Procurement

DOD competes fewer contracts

businesspeople running track

Competition is the ideal, but an audit shows that DOD often sidesteps the process. (Stock image)

The Defense Department held fewer competitions for contracts in fiscal 2012 than in 2008, declining in total by 5.5 percent during the four-year span, according to a report released March 28. The majority of the non-competitive contract awards were tagged as having only a single company able to do the work, justifying a sole-source award.

In fiscal 2012, DOD obligated $359 billion through contracts and task orders, of which $205.3 billion, or 57 percent, went to competitive awards. In 2008, DOD obligated 62.6 percent of its money through the competitive process, the Government Accountability Office found in its analysis of spending data.

The 2012 competition rate varied widely across the services.. The Air Force had the lowest competition rate at 37.1 percent. The Defense Logistics Agency had the highest rate at 83.3 percent.

Defense officials have several factors that affect their attempts to reach competition goals. The department may rely too much on an original equipment manufacturer; GAO concluded that this has been a long-standing challenge for officials. The rate also is affected when DOD buys on behalf of a foreign government.

GAO wrote that DOD does not consider such factors as it sets annual competition goals. Instead, it adds two percentage points to what it did the prior year.

competiton graphic

Reasons given to justify sole-source contracts. (GAO graphic)

"Without identifying and tracking the specific factors affecting competition DOD cannot set meaningful goals for improving competition or accurately gauge its progress toward achieving them," GAO wrote.

In response to GAO, Richard Ginman, director of procurement and acquisition policy at DOD, wrote that he would consider such factors when setting future goals.

GAO had another issue with DOD, as it faces a high number of competitions where only a single company could responsibly handle the work: the Pentagon's procurement workforce does not keep reliable records. GAO recommended defense officials push the military branches to collect reliable data these types of contracts.

In 2010, under DOD’s Better Buying Power initiative, officials considered any solicitation in which DOD received just one bid an "ineffective competition." A contracting officer would have to revamp the requirements and put the work out for bid for another month.

That policy remains in place, but the data are not there. The poor data-collection prevents officials from determining if the policy, in fact, works.

With better records, "the department could better determine the effects of its new requirement on one-offer contracts," GAO wrote. "The impact of the requirement is unknown because of unreliable data."

In an analysis of 35 one-offer awards, GAO’s auditors found contracting officers had incorrectly coded 10 of the awards in the procurement database that DOD relies on to measure the impact of its new requirement. But six of the 10 awards were noncompetitive awards, and the remaining four had received multiple offers.

"As a result, GAO determined that DOD’s data cannot be used to accurately calculate the amount obligated on one-offer awards during fiscal year 2012," GAO wrote.

Ginman assured auditors he would review training policies and then update guidance to improve the quality of the information entered into the Federal Procurement Data System. In addition, he wrote, officials would raise the issue at competition advocates’ meetings in the future.

About the Author

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

Featured

  • Cybersecurity

    DHS floats 'collective defense' model for cybersecurity

    Homeland Security Secretary Kirstjen Nielsen wants her department to have a more direct role in defending the private sector and critical infrastructure entities from cyberthreats.

  • Defense
    Defense Secretary James Mattis testifies at an April 12 hearing of the House Armed Services Committee.

    Mattis: Cloud deal not tailored for Amazon

    On Capitol Hill, Defense Secretary Jim Mattis sought to quell "rumors" that the Pentagon's planned single-award cloud acquisition was designed with Amazon Web Services in mind.

  • Census
    shutterstock image

    2020 Census to include citizenship question

    The Department of Commerce is breaking with recent practice and restoring a question about respondent citizenship last used in 1950, despite being urged not to by former Census directors and outside experts.

Stay Connected

FCW Update

Sign up for our newsletter.

I agree to this site's Privacy Policy.