Pentagon not properly monitoring sole-source contracts, audit finds

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The Defense Department is inadequately following guidance on single-bid contracts and failing to encourage the type of competition that saves taxpayer dollars, the inspector general’s office found in a recent audit.

In a review of 107 contracts valued at nearly $1.4 billion, along with another half-billion dollars’ worth of contract modifications, the IG determined that the military’s competition advocates failed to follow single-bid guidance in 31 cases. The Pentagon also neglected to “develop adequate plans to increase competition because Defense Procurement and Acquisition Policy (DPAP) did not provide effective oversight of the plans,” the report said. And Defense officials did not develop specific steps to improve competition rates in their plans or “develop specific steps to prevent 39 of 47 contract modifications, valued at $390.9 million, from exceeding the three-year limitation on awarding contract modifications without first recompeting.”

The IG recommended improved monitoring and creation of an overall schedule on altering contracts. The service largely agreed.

Commenting on the report, Scott Amey, general counsel for the nonprofit Project on Government Oversight, wrote in a blog: “Imagine going to only one car dealer to buy a car and doing so without seeing a window sticker or entering into an aggressive price negotiation. That is how DoD is buying, despite guidance from DoD procurement officials and the White House. There is no competition helping to drive down costs, and there is no cost or pricing data that ensures the government is paying fair and reasonable prices. That’s a recipe for waste, fraud and abuse, if I ever heard one.”

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