"Competition is a cornerstone of our acquisition systems"

GAO studies contract competition

John Hutton, Director of Acquisition and Sourcing Management Issues at the GAO, told Federal News Radio the reason why competition matters. [You can listen to his interview here.]

"(Competition is) a cornerstone of our acquisition systems. It's a tool for achieving, really the best possible return on investment for the taxpayer. As a vehicle it can help improve contractor performance, it might help curb some fraud, it can help promote accountability for results and some of our past work has demonstrated that agencies could take advantage of greater opportunities of competition."

The interview was in response to this US Government Accounting Office:

Federal Contracting: Opportunities Exist to Increase Competition and Assess Reasons When Only One Offer Is Received

Highlights of the report include:

Competition is a critical tool for achieving the best return on the government's investment. While federal agencies are generally required to award contracts on the basis of full and open competition, they are permitted to award noncompetitive contracts in certain situations. Agencies are also required to establish competition advocates to promote competition.

Agencies used a variety of exceptions to competition for the contracts and orders in our sample, with the two most common being "only one responsible source" and sole-source awards under the Small Business Administration's 8(a) business development program.

For services supporting DOD weapons programs, the government's lack of access to proprietary technical data and decades-long reliance on specific contractors for expertise limit--or even preclude the possibility of--competition.

In other cases, program offices may press for contracts to be awarded to the incumbent contractor without competition, largely due to their relationship and the contractor's understanding of program requirements.

For competitive procurements where only one offer is received, factors include a strong incumbent, sometimes coupled with overly restrictive government requirements, or vendors forming large teams to submit one offer for broader government requirements, whereas previously several vendors may have competed.

Contracting approaches for nine contracts reviewed did not reflect sound procurement practices and in some instances sound management practices, in some cases not leveraging the effectiveness of the market place. These approaches included ambiguously written justifications for noncompetitive contracts, very limited documentation of the reasonableness of contractors' proposed prices, instances where the contract's cost grew significantly or where labor categories were improperly authorized, and undefinitized contract actions that did not meet definitization requirements.