Army of One ... Contractor

January 11, 2013

Mark Thompson posted an interesting federal contracting-related tidbit Tuesday on TIME’s national security blog, Battleland. He looked at a list of recent Department of Defense contract awards and noticed that many of them had received only one bid.

Of the 35 contracts in the list that Thompson reviewed, 20 of them, worth a combined $257 million, either solicited or received just a single bid. On many of them, including contracts awarded to big players such as Computer Sciences Corporation (CSC), General Dynamics, Raytheon, and BAE Systems , the government  solicited only one bid. Federal agencies are required to award contracts on the basis of full and open competition but are permitted to award non-competitive contracts in certain situations. The U.S. Army awarded 19 of the 20 contracts, which makes us wonder if the Army is perhaps taking its old “Army of One” slogan a bit too literally when it comes to contracting.

This DoD contract award announcement is by no means an aberration. On most of the announcements, you will find at least a few solicitations in which only one bid was solicited or received. According to USAspending.gov, DoD has one of the lowest rates of contracting competition of all the agencies. DoD has spent more than $3.7 trillion on contracts since fiscal year 2000, about 56 percent of which was competitively awarded. In contrast, the departments of Energy, Transportation, and Health and Human Services have competition rates well over 70 percent, while the departments of Education and Agriculture both exceed 80 percent.

Of course, USAspending’s competition numbers are somewhat undermined by the federal government’s ridiculously broad definition of competition. For example, contracts under which the work is carried out under indefinite delivery, indefinite quantity task orders – most notably, the LOGCAP III worldwide logistics contract awarded to KBR in 2001 – are counted as competitive, even though the task orders are not competitively bid. Furthermore, DoD estimates that at least $55 billion of the contracts it awards every year involve what it calls “ineffective competition,” or solicitations publicized under full and open competition that receive only one bid.

DoD, to its credit, has been working to improve its contracting competition practices. DoD’s Better Buying Power initiative places an emphasis on maximizing opportunities for competition, such as providing additional time for bidders to respond to solicitations that receive only one offer. As that defense contract award announcement shows, however, there is still plenty of room for improvement.

POGO has long advocated for increased competition in federal contracting. It is only through full and open competition that the government can be assured of acquiring the best quality goods and services at the best prices. Competition also acts as a check on fraud, waste, and abuse. The government will be less tolerant of poorly performing contractors if it has a pool of viable alternatives from which to choose.

Topics: Contract Oversight

Related Content: Contractor Accountability, DOD Oversight, Transparency in Contracting

Authors: Neil Gordon

Submitted by Dfens at: January 31, 2013

It is odd that some would blame the federal government employees for all that is wrong with our current procurement system, and yet this is the very system that the defense contractors lobbied for and got, and make record profits year after year from. But clearly, the problem is mismanagement by federal employees. Yet, when federal employees designed our Naval ships, we had a fleet 600 ships strong. Today with defense contractors designing our ships we cannot keep 280 rust buckets afloat and a glorified PT boat, otherwise known as LCS, costs more to both design and build than an Iowa class battleship. Obviously the problem is the federal employee, not the blood sucking contractors. If it were the blood suckers, they'd obviously tell you that was the case, and they'd never hide behind the propaganda of internet schills.

Submitted by Dorkenmeister at: January 16, 2013

Mr. Gordon--it appears that I did not edit or proof my earlier comments, which are somewhat garbled and embarrassing, because of the English, not the content. Sorry, sir. As for your "evidence" of savings from competition, you have to consider the sources. These are the same feds who can lose a few tens of billions of dollars on DoD's books and think nothing of it. Or who have massively mismanaged the finances of so many agencies and programs. When someone claims savings, you have to see the base (and sort of trust its accounting goodness) and then say: "compared to what?" From some familiarity with your cited evidence, it is clear the feds who provided these figures were their usually sloppy selves. That said, I agree completely that competition should result in not only dollar savings, but also better value and more cost-effectiveness. You need to remember that you are criticizing in your piece not conniving contractors, but rather incompetent and conflicted federal employees who struggle in so many cases to put out plain-vanilla procurements and acquisitions. They should be cashiered for failing to do so. It isn't political pressure or contractor scheming that is the case. You know as well as I why these legions of acquisition "professionals" are still in place, regardless of their conflicts and incompetence.

Submitted by Dfens at: January 16, 2013

I'm sure if I were illiterate I too would believe that a system that pays a contractor $1.10 for every $1.00 they spend is not inherently flawed too. And I'd look at NASA in the days of von Braun (a government employee) and think how much better off we are now that contractors design our rockets. I mean, sure NASA spends, on average, the same amount of money now they did during the Apollo program, but clearly we are better off buying rides to low earth orbit for our astronauts on ex-Soviet Union rockets than we were before when we could send men to the Moon. Obviously stupidity has a price, and our government contractors are here to collect it.

Submitted by Dorkenmeister at: January 16, 2013

Look, depends and other Kontractors: the government's sloppy thinking and incompetence leads to many of the known, true contractor ills. There is a kind of soft corruption in place that encourages this sloppiness, and on the back end, jobs for govt retirees in the so-called "private sector" Things would work much getter if there were some political well and enforcement of laws and regs already in place. There are more than enough prods and incentives for competition, but it they are not exercised. Government failures of this type and just billboards for having more contracting, including for services that the Federalees claim are "inherently governmental." A lot of that is BS, too. Finally, one of the things that continually muddies these waters is POGO's continuing assertion, on the basis of deeply and obviously flawed studies, that feds are cheaper than contractors.

Submitted by Dfens at: January 14, 2013

In none of the cases you site is anything proven. All they did is take the difference between the highest and lowest bid and claim that as a cost savings. Since the amount the contractor ultimately made is determined by how much they spent rather than how much they bid, the numbers you site mean less than nothing. As I said to begin with, there is no actual proof that competitively bidding government contracts saves even one thin dime for the US taxpayer. In fact, I'd go as far as to say that the competitive bidding process does nothing but lose money for the taxpayer. The contractors are not held to their bid amounts, and the entire process is nothing but an elaborate smoke screen. It is a complete waste of time and money. Your time would be far better spent demanding the government cease buying contractor lies (int the form of proposals) and limit contracts to only buying finished goods developed at the contractors cost or labor that can be genuinely called hourly labor. That means, no more paying scientists, engineers, lawyers, or other office personnel by the hour for tasks where value added cannot be determined by casual visual observation. Do that and you'll actually save the US taxpayer some money.

Submitted by Neil Gordon at: January 14, 2013

Dfens, It’s pretty much conventional wisdom that contracting competition saves money. I could go through numerous reports and articles over the years and pick out dozens of examples. To wit: - State Department saved over $281 million when it competitively awarded a contract for installation and maintenance of security equipment at U.S. embassies in 2007. - Army spent 25 percent less for security guards when it put the contracts up for competition. (Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance Revenue, GAO-11-441T, 3/3/11) - NASA Michoud Assembly Facility in Louisiana breaks an operations and maintenance contract into smaller contracts that are competitively bid, reduces costs by $89 million. (Acquisition and Contracting Improvement Plans and Pilots: Saving Money and Improving Government, OMB, 12/09) - In FY 2009, DHS conducted more than 2,500 reverse auctions [vendors bid prices down to win an agency’s work] for approximately $340 million in goods, resulting in savings of more than $40 million. (Cutting Waste and Saving Money Through Contracting Reform, Whitehouse.gov, 7/7/10) - TSA conducts a competition for the department-wide EAGLE information technology contract, allowing TSA to save over 30% a month, or $40 million in just one year. (Improving the Way the Government Buys: Getting the Best Value for our Taxpayers, OMB, 7/11)

Submitted by Scott at: January 14, 2013

While some other agencies are meeting goals to increase competition and and reduce sole source and single-bid contracts, DoD has failed, see the "Agencies Decreasing High Risk Contracting" chart: http://acquisition.performance.gov/initiative/contracting-risk/home

Submitted by Jack at: January 13, 2013

Obama is just a lip service servant of the people that lies with the skill of satin. Obama does not support whistle blowers and as long as he is tied to PNAC and other anti American organizations the torture of people that are not afraid to stand up to the treason in our government will continue to be tortured and punished for their service to the people.

Submitted by Tigermac at: January 12, 2013

It has been obvious for decades, that the DoD is using the same Contractors, due to the amount of money these Contractors donate to reelection Campaigns. This practice cut competition and allows the Contractor to charge any price they desire, this costs the taxpayers billions of dollars per year. Until money is taken out of politics there will not be any other competitors to bid on contracts and save the taxpayers money.

Submitted by Dfens at: January 11, 2013

"The government will be less tolerant of poorly performing contractors if it has a pool of viable alternatives from which to choose." Prove it! The Joint Strike Fighter program was competitively bid. Are you saying that the Air Force could, any day now, switch over to Boeing as the prime contractor for that program? That's laughable. The Boeing airplane wouldn't even perform the vertical take-off despite years Boeing assurances it would and billions of US taxpayer dollars spent on the prototype. Just more lies that no one was held accountable for because it's not a crime to lie to the American people. It's expected. How much money did competitive bidding of the Arial Common Sensor program save the US taxpayer? In that "competition" one contractor proposed an airplane that was half big enough to do the job. The other proposed an "all American" airplane that was 1/4th big enough. So tell me, how do you compute the savings to the US taxpayer on that one? In fact, POGO keeps telling us we save money when contracts are competitively bid, but never shows any proof. Why is that? Could it be because it is a lie?

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