Interagency Contracting: Strides Made in the Right Direction, but More Implementation Work Needed

Published: February 06, 2013

Acquisition ReformDEFENSEOMB

GAO recently commended the Office of Federal Procurement Policy (OFPP) for its new policy framework for interagency contracting, but cautioned that more implementation work needs to be done. Most of the 24 CFO Act agencies had issued guidance and performed internal reviews. However, GSA and DOD showed some actions still in process.

Interagency contracting involves one agency placing an order directly against another agency's contract or using the contracting services of another agency to obtain supplies or services, such as multiple award contracts or government-wide acquisition contracts.  Use of interagency contracts can provide efficiency in contracting by helping to streamline the procurement process, take advantage of unique expertise in a particular type of procurement, and achieve savings by leveraging the government's collective buying power.  However, they also carry risks. 

GAO designated management of interagency contracting as a high risk area in 2005, and in 2010 subsequently reported on the need for government-wide policies for contract creation and data collection for effective oversight and management.  

GAO’s most recent report was part of ongoing efforts to monitor federal high-risk areas, and identify actions taken to address concerns identified in the 2010 report and to review agency actions to implement interagency contracting policy changes. 

Since 2010, OFPP has developed a policy framework for use in the development of new interagency contracts, requiring a business case to demonstrate value of the approach for multi-agency contracts valued at over $250 million.  The FAR was revised to require agencies to determine if an assisted acquisition is the best approach, and if so, to establish an interagency agreement which formally specifies agency roles and responsibilities.  

However, both GSA and DoD lag behind other agencies in implementing or updating internal guidance to meet OFPP mandates.  GSA needs to update ordering guides to require customers to make a best procurement approach determination.  In addition, DoD acquisition regulations need updating to denote this similar requirement. 

DoD concurred with GAO’s recommendations and stated in a written response from Richard Ginman, director of defense procurement and acquisition policy at DoD, that an Interagency Acquisition Policy Review working group had been established to address the deficiencies identified by GAO. 
Dan Tangherlini, GSA's acting administrator, also responded to say that GSA would make the appropriate updates and that updated order guides are expected to be released by March 31.
In conclusion, the GAO study stated, "Now that a new framework for managing the use of interagency contracts is in place, implementation of these requirements is important in order for agencies to demonstrate whether the new policies established to address interagency contracting deficiencies produce the desired results."