WASHINGTON — In March of 2009, the White House released a memorandum condemning the use of sole-sourced government contracts because of their adverse effects on taxpayer funds, ordering a review of government contracts and a shift to more competition in the future.
Ten years later, 67 percent of major defense acquisition programs, or MDAP, were not competed. Furthermore, nearly half of contracts went to five contractors.
Those recent statistics come from an annual assessment on weapon systems by the Government Accountability Office. The report, released this month, looked at the 183 major contracts currently reported for the Department of Defense’s 82 major programs. Out of those, only 31 percent were competed; and of that slice, 15 percent of the contracts received two bids. Six percent received only one offer, which reflects either a lack of a competitive market or overly restrictive requirements.
Of the 183 contracts, 47 percent were offered to five companies: Boeing, Lockheed Martin, General Dynamics, United Technologies and Northrop Grumman. This 47 percent makes up 72 percent of the total money allocated, with those five companies receiving 86 awards totaling $262 billion. The other 28 percent of contract dollars went to 30 companies.
Lockheed Martin, the largest defense company in the world, received the most awards at 36. But according to the report, Boeing was awarded the most money, totaling $95.1 billion. The other 30 companies combined were awarded $99.9 billion.
Agencies are permitted to accept noncompetitive contracts when there is only one company that meets their requirements; when there is an unusual urgency; or when authorized by statute, according to the report. However, the Federal Acquisition Regulation instructs agencies to create competition “as long as it is economically beneficial and practicable to do so.”
“DoD acknowledges the findings of awarding non-competitive contracts to a large number of programs, and DoD agrees that competition is the best way to reduce price," Stacy Cummings, principal deputy assistant secretary of defense, said in a submitted response to the GAO.
According to the report, competition rates can be affected by “the government’s preference for a specific vendor, inadequate acquisition planning, and overly restrictive government requirements.” The report also cites issues that should be addressed by the DoD, including entry barriers that emerge from over reliance on original manufacturers and lack of data rights.
Kelsey Reichmann is a general assignment editorial fellow supporting Defense News, Fifth Domain, C4ISRNET and Federal Times. She attended California State University.