OIG/98A-03 - Procurement Streamlining Measures Implemented: Improvements Can Be Made
June 10, 1998
|MEMORANDUM TO:||L. Joseph Callan
Executive Director for Operations
|FROM:||Thomas J. Barchi
Assistant Inspector General for Audits
|SUBJECT:||AUDIT REPORT - PROCUREMENT STREAMLINING MEASURES IMPLEMENTED:IMPROVEMENTS CAN BE MADE|
Attached is the Office of the Inspector General's audit report entitled "Procurement Streamlining Measures Implemented: Improvements Can Be Made." This report reflects the results of the OIG's audit of the agency's procurement streamlining initiative.
On May 12, 1998, we provided a draft of this report to the Deputy Executive Director for Management Services for review and comment. On May 29, 1998, the Deputy Executive Director for Management Services responded to our draft report and agreed with the report's recommendation.
Please contact me on 415-5915 if we can assist you further in this matter.
Attachment: As stated
- Agency Comments
- Objectives, Scope, and Methodology
- Major Contributors to this Report
- Glossary: Office of the Inspector General Products
As a result of Vice President Gore's National Performance Review (NPR), selected Federal agencies, including the U.S. Nuclear Regulatory Commission (NRC), were designated as procurement reinvention laboratories in 1993. NRC used its NPR laboratory status to streamline its procurement process in an effort to reduce procurement lead times and remove some of the burdensome aspects of the contracting process. The purpose of our review was to assess the efficiency and effectiveness of NRC's procurement streamlining process.
Our review found that streamlining appears to have had a positive effect on NRC's procurement process. Almost all fiscal year 1997 procurements used one or more streamlining measures. In addition, NRC's Contract Tracking System reports a reduction in procurement lead times when streamlining measures were applied. We also found that the agency could take steps to improve the streamlining data it tracks. NRC accounts for the time saved using streamlining measures primarily by applying estimated savings criteria that were established in 1994. Our review found that NRC has not reassessed these savings since that time. We believe the agency should periodically reassess its estimated savings to ensure that the reported benefits are accurate and that tracking them remains worthwhile.
In 1993, at the request of the U.S. Nuclear Regulatory Commission (NRC), Vice President Gore's National Performance Review(1) (NPR) designated the NRC as a procurement reinvention laboratory. NPR defines reinvention laboratories as:
. . . innovative organizations or activities that are established to test or prototype new "reinventing government" initiatives. The reinvention laboratories are empowered to begin experimenting with radical new ways of doing business, and share their ideas, successes and lessons across government.
As a laboratory, NRC developed and implemented streamlining measures for the purpose of reducing contract lead times and removing some of the burdensome aspects of the competitive contracting process. The objective of our review was to evaluate the efficiency and effectiveness of the streamlining process. See Appendix I for more details on our objective, scope, and methodology.
In 1994, NRC modified its procurement process to incorporate the use of 22 streamlining measures which could result in time saved in completing procurement milestones. The Division of Contracts and Property Management (DCPM), Office of Administration, assigned estimated savings, stated in days, to each streamlining measure. The 22 streamlining measures and their estimated savings are described in Appendix II.
While most of the streamlining measures are allowable under Federal Acquisition Regulation (FAR), one measure requires a FAR waiver from the Office of Federal Procurement Policy (OFPP) and the Small Business Administration. As a result of the waiver, NRC is not required to advertise its technical assistance/research contracts in the Commerce Business Daily. NRC requests a renewal of the waiver on a biannual basis.
NRC program offices, such as the Office of Nuclear Reactor Regulation, Office of Nuclear Regulatory Research, and Office of Nuclear Material Safety and Safeguards, assign staff to participate in competing the procurement and evaluating the resulting proposals.(2) DCPM also assigns a contracting officer and contract specialist to each procurement. The contracting officer coordinates with the contract specialist to ensure that all possible streamlining measures are considered. Streamlining measures are discussed by the DCPM contract specialist and the program office representatives when procurement milestones are established. At that time, the contract specialist will recommend the use of appropriate streamlining measures to the program office representatives. The agreed upon streamlining measures are incorporated into the procurement milestones.
NRC has been active in overall Federal procurement streamlining initiatives. NRC participated in several OFPP procurement streamlining pilot projects and contributed to OFPP's procurement best practices guides. For example, NRC participated in the Procurement Innovation Working Group and contributed to the OFPP-sponsored "Guidelines for the Use of Oral Presentations." NRC has also contributed to OFPP's "A Guide to Best Practices for Past Performance" and "A Guide to Best Practices for Contract Administration."
NRC appears to have made progress in reducing procurement lead times and removing some of the burdensome aspects of contracting. In fiscal year (FY) 1997, NRC issued 37 new contract awards totaling over $18 million. Of those totals, 33 contracts totaling over $17 million used one or more streamlining measures. According to DCPM's Contract Tracking System, total savings as a result of applying streamlining measures to those 33 FY 1997 contracts totaled 1,333 days, averaging about 40 days per procurement. However, NRC could not support the estimated savings assigned to each streamlining measure. Therefore, we could not verify the exact number of total days saved as a result of streamlining. This demonstrates NRC's need to reevaluate the estimated savings for each streamlining measure to ensure that the total savings reported are accurate and that tracking them remains worthwhile.
DCPM has not reassessed its estimated savings since developing them in 1994. At that time, DCPM assigned estimated savings to each of the 22 streamlining measures for the purpose of tracking streamlining savings for each procurement. For example, awarding a contract without discussions is estimated to save 25 days.(3) However, DCPM did not document the basis for these estimated savings and has not revisited them to ensure that they are accurate or that tracking them is still beneficial.
Although DCPM encourages its contract specialists to use actual time savings when reporting streamlining results, we found that estimated savings are almost exclusively used in lieu of actuals. DCPM told us that it plans to continue tracking streamlining savings and would like for the savings to be as accurate as possible.
In addition, several streamlining measures which were innovative in 1994 are now common practice. For example, two streamlining measures promote sharing documents electronically. Currently, e-mail and an agency wide network make the sharing of documents within program offices and between program offices and DCPM a common occurrence. We discussed this with DCPM officials and they agreed that these streamlining measures should no longer be considered streamlining and further tracking is probably unnecessary. Further, there are other streamlining measures that produce no noticeable savings. Examples include the streamlining of the determinations and finding memoranda which only accounted for 4.5 of the 1,333 days saved through streamlining in FY 1997. We believe DCPM should review all of its streamlining measures to ensure that tracking them remains worthwhile.
We found that NRC has benefitted from its procurement streamlining program. However, NRC has not reassessed the estimated savings assigned to each streamlining measure since 1994. Therefore, NRC cannot be certain whether the savings it is recording are accurate or that tracking them is beneficial.
To increase the efficiency and effectiveness of NRC's procurement streamlining efforts, we recommend that DCPM reassess the streamlining measures to ensure that estimated savings are accurate and that tracking them is worthwhile.
On May 29, 1998, the Deputy Executive Director for Management Services responded to our draft report and agreed with the report's recommendation.
Objectives, Scope, and Methodology
The objective of our review was to evaluate the efficiency and effectiveness of the U.S. Nuclear Regulatory Commission's (NRC) procurement streamlining process. We focused our review on fiscal years 1996 and 1997 procurements which incorporated one or more streamlining measures.
We held interviews and discussions with NRC personnel responsible for setting procurement policy and facilitating the procurement process. We also interviewed program office personnel who participated in streamlined procurements. In addition, we met with an Office of Federal Procurement Policy representative to discuss procurement streamlining best practices throughout the Government. We also reviewed National Performance Review information regarding other agencies' procurement reinvention efforts.
We reviewed NRC's management controls regarding the application of streamlining measures and the tracking and reporting of streamlining measure usage. To perform our review of controls, we interviewed management and staff from the Division of Contracts and Property Management and reviewed pertinent documentation.
We conducted our review at NRC Headquarters from December 1997 through March 1998, in accordance with generally accepted Government auditing standards.
|Streamlining Measure||Description||Estimated Time Saved
|1. Electronic transmittal of the Statement of Work.||Statement of Work is e-mailed to the contract specialist, allowing them direct access to the document.||4 days|
|2. Use of commercial product description.||The Statement of Work is written for the purchase of a product or service using a commercial product description.||1 day|
|3. Delegation of authority to the Director, DCPM.||Procurement authority between $750,001 and $3,000,000 has been delegated to the Director, DCPM.||5 days|
|4. The Justification for Other than Full and Open Competition (JOFOC) authority is delegated to the DCPM Branch Chief.||This authority is delegated for technical assistance procurements between $2,501 and $100,000, or for other procurements between $10,000 and $100,000.||3 days|
|5. Waiver of the Commerce Business Daily (CBD) notice.||The CBD notice can be waived for technical assistance or research procurements.||5 days|
|6. Set deadline for proposer's questions.||The solicitation contains a deadline for proposer's questions prior to the due date for proposals which will normally permit questions to be answered without extending the solicitation period.||14 days|
|7. Reduce proposal preparation time.||The solicitation period is set at less than the period of time normally required by the Federal Acquisition Regulation (FAR). This is permissible under the procurement reinvention laboratory for procurements not advertised in the CBD.||10 days|
|8. Less than 3 Source Evaluation Panel (SEP) technical members used in developing the Request for Procurement Action.||Less than 3 persons are formally part of the SEP, but they may consult with additional advisors.||10 days|
|9. Simplified evaluation criteria using past performance.||The evaluation criteria has been simplified, and/or past performance is used as criteria.||0.5 days|
|10. Limit the number of pages in the proposal.||The number of pages in the proposal has been limited to less than 100 pages.||4 days|
|11. Prohibit foldouts, sales brochures, videos, etc.||Folders, brochures, and videos have been prohibited from the submission.||1 day|
|12. Use of commercial product description.||Submittals are evaluated based on a commercial product description.||1 day|
|13. Limit competition to known sources.||This is available for only competitive research and technical services procurements.||1.5 days|
|14. Oral proposals.||Oral, not written, proposals are used.||5 days|
|15. Waive audit requirements for procurements over $500,000.||The contracting officer waives the audit requirement previously mandatory for all firms with which NRC negotiates.||15 days|
|16. Award without discussions.||Formal discussions with the proposer(s) are not held between receipt of the proposal(s) and award.||25 days|
|17. Less than 3 SEP technical members for procurements in excess of $500,000.||Less than 3 SEP technical members are used to evaluate the proposals.||10 days|
|18. Simplified evaluation criteria - past performance.||The proposal evaluation criteria has been simplified, and/or past performance is used.||1.5 days|
|19. Electronic coordination of the Final Evaluation Report.||The Final Evaluation Report is e-mailed, allowing the contract specialist direct access to the document during coordination.||3 days|
|20. Abolition of the determination and findings for cost type contracts.||A determinations and findings memorandum is no longer required for cost type contracts.||0.125 days|
|21. Delegation of authority to the DCPM Branch Chief.||Procurement authority between $500,001 and $750,000 is delegated to the DCPM Branch Chief.||5 days|
|22. Simplified determinations and findings for other than sealed bid contracts.||If a contract is negotiated, a note to the file suffices in lieu of a determinations and findings memorandum.||0.125 days|
Major Contributors to this Report
Corenthis B. Kelley
Judy L. Leonhardt
George T. Pourchot
Glossary: Office of the Inspector General Products
1. INVESTIGATIVE REPORT - WHITE COVER
An Investigative Report documents pertinent facts of a case and describes available evidence relevant to allegations against individuals, including aspects of an allegation not substantiated. Investigative reports do not recommend disciplinary action against individual employees. Investigative reports are sensitive documents and contain information subject to the Privacy Act restrictions. Reports are given to officials and managers who have a need to know in order to properly determine whether administrative action is warranted. The agency is expected to advise the OIG within 90 days of receiving the investigative report as to what disciplinary or other action has been taken in response to investigative report findings.
2. EVENT INQUIRY - GREEN COVER
The Event Inquiry is an investigative product that documents the examination of events or agency actions that do not focus specifically on individual misconduct. These reports identify institutional weaknesses that led to or allowed a problem to occur. The agency is requested to advise the OIG of managerial initiatives taken in response to issues identified in these reports but tracking its recommendations is not required.
3. MANAGEMENT IMPLICATIONS REPORT (MIR) - MEMORANDUM
MIRs provide a "ROOT CAUSE" analysis sufficient for managers to facilitate correction of problems and to avoid similar issues in the future. Agency tracking of recommendations is not required.
4. AUDIT REPORT - BLUE COVER
An Audit Report is the documentation of the review, recommendations, and findings resulting from an objective assessment of a program, function, or activity. Audits follow a defined procedure that allows for agency review and comment on draft audit reports. The audit results are also reported in the OIG's "Semiannual Report" to the Congress. Tracking of audit report recommendations and agency response is required.
5. SPECIAL EVALUATION REPORT - BURGUNDY COVER
A Special Evaluation Report documents the results of short-term, limited assessments. It provides an initial, quick response to a question or issue, and data to determine whether an in-depth independent audit should be planned. Agency tracking of recommendations is not required.
6. REGULATORY COMMENTARY - BROWN COVER
Regulatory Commentary is the review of existing and proposed legislation, regulations, and policies so as to assist the agency in preventing and detecting fraud, waste, and abuse in programs and operations. Commentaries cite the IG Act as authority for the review, state the specific law, regulation or policy examined, pertinent background information considered and identifies OIG concerns, observations, and objections. Significant observations regarding action or inaction by the agency are reported in the OIG Semiannual Report to Congress. Each report indicates whether a response is required.
1. Currently referred to as the National Partnership for Reinventing Government.
2. As members of the Source Evaluation Panel (SEP).
3. Estimated savings for each streamlining measure are shown in Appendix II.