Key Issues > Duplication & Cost Savings > GAO's Action Tracker > Competition for Federal Contracts (2011-47)
government icon, source: Eyewire

General Government: Competition for Federal Contracts (2011-47)

Promoting competition for the nearly $500 billion in federal contracts could potentially save billions of dollars over time.

Action:

The Office of Management and Budget (OMB) needs to continue to focus on reducing obligations under high-risk contracts, including those awarded noncompetitively.

Progress:

Since 2011, OMB has taken action to reduce obligations under high-risk contracts, as GAO suggested in March 2011. In particular, OMB has taken steps to address several of GAO’s recommendations related to competition that can help reduce overall contract costs and obligations. In March 2011, the Federal Acquisition Regulation (FAR) was amended to enhance competition for certain orders under federal supply schedule contracts. In November 2011, OMB issued guidance to agencies on ways to reduce use of management support services, such as engineering and program management, where spending has grown at an accelerated pace with extensive reliance on high-risk contract types, such as time and materials contracts. In December 2014, changes to the FAR were proposed to clarify rules around use of noncompetitive contracts awarded in unusual and compelling circumstances. Also in December 2014, OMB officials explained that government-wide cost and quality benchmarks have been developed that include tracking the level of competition where only one offer is received to reduce financial risk to the government. In the summer of 2014, OMB held sessions with agencies to discuss benchmark data as well as steps to improve performance. From fiscal years 2011 to 2014, the government-wide competition rate increased from 64 to 66 percent, with obligations on noncompetitive contracts decreasing by $43.5 billion, or 23 percent.

Emphasis on competition is a cornerstone of the acquisition system and a critical tool for achieving the best possible return on investment for taxpayers—therefore, a focus on competition should be ongoing. Given OMB’s steps to address GAO’s recommendations thereby reducing obligations under high-risk contracts, GAO has determined this action is addressed.  Opportunities to increase competition remain in other areas—such Action 2 in this area and in Area 19, Reverse Auctions in Government Contracting Including Commercial Items, from GAO’s April 2014 report—which GAO will continue to monitor.

Implementing Entity:

Office of Management and Budget

Action:

Program and contracting officials need to actively promote competition.

Progress:

No executive branch action taken.  The Office of Management and Budget (OMB) has not implemented GAO’s July 2010 recommendation to direct agencies to actively involve program offices in opportunities to highlight competition. OMB officials stated that they have taken some steps to improve competition, such as developing agency-level benchmarks to better measure competition. However, as of January 2018, OMB has taken no further action. 

According to Office of Federal Procurement Policy officials, they do not plan to issue guidance on increasing the role of program officials in promoting competition, but stated that they have engaged with the Chief Acquisition Officers Council regarding the issue, reminding them of GAO’s 2010 findings. GAO maintains that it is important for federal agencies to continuously promote competition, which is a critical tool for achieving the best possible return on investment for taxpayers.  Along these lines, actions taken by individual agencies can help achieve the intent of this action.  For example, DOD’s Better Buying Power Initiative includes several elements aimed at improving competition. In April 2015, DOD updated its procedures to specifically incorporate guidelines for improving competition.

GAO has closed this action as not addressed and will no longer track implementation.

Implementing Entity:

Office of Management and Budget, Department of Defense
  • portrait of
    • Timothy J. DiNapoli
    • Director, Contracting and National Security Acquisitions
    • dinapolit@gao.gov
    • (202) 512-4841