidly, and the system began to be used NASA-wide in 1995. It was
the first agencywide procurement information system on the Internet.
With some exceptions, federal agencies must publish notices of
competitive contracting opportunities above $25,000 in the CBD. To
accommodate timely delivery of notices through a paper-based mail
delivery system, the law generally prescribes a 15-day minimum
interval between publication of a notice in the CBD and the issuance
of a solicitation by an agency. After a solicitation is issued,
agencies generally must give contractors a minimum of 30 days to
prepare and deliver bids or offers. In support of NASA's test of
alternatives to the use of paper documents for communicating business
opportunities to prospective contractors, FASA authorized NASA to
waive the CBD notice and waiting period requirements for 4 years
(until Oct. 13, 1998) and for up to $100 million in procurement
life-cycle costs.
Congress has supported the use of federal electronic commerce\4 and
electronic access to procurement information. Under FASA, this
capability was to be provided through the Federal Acquisition
Computer Network (FACNET), a governmentwide systems architecture for
acquisitions based on electronic data interchange, which is the
computer-to-computer exchange of routine business documents using
standardized data formats. FACNET implementation proved to be
problematic, however, and in 1997, section 850 of the National
Defense Authorization Act for Fiscal Year 1998 replaced the
preference for FACNET with a more flexible policy that promotes the
use of electronic commerce techniques whenever practicable or
cost-effective.\5
Section 850 also requires that in implementing electronic commerce,
agencies apply standards consistent with nationally and
internationally recognized standards that broaden interoperability
and ease of use. Agency notices of procurement opportunities must be
provided in a form that allows convenient and easy user access
through a single governmentwide point of entry. While CBDNet
satisfies the requirement with respect to notices, neither it nor
other currently available electronic procurement posting systems
satisfy the requirement for a single governmentwide point of entry
for access to solicitations and other procurement information.
The law also requires that the Administrator of the Office of Federal
Procurement Policy (OFPP) submit to Congress yearly reports through
2003 on the progress being made in implementing section 850. The
reports must include a strategic plan for implementation of
governmentwide electronic commerce and an assessment of compliance
with the requirement for a single point of entry.
--------------------
\4 Electronic commerce is conducted using electronic techniques for
business transactions, including electronic mail or messaging, World
Wide Web technology, electronic bulletin boards, purchase cards,
electronic funds transfers, and electronic data interchange.
\5 We reported previously on numerous concerns about FACNET
implementation, including FASA's requirements. See Acquisition
Reform: Obstacles to Implementing the Federal Acquisition Computer
Network (GAO/NSIAD-97-26, Jan. 3, 1997) and Acquisition Reform:
Classes of Contracts Not Suitable for the Federal Acquisition
Computer Network (GAO/NSIAD-97-232, Sept. 17, 1997).
NAIS IS AN EFFECTIVE
INFORMATION SERVICE
------------------------------------------------------------ Letter :3
Since 1994, NAIS has evolved into a procurement information system
with many operational features that are effective, easy to use, and
beneficial to NASA and vendors. By eliminating many of the steps in
the paper-based process of publicizing contract opportunities and
issuing solicitations, NAIS has contributed to a more streamlined
agency acquisition process. Feedback from NAIS users, particularly
small businesses, has generally been positive. However, the lack of
data makes it very difficult to quantify specific benefits of NAIS,
such as the amount of time it actually saves. NASA exceeded the
$100-million ceiling authorized by FASA for the test. After NAIS
implementation, the number of offers per contract and small
businesses' share of contract actions and dollars showed some
increases.
NAIS IS USER-FRIENDLY AND
WORKS
---------------------------------------------------------- Letter :3.1
Since July 1994, NAIS has evolved to provide a broad range of
procurement-related functions and information. For example, in
November 1995, NASA added an on-line procurement reference library.
In March 1997, NASA completed the NAIS Electronic Posting System
(EPS), which enables procurement staff anywhere in the agency to
prepare and post notices and place solicitation files directly onto
the NAIS Internet site. In March 1997, NASA also added an e-mail
notification service that automatically notifies subscribers of new
procurement information available on NAIS.
We found that the system's operational features were easy to use and
worked as described. Procurement staff demonstrated how they use the
EPS to generate, edit, and post notices and place solicitation files
directly onto the Internet. The EPS automatically formats each NAIS
posting, inserts links to other relevant documents and external
information, updates the business opportunities index library, and
constructs and feeds messages to the NAIS e-mail notification
service. Appendix I provides more information on the development and
evolution of the EPS and the approach NASA used to design, develop,
and operate the system.
By going to the NAIS Internet site, users can
-- identify, at one location, notices of and solicitations for
competitive business opportunities and awards over $25,000 at
all NASA centers;
-- search for business opportunities by type of product and/or
service, NASA center, or posting date;
-- locate and download documents related to a specific procurement;
and
-- view summaries of NASA's current contracts (with contractor
name, value, obligations, and description) and search current
contracts by state, congressional district, business type, or
type of product and/or service.
The e-mail notification service automatically transmits announcements
to subscribers immediately after new procurement information is
posted on NAIS. This allows subscribers to track developments in the
solicitation cycle and learn of new releases. Subscribers can
register free of charge by providing an e-mail address and selecting
the types of contracting opportunities in which they have the
greatest interest. Thus, instead of having to search for
information, subscribers can have it selected and delivered to their
desktop electronically. As of July 1998, there were over 7,100
subscribers to the e-mail notification service. According to NASA,
user feedback showed that this service was the most popular feature
of NAIS.
NAIS CONTRIBUTES TO A
STREAMLINED AND ACCESSIBLE
PROCUREMENT SYSTEM
---------------------------------------------------------- Letter :3.2
One of NASA's goals in establishing NAIS was to streamline and
standardize the agency's procurement process by using the Internet as
the gateway to contracting opportunities for businesses. NAIS
streamlined or eliminated many of the steps required by the
paper-based process for publicizing synopses of contracting
opportunities and issuing solicitations.
The NAIS process involves fewer steps for procurement staff than the
paper process. The EPS, for example, automatically formats notices,
performs edit checks, automatically posts notices on the Internet
through the NAIS server, and transmits them to the Government
Printing Office for publication in the CBD. Using the paper process,
procurement staff have to perform analogous functions manually and
must also respond to requests for copies of solicitations by
preparing mailing labels and mailing the copies. With NAIS, the
solicitation files are available for review and retrieval
("downloading") through the Internet.
We believe the NAIS process is also easier for contractors to use.
Using the paper-based system, contractors must either scan the CBD or
periodically call or visit each of NASA's procurement offices to
identify contracting opportunities. In contrast, using NAIS,
contractors can search for and view as many synopses and
solicitations as they wish on-line. They can search by specific
commodity, service, or location; view and provide comments on draft
solicitations; and access the Federal Acquisition Regulation, NASA
procurement policies and procedures, and NASA procurement forms.
NASA officials point to the absence of protests\6 from contractors
concerning NAIS and the lack of complaints about NAIS to the NASA
Ombudsman Program\7 as evidence that the contractor community
approves of NAIS.
--------------------
\6 A protest is a written objection by an interested party to a
solicitation or proposed award or award of a contract. Protests are
usually filed either with the procuring agency or with GAO.
\7 The program was established in October 1995 to facilitate
communications between NASA and current and potential contractors.
It provides offerors, potential offerors, and contractors with a
single point of contact to address their concerns.
USER FEEDBACK WAS POSITIVE
---------------------------------------------------------- Letter :3.3
Both businesses and NASA procurement staff have provided positive
feedback about NAIS. Overall, industry responses to specific NAIS
operational features were positive. In a tally of on-line comments
from NAIS users, 87 percent of respondents said they found NAIS to be
beneficial. The respondents identified themselves primarily as
small, small disadvantaged, or women-owned businesses. For the most
part, feedback from the procurement staff was positive, and comments
were often similar to those made by businesses. Federal electronic
commerce officials from other agencies and industry representatives
told us that systems with the operational features of NAIS can
benefit both industry and government, especially when all buying
organizations are using the same system.
An on-line NAIS feedback system was established in 1995 to obtain
input, especially from businesses, about the system. The NAIS team\8
also requests feedback from the procurement staff at NASA centers.
This feedback was compiled in December 1997 and again in June 1998.
The team compiles survey feedback data, develops a consolidated
summary of industry suggestions, and uses the summary to determine
which changes and enhancements should be made.
--------------------
\8 The NAIS team consists of a small group of procurement and, in
some cases, technical staff from each NASA center and headquarters.
LACK OF DATA MAKES IT
DIFFICULT TO QUANTIFY NAIS
BENEFITS
---------------------------------------------------------- Letter :3.4
NASA's evaluation plan for the Midrange Pilot Program did not include
a separate NAIS evaluation plan. In May 1998, NASA published the
NAIS Business Case, which provides details of current NAIS features,
along with its history, benefits, and funding alternatives. However,
NASA did not collect data on or evaluate individual procurements
advertised through NAIS. The information needed to determine how
much time NAIS actually saved or to quantify other NAIS benefits,
such as cost avoidance for the procurement process, was not
available. We did not find any evidence that NAIS had negative
effects, and there is substantial qualitative evidence of the
positive impact of NAIS. Appendix II provides more information on
our assessment of the NAIS Business Case.
NASA EXCEEDED WAIVER
AUTHORITY'S DOLLAR CEILING
---------------------------------------------------------- Letter :3.5
Although FASA allowed NASA a 4-year test authority to waive CBD
publication requirements and waiting periods up to a limit of $100
million in life-cycle costs, NASA did not establish a mechanism to
track compliance with the waiver provision. NASA officials told us
that when the waiver authority was originally requested, they
anticipated that NAIS, though not yet developed, would be used
primarily by the Marshall Space Flight Center, the focal point of the
pilot test, and that the $100-million ceiling would be adequate to
cover Marshall's procurements. However, the Internet posting
capability was rolled out to all NASA centers by April 1995 and was
being used agencywide for all competitive procurements over $25,000 1
month before NASA began waiving the CBD notice requirements in
October 1995.
In early 1997, NASA officials realized that the $100-million ceiling
authorized by FASA for the test would not cover agencywide use of
NAIS. In May 1997, the Administration submitted a legislative
proposal to increase the ceiling for NASA's use of the waiver
authority and extend the test period from 4 to 6 years. Congress did
not act on the proposal. NASA used the CBD waiver authority through
the end of the fiscal yearSeptember 30, 1997. NASA calculated that
it awarded approximately 1,585 contracts worth a total of about $177
million using the CBD waiver authority.
NO SIGNIFICANT CHANGES IN
OFFERS AND AWARDS REPORTED
AFTER NAIS IMPLEMENTATION
---------------------------------------------------------- Letter :3.6
In an effort to determine the impact of NAIS on the amount of
competition for awards, NASA compared the number of vendors'
proposals received before and after NAIS implementation. NASA
compared the number of offers received per contract action in fiscal
year 1994the year prior to agencywide use of NAISto the number of
offers per contract action in fiscal year 1997a year in which all
midrange procurements were only advertised through NAIS. As table 1
shows, the average number of offers received per acquisition
increased from 6.1 to 7.2 after NAIS implementation. NASA said in
the NAIS Business Case that the increase in the average number of
offers received per acquisition was especially promising because the
majority of these acquisitions were set aside for small businesses.
Table 1
NAIS's Impact on Competition
(Dollars in thousands)
Fiscal year
----------------------------------------------
Procurement
activities\a 1994 1997
---------------------- ---------------------- ----------------------
Number of contracts 644 396
awarded
Offers received from 3,959 2,852
businesses
Offers per contract 6.1 7.2
Number of contracts to 380 252
small businesses
Small-business share 59.01 63.64
(percent)
Dollar value of $3,296 $930
contract awards
Dollars awarded to $431 $283
small businesses
Small-business dollar 13.1 30.4
share (percent)
----------------------------------------------------------------------
\a Competitive contract actions over $25,000.
We also calculated and compared the percentages of contract actions
and dollars awarded to small businesses in fiscal years 1994 and
1997, respectively. Table 1 shows these calculations. The
percentage share of awards to small businesses did not change
significantly after NAIS implementation, but the percentage share of
dollars awarded to small businesses increased substantially in 1997.
A NASA official said this was due in large part to a drop in awards
to large businesses and not to any substantial change in dollars
awarded to small businesses.
EFFORTS ARE UNDERWAY TO
ESTABLISH A GOVERNMENTWIDE EPS
------------------------------------------------------------ Letter :4
Today most federal agencies use the Internet in some way to advertise
their contracting opportunities. Vendors search all these various
Internet sites for government procurement information. Recent
legislation requires the government to provide direct access to
notices of agencies' requirements and solicitations through a single
governmentwide electronic point of entry. NASA, GSA, and other
agencies are testing a multiagency electronic posting system. Agency
officials are concerned that the benefits of providing direct
electronic access to contracting opportunities may be offset by
existing statutory requirements for publication of procurement
notices and minimum waiting periods.
STATUS OF EFFORTS TO DEVELOP
A GOVERNMENTWIDE EPS
---------------------------------------------------------- Letter :4.1
According to the San Antonio Electronic Commerce Resource Center,\9
more than 400 different Internet sites provide federal procurement
information. This multitude of sites makes it difficult and
time-consuming for contractors to obtain governmentwide information
on contracting opportunities.
The March 1998 report, Electronic Commerce for Buyers and Sellers, A
Strategic Plan for Electronic Federal Purchasing and Payment,\10
described planned enhancements to the electronic version of the CBD,
CBDNet, which now provides a single point of entry only for
procurement notices. GSA and NASA approached the Department of
Commerce and the Government Printing Office to form an interagency
team to implement an enhanced CBDNet and to make an Internet-based
EPS with features comparable to those of the NAIS system available to
the entire federal sector.\11 However, the agencies could not reach
agreement on an enhanced CBDNet implementation approach. Among
unresolved issues were the source and level of funding needed for the
project, the costs to develop and implement the system, and the
potential financial impact on the operating and user agencies.
NASA, GSA, and other members of the Interagency Acquisition Internet
Council\12 are developing and testing a pilot multiagency posting
system derived from the NAIS EPS to enable agencies to post notices,
solicitations, and other acquisition-related documentation directly
onto the Internet, where it would be available through a single point
of entry. GSA is leading this effort and spent over $400,000 in the
past year developing this multiagency EPS software. In October 1998,
GSA began using the pilot software as the agency's single EPS. If
testing demonstrates that the multiagency EPS is capable of providing
effective access to notices and solicitations through a single point
of entry, the Administrator of the Office of Federal Procurement
Policy will consider designating it as the single governmentwide
point of entry required by section 850.
--------------------
\9 Electronic Commerce Resource Centers are a network of
government-sponsored centers that provide electronic commerce
training and support to the contractor community.
\10 Prepared by the Electronic Processes Initiatives Committee of the
President's Management Council and submitted to Congress in response
to the requirement in section 850 of the Fiscal Year 1998 Department
of Defense Authorization Act for a strategic plan for the
implementation of a governmentwide electronic commerce capability.
\11 The Department of Commerce is responsible for keeping the
business community informed about federal procurement actions through
publication of the CBD. In 1961, the Government Printing Office
assumed CBD publication and distribution functions. However, all
editorial functions remained within the jurisdiction of the
Department of Commerce.
\12 The Council was established in May 1996 to seek and promote ways
to optimize the use of the Internet in streamlining the federal
acquisition process and increasing communication of federal
acquisition-related information.
CHALLENGES TO GOVERNMENTWIDE
IMPLEMENTATION
---------------------------------------------------------- Letter :4.2
The difficulty of establishing a single governmentwide electronic
point of entry for federal procurement opportunities was emphasized
by several agency officials, who said they were concerned about the
costs involved in developing, operating, and maintaining such a
system; cost sharing among different agencies; and the linkages that
need to be established with existing agency systems through the
Internet. They also questioned how and when decisions would be made
concerning who would lead such a project, who would be responsible
for operating and maintaining the system, and who would mandate its
use by agencies.
Agency officials also said that the benefits of a governmentwide
electronic notice capability could be enhanced through changes to the
current statutory minimum waiting periods for notices and
solicitations, which were fashioned around a paper-based process.
Acquisition officials noted, in particular, that the law requires a
15-day waiting period after publication of a notice before a
solicitation can be issued, even though the Internet enables agencies
to publicize notices and provide solicitation files simultaneously,
giving contractors immediate access to these documents and saving
time in the procurement process. Agency officials said that changing
these requirements could increase the benefits of using electronic
commerce. OFPP plans to study what type of legislative action may be
needed to enhance the benefits of electronic publication of business
opportunities.
CONCLUSIONS
------------------------------------------------------------ Letter :5
NASA has shown that it can successfully use NAIS to effectively
disseminate solicitations and other procurement information, giving
contractors easy and immediate access to business opportunities at
each of its geographically dispersed procurement offices. Feedback
from users has been positive, and the system has allowed increased
standardization of the procurement process agencywide. However,
benefits such as the time savings obtained through use of the system
cannot be readily quantified because of data limitations. While NASA
believes that NAIS has had a positive impact on competition, this
conclusion was based on only 2 years of data.
NASA's on-line electronic posting system was the model for the pilot
multiagency EPS software that is being tested by GSA, NASA, and
several other agencies. If successful, this EPS may be considered
for governmentwide expansion and designation as the single
governmentwide point of entry for both notices and solicitations.
While the March 1998 report assessing electronic commerce initiatives
discussed enhancements to the CBDNet, it did not discuss the
multiagency EPS pilot program. If a governmentwide EPS is
successfully implemented, its benefits potentially could be enhanced
by changing the statutory notice and waiting periods.
RECOMMENDATIONS
------------------------------------------------------------ Letter :6
We recommend that the Administrator of the Office of Federal
Procurement Policy describe the current plan for implementation of a
governmentwide single point of entry to procurement information in
its next annual report to Congress. This plan should take into
consideration the status of and lessons learned from the multiagency
EPS pilot and its potential as the basis for a comprehensive
governmentwide electronic posting system.
We also recommend that the Administrator of the Office of Federal
Procurement Policy determine whether the issues raised by agency
officials concerning procurement notice requirements set forth in
statute, including waiting periods, require legislative action and
make recommendations to Congress on legislative changes, if
necessary.
AGENCY COMMENTS
------------------------------------------------------------ Letter :7
In commenting on the draft of this report, NASA and OFPP generally
agreed with our findings and recommendations. NASA stated that it
was proud of the NAIS staff for pioneering the use of the Internet in
federal procurement; and our review largely corroborated the agency's
assessment of the value of NAIS.
OFPP stated that NAIS has created the foundation for the ongoing
multiagency pilot of an electronic posting system. If successful,
the EPS will provide easy access to procurement information across
the government through a single point of entry. OFPP was encouraged
by the promising findings identified in the report. OFPP also
commented on our recognition that current statutory requirements for
procurement notices and minimum waiting periods may limit the
potential benefits of electronic commerce and indicated that the
feasibility of legislative action would be studied.
The comments from NASA and OFPP are reprinted in their entirety in
appendix III and IV, respectively.
SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :8
To determine whether the NAIS electronic notice and publication
system was an effective mechanism for disseminating procurement
information, we obtained information about the system's design,
development, operation, costs, and benefits. We obtained documents
from and interviewed officials at NASA Headquarters in Washington,
D.C., and at the Marshall Space Flight Center (the lead center for
NAIS project management) in Huntsville, Alabama. We also accessed
NASA's procurement Internet site (http://procurement.nasa.gov) and
reviewed the on-line NAIS operational features available to both
public users and NASA contracting staff to determine whether the
system worked as NASA represented. To evaluate NASA's claim that
NAIS usage had a positive impact on competition and was beneficial to
small businesses, we compared NASA procurement data for fiscal year
1994 (the year prior to agencywide use of NAIS) with data for fiscal
year 1997. We did not independently verify the NASA procurement data
obtained from the NASA acquisition management information system.
We also reviewed NASA's evaluation of the system contained in the May
1998 NAIS Business Case. We reviewed the data in the NAIS Business
Case, including calculations of cost avoidance and other benefits
attributed to NAIS. We examined on-line industry feedback and
narrative responses from vendors and NASA buyers about NAIS. To
determine the agency's compliance with statutory requirements, we
reviewed the goals, objectives, and time frames established by FASA
for NASA's test of electronic notice and publication.
To assess the status of efforts to establish a governmentwide EPS
based on the NAIS model, we asked electronic commerce coordinators
from several federal agencies, federal Electronic Commerce Resource
Centers, and two industry groups for their observations. We received
responses from coordinators at five agencies, two resource centers,
and one industry group. We also interviewed acquisition officials at
GSA, the Department of Commerce, and OFPP to obtain information on
interagency efforts to develop a governmentwide electronic
procurement posting system. We also reviewed the goals, objectives,
and milestones established for the governmentwide electronic commerce
program by the National Defense Authorization Act for Fiscal Year
1998.
We performed our work between January and December 1998 in accordance
with generally accepted government auditing standards.
---------------------------------------------------------- Letter :8.1
We are sending copies of this report to the Administrator, NASA; the
Administrator, OFPP; and the Director, Office of Management and
Budget. We will also make copies available to others upon request.
Please contact me at (202) 512-4841 if you or your staff have any
questions concerning this report. Major contributors to this report
are listed in appendix V.
Allen Li
Associate Director
Defense Acquisitions Issues
List of Congressional Committees
The Honorable Fred Thompson
Chairman
The Honorable Joseph I. Lieberman
Ranking Minority Member
Committee on Government Affairs
United States Senate
The Honorable John W. Warner
Chairman
The Honorable Carl Levin
Ranking Minority Member
Committee on Armed Services
United States Senate
The Honorable Christopher S. Bond
Chairman
The Honorable John F. Kerry
Ranking Minority Member
Committee on Small Business
United States Senate
The Honorable Dan Burton
Chairman
The Honorable Henry A. Waxman
Ranking Minority Member
Committee on Government Reform
House of Representatives
The Honorable Floyd Spence
Chairman
The Honorable Ike Skelton
Ranking Minority Member
Committee on Armed Services
House of Representatives
The Honorable James M. Talent
Chairman
The Honorable Nydia M. Velzquez
Ranking Minority Member
Committee on Small Business
House of Representatives
THE NAIS ELECTRONIC POSTING SYSTEM
=========================================================== Appendix I
Staff at the National Aeronautics and Space Administration (NASA)
responsible for developing and implementing the NASA Acquisition
Internet Service (NAIS) consisted of a small group of procurement
and, in some cases, technical staff from each NASA center and
headquarters. They adopted an incremental approach to system
development and operations. This approach included the following
steps: (1) general requirements were drawn up, (2) commercially
available software options were researched, (3) a prototype was
designed and developed if a commercial solution was not available,
(4) a prototype for testing was installed, (5) requirements were
refined and a small pilot initiated, and (6) the pilot was expanded
and the software solution added to the NAIS system.
NASA's development of its Electronic Posting System (EPS) is
characteristic of the way the NAIS team applied the concept of
incremental design, development, and implementation of NAIS features.
Prior to agencywide use of EPS, each NASA center had its own unique
process for preparing and posting procurement notices and
solicitations on the Internet. Some centers used word processors
while others used some form of automated document generation system.
The completed files were then provided to a Web curator at the center
who would post them on an Internet server and manually update a
readable index of files. Changes to the posting process occurred
spontaneously at various centers with little central control or
agreement. The 10 centers' differing processes required 10 separate
efforts to implement a single change that had to be agreed on by the
larger NAIS team. These process differences also made it difficult
to maintain a standard "look and feel" when searching out business
opportunities. A vendor was faced with 10 different entry points to
search.
NAIS operated for a year in this fashion. Then an ad-hoc group of
NAIS team members began to study ways to make the centers' posting
processes more uniform. The team concluded that the NAIS posting
process should be centralized to a single server and that the
application for posting and maintaining documents should be
standardized by using on-line forms to be completed by users. NAIS
technical team members then designed and developed the uniform Web
posting tools that were first piloted and then deployed agencywide.
According to NASA, implementation of the EPS eliminated much
duplication among the centers, standardized posting practices across
all NASA centers, and lowered NAIS maintenance costs. The EPS
application provides a common look and feel of acquisition
opportunities.
The incremental, evolutionary approach to deploying an electronic
posting system avoided the costs and delays often associated with
attempting a single solution to standardize disparate, decentralized
systems. Additionally, because much of the system is based on
commercial standards, commercially available software, and standard
hardware, it was easily adopted by each of the centers without major
disruptions.
All NAIS features have been built using commercial Internet standards
and Web methodology so that even casual Internet users can easily use
NAIS. For internal procurement staff using standard NASA computer
hardware and software, NAIS tools may include user instructions. For
example, the NAIS EPS has an on-line user's manual linked directly to
the application. For external users with a wide variety of hardware
and software, NAIS features are based on widely accepted Internet
protocols and standards, and the features are designed to be used
without any formal training.
NASA'S BUSINESS CASE FOR NAIS
========================================================== Appendix II
In May 1998, NASA completed and published an evaluation of NAIS in a
document called the NAIS Business Case. The document sought to
justify continued funding for NAIS by showing that the system's
quantitative and qualitative benefits far exceed NASA's investment.
According to NASA's assessment, the NAIS tools implemented to date
had produced outstanding results.
We found weaknesses in the evaluation's methodology. For example,
NASA claimed that the Midrange Pilot initiatives, including NAIS,
reduced procurement leadtimes by 40 percent.\1 We examined the data
used by NASA to support this calculation. In a number of cases, the
data showed that the official purchase requests arrived at NASA
procurement offices after solicitations for the requested products or
services had already been issued. Consequently, we could not verify
NASA's claimed 40-percent reduction in leadtime. However, it is
obvious that the reduction in mail delays and in the manual steps and
efforts needed to post a procurement notice should contribute to
reduced leadtimes.
We also found that the NAIS Business Case's discussion of the
resources used in developing and operating NAIS was incomplete. It
described only the full-time equivalent (FTE)\2 staff years of
effort, both funded and unfunded, which were devoted to NAIS
development and support in fiscal year 1997 and did not reflect the
additional resources such as technical support, hardware, software,
and communications services provided by various NASA centers.
Because the evaluation only identified NAIS FTE staffing for 1 year
and did not identify hardware, software, and other costs associated
with NAIS, we asked NASA to provide fiscal year estimates of the
total costs associated with NAIS development and ongoing operations.
The table below depicts NASA's estimates of the staffing, hardware,
software, and miscellaneous costs associated with NAIS for fiscal
years 1995 through 1998. Amounts for fiscal years 1995 through 1997
are estimates, while the amount for fiscal year 1998 is a projection.
Table II.1
Annual NAIS Cost Estimates
Hardware/
NASA Contract software/
Fiscal year staff or staff misc. Total
------------------------------ -------- -------- ---------- ======
1995 $268,620 $56,000 $145,000 $469,6
20
1996 529,100 108,500 145,000 $782,6
00
1997 345,090 248,500 185,900 $788,4
90
1998 488,400 280,000 145,000 $913,4
00
----------------------------------------------------------------------
--------------------
\1 Procurement leadtime, broadly speaking, is the time it takes to
accomplish a contracting action. Leadtime can be calculated in a
variety of ways and is affected by many variables. Leadtime in the
NAIS evaluation represented the period of time from receipt of a
purchase request by the procurement office to award of the contract.
\2 Federal civilian employment is generally stated on an FTE basis.
It is the total number of hours worked (or to be worked) divided by
the number of compensable hours applicable to each fiscal year.
USER FEEDBACK ON NAIS WAS
POSITIVE
------------------------------------------------------ Appendix II:0.1
NASA reported in the NAIS Business Case that data from the NAIS
on-line feedback system showed that over 85 percent of those who
responded to the question, "Is NAIS, as a whole, beneficial?,"
answered "yes." We reviewed summary reports of responses tallied from
the NAIS system and found that of the 2,310 persons answering this
question, 2,007 answered yes (87 percent). The survey respondents
identified themselves primarily as small, small disadvantaged, or
women-owned businesses. Overall, we found both industry and NASA
procurement staff comments about specific NAIS operational features
were positive.
We also reviewed feedback responses submitted from 1995 through June
1998 to an open-ended question about enhancements that would improve
NAIS. As of June 30, 1998, the NAIS team had completed actions or
had actions underway related to 42 of 89 suggestions.
Federal officials and groups representing industry perspectives told
us that the NAIS Business Case properly identified the areas in which
both government and industry may experience time and cost savings
through an effective agencywide EPS. They noted that electronic
commerce systems with the functionality and user-friendly features of
NAIS have clear potential to benefit both industry and government,
particularly if all buying centers are using the same system.
(See figure in printed edition.)Appendix III
COMMENTS FROM THE NATIONAL
AERONAUTICS AND SPACE
ADMINISTRATION
========================================================== Appendix II
(See figure in printed edition.)Appendix IV
COMMENTS FROM THE OFFICE OF
FEDERAL PROCUREMENT POLICY
========================================================== Appendix II
(See figure in printed edition.)
MAJOR CONTRIBUTORS TO THIS REPORT
=========================================================== Appendix V
NATIONAL SECURITY AND
INTERNATIONAL AFFAIRS DIVISION,
WASHINGTON, D.C.
Delores Cohen
Richard J. Herley
Dan Hoagland
Stefano Petrucci
Patricia D. Slocum
ATLANTA FIELD OFFICE
Bobby Hall
OFFICE OF GENERAL COUNSEL,
WASHINGTON, D.C.
John Carter
*** End of document. ***