Changes Spurred Buying, Abuses

Abuses have been well-documented.

In 2001, auditors found that GSA contracting officials failed in 10 of 11 price negotiations to secure the best deals for photocopiers largely because they "too readily accepted vendors' unsubstantiated or inaccurate information." Auditors put the cost to taxpayers at $195 million.

Last year, Oracle settled the largest fraud case involving the GSA schedule program, agreeing to pay the Justice Department a $98.5 million fine following allegations that a company it acquired had inflated prices for software it sold to the government.

The streamlining efforts have drawn contractors and government agencies into close relationships, often referred to as partnerships. Companies are no longer required to certify their prices on services as most favorable to the government even as the number of federal contracting officials watching the prices has not kept up with the growth in spending.

"It's kind of like going into a used-car dealership and being too trusting," said Angela B. Styles, a corporate lawyer who served as President Bush's chief contracting official from 2001 to 2003. "I don't think you really want a partnership with a used-car dealer because you're probably not going to get the best car at the lowest price."

Reinventing Government

Congress created the GSA's buying program in 1949 to make it easier for the burgeoning federal bureaucracy to buy furniture, office supplies and other products. The government sought to leverage its position as the world's leading buyer to get the lowest prices.

It permitted officials across the government to buy commonly used items and supplies, such as pencils and paper, directly from approved vendors, who were given open-ended contracts to supply products at pre-negotiated prices.

The products were then put on GSA lists known as schedules. Contractors who deceive the government about their prices face civil and possible criminal penalties under the False Claims Act.

In the 1990s, lawmakers and contractors argued that the system was too cumbersome and the products and services too limited. Congress began streamlining and expanding the GSA's contracting programs. But the GSA's inspector general warned that the proposals would weaken oversight.

One proposal, to cut back on contract audits, "would strip the government of one of the most important tools" for detecting overpricing and "would hand contractors 'carte blanche' to violate contract terms," the inspector general wrote.

By 1997, a year after some of the changes went into effect under the Clinger-Cohen Act, the GSA had started to become one of the government's biggest brokers of sophisticated information technology and consulting services to federal agencies.

Over the next 10 years, information technology spending through the agency increased tenfold, to more than $17 billion. The number of GSA officials keeping watch over increasingly complex contracts remained relatively flat, however, and audits plummeted.