GAO Calls for Action to Increase Competition The General Accounting Office is pushing for action to increase competition in information technology purchases through GSA Schedules, an issue it first raised more than two years ago. In a letter to Angela Styles, administrator of federal procurement policy, David Cooper, GAO’s director of acquisition and sourcing management, called for two amendments to the Federal Acquisition Regulation: to require contracting officers to get competitive quotes for services; and to clarify rules governing sole-source orders. “Although a FAR case has been opened, little progress has been made in implementing the recommendations,” Cooper wrote. “Moreover, the latest informal estimate indicates that a final rule will not be published until April 2004. “We are concerned about the delay because sales of services under the (schedules) continue to substantially increase. Moreover, recent federal audits suggest that the problems still exist,” he added. In a November 2000 report on Defense Department procurement, GAO found, “Most DOD contracting officers included in our review did not follow GSA’s established procedures intended to ensure fair and reasonable prices when using the Federal Supply Schedule. In fact, 17 of the 22 orders—valued at $60.5 million—were placed without seeking competitive quotes from multiple contractors.” GAO said, “many contracting officers were not even aware of GSA’s requirement to seek competitive quotes.” Partly in response to that report, Congress voted to require competitive bidding on DOD’s services procurements above $100,000 through GSA schedules. The department published a final rule Oct. 25, 2002, instructing contracting officers to get at least three bids, or else explain why they did not. But the rule does not require every GSA schedule purchase to be advertised to all qualified schedule holders. (SAA, 11/1/02) No similar rule exists for civilian agencies’ use of the schedules. Some contracting officers and contractor groups warned that the requirement would slow down procurements through the schedules. OMB announced formation of an inter-agency working group on competition issues last spring, with a mandate to fulfill President Bush’s pledge to increase contracting opportunities for small businesses. The competition working group has not yet produced results. GAO’s Cooper said he understood that implementing the GAO recommendations “has been delayed because of unnecessary coupling with other (Federal Supply Schedule) issues,” specifically the question of whether to allow use of time-and-materials contracts under the schedules. OMB’s Styles had wanted to prohibit those contracts because she believed they give contractors no incentive to hold down costs. A deadlock over that issue reportedly delayed the Defense Department’s competition rule for several months, before Styles dropped her objection. At the time she said OMB would deal with time-and-materials contracts in a separate rulemaking. In urging OMB to move ahead, Cooper wrote, “we believe that this would provide a foundation for immediate improvements in the use of (schedule) contracts.”