No-bid contracts used too much for stimulus projects, GAO says

Although most contracts funded by the economic stimulus law are being awarded competitively, a trio of federal agencies avoided competition for 35 percent or more of those agreements, according to a new report from the Government Accountability Office.

The Small Business Administration issued 68 percent of its stimulus contracts noncompetitively. NASA used such contracts for 37 percent of its awards, and the Housing and Urban Development Department used them for 35 percent, according to a report issued Nov. 30 by Acting Comptroller General Gene Dodaro.

Overall, the numbers favored competition, with 92 percent of the 27,774 contract actions being issued competitively as of November, GAO said. The Defense Department was responsible for the largest number of contract actions: 6,357, of which 1,250 – about 20 percent -- were noncompetitive.

Five other agencies used noncompetitive contracts for at least 20 percent of their awards:

• Transportation Department, 22 percent.
  
• Environmental Protection Agency, 24 percent.
  
• Homeland Security Department, 25 percent.
  
• Commerce Department, 29 percent.
  
• Agriculture Department, 30 percent.

The economic stimulus law recommends, but does not require, that government agencies issue competitive and fixed-price contracts whenever possible. When agencies award a noncompetitive contract, they must explain their reasons for doing so.

The Recovery Accountability and Transparency Board, which oversees stimulus law spending, agreed with GAO’s findings.

The board regularly updates a tally of noncompetitive and non-fixed-price contracts on its Web site, Recovery.gov. As of October, federal agencies had spent about $7.8 billion in stimulus funds on noncompetitive and non-fixed-price contracts.