Dec 31, 2003 (11:12 AM EST)
GAO: Procurement Database Has Inaccuracies

Read the Original Article at InformationWeek

The General Accounting Office contends that the information contained in the Federal Procurement Data System--the government's central database of information on federal procurement actions since 1978--is inaccurate and incomplete, perhaps causing hundreds of millions of dollars in discrepancies in the amount of goods and services the government buys. "Although we have not fully assessed the extent of reporting errors, we have found sufficient problems to warrant concern about the current reliability of FPDS information, writes William Woods, GAO director of acquisition and sourcing management, in a letter to Joshua Bolten, director of the White House Office of Management and Budget.

The GAO, the investigative arm of Congress, notes in the letter posted at its Web site on New Years Eve day that the administration is moving forward with plans to modernize that system through FPDS-NG, the next generation of the procurement data system, which could address the problem.

Work performed by the GAO and agency inspectors general suggests that many of the errors in FPDS were caused by data-entry mistakes by agency contracting personnel. In some instances, GAO says, those processing the data didn't have a complete understanding of the information requirements. In other cases, there was inadequate verification of the information entered into agency feeder systems, which, in turn, was transferred into FPDS. GAO says that when it discussed these problems with agency officials during the course of its reviews, they cited a lack of training, high personnel turnover, the complexity of the agency systems, and frequent changes to FPDS data entry requirements as reasons for the errors.

According to the GAO, the use of a test program by the reported three largest users was either overstated or understated by millions of dollars. GAO found similar inaccuracies with the Department of Defense's data system, which feeds information into FPDS. Because of the unreliability of the data, GAO couldn't determine the extent to which executive branch agencies used the test program or assess the benefits realized.

A GAO review of a Small Business Administration program known as HubZone, which provides loans for historically underutilized business zones, found that value of awarded contracts awarded could have been hundreds of millions of dollars different than reported. The FPDS categorized 1,034 contracts worth $325 million as HubZone awards even though the SBA hadn't certified the awardees of those contracts as HubZone firms. Conversely, FPDS data didn't report as HubZone awards 1,712 contracts worth $589 million with firms that may have been SBA-certified at time of contract award.

In addition, a GAO review of task and delivery orders revealed multiple orders reported as single transactions. For instance, an order reported as $11.44 million in FPDS should have been reported as 87 separate transactions at or over $25,000 and one cumulative transaction for contracts below $25,000.

The situation should improve, the GAO says. The new system, FPDS-NG, became operational on Oct. 1, and, if implemented effectively, could eliminate many of the sources of the errors in the current FPDS, GAO says. "At the heart of the new system are data-entry methods that rely less on manual inputs and more on electronic machine-to-machine approaches," Woods writes. For example, he says, most agencies are expected to have computerized contract-writing systems that will allow for direct submission of data to FPDS. The new system will be based on data already in the contract writing systems, reducing or eliminating separate data entry requirements. The system provides for immediate data verification to detect errors. If errors are detected, agency procurement officials will have the opportunity to correct them immediately while the information remains readily available.

The General Accounting Office recommends that the OMB:

* Ensure that agencies allocate the resources necessary to implement contract-writing systems capable of electronic transfer of information to FPDS-NG.

* Require agencies that have yet to implement electronic contract-writing systems to report regularly to OMB on their plans to ensure reliability of the information reported to FPDS-NG.

* Request that major agencies, in consultation with the General Services Administration, conduct regular reviews of their procedures for collecting and reporting information to the new system. Agencies should conduct such reviews annually until a satisfactory level of reliability is achieved, and periodically thereafter.

An OMB official told the GAO that the White House agreed with the recommendations. An official from GSA, which funds and manages the Federal Procurement Data Center, informed the GAO by E-mail that it concurred with the recommendations and hoped the suggestions would lead to more accurate reporting of procurement information to the next-generation system.