DOD contracting practices stifle competition
- By Dan Verton
- Mar 21, 2000
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
"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.