Report | Oct. 4, 2012

Improvement Needed With DoD Single-Bid Program to Increase Effective Competition for Contracts

DODIG-2013-002

What We Did

Our audit objective was to determine whether DoD followed applicable guidance when awarding competitive contracts after receiving a single offer. Specifically, we reviewed 107 contracts, valued at almost $1.4 billion, 47 contract modifications, valued at $461.3 million, and 83 Broad Agency Agreement (BAA) and Small Business Innovation Research (SBIR) contracts, valued at $96.3 million, to determine whether the Services followed single-bid guidance.

What We Found

The Services did not:

  • follow single-bid guidance for 31 of 78 single-bid contracts because the Services’ Competition Advocates did not adequately monitor their commands’ implementation of the guidance to verify proper application;
  • develop adequate plans to increase competition because Defense Procurement and Acquisition Policy (DPAP) did not provide effective oversight of the plans and the Competition Advocates did not:
    • develop specific steps to improve competition rates in their plans;
    • develop specific steps to prevent 39 of 47 contract modifications, valued at $390.9 million, from exceeding the 3-year limitation on awarding contract modifications without first recompeting; and
  • correctly code the remaining 29 of 107 contracts in the Federal Procurement Data System-Next Generation (FPDS-NG) database because the Services’ Competition Advocates did not establish an adequate review process to verify that contracting officers correctly input contract type. Additionally, DPAP allowed the single-bid guidance to expire because DPAP did not incorporate the single-bid guidance requirements in policy within 180 days. DPAP also did not classify 83 BAA and SBIR contracts as having effective competition because DPAP incorrectly identified them in the DoD Effective Competition Report.

As a result, the Services have not realized potential cost savings associated with increased competition and re-competing $390.9 million in contract modifications. DoD also cannot accurately assess the percent of improvements in DoD achieving effective competition.

What We Recommend

We recommend that the Director, DPAP review the Services’ competition reports; direct the Services’ Competition Advocates to develop a plan related to the length of contract modifications; and modify the DoD Effective Competition Report. We recommend that the Services’ Competition Advocates develop procedures to adequately monitor their commands’ implementation of the single-bid guidance; develop steps to increase competition in their competition plans and 3-year period of performance plans; and monitor their contracting officers’ FPDS-NG input.  

Management Comments and Our Response

The Army and Air Force comments were responsive and do not require additional comments. DPAP and Navy comments were partially responsive and require additional comments.