Army Procurement:

Restricted Competition for Water Purification Equipment Not Justified

NSIAD-87-129: Published: Apr 28, 1987. Publicly Released: May 12, 1987.

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In response to a congressional request, GAO reviewed the Army's procedures in awarding and administrating contracts for the design, development, and production of 600 and 3,000 gallon-per-hour (GPH) reverse osmosis water purification units (ROWPU) to convert seawater and contaminated fresh water into potable water.

GAO found that, the Army restricted competition to two contractors because: (1) it urgently needed to field the units; (2) an amendment to the Competition in Contracting Act (CICA) permitted agencies to use noncompetitive procedures when the property or services needed were available from a limited number of responsible sources; and (3) the development contractors' drawings and data were not adequate for use in soliciting open competition. GAO believes that the Army's justification for limiting competition was inadequate because: (1) there was no analysis that demonstrated that the use of restrictive procedures would ensure that the contractors could provide ROWPU by the desired date, or that CICA procedures would not; (2) first-article testing would avoid or limit deficiencies in the drawings and manufacturing process; and (3) its plans to procure 60 percent of its requirement under the first contract would limit future competition for the remaining units.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: The Army stated that full and open competition introduced high risk. The Army awarded the contract for 98 units. The next production contract will be by full and open competition.

    Recommendation: The Secretary of the Army should direct procurement officials to solicit full and open competition for the planned procurement of the 3,000 GPH ROWPU, unless an analysis shows that the risk of doing so outweighs the benefits envisioned by CICA.

    Agency Affected: Department of Defense: Department of the Army

 

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