Procurement

GAO reviewed the contracting practices that the military services use to award, extend, and renew large multifunction or umbrella contracts for base support services to determine whether: (1) the practices used to extend or review umbrella contracts comply with procurement regulations; and (2) the effectiveness of competition is being restricted by excluding umbrella contract extension or renewal periods from the evaluations for initial contract awards.

GAO found that the military services' use of extensions or renewals for umbrella contracts sometimes does not meet regulatory requirements. In a number of cases, unpriced options were exercised and follow-on contracts were awarded. Although such awards were noncompetitive contracts, contracting officers did not justify their use in writing, as required. As a result, the important benefits that competition is intended to achieve, such as equal opportunity for all to compete, assurance that prices are reasonable, or the increased incentive for improved quality or delivery, were foregone without justification. In addition, GAO found that, in some cases, the military services also restricted the effectiveness of competition obtained on initial awards because they excluded the cost of option or follow-on years from consideration of the initial contracts, thereby lessening the assurance that the government would receive a fair and reasonable price over the life of the contracting cycle.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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