DOD struggles to justify sole source awards

pen and check

DOD officials are not following all the steps they're supposed to before signing the check for a sole-source contract, GAO finds. (Stock image)

The Government Accountability Office found that defense acquisition officials often fail to justify sole-source awards to small, disadvantaged companies even though a new law requires written justification when the contracts are worth more than $20 million.

The Defense Department made eight such awards between March 2011, when the new rule took effect, and March 2012. DOD officials did not meet the new justification requirement on six of those contracts. The Air Force awarded the two contracts that complied with the requirement.

GAO said the other contracting officials were unaware of the requirement or were confused about the type of justification needed. On two Army contracts, for example, officials prepared justifications but based them on the Competition in Contracting Act of 1984.

Under the new rule, officials must address five specific elements, including showing why the sole-source contract is in the agency's best interest and ensuring that it is paying a fair price.

The law does not specify at which stage an agency needs to justify its decision, but it should happen before contract negotiations begin.

In December 2012, GAO recommended that the Office of Federal Procurement Policy issue guidance clarifying the justification rule.

DOD officials had no comments to add to GAO’s report.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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