Government Contracts Monitor

Short Take: DPAP Acquisition Scorecard, Third Quarter

August 15, 2016

On August 11, the Office of the Undersecretary for Defense, Acquisition, Technology and Logistics (OUSD/ATL) released its Acquisition Compliance Scorecard for the third quarter of fiscal year 2016. The report analyzed several DoD Agencies’ compliance with procurement regulations in three areas: competition, past performance, and inclusion of the new DFARS clause 252.204-7012, Safeguarding Covered Defense Information and Cyber Incident Reporting, for contracts awarded by DoD agencies from April 1 through June 30 of 2016.

OUSD/ATL releases the scorecard quarterly, and measures each of several DoD agencies’ performance against an overall DoD goal. The competition component measures what percentage of contract dollars are competed vs. sole sourced; each DoD agency has a unique goal depending on its history and the type of requirements it awarded that quarter. For this quarter, DoD reported a total of 8.6 million contract actions at a dollar amount of 205.2 billion. By contrast, in FY16 quarter 2, the DoD made 5.6 million awards totaling $142.6 billion. This uptick makes sense as agencies increase spending toward the end of the fiscal year.

Of this total, $101.9 billion, or 49.7% of total contract dollars, were awarded competitively; $103.2 billion in DoD contracting awards were sole sourced. The DoD’s FY16 goal is to compete 57.0% of contract dollars. Six of the 23 DoD agencies graded met or exceeded their competition goal this quarter; the remaining seventeen fell short. The Air Force had the lowest percentage of dollars awarded competitively, at 31.3%. Its FY16 goal is to compete 40.3% of awarded dollars.

The scorecard also reported 24 DoD agencies’ compliance with past performance reporting. This report assessed 24 DoD agencies, and found that, overall, the evaluated agencies complied with past performance reporting requirements in 84.47% of cases, up from 82.61% in the second quarter. The DoD as a whole reported 15,298 overdue past performance reports (of a total requirement of 98,491). Past performance reviews are a critical tool for contractors competing for future federal procurements because those scores are often used as a criterion in evaluating proposals.

Finally, the report measured DoD agencies’ inclusion of the new DFARS Clause 252.204-7012, regarding safeguarding sensitive defense information and reporting cybersecurity incidents, into awarded contracts. The DoD’s overall goal remains an aggressive 95% compliance; for FY16 Q2, none of the major DoD agencies met this goal. The Department of the Navy again came closest, with a compliance rate of 93%; for every quarter of FY16, the Navy has exceeded 90% compliance. DCMA improved from 82% last quarter to 90% this quarter; all other DoD agencies, with the exception of the Air Force (which fell from 65% to 58% compliance), also posted an improvement over quarter 2. The Defense Logistics Agency, at 28% compliance, has the longest way to go. Overall, 58% of DoD’s contracts included the new DFARS clause—a significant increase from the 48% compliance reported overall in the second quarter, and 39% compliance in FY16’s first quarter.

With the final quarter of Fiscal Year 2016 well underway, it will be interesting to see how the data changes in DPAP’s next report. As contracting officers face accelerated deadlines and seek to award contracts as efficiently and quickly as possible, they must act diligently to ensure that awards are made properly and in compliance with the required federal and DoD regulations. This data provides interesting insight into the relative performance of different DoD agencies in complying with procurement regulations.