March 23 2012 Copyright (c) 2012 Business Research Services Inc. 301-229-5561 All rights reserved.

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  • GAO: Competition High On DOD Service Contracts

    Competition rates for Defense Department service contracts have not changed significantly in the past five years, despite the recent emphasis on awarding more contracts competitively.

    The Government Accountability Office said 78% of defense service contract dollars were awarded competitively in 2011. The competition rate for services, not including R&D, was nearly twice as high as for products.

    While overall competition rates held steady, the Air Force competed only 59% of its service contract dollars last year, down from 75% five years earlier. DOD officials said the Air Force is looking for explanations for the decline.

    GAO said the most common reason for awarding sole-source contracts was that only one company had the expertise or technology to fulfill the requirement. But the auditors found that program managers often influence competition by going to bat for a favored vendor or writing requirements that only one contractor can satisfy. They said, “Program officials pressure the contracting office” to stay with incumbent contractors in many cases.

    In recent years both the Defense Department and the Office of Management and Budget have taken steps to increase competition. DOD launched its Better Buying Power initiative in 2010.

    GAO said they could take additional measures, including training program officers and doing research to understand why sole-source contracts are awarded.


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