Pursuant to a congressional request, the GAO reviewed the government's use of Office of Technology Plus (OTP) computer stores, which the General Services Administration (GSA) established to facilitate federal acquisition of automatic data processing (ADP) products. Agencies may place single orders with OTP stores for up to $100,000 as an alternative to GSA ADP schedule contracts. The GAO was asked to determine whether: (1) agencies are paying more for ADP products at OTP stores than they would if they used GSA schedule contracts; (2) agencies are complying with laws and regulations applicable to the use of OTP stores; and (3) agencies' use of OTP stores is causing small businesses who are GSA schedule contractors to abandon the federal market.
The GAO found that: (1) the government pays about 12.8% more for comparable products from OTP stores than it would from schedule contractors; (2) OTP stores offer inexperienced ADP buyers valuable assistance in making procurement decisions that would not be available from GSA schedule contractors; (3) agencies frequently use OTP stores because they are more convenient than GSA schedule contractors; and (4) applicable regulations favor the use of OTP stores.
The GAO also found that: (1) some agencies may have circumvented regulations by splitting orders so that they could fulfill their requirements through purchases from OTP stores, even though their total requirements exceeded $100,000; (2) in some cases, agencies used OTP stores without determining whether they afforded the lowest overall procurement cost; and (3) there was no indication that any agency violated the geographic restrictions on the use of OTP stores.
In addition, the GAO found that: (1) it was difficult to determine the effect of OTP stores on small GSA schedule contractors because of the instability of the ADP market; (2) most of the hardware items offered by OTP stores are not available from small GSA schedule contractors; (3) 8 of the 9 top-selling software lines sold by OTP stores are offered at lower prices by small GSA schedule contractors; and (4) many GSA schedule contractors, both small and large, complained that the use of OTP stores is favored by procurement regulations.