DOD contracting practices stifle competition

Despite Congressional mandates designed to promote fair competition among

contractors vying for Defense Department information technology contracts,

the Pentagon has routinely awarded large task order contracts to incumbent

contractors without inviting other vendors to compete, according to a recent

study by the General Accounting Office.

According to the GAO report released this week, 16 of the 22 large task

and delivery order IT contracts reviewed, together worth about $443.7 million,

were awarded to incumbent contractors without other vendors being given

a fair chance to compete for the work.

As early as 1993, Congress, through the Federal Acquisition Streamlining

Act (FASA), specifically sought to promote competition by establishing a

preference for awarding task and delivery order contracts to multiple vendors

rather than a single company. In addition, guidance published by the Office

of Federal Procurement Policy states that follow-on orders should not be

substantially broader in scope or dollar value than the original order.

But GAO uncovered several examples where DOD agencies violated the spirit

and letter of the guidance. In one case involving a $149 million contract

awarded by the General Services Administration to support Army communications

systems, Army officials had not held meetings with contractors other than

the incumbent to explain their requirements. In another non-competitive

follow-on award, the National Institutes of Health awarded an incumbent

contractor a 45-month, $32.1 million task order as "a logical" follow-on

to an original $1.6 million order.

Agencies also used practices that were not designed to elicit competing

proposals, according to GAO. For example, an Air Force intelligence command

asked contractors to submit proposals for a follow-on contract within two

days. Command representatives told GAO that the purpose of the contract

was to ascertain the services of a specific employee of the incumbent contractor.

Documents also indicate that the command planned to award the order to the

incumbent contractor before the opportunity was announced, according to

GAO.

"In some cases, it was apparent that incumbent contractors have an inherent

advantage in competing for an order," according to the GAO report.

GAO has recommended that OFPP clarify its guidance to agency contracting

officials and encourage greater "outreach activities" that would alert vendors

to contracting opportunities.

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