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In May 1976, the Office of Procurement Policy decided government agencies should purchase commercial stock items as needed, through normal distribution channels, a shift away from reliance on detailed specifications and maintaining large inventories. The objective of this change was to reduce the government's procurement and distribution costs while stimulating competition, capitalizing on technological innovations, avoiding specification development costs, and reducing the risks and costs of shipment and storage. The key organization in accomplishing the changeover has been the Defense Personnel Support Center (DPSC) which procured $644 million of clothing and textile items in fiscal year 1978. GAO reviewed implementation of this policy by DPSC under a pilot program begun in January 1977.

Of the 4,500 clothing and textile items managed by DPSC, only 19 were approved for purchase through commercial channels, and 2 of those have since been deleted. Furthermore, the use of commercial distribution channels is not yet underway. The project was hampered by understaffing, with personnel assigned as a task supplemental to their ordinary duties. Market research, vital to the acquisition program, was fragmented and was late in providing buyers with the information necessary for making sound purchasing decisions. Over half of the money set aside for fiscal year 1978 was earmarked for socioeconomic (prison, blind, and handicapped industries) programs, a step which has seriously impeded the competition aspect of the policy. This overemphasis resulted from a too-stringent interpretation of a Department of Defense decision to give such set-asides precedence. In the seven buys made so far under the new policy, procurement costs have been estimated at $1 million less than what they would have been under the previous program based on a unit-price measurement despite continuing inflation and rising cost trends.