Despite more competition, single-bid contracts stay steady

Noncompetitive contracts declined from fiscal 2005 to fiscal 2009, but contracts receiving only one bid remained steady

The Obama administration’s chief procurement policy official agreed with the Government Accountability Office’s recommendations to boost the role of the competition advocate and have agencies review why they often receive only one bid on a contract, according to a new report.

In reviewing competition in federal contracting, GAO found agencies’ use of noncompetitive contracts declined from 36 percent of contracts in fiscal 2005 to 31 percent in fiscal 2009. However, contracts that received only one bid remained steady at 13 percent of the total each year.

Daniel Gordon, administrator of the Office of Federal Procurement Policy, told GAO that its recommendations are consistent with President Barack Obama’s procurement reforms. Obama has directed agencies to be more fiscally responsible and reduce how often they use high-risk types of contracts, such as sole-source awards or cost-reimbursement contracts, according to the report.

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Gordon also told GAO the administration has a lot of work ahead to change agencies’ approaches to acquisition. However, Gordon and other OFPP officials will meet periodically with agency leaders to review their progress on reducing risks in procurement.

Defense Department officials also agreed with GAO’s recommendations, according to the report.

In GAO's review of 107 contracts, auditors found agencies had a variety of reasons for not opening their contracts and task orders to full competition. The two most common reasons were that there was only one responsible source capable of doing the work and that sole-source awards are allowed under the Small Business Administration’s 8(a) business development program.

For work that supports DOD’s weapons programs, competition was limited or even ruled out because officials lacked access to proprietary technical data and for decades had relied on a specific contractor for expertise, the report states.

Even a program office can stop competition, GAO found. Managers can press contracting officers to award contracts with no competition largely due to their relationship with a company and because the company understands the program’s requirements, the report states.

At the same time, strong incumbent contractors and overly restrictive program requirements can prevent competition. In addition, vendors sometimes form large teams to submit one offer for broader government requirements, which results in a contract receiving just one bid, the report states. On the other hand, ambiguous justifications for noncompetitive contracts and limited documentation for why a contractor’s price is reasonable also held competitions down to one bid.

To boost competition, GAO recommended that agencies’ competition advocates get actively involved with program offices to highlight opportunities for more competition.

DOD officials told GAO that their competition advocates will be directed to measure and report on ineffective competitions, or solicitations that receive only one bid. In addition, contracting officers must analyze costs in all situations with ineffective competition. DOD also intends to form a contracting integrity panel to study creating more opportunities for good competition, the report states.

About the Author

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

Reader Comments

Sun, Sep 26, 2010 Allen Bahn Maryland

It is truly depressing when the contracting officers block access to the prog managers.The program manager has a high stake in the sucess of the project.When I was in the industry i always had twice a month social and technical face time with the program managers and staff.This session lasted about 4 hours. The future contactors and their senior staff would meet in my conference room and go over the details of the future contracts.I made it clear that there would be some work given to the new contractors and it was imperative that the progmanagerbreak in new contractors.That was part of their duty.The idea behind this was to introduce new blood and ideas.I also picked up some key personel from program offices and gave the a two year rotation in the cotracting office.

Fri, Aug 27, 2010 Michael D. Long Knoxville, TN

The GAO and this article have omitted the number one reason: government employees responsible for developing the requirement document(s) are either incompetent and incapable of defining requirements and writing a statement of work, or intentionally develop vague or misleading statements of work so that only one company having held private communications with the government representatives have sufficient knowledge to be able to respond. Don't believe me? Just read some of the solicitations that have appeared on FedBusOps or the GSA e-Buy system within the past few weeks. Also, you will on occasion note that some of the requirements are for "commercial items" that are only sold to government agencies and have never (and will never) be sold commercially; this is another method of effecting a single bid response.

Fri, Aug 27, 2010 SOW_Writer

This article ignores the fact that in some acquisition, no many acquisitions in the IT areana, you just can't open a procurement up to full and open competition. Example: where are you going to procure continuation of Oracle software maintenance (patch maintenance) from someone other than Oracle ? I think the Patent and Trademark Office would get a call on that one unless there was a re-licensing agreement in place (there never is in the case of Oracle). So tell me Competition Advocates, who would bid on something like that, except the ONE company that holds the PATENTS on the item ? Competition is great, but sometimes you just get in the way and generate more red tape and paper uselessly.

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