Acquisition Network Flops

Agencies say that the Federal Acquisition Computer Network (FACNET), designed to become a governmentwide vehicle for electronic procurement, is a failure, according to a new General Accounting Office report.

The Federal Acquisition Streamlining Act mandated the creation of FACNET for agencies to use for purchases between $2,500 and $100,000. FACNET would provide a "single face" to industry for procurements within this range, speed up communication between contractors and agencies, and lower costs by cutting paperwork and reducing lead times. It would become a model of how the federal government could use electronic commerce to improve the procurement process. But agencies surveyed by GAO found that the difficulties of using FACNET outweigh the benefits it has provided.

Federal users said FACNET lacks a sound infrastructure, is ineffectively managed and is not appealing to contractors. FACNET is a closed network, and thus is unavailable over the Internet.

In 1995 less than 2 percent of the 2 million federal procurements in FACNET's price range were accomplished through FACNET. Of the 113,000 procurements made over FACNET, 75 percent were actually below the $2,500 threshold. Ninety-seven percent were performed by the Department of Defense.

Government contractors are unimpressed with FACNET as well. As of October only about 4,000 of an estimated 300,000 government contractors had registered in the FACNET database. Companies said that FACNET's unreliability was the primary reason they didn't want to use it.

In 1993, the National Performance Review predicted electronic commerce could save the government $500 million a year in acquisition costs.

The failure of FACNET does not mean agencies are dumping electronic commerce. Most agencies are finding other electronic commerce initiatives more useful than FACNET. Purchase cards, the Internet, and on-line catalogs are considered simpler and faster.

Survey respondents also told GAO that although time and money were not saved through FACNET, they did benefit from the lessons they learned and the skills they acquired using the network. The Defense Logistics Agency, the General Services Administration, and the Department of Veterans Affairs reported they extensively use electronic data interchange (EDI), the electronic exchange of business documents, for procurements--though their successes have been outside of FACNET.

Because the Federal Acquisition Streamlining Act requires the use of FACNET, GAO recommended that procurement policymakers may want to seek legislative relief from that requirement. Because a few agencies, particularly segments of DoD, have found success on FACNET, it will likely remain part of the government's electronic commerce program.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.


When you download a report, your information may be shared with the underwriters of that document.