Contract Management

The government buys billions of dollars' worth of information technology products and services each year, with the military meeting a large part of its information technology needs through task- and delivery-order contracts. Concerns have been raised that federal agencies had avoided competition when ordering under such contracts. In response, Congress mandated that agencies consider awarding multiple contracts rather than a single contract when planning a task- or delivery-order contract. GAO reviewed orders valued at more than $5 million that the Defense Department awarded between October 1997 and December 1998; most of the orders involved information technology services for ongoing military programs. Most of the 22 large orders GAO reviewed were awarded without competing proposals having been received. Agencies often used the statutory exceptions to the fair opportunity requirement. Moreover, contractors often did not submit proposals when given a chance to do so. Contractor representatives said that if program officials were interested in receiving competing proposals, then more outreach activities, such as meetings with potential contractors to explain program requirements, are needed. Work descriptions for most orders GAO reviewed defined tasks broadly. As a result, the orders did not establish fixed prices for the work but provided for reimbursement of contractors' costs. Also, several broadly defined orders were later defined by sole-source work orders.

GAO noted that: (1) many of the 22 large orders GAO reviewed were awarded without competing proposals having been received; (2) agencies made frequent use of the statutory exceptions to the fair opportunity requirement; (3) further, contractors frequently did not submit proposals when provided an opportunity to do so; (4) only one proposal was received in 16 of the 22 cases--the 16 cases all involved incumbent contractors and represented about $444 million of the total $553 million awarded; (5) contractor representatives told GAO that if program officials were interested in receiving competing proposals, then more outreach activities--such as meetings with potential contractors to explain requirements--should be conducted; (6) work descriptions for most orders reviewed defined tasks broadly; (7) most of these orders were for information technology services and frequently covered several years of effort; (8) because the work was broadly defined, the orders did not establish fixed prices for the work but provided for reimbursement of contractors' costs; (9) further, several broadly defined orders were later defined by sole-source work orders; and (10) according to program officials, specifying the information technology services that will be required in future years involves considerable uncertainty.

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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