Comments on H.R. 2274 and Our Report on Contracting Practices for Military Base Support Contracts

Gao ID: T-NSIAD-90-34 April 19, 1990

GAO discussed proposed legislation that would require procuring agencies to complete a small business impact statement when proposing to consolidate single-function contracts currently being performed by small businesses into larger contracts that may not be conducive to small business participation. GAO noted that its analysis of military bases' use of consolidated contracts indicated that: (1) the dollar value of such contracts increased from $20 million in fiscal year (FY) 1977 to more than $1 billion in FY 1983; (2) military bases could reduce the number of contracts they needed to award and administer with the use of umbrella contracts; (3) the bases provided little or no support for their use of such less-preferred contracting practices as cost-reimbursement contracts, fixed-price incentive contracts, evaluation emphasis on non-price factors, noncompetitive procurements, insufficient work statements, and the exercise of unpriced options; and (4) umbrella contract solicitations typically resulted in less competition than single-function contracts. GAO also noted that, although the Department of Defense (DOD) did not concur with a previous GAO recommendation that it require justification for using other than the preferred contracting practices for umbrella contracts, the requirement would help DOD to limit the: (1) inappropriate use of umbrella contracts; and (2) restriction of small business competition opportunities.

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