Contract Management

The Department of Defense (DOD) spends billions of dollars each year acquiring services through task orders issued under multiple-award contracts or the General Services Administration's federal supply schedule program. However, previous GAO and DOD Inspector General reports found that DOD was not obtaining the level of competition on these task orders that Congress had envisioned. Congress responded by enacting section 803 of the National Defense Authorization Act for Fiscal Year 2002, which requires procedures to promote competition and provides when waivers of competition are allowed. In response to a congressional mandate, GAO identified the extent to which selected DOD buying organizations waived the competition requirements of section 803 and determined the level of competition on orders available for competition. For this review, GAO randomly selected 74 orders at five DOD buying organizations.

Competition requirements were waived for nearly half (34 of 74) of the multiple-award contract and federal supply schedule orders GAO reviewed. Often, contracting officers waived competition based on requests from the program offices to retain the services of contractors currently performing the work. In addressing these requests, safeguards to ensure that waivers were granted only under appropriate circumstances were lacking. Specifically, guidance for granting waivers did not sufficiently describe the circumstances under which a waiver of competition could be used. In addition, the requirements for documenting the basis for waivers were not specific, and there was no requirement that waivers be approved above the level of the contracting officer. Competition was limited on the 40 orders available for competition. For 16 orders, only one offer was received in response to agency solicitations. For 15 orders, the buying organizations received two or more offers. For nine orders, contracting officials did not solicit competitive offers on individual orders. Instead, the nine orders were awarded based on data previously submitted to the government. Striking the right balance between achieving the benefits of competition and retaining contractors that are satisfying customer needs is a challenge for DOD. The frequent use of waivers to competition may be hindering DOD's ability to obtain innovative solutions to problems, and the best value for the taxpayer. On the other hand, requests by program offices to waive competition to retain the services of incumbent contractors are strong indications that contractors are satisfying customer needs.

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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