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Defense Contracting: Competition for Services and Recent Initiatives to Increase Competitive Procurements

Abstract : Competition is a critical tool for achieving the best return on investment for taxpayers. In fiscal year 2011, the Department of Defense (DoD) obligated about $375 billion through contracts; more than half that amount was for services. Agencies are required to award contracts on the basis of full and open competition, but are permitted to award noncompetitive contracts in certain situations. The Senate Armed Services Committee report on the National Defense Authorization Act for Fiscal Year 2012 directed GAO to report on competition for DoD contracts and task orders for services. GAO examined the following: (1) how competition rates for services compare to competition rates for products and trends in competition for services, (2) the reasons for noncompetitive contracts and task orders for services, and (3) steps DoD has taken to increase competition. GAO reviewed federal procurement data for 2007 through 2011 and a nongeneralizable sample of 111 justifications for noncompetitive awards, which were from different DoD components and for different types of services. GAO defines competition rates as the dollars obligated under competitive contracts and task orders as a percentage of all obligations. GAO focused on nonresearch and development (R&D) services to concentrate analysis on contracts not related to development of weapons systems. GAO reviewed DoD policies and competition reports, and prior GAO reports. GAO is not making any new recommendations. DoD responded to a draft of this report with no comments.