Less Sole-Source, More Competition Needed on Federal Civil Agencies' Contracting

PLRD-82-40: Published: Apr 7, 1982. Publicly Released: Apr 20, 1982.

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GAO was asked to examine a sample of six civil agencies' new sole-source contract awards to assess the adequacy of the sole-source decisions.

Federal regulations require contracting officers to award all purchases and contracts on a competitive basis to the maximum extent practical. GAO estimated that 32 percent of the sole-source contracts it examined could have been awarded on a competitive basis. Underlying causes of the absence of competition on those contract awards were often interrelated. The frequent acceptance of inadequately supported and invalid reasons for sole-source procurements show the need for Federal regulations to more clearly set forth what constitutes an adequate sole-source justification. More effective management controls are also needed to ensure that these regulations are followed. The agencies reviewed made little effort to conduct market research before awarding sole-source contracts, and important differences exist in the interpretations by agency personnel of the requirement to publicize preaward notices. GAO believes that improving agency efforts to obtain competition and strengthening and clarifying the regulations on market research would make the greatest contribution toward eliminating unnecessary sole-source awards. Agencies would benefit from publicizing a preaward sources-sought synopsis in the Commerce Business Daily when requesting officials claim that one contractor is uniquely capable of meeting the Government's needs and when this claim has not been demonstrated. The reliability of the Federal Procurement Data System should be improved. GAO estimated that almost half of the contract actions entered into the system had one or more errors in data elements.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Administrator of the General Services Administration should amend the Federal Procurement Regulations to clearly set forth standards for measuring accountability in obtaining competition on procurement awards and specifically should: (1) require a market search for competitive sources before approving a sole-source justification, unless specified conditions are met; (2) require that the market search include publicizing a preaward notice in the Commerce Business Daily which invites competition on the prime contract, unless one of the regulatory exceptions to publicizing applies; and (3) describe the criteria that must be met to justify sole-source procurement.

    Agency Affected: Department of Energy

  2. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Administrator of the General Services Administration should amend the Federal Procurement Regulations to clearly set forth standards for measuring accountability in obtaining competition on procurement awards and specifically should: (1) require a market search for competitive sources before approving a sole-source justification, unless specified conditions are met; (2) require that the market search include publicizing a preaward notice in the Commerce Business Daily which invites competition on the prime contract, unless one of the regulatory exceptions to publicizing applies; and (3) describe the criteria that must be met to justify sole-source procurement.

    Agency Affected: Department of the Interior

  3. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Administrator of the General Services Administration should amend the Federal Procurement Regulations to clearly set forth standards for measuring accountability in obtaining competition on procurement awards and specifically should: (1) require a market search for competitive sources before approving a sole-source justification, unless specified conditions are met; (2) require that the market search include publicizing a preaward notice in the Commerce Business Daily which invites competition on the prime contract, unless one of the regulatory exceptions to publicizing applies; and (3) describe the criteria that must be met to justify sole-source procurement.

    Agency Affected: Department of Transportation

  4. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Administrator of the General Services Administration should amend the Federal Procurement Regulations to clearly set forth standards for measuring accountability in obtaining competition on procurement awards and specifically should: (1) require a market search for competitive sources before approving a sole-source justification, unless specified conditions are met; (2) require that the market search include publicizing a preaward notice in the Commerce Business Daily which invites competition on the prime contract, unless one of the regulatory exceptions to publicizing applies; and (3) describe the criteria that must be met to justify sole-source procurement.

    Agency Affected: Heads of Federal Agencies

  5. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Administrator of the General Services Administration should amend the Federal Procurement Regulations to clearly set forth standards for measuring accountability in obtaining competition on procurement awards and specifically should: (1) require a market search for competitive sources before approving a sole-source justification, unless specified conditions are met; (2) require that the market search include publicizing a preaward notice in the Commerce Business Daily which invites competition on the prime contract, unless one of the regulatory exceptions to publicizing applies; and (3) describe the criteria that must be met to justify sole-source procurement.

    Agency Affected: Veterans Administration

  6. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Administrator of the General Services Administration should amend the Federal Procurement Regulations to clearly set forth standards for measuring accountability in obtaining competition on procurement award and specifically should require: (1) a written sole-source justification for each new award over $10,000 to document the facts and circumstances substantiating the infeasibility of competition; (2) major agencies to establish and maintain effective procurement planning systems; and (3) that agency requesting officials notify procurement offices as soon as requirements become known to maximize the time available for conducting the market search and obtaining competition.

    Agency Affected: Department of Energy

  7. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information..

    Recommendation: The Administrator of the General Services Administration should amend the Federal Procurement Regulations to clearly set forth standards for measuring accountability in obtaining competition on procurement award and specifically should require: (1) a written sole-source justification for each new award over $10,000 to document the facts and circumstances substantiating the infeasibility of competition; (2) major agencies to establish and maintain effective procurement planning systems; and (3) that agency requesting officials notify procurement offices as soon as requirements become known to maximize the time available for conducting the market search and obtaining competition.

    Agency Affected: Department of the Interior

  8. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Administrator of the General Services Administration should amend the Federal Procurement Regulations to clearly set forth standards for measuring accountability in obtaining competition on procurement award and specifically should require: (1) a written sole-source justification for each new award over $10,000 to document the facts and circumstances substantiating the infeasibility of competition; (2) major agencies to establish and maintain effective procurement planning systems; and (3) that agency requesting officials notify procurement offices as soon as requirements become known to maximize the time available for conducting the market search and obtaining competition.

    Agency Affected: Department of Transportation

  9. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: The Administrator of the General Services Administration should amend the Federal Procurement Regulations to clearly set forth standards for measuring accountability in obtaining competition on procurement award and specifically should require: (1) a written sole-source justification for each new award over $10,000 to document the facts and circumstances substantiating the infeasibility of competition; (2) major agencies to establish and maintain effective procurement planning systems; and (3) that agency requesting officials notify procurement offices as soon as requirements become known to maximize the time available for conducting the market search and obtaining competition.

    Agency Affected: Heads of Federal Agencies

  10. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information..

    Recommendation: The Administrator of the General Services Administration should amend the Federal Procurement Regulations to clearly set forth standards for measuring accountability in obtaining competition on procurement award and specifically should require: (1) a written sole-source justification for each new award over $10,000 to document the facts and circumstances substantiating the infeasibility of competition; (2) major agencies to establish and maintain effective procurement planning systems; and (3) that agency requesting officials notify procurement offices as soon as requirements become known to maximize the time available for conducting the market search and obtaining competition.

    Agency Affected: Veterans Administration

  11. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information..

    Recommendation: Heads of all Federal departments and agencies participating in the Federal Procurement Data System should take other specific actions to correct the problems identified. They should effectively communicate a strong commitment to competition to personnel throughout their agencies by: (1) increasing the effectiveness of the required reviews of sole-source decisions, ensuring that they are made, improving the documentation to sole-source justifications, and implementing other recommendations suggested in this report which should help improve the quality of these reviews; (2) reducing the number of unjustified sole-source contracts evolving from unsolicited proposals; and (3) ensuring that contract specifications are not unnecessarily restrictive and that competition is fostered to the maximum extent practical in subsequent procurements after previous noncompetitive awards.

    Agency Affected: Department of Energy

  12. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: Heads of all Federal departments and agencies participating in the Federal Procurement Data System should take other specific actions to correct the problems identified. They should effectively communicate a strong commitment to competition to personnel throughout their agencies by: (1) increasing the effectiveness of the required reviews of sole-source decisions, ensuring that they are made, improving the documentation to sole-source justifications, and implementing other recommendations suggested in this report which should help improve the quality of these reviews; (2) reducing the number of unjustified sole-source contracts evolving from unsolicited proposals; and (3) ensuring that contract specifications are not unnecessarily restrictive and that competition is fostered to the maximum extent practical in subsequent procurements after previous noncompetitive awards.

    Agency Affected: Department of the Interior

  13. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: Heads of all Federal departments and agencies participating in the Federal Procurement Data System should take other specific actions to correct the problems identified. They should effectively communicate a strong commitment to competition to personnel throughout their agencies by: (1) increasing the effectiveness of the required reviews of sole-source decisions, ensuring that they are made, improving the documentation to sole-source justifications, and implementing other recommendations suggested in this report which should help improve the quality of these reviews; (2) reducing the number of unjustified sole-source contracts evolving from unsolicited proposals; and (3) ensuring that contract specifications are not unnecessarily restrictive and that competition is fostered to the maximum extent practical in subsequent procurements after previous noncompetitive awards.

    Agency Affected: Department of Transportation

  14. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: Heads of all Federal departments and agencies participating in the Federal Procurement Data System should take other specific actions to correct the problems identified. They should effectively communicate a strong commitment to competition to personnel throughout their agencies by: (1) increasing the effectiveness of the required reviews of sole-source decisions, ensuring that they are made, improving the documentation to sole-source justifications, and implementing other recommendations suggested in this report which should help improve the quality of these reviews; (2) reducing the number of unjustified sole-source contracts evolving from unsolicited proposals; and (3) ensuring that contract specifications are not unnecessarily restrictive and that competition is fostered to the maximum extent practical in subsequent procurements after previous noncompetitive awards.

    Agency Affected: Heads of Federal Agencies

  15. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: Heads of all Federal departments and agencies participating in the Federal Procurement Data System should take other specific actions to correct the problems identified. They should effectively communicate a strong commitment to competition to personnel throughout their agencies by: (1) increasing the effectiveness of the required reviews of sole-source decisions, ensuring that they are made, improving the documentation to sole-source justifications, and implementing other recommendations suggested in this report which should help improve the quality of these reviews; (2) reducing the number of unjustified sole-source contracts evolving from unsolicited proposals; and (3) ensuring that contract specifications are not unnecessarily restrictive and that competition is fostered to the maximum extent practical in subsequent procurements after previous noncompetitive awards.

    Agency Affected: Veterans Administration

  16. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: Heads of all Federal departments and agencies participating in the Federal Procurement Data System, the Director of the Federal Procurement Data Center, and the Administrator, Office of Federal Procurement Policy should, to improve the accuracy and completeness of the data system: (1) institute a quality control program, including periodic sampling of agency data; (2) improve data entry and corrections procedures; (3) resolve inconsistencies between the system's requirements and the agencies' own systems; (4) provide training to appropriate personnel concerning system definitions and procedures; and (5) hold contracting officers accountable for ensuring that correct and complete data are promptly entered into the system on each of their contract actions by providing feedback on the coding errors for their contracts and assessing their performance.

    Agency Affected: Department of Energy

  17. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: Heads of all Federal departments and agencies participating in the Federal Procurement Data System, the Director of the Federal Procurement Data Center, and the Administrator, Office of Federal Procurement Policy should, to improve the accuracy and completeness of the data system: (1) institute a quality control program, including periodic sampling of agency data; (2) improve data entry and corrections procedures; (3) resolve inconsistencies between the system's requirements and the agencies' own systems; (4) provide training to appropriate personnel concerning system definitions and procedures; and (5) hold contracting officers accountable for ensuring that correct and complete data are promptly entered into the system on each of their contract actions by providing feedback on the coding errors for their contracts and assessing their performance.

    Agency Affected: Department of the Interior

  18. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: Heads of all Federal departments and agencies participating in the Federal Procurement Data System, the Director of the Federal Procurement Data Center, and the Administrator, Office of Federal Procurement Policy should, to improve the accuracy and completeness of the data system: (1) institute a quality control program, including periodic sampling of agency data; (2) improve data entry and corrections procedures; (3) resolve inconsistencies between the system's requirements and the agencies' own systems; (4) provide training to appropriate personnel concerning system definitions and procedures; and (5) hold contracting officers accountable for ensuring that correct and complete data are promptly entered into the system on each of their contract actions by providing feedback on the coding errors for their contracts and assessing their performance.

    Agency Affected: Department of Transportation

  19. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: Heads of all Federal departments and agencies participating in the Federal Procurement Data System, the Director of the Federal Procurement Data Center, and the Administrator, Office of Federal Procurement Policy should, to improve the accuracy and completeness of the data system: (1) institute a quality control program, including periodic sampling of agency data; (2) improve data entry and corrections procedures; (3) resolve inconsistencies between the system's requirements and the agencies' own systems; (4) provide training to appropriate personnel concerning system definitions and procedures; and (5) hold contracting officers accountable for ensuring that correct and complete data are promptly entered into the system on each of their contract actions by providing feedback on the coding errors for their contracts and assessing their performance.

    Agency Affected: Heads of Federal Agencies

  20. Status: Closed - Implemented

    Comments: Please call 202/512-6100 for information.

    Recommendation: Heads of all Federal departments and agencies participating in the Federal Procurement Data System, the Director of the Federal Procurement Data Center, and the Administrator, Office of Federal Procurement Policy should, to improve the accuracy and completeness of the data system: (1) institute a quality control program, including periodic sampling of agency data; (2) improve data entry and corrections procedures; (3) resolve inconsistencies between the system's requirements and the agencies' own systems; (4) provide training to appropriate personnel concerning system definitions and procedures; and (5) hold contracting officers accountable for ensuring that correct and complete data are promptly entered into the system on each of their contract actions by providing feedback on the coding errors for their contracts and assessing their performance.

    Agency Affected: Veterans Administration

 

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