The title of the Report, “Few Competing Proposals for Large DOD Information Technology Orders” tells the story. The FAR Council, which issued a final rule on “Competition Under Multiple Award Contracts” shortly after the GAO Report was published, is developing other rules on Task Order and Delivery Order Contracts, FAR Case 1999-303, which will take into consideration the findings and recommendations in the Report.
To promote competition under task and delivery order contracts, the Federal Acquisition Streamlining Act (“FASA”) established a preference for multiple awards, rather than a single award, for IDIQ contracts. FASA and the implementing regulations in FAR Part 16.5 require that each awardee “must be provided a fair opportunity to be considered for each order in excess of $2,500.” There are several enumerated exceptions to this “fair opportunity” requirement. In addition, individual orders must “clearly describe all services to be performed or supplies to be delivered.” The GAO Report finds that in the majority of cases, there is no “fair opportunity,” and orders often contain broad and ill defined statements of work.
Of the 16 orders where only one proposal was received, 10 involved agency use of statutory exceptions to the fair opportunity requirement—predominately the exception for “a logical follow on to an order already issued.” But the Report suggests that in a number of cases the invocation of the exceptions may not have been appropriate. For example, in one of the cases, the Defense Information Systems Agency awarded a contractor an initial order of $300,000 for two months worth of work without considering any other contractors and then awarded a second $6.7 million order as a “logical follow on.”
Even in the cases where other contractors theoretically had an opportunity to be considered for an order, the reality was that only the incumbent was in a position to respond. For example on a $23.7 million Department of Transportation order to support a Navy intelligence command, contractors would have needed to station about 40 staff at the Navy installation, with security clearances and knowledge of the command’s information technology system, within days after the award. Not surprisingly, only the incumbent submitted a proposal.
The new FAR Rule, issued on April 25, 2000, provides that the contracting officer must develop and include in solicitations for multiple award contracts the procedures the government will use to place orders and may not use any method, such as designation of a “preferred” awardee, that would preclude a fair opportunity to be considered. It provides guidance for contracting officers to avoid situations in which awardees specialize exclusively in only one or a few areas within the statement of work. Such situations create the likelihood that orders in those areas will be awarded on a sole source basis. Contractors who believe they have not had a fair opportunity to be considered for individual orders will be able to take their complaints to a “task and delivery order ombudsman.”
Further rules to deal more explicitly with the concerns raised in the GAO report are also being developed. This is currently an area of significant scrutiny. Indeed, in a recent ABA meeting at Wiley, Rein & Fielding, a high-level OFPP official indicated that Multiple Award Contracting and the GAO study were an “OFPP priority” and one of its “current hot issues.”