Contract Management:

Few Competing Proposals for Large DOD Information Technology Orders

NSIAD-00-56: Published: Mar 20, 2000. Publicly Released: Mar 20, 2000.

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Pursuant to a congressional request, GAO provided information on the Department of Defense's use of large orders under multiple-award contracts to acquire information technology products and services, focusing on: (1) whether contractors were provided a fair opportunity to be considered and the extent of competition realized; and (2) how ordering offices met requirements to clearly specify the tasks to be performed or property to be delivered under the orders.

GAO noted that: (1) many of the 22 large orders GAO reviewed were awarded without competing proposals having been received; (2) agencies made frequent use of the statutory exceptions to the fair opportunity requirement; (3) further, contractors frequently did not submit proposals when provided an opportunity to do so; (4) only one proposal was received in 16 of the 22 cases--the 16 cases all involved incumbent contractors and represented about $444 million of the total $553 million awarded; (5) contractor representatives told GAO that if program officials were interested in receiving competing proposals, then more outreach activities--such as meetings with potential contractors to explain requirements--should be conducted; (6) work descriptions for most orders reviewed defined tasks broadly; (7) most of these orders were for information technology services and frequently covered several years of effort; (8) because the work was broadly defined, the orders did not establish fixed prices for the work but provided for reimbursement of contractors' costs; (9) further, several broadly defined orders were later defined by sole-source work orders; and (10) according to program officials, specifying the information technology services that will be required in future years involves considerable uncertainty.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Federal Acquisition Regulation has been revised to require agencies to (1) document the relationship between an initial order placed competitively and subsequent non-competitive orders placed as a logical follow-on to the initial order, and (2) describe the services to be performed or supplies to be delivered under orders clearly so that the full cost or price for the work can be established when the order is placed.

    Recommendation: The Administrator, Office of Federal Procurement Policy, as chair of the Federal Acquisition Regulatory Council, should seek to develop and incorporate guidance to make it clear that agencies should not: (1) award follow-on orders whose scope or costs significantly exceed those of orders for which contractors were provided an opportunity to be considered; or (2) award large undefined orders and subsequently issues sole-source work orders for specific tasks.

    Agency Affected: Executive Office of the President: Office of Management and Budget: Office of Federal Procurement Policy

  2. Status: Closed - Implemented

    Comments: The Federal Acquisition Regulation has been revised to clarify that agencies should develop sound acquisition plans for multiple-award contract orders, and to encourage agencies to use performance-based statements of work whenever possible. Office of Federal Procurement Policy officials indicate that the clearer definitions of agency needs that result from sound acquisition planning, and the use of performance-based statements of work, each facilitate issuing fixed-priced orders. Thus, the officials anticipate that these changes will result in increased use of fixed-price orders.

    Recommendation: The Administrator, Office of Federal Procurement Policy, as chair of the Federal Regulatory Council, should seek to develop and incorporate guidance to encourage contracting officers to use fixed-price orders to the maximum extent practicable.

    Agency Affected: Executive Office of the President: Office of Management and Budget: Office of Federal Procurement Policy

  3. Status: Closed - Implemented

    Comments: The Federal Acquisition Regulation has been revised to require agencies to consider outreach efforts such as seeking comments on draft statements of work and employing multiphased solicitation approaches when ordering under multiple-award contracts.

    Recommendation: The Administrator, Office of Federal Procurement Policy, as chair of the Federal Regulatory Council, should ensure that the guidance encourages agencies to conduct more outreach activities when providing contractors an opportunity to be considered for orders.

    Agency Affected: Executive Office of the President: Office of Management and Budget: Office of Federal Procurement Policy

 

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