Pentagon’s Sole-Source Contracts Continue to Dwindle, Says GAO

The Defense Department is doing its part to curb the number of sole-source contracts awarded without competition and is properly justifying—in most instances—their use to help develop small, disadvantaged businesses, an audit found.

The Government Accountability Office’s Sept. 9 report to the House and Senate Armed Services committees evaluated sole-source contracts worth more than $20 million under the Small Business Administration’s 8(a) program and found that the Pentagon in fiscal 2013 continued a “significant decrease” in such contracts. It awarded five in 2013, each worth $20 million, compared with 27 contracts valued at $2 billion in 2009.

All five of the recent contracts were justified as being “in the best interest of the government,” though three of them failed to fully meet Federal Acquisition Regulation requirements that relevant officials sign off on them in a timely manner.

Fifty-five sole-source contracts were awarded under the 8(a) program over the past four years, the report found, led by the Army with 37, the Navy with 13, the Air Force with two, and three elsewhere in the department.

In 2013, the Defense Department obligated some $8.7 billion in contracts through the program designed to develop small businesses owned by socially and economically disadvantaged individuals. Since 2009, it has been required to justify such awards.

In one Army contract, for example, the justification stated that the disadvantaged firm self-marketed an approach that would augment existing technical, engineering, and program management services used in the manufacturing of military armed vehicles and specialized components, GAO said. “The contracting officer told us that awarding this sole-source contract was in the best interest of the government because the 8(a) firm was uniquely qualified to perform the services, and at that time, she was encouraged to award contracts through the 8(a) program.”