Less Sole-Source, More Competition Needed on Federal Civil Agencies' Contracting

GAO was asked to examine a sample of six civil agencies' new sole-source contract awards to assess the adequacy of the sole-source decisions.

Federal regulations require contracting officers to award all purchases and contracts on a competitive basis to the maximum extent practical. GAO estimated that 32 percent of the sole-source contracts it examined could have been awarded on a competitive basis. Underlying causes of the absence of competition on those contract awards were often interrelated. The frequent acceptance of inadequately supported and invalid reasons for sole-source procurements show the need for Federal regulations to more clearly set forth what constitutes an adequate sole-source justification. More effective management controls are also needed to ensure that these regulations are followed. The agencies reviewed made little effort to conduct market research before awarding sole-source contracts, and important differences exist in the interpretations by agency personnel of the requirement to publicize preaward notices. GAO believes that improving agency efforts to obtain competition and strengthening and clarifying the regulations on market research would make the greatest contribution toward eliminating unnecessary sole-source awards. Agencies would benefit from publicizing a preaward sources-sought synopsis in the Commerce Business Daily when requesting officials claim that one contractor is uniquely capable of meeting the Government's needs and when this claim has not been demonstrated. The reliability of the Federal Procurement Data System should be improved. GAO estimated that almost half of the contract actions entered into the system had one or more errors in data elements.

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.

Director: Robert M. Gilroy Team: General Accounting Office: Procurement, Logistics, and Readiness Division Phone: (202) 275-4268