Government Contracts Monitor

Sole Source Awards Continue Unabated – Poor Procurement Planning Prevails

October 21, 2014

Federal law and regulations require our Government to award contracts on a competitive basis, to the maximum extent practical. Yet more than 30 years ago the Government Accountability Office (GAO) found that “32 percent of the sole-source contracts it examined could have been awarded on a competitive basis.” The problem: ineffective management, including market research and advance planning. At that time, GAO found that “improving agency efforts to obtain competition . . . would make the greatest contribution toward eliminating unnecessary sole-source awards.” These findings have been repeated in many reports issued since the early 1980’s, including a 2013 Office of Inspector General (OIG) Report on the extraordinarily high number of sole source awards for Job Corps Center operations contracts during the 5-year period ending December 31, 2012. OIG Report 2013. In short, the unjustified use of sole source procurement has not been fixed.

As reported on here earlier this summer, GAO and the courts have long held that agencies may not rely on sole source procurements – an exception to full and open competition – to remedy their own lack of advance planning, or inadequate procurement planning. Said another way, urgency for goods and services that arises from agency missteps of this kind are not recognized as a valid basis for invoking FAR Subpart 6.3 Other Than Full and Open Competition.

Against this backdrop it is difficult to understand why and how certain agencies continue to rely heavily on sole source awards to cover the tracks of their missteps. A case in point continues to be DOL’s Job Corps program. During September 2014 alone, DOL made five sole source awards for Job Corps Center operations contracts, as evidenced on www.fbo.gov.

Thus, while five years ago President Obama stated that sole source contracts were “wasteful’’ and “inefficient,’’ the Government today spends more money on non-competitive contracts than ever before. And, at the same time as these non-competitive awards are increasing, federal procurement dollars are shrinking. We see more and more reports and “measures” to address this problem, but the problem persists (see, e.g., August 21, 2014, Department of Defense Actions to Improve Department of Defense Competition that adds new procedural steps for sole source procurements). Everyone seems to recognize the problem, yet it continues unabated.

A few steps contractors can take: respond to Sources Sought notices and other forms of market research by the government intended to identify possible sources; initiate your own demonstrations of capability with government personnel; and watch www.fbo.gov for notices of sole source awards to determine if you have a basis for filing a protest. These notices are accompanied by a Justification & Approval detailing the agency’s support for the sole source.

Attorneys

Lindsay Simmons