Senators Respond to GAO Report Showing that Federal Contracting Officers Too Often Do Not Drive a Hard Bargain

WASHINGTON — Top members of the Senate Homeland Security and Governmental Affairs Committee learned Monday that federal contracting officers could achieve savings in contracts and purchases by adopting best practices such as seeking discounts from commercial vendors and by improvements to competitive bidding.

A new report by the Government Accountability Office (GAO) found that procurement officials often did not attempt to get a price discounts on products and services, which is typically required by federal purchasing rules. Although contractors generally did lower their prices when requested, the GAO found that some contracting officials, including some senior officials, were not aware of the requirement to seek a discount or did not consistently adhere to the requirement.

The report was requested by the top two members of the Senate Homeland Security and Governmental Affairs Committee, Ranking Member Tom Carper (D-Del.) and Chairman Ron Johnson (R-Wis.), and by the top Democrat on the Permanent Subcommittee on Investigations, Sen. Claire McCaskill (D-Mo.).

The report, which examined purchases by the Department of Defense (DOD), the Department of Health and Human Services (HHS), and the General Services Administration (GSA), also found that agencies should more closely follow federal procurement rules and best practices that seek competitive bidding in order to get the best deals. For example, the GAO found that the three agencies it studied often would seek bids from a relatively small, preselected group of companies and email the opportunity directly to them. Federal agencies are supposed to use a more fully competitive bidding procedure that allows a large range of vendors to determine whether the work lies within their capabilities in order to drive down costs and improve quality. According to the GAO, the sample of purchases analyzed was not generalizable for all federal purchases but does provide important examples that point to necessary policy improvements.

In the sample of government contracts examined by the GAO, the agencies did not ask for a discount for 36 percent of the time.

“The United States is the largest purchaser in the world and should use its bulk purchasing power to get good deals. Wisconsinites roll their eyes when problems with government’s financial stewardship continue despite obvious, common-sense solutions. If government employees simply treated taxpayer money as if it were their own, we’d save hundreds of millions in contracting costs,” said Sen. Johnson.

“Most Americans know that when buying a car, you should never just accept the sticker price as the final price, and you should always shop around,” said Sen. Carper. “The same goes for federal agencies’ purchases of goods and services. Today’s report highlights the need to better train the federal government’s acquisition workforce on how to shop around. It also points to the importance of the Administration’s new initiative to develop better government-wide pricing data so that contracting officers are smarter shoppers. Too often, one federal agency has no idea what another agency has paid for the same good or service. We can and should fix that. I look forward to working with the Administration and the Government Accountability Office to make sure agencies learn from this report and save real money on government contracts.”

“When it comes to contracts, government agencies should use every tool available to get the best deal,” said Sen. McCaskill, a former Missouri state Auditor. “It’s my hope that by encouraging the adoption of best practices for negotiating lower-priced contracts, today’s report can help safeguard against waste, fraud, and abuse of taxpayer dollars.”

The General Services Administration is developing two initiatives to help the government drive a hard bargain in order to save procurement dollars. One initiative would require contractors to say whether they had been asked for a discount. A second initiative would share prices among departments, so a federal agency could insist that a contractor match the deal it gave another agency.

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