Contract Management: Guidance Needed to Promote Competition for Defense Task Orders

Between September 2004 and March 2006, consistent with GAO's recommendation and to implement Section 803 requirements, DOD developed additional guidance on acceptable and justifiable circumstances for waiving competition when acquiring services through task orders under multiple-award contracts or the General Services Administration's federal supply schedule program. For example, prompted by GAO's report examples of DOD's lack of adequate support when using the logical follow-on circumstance for waiving competition, in September 2004 the Director of Defense Procurement and Acquisition Policy issued written guidance to DOD agencies and senior procurement executives regarding sole source (i.e., noncompetitive) task orders under multiple-award contracts and the federal supply program. The purpose of the September 2004 action was to promote competition for Defense task orders by tightening or clarifying guidance or appropriately excepting cases for waiving competition for follow-on services contracting. For example, the guidance stated that contracting officers must ensure that program offices who request to retain the services of contractors currently performing the work provide adequate information for justifying and approving waivers. Information specifically called for includes the results of market research and other data supporting why competition is not in the government's best interest. In addition, on March 21, 2006 DOD completed revision of the Defense Federal Acquisition Regulation (DFARS) and corresponding DFARS procedures that implement Section 803 requirements by incorporating detailed guidance on acceptable follow-on task order contract actions where waivers of competition are allowed. Specifically, DFARS 208.405.70(2) references new procedures at PGI 216.505-70(2)that explicitly state examples of acceptable circumstances under which the logical follow-on and unique services waivers may be used. For example, the March 2006 guidance cites examples, such as awarding the task order to a different firm would cause unacceptable delays or a contractor is already at work on a site and it would not be practical to allow another contractor to work on the same site. This new guidance should be helpful in providing safeguards for ensuring that waivers are granted only under appropriate circumstances and thus should promote more competition for Defense task orders.

In September 2004, consistent with GAO's recommendation, DOD issued guidance that included a requirement that all competition waiver determinations be sufficiently documented when acquiring services through task orders under multiple-award contracts or the General Services Administration's federal supply schedule program. Specifically, prompted by GAO's report examples of DOD's lack of adequate support for waiving competition, in September 2004 the Director of Defense Procurement and Acquisition Policy issued written guidance to DOD agencies and senior procurement executives that required any determination waiving competition must solidly support the action taken with adequate information in the contract files. The determination must include the results of market research and data to support why further competition is not in the government's best interest. The September 2004 guidance referred to FAR 6.303-2 for content requirements for the justification and approval to include in the contract files and also assigned responsibility for the contract file documentation to the contracting officer. The September 2004 guidance should be helpful in providing safeguards for ensuring that waivers are granted only under appropriate circumstances and thus should promote more competition for Defense task orders.

Between September 2004 and March 2006, consistent with GAO's recommendation and to implement Section 803 requirements, DOD took action to establish approval thresholds for waiving competition when acquiring higher dollar-value task order services under multiple-award contracts that match the approval thresholds for sole-source federal supply schedule orders required by subpart 8.405-6 of the Federal Acquisition Regulation. For example, prompted by GAO's report examples of DOD's lack of adequate support for waiving competition, in September 2004 the Director of Defense Procurement and Acquisition Policy issued written guidance to DOD agencies and senior procurement executives establishing approval thresholds for sole source task orders under multiple-award contracts consistent with requirements already in place for orders through the federal supply program. Specifically, the September 2004 guidance stated that the same approval levels under FAR 8.405-6 apply whether a sole-source task order is placed through the federal supply schedule program by DOD or through a multiple-award contract by a non-DOD agency on behalf of DOD. In addition, on March 21, 2006 DOD completed revision of the Defense Federal Acquisition Regulation (DFARS) to implement Section 803 requirements by changing the approval levels for consistency with FAR 8.405-6. This new guidance for sole-source orders through multiple-award contracts should be helpful in providing safeguards for ensuring that waivers are granted only under appropriate circumstances and thus should promote more competition for Defense task orders.