A push for more competition

White House, Congress want to see less work done through sole-source contracts

Top departments

Five departments competed at least 80 percent of their procurement spending in 2007. The top performer, the Energy Department, was ranked No. 8 in both 2005 and 2006.
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  • 1. Energy: Competed 85 percent of its $22.58 billion
  • 2. Labor: Competed 84 percent of its $1.91 billion
  • 3. Education: Competed 84 percent of its $1.26 billion
  • 4. Commerce: Competed 81 percent of its $1.82 billion
  • 5. Agriculture: Competed 80 percent of its $3.95 billion

    Source: Office of Federal Procurement Policy

  • Departments will likely soon feel more pressure from policy-makers to buy more products and services through competitive bids, rather than sole-source contracts.

    The federal government has competed approximately 64 percent of its procurements (based on dollar value) each year since fiscal 2005, although total procurement spending has increased from $371.8 billion in fiscal 2005, according to the Office of Federal Procurement Policy.

    Members of Congress and the Bush administration’s chief procurement official said they believe agencies can do more, and they are looking for new ways to push agencies along.

    Sen. Susan Collins (R-Maine), an advocate for acquisition reform, is sponsoring the Accountability in Government Contracting Act (S. 680), which would force agencies to host more competitions for contracts, in part, by requiring tougher standards for justifying a sole-source contract.

    “We need to increase competition,” Collins said.

    Collins’ bill “re-emphasizes the use of competition as the mainstay of the government’s acquisition  system,” wrote the Homeland Security and Governmental Affairs Committee in a report accompanying the bill.

    Experts say the bill, which the Senate passed in 2007, will probably be added to the fiscal 2009 National Defense Authorization Act (H.R. 5658).

    Meanwhile, Paul Denett, OFPP administrator, has urged the Chief Acquisition Officers Council to create a working group to promote more competition in contracting.

    The group could analyze procurement data to identify trends, such as the link between competition and different types of products and services, Denett wrote. The information would help agencies evaluate their success at meeting their own competition goals, he added.

    Denett also cited some methods agencies use to encourage greater competition, which other agencies and departments might be able to adopt.

    For example, the Homeland Security Department restricts its contracting officers from exercising the options on a contract awarded without competition, and the Environmental Protection Agency conducts face-to-face acquisition planning meetings with program offices, Denett wrote.

    “We must continue to do everything we can to help our agencies use competition whenever possible,” Denett said.

    But Rep. Henry Waxman (D-Calif.), chairman of the Oversight and Government Reform Committee, has questioned the validity of OFPP’s percentage calculations in the past, although he declined to comment on the fiscal 2007 figures.

    In his reports on competition, Waxman counts only full-and-open contracts as true competitions. Other means of awarding contracts that limit the range of bidders, such as small-business set-asides, don’t qualify in Waxman’s view because they don’t allow all contractors to compete.  

    Denett said Waxman’s definition is misleadingly narrow. The 64 percent figure for government includes awards made through full-and-open competitions, in addition to orders under multiple-award task- and delivery-order contracts.

    The appeal of expediency
    As government spending rises and work piles up on their desks, contracting officers increasingly realize that making purchases through task and delivery orders on existing contracts is more expedient than running traditional competitions, said Robert Burton, former OFPP deputy administrator.

    One advantage of task orders, from a contracting officers’ perspective, is that other vendors generally do not have an opportunity to protest such awards, if they know about them at all.

    Collins’ bill, to prevent the misuse of task orders, would allow such protests. The bill also would limit the extent to which agencies can justify sole-source contracting based on urgent needs. Agencies would still be able to make such awards, but such contracts could not exceed nine months. The committee said this provision would give agencies enough time to develop a competition strategy.

    The House already added its contracting reforms to the authorization bill. Waxman’s Accountability in Contracting Act would reduce the number of sole-source contracts, limit the length of certain noncompetitive contracts and require agencies to buy property and services on a competitive basis. 

    About the Author

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

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