Defense Contracting: DOD's Use of Competitive Procedures

What GAO Found

During the period from fiscal year 2010 through fiscal year 2014, DOD’s competition rate—the dollars obligated annually on competitive contracts and task orders as a percentage of dollars obligated on all contracts and orders—ranged from 60.8 percent to 56.5 percent. In fiscal year 2014, DOD obligated $284.4 billion through contracts and task orders, of which 58.2 percent was competed.

GAO also found that the competition rate for all contract obligations varied across DOD components. Of the contracts and offers awarded by the Air Force, Army, Navy, and the defense agencies in fiscal year 2014, the Air Force continued to have the lowest competition rate, at 43.6 percent. Services were competed at a substantially higher rate than products during the 5-year period. In fiscal year 2014, the competition rate for services was 71 percent compared to 43 percent for products.

Throughout the 5-year period, the primary basis for exceptions to competitive procedures was “only one responsible source.” In fiscal year 2014, 69 percent of exceptions to competitive procedures were characterized this way.

DOD’s competitive one-offer awards represented roughly 13 percent of all competed obligations for fiscal years 2013 and 2014. In fiscal year 2014, there were $20.9 billion in obligations for these one-offer awards.

Competition is the cornerstone of a sound acquisition process and a critical tool for achieving the best return on investment for taxpayers. The conference report for the National Defense Authorization Act for Fiscal Year 2012 directed GAO to report annually for 3 years on DOD noncompetitive awards and competitive awards based on receipt of one offer. GAO has issued two prior reports on DOD competition, and this is the third and final report. For this report, GAO examined (1) the trends in DOD’s use of competitive contracts for fiscal years 2010 through 2014; (2) the basis for exceptions to competitive procedures for fiscal years 2010 through 2014; and (3) the number and dollar amounts of awards for which DOD used competitive procedure but received only one offer during fiscal years 2013 and 2014.

To address the review objectives, GAO analyzed data in the Federal Procurement Data System-Next Generation (FPDS-NG), spoke with DOD officials, and reviewed DOD policy documents and competition reports to better understand current efforts to improve competition in DOD contracting. GAO calculated the competition rate as the dollars obligated annually on competitive contracts and orders as a percentage of dollars obligated on all contracts and orders.