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GGD-82-44 1 (1982-06-08)

handle is hein.gao/gaobabdjb0001 and id is 1 raw text is: 
                     UNITED STATES GENERAL ACCOUNTING OFFICE
                            WASHINGTON, D.C. 20548             (



                                      June 8, 1982
GZNERAL GOVERNMDT
    DIVIIIN



      The Honorable Cora P. BeebeII1111011
      Assistant Secretary for
        Administration                                         118644
      Department of the Treasury

      Dear Ms. Beebe:

           Subject: Improvements In Small Purchasing Activities
                     Can Save Money, Increase Competition, and
                     Achieve Required Goals'(GAO/GGD-82-44)

           We have reviewed small purchasing operations at the New York
      and Los Angeles offices of the Internal Revenue Service (IRS) and
      the Customs Service. At all four locations our sample trans-
      actions showed (1) many purchases were made without competition,
      (2) purchases often were directed from program offices rather
      than controlled by procurement officials, (3) various set-aside
      and sheltered procurement programs were not implemented, and
      (4) many transactions were for less than $500 but were paid using
      costly purchase order procedures. These low cost transactions
      are now payable by cash under the newly raised imprest fund
      level. We estimate that by increasing competition, implementing
      required procurement preference programs, and using more cash
      payments, Treasury will save over $2 million in its small pur-
      chasing activities.

           Most Federal procurement actions fall into the small pur-
      chase category (less than $10,000). In fiscal year 1981 the
      Federal Government recorded about 18.1 million procurement trans-
      actions totaling about $134 billion. Small purchases accounted
      for 97 percent of these transactions (17.6 million) and 8 per-
      cent of expenditures ($11.1 billion). Comparable fiscal year
      1981 totals were recorded at Treasury, with small purchases ac-
      counting for about 104,000 transactions and $87 million (99 and
      25 percent, respectively, of Treasury procurement totals).

           Federal procurement regulations are based on over 4,000
      separate legal provisions and total over 64,000 pages. Annually,
      over 21,000 pages are either replaced or modified. This makes it
      difficult to keep up with proper procurement procedures. The
      introduction of various socioeconomic objectives (such as prefer-
      ences for small and minority businesses) into the procurement
      process also serves to further complicate its administration.


                                                             (019006)

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