GAO eases sole-source fears

A General Accounting Office report counters widespread suggestions that the
government’s increased use of multiple-award contracts has resulted in too many
sole-source task orders.

GAO said agencies varied in their efforts to promote competition within multiple-award
contracts. “Two of the six organizations we reviewed consistently obtained
competition for orders under multiple-award contracts, but the remaining four did
not,” the report said.

The organizations where there were problems are taking steps to increase
competitiveness, said the report, Acquisition Reform: Multiple-award Contracting at Six
Federal Organizations.

The report, released last month, is much less harsh than many federal market observers
had anticipated. Some lawmakers have suggested that agencies avoid competition by using
preferred vendors for task and delivery orders under multiple-award contracts.

Earlier this year, in anticipation of the GAO report, Office of Management and Budget
director for management G. Edward DeSeve directed agencies to boost the competition for
task orders under such contracts [GCN, June 1, Page 69].

“We were very satisfied with the results,” said Olga Grkavac, senior vice
president for systems integration at the Information Technology Association of America.
The Arlington, Va., association counts among its members several IT vendors that hold
large federal multiple-award IT contracts.

The final GAO report did not live up to the “leaked versions,” Grkavac said.

GAO also concluded in its report that multiple-award contracts do not pose a threat to
small businesses. “Despite concerns that the use of the multiple-award contracting
mechanism would tend to exclude small businesses from the federal marketplace, the
experience with the contracts we reviewed indicates that small businesses can compete
successfully, given the right circumstances,” the report said.

The Office of Federal Procurement Policy and the Small Business Administration are
taking steps to preserve small-business opportunities, GAO said.

GAO examined six programs: the Air Force’s Desktop V contracts, the Air Force
Electronic Systems Center’s Management Information Systems Technical Support buy, the
Defense Information Systems Agency’s Defense Enterprise Integration Services, the
General Services Administration’s Can’t Beat GSA Leasing and Renovations buy,
the National Institutes of Health’s Chief Information Officer Solutions and Partners
program, and the Transportation Department’s Information Technology Omnibus

GAO found that the Air Force Electronic Systems Center and GSA regularly sought
competing orders under their contracts.

Although there were sole-source orders among the other programs, those agencies were
trying to resolve the problem, GAO said.

For example, sole-source orders represented 64 percent of orders placed against
Transportation’s ITOP contracts, the report said.

Although DOT requires program officials to justify sole-source orders, some of the
justifications were less than convincing, GAO said. DOT officials told GAO that they will
require legal review for the justifications on large sole-source orders.

For the first half of fiscal 1998, DOT reduced the proportion of sole-source orders to
38 percent with 25 percent of the dollars being awarded under sole-source orders, GAO
said. “While reducing its sole-source orders, DOT has not yet met OFPP’s
guideline of obtaining competition on 90 percent of orders,” the report said.

Robert Deller, president of Market Access International Inc. of Chevy Chase, Md., said
there will be some sole-source contracting but that the overall situation is much improved
as a result of procurement reform.

“It still goes on, but it’s at a much more refined level,” Deller said.

OFPP administrator Deidre A. Lee said multiple-award contracts have become an important
vehicle for agency buys, but she acknowledged that agencies need to be diligent about
promoting competition.

Before GAO had released its reports, congressional staff members had suggested there
might be hearings and legislation resulting from GAO’s findings. But “based on
the final report, we don’t see that happening,” Grkavac said.    

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