Defense Dept. Can’t Break its Noncompetitive Habit The Defense Department’s use of noncompetitive contracts is growing, despite policy directives from President Obama and DOD leaders demanding increased competition, according to a report by the Project on Government Procurement. POGO, an independent watchdog group, says the value of defense contracts awarded without competition has nearly tripled over the past 10 years, topping $140 billion in 2010, and is still growing. According to the group’s analysis of federal procurement data, competed dollars dropped from 63.5% of contracts awarded in 2009 to 61.7% in 2010, and just 55% in the first half of 2011. That is far less than many other agencies. POGO said the State Department in 2010 competed almost 75% of its contract dollars, the Homeland Security Department almost 77% and the Energy Department competed 94%. A Defense Department spokeswoman said many of the noncompetitive contracts are follow-ons for weapons systems developed by a single large contractor. “These high-dollar non-competitive procurements significantly impact the Department’s overall level of competition,” she told POGO. But several investigations have found different reasons. The Government Accountability Office blamed the department’s “failure to plan” for making many noncompetitive contracts necessary. The Defense Science Board, an independent DOD advisory committee, pointed to the growing popularity of IDIQ task order contracts. “Approximately 66% of services were procured using indefinite delivery/indefinite quantity (IDIQ) contracts in 2010, something that was never contemplated when IDIQs were first proposed,” the board said. A study of the department’s service contracts by the federally-funded Institute for Defense Analyses blamed widespread use of “bridge contracts,” when an existing contract is extended. “We found that the use of short-term contracts and modifications to fill the gap in services between the end of one contract and the beginning of the next is a significant source of sole source contracts,” the institute said. President Obama began urging increased competition in contracting during the 2008 campaign. Shortly after taking office, he directed all agencies to limit the use of sole source contracts. But the president’s order has evidently produced few results at the Defense Department. In July DOD proposed new controls on contracts that attract only a single bid. The proposed rule “states the DoD policy that adequate price competition does not exist if only one offer is received.” Under the rule, if an RFP was open for less than 30 days and only one offer was received, the contracting officer would have to reopen the solicitation for another 30 days in an effort to attract more offers. For RFPs that were open for 30 days or more, the contracting officer would have to seek a lower price either through price analysis or negotiations with the single bidder. (SAA, 8/5) Comments on the proposal are due Sept. 23.