oversight

Procurement: Efforts Still Needed to Comply With the Competition in Contracting Act

Published by the Government Accountability Office on 1990-05-30.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                  IJnited   States   General   Accounting   Office

                  Report to the Chairman, Committee on
                  Armed Services, House of
                  Representatives


May   1990
                  PROCUREMENT
                  Efforts Still Needed to
                  Comply With the
                  Competition in
                  Contracting Act
                                                                              a


                                                                     141467




GAO/NSIAD-W-104
                   United States
                   General Accounting Office
                   Washington, D.C. 20648

                   National Security and
                   International Affairs Division

                   B-208159

                   May 30,199O

                   The Honorable Les Aspin
                   Chairman, Committee on Armed Services
                   House of Representatives

                   Dear Mr. Chairman:

                   In response to your request, we performed a follow-up review concern-
                   ing the Department of Defense’s (DOD) compliance with the Competition
                   in Contracting Act of 1984 (CICA).In August 1987, we reported on five
                   DOD procuring activities’ compliance with CICAin awarding two catego-
                   ries of contracts: (1) awards based on other than full and open competi-
                   tion’ and (2) awards reported as based on full and open competition and
                   the submission of only one offer.2 The contracts we examined had been
                   awarded in September 1985, about 5 months after the contract solicita-
                   tion and award provisions of CICA took effect. As agreed with your staff,
                   our follow-up review, beginning in October 1988, included the same two
                   categories of contracts, We examined random statistical samples of con-
                   tracts awarded from April through June 1988 at the same five DOD activ-
                   ities we previously reviewed and one additional DOD activity to
                   determine whether the problems we previously identified were still
                   occurring.” Our projected results are representative of the DOD activities
                   reviewed, but not necessarily DOD as a whole.


                        requires that certain procedures be followed to assure agency offi-
Results in Brief   CICA
                   cials and others of the appropriateness of agency decisions not to pro-
                   vide for full and open competition. We reviewed a random sample of 42
                   awards of this kind. Our results show significant improvement, com-
                   pared to our previous review, regarding the procedures used and the
                   assurance provided that such decisions were appropriate. However, as
                   was the case in our previous review, we found widespread compliance
                   problems concerning specific statutory and regulatory requirements


                   ‘Under the act, “full and open competition” basically means allowing all sources capable of satisfying
                   the government’s needs to compete for a contract award.
                   “Procurement: Better Compliance With the Competition in Contracting Act Is Needed (GAO/
                          _ 7_145, Aug. 26,1987).

                   “In this report, our comparisons between the results of our previous and current reviews, which are
                   based on projections to our statistical populations of contract awards, do not take into account this
                   additional DOD procuring activity. Our comparative projections are based only on the results at the
                   five DOD activities covered in both reviews.



                   Page 1                                         GAO/NSIAD-90-104      Competition   in Contracting   Act
                      B-208159




                      related to (1) written justifications for other than full and open competi-
                      tion and (2) public notices in the Commerce Business Daily (CBD) pub-
                      lished to help survey the market and encourage competition for
                      proposed awards.

                      We also reviewed a random sample of 16 contract awards reported as
                      based on full and open competition and the submission of only one offer.
                      We found that agency officials had used practices inconsistent with full
                      and open competition for eight of these awards. Moreover, our results
                      show a significant worsening of this condition in comparison to what we
                      found in our previous review. The eight contracts were inappropriately
                      awarded without written justification, certification, or approval. As a
                      result, DOD did not have the assurance intended under CICA that opportu-
                      nities for potential sources to compete for these awards were not missed.

                      Overall, for both of the samples we examined in this review, we identi-
                      fied many more problems of a significant nature at the Defense Logistics
                      Agency’s Defense General Supply Center than at the other DOD activities.
                      (See tables IV.3 and IV.21 .)

                      The data DOD collects on its contract awards indicate a positive trend in
                      the use of competitive contracting during the past several years. CICA
                      appears to be one of the reasons for this improvement. However, the
                      limited data available indicates that procurement award processing
                      time-the interval between the receipt by the procurement office of a
                      purchase request and a contract award to fulfill the requirement-has
                      increased at all five DOD activities for which we collected such data.
                      According to procurement officials at these activities, the increases can-
                      not be attributed to any one specific cause.


                      We found that the DOD procuring activities’ decisions not to provide for
Awards Based on       full and open competition were much less frequently based on question-
Other Than Full and   able practices in our current review, as compared to our previous
Open Competition      review. These practices related primarily to the use of certain footnotes
                      in pre-award notices published in the CBD that either conflicted with
                      CICA’Srequirements or were questionable and may have discouraged
                      competition. Based on our previous review, we recommended that these
                      footnotes not be used. Effective November 2, 1987, the CBD adopted this
                      recommendation. As a result, during this review we found that CBD pre-
                      award notices for a projected 19 percent of the awards in our statistical
                      population contained such footnotes, compared to 91 percent for our



                      Page 2                            GAO/NSIAD-90-104   Competition   in Contracting   Act
-   ’
                       B-208159




                       previous reviewq4 Moreover, almost all of the notices comprising the 19
                       percent were published in the CBD before November 2,1987.

                        However, we still found many of the same compliance problems relating
                        to specific statutory and Federal Acquisition Regulation (FAR)” require-
                        ments during this review as we found during our previous review. For
                        example, we identified problems with written justifications for other
                        than full and open competition for most of the awards. Deficiencies
                        included (1) not properly preparing or certifying the accuracy of the jus-
                        tifications so that they included all the required elements of informa-
                        tion, (2) not properly approving them, and (3) certifying the
                       justifications “prematurely’‘-before      the statutorily required time had
                        elapsed for potentially competitive sources to respond to the pre-award
                       CBDnotices.

                       We also found that agency officials had not fully complied with certain
                       requirements relating to pre-award CBD notices for most of the contract
                       awards for which such notices were required. Deficiencies included
                       (1) not publishing the required notices, (2) not providing required infor-
                       mation or providing inaccurate information in the notices, and (3) not
                       allowing enough time for potential offerors to respond to notices or issu-
                       ing the solicitations too early.


                       Regarding the other statistically valid sample of contract awards we
One-Offer Awards       reviewed at the six activities, many were one-offer awards reported as,
Reported as Based on   but based on practices inconsistent with, full and open competition.
Full and Open          Thirteen of the contracts, including 8 based on practices inconsistent
                       with full and open competition, were awarded at activities also included
Competition            in our previous review. These eight cases represent a projected 95 per-
                       cent of our population of contract awards. In our previous review, we
                       found that 9 of the 19 DOD awards we examined were inconsistent with




                       4Seetables IV.26 and IV.26 for the confidence and precision estimates relating to all our projections
                       and appendix VI for the limitations on our sampling. Details supporting the projected 19 percent and
                       91 percent arc shown in tables IV.17 and IV.18, respectively.

                       “Procurement by the federal government is regulated primarily by the FAR system, which consists of
                       FAR and agency regulations that implement and supplement it. FAR, a single governmentwide pro-
                       curement regulation, is issued and maintained by DOD, National Aeronautics and Space Administra-
                       tion, and the General Services Administration. The Administrator for Federal Procurement Policy
                       also has authority to revise FAR and is responsible for providing overall direction of government
                       procurement policy.



                       Page 3                                        GAO/NSIAD-90-104      Competition   in Contracting   Act
Lb208169




full and open competition; these 9 cases represented a projected 48 per-
cent of our population.”

We attribute this deterioration largely to conditions at two procuring
activities, the Defense General Supply Center and the San Antonio Air
Logistics Center. That is, we identified problems with all three of our
sample awards at each of these locations and each had a relatively large
population of such contracts.

We found many of the same problems during the current and previous
reviews. In three of the eight current cases based on practices inconsis-
tent with full and open competition, agency officials had not reasonably
complied with the statutory requirement to publish a pre-award CBD
notice. In two other cases, the solicitation had been limited to a particu-
lar product of one manufacturer. In the three remaining cases-all at
the Defense General Supply Center-the solicitation had been limited to
a particular product of one manufacturer or alternate products meeting
the agency’s requirement; however, the solicitation had not described
the essential features of the agency’s requirement so that potential
offerors of alternate products could know what would be acceptable.

 Defense General Supply Center procurement officials said that they had
 followed Defense Logistics Agency guidance in awarding the three con-
tracts. In November 1989, the Defense Logistics Agency revised its regu-
 lations to correct this problem. The revisions require written
justification and approval for other than full and open competition
 when the solicitation does not provide access to complete, unrestricted
technical data for the items being procured. Defense Logistics Agency
officials said they estimate that (1) about 60 percent of the agency’s
 fiscal year 1989 procurements exceeding $25,000 each were based on
 solicitations that, under the newly revised regulations, would have been
 categorized, processed, and reviewed as other than full and open compe-
 tition and (2) these procurements resulted in total obligations of about
 $1.8 billion.

In addition, as we found in our previous review, most of our sample
awards had not fully complied with statutory and regulatory require-
ments relating to the use of the CBD,


“Although this projection might appear erroneous, it correctly reflects the different weights used to
project the sample results (based on the number of awards included in our population) at each of the
five activities. (See tables IV.21, IV.22, and VI.2.)



Page 4                                        GAO/NSLAD-90-104      Competition   in Contracting   Act
                        B-208169




                        In its December 9, 1987, overall comments on our 1987 report, DOD said
DOD’s Position on Our   that we had reached significant conclusions based on a premature and
1987 Report and Our     limited review. DOD said (1) our review had been premature because it
Evaluation              was based on contracts awarded in September 1985, only 6 months after
                        CICA’S implementation and (2) our report had not reflected the signifi-
                        cant progress DOD had made in implementing CICA’S provisions. In addi-
                        tion, DOD said that the scope of our review had been very restricted,
                        with only a limited sample reviewed at designated activities. DOD said
                        that, largely because of these limitations, we had not established a need
                        for substantial changes. DOD, adding that its efforts to promote competi-
                        tion had produced significant results, cited the increased percentage of
                        DOD dollars awarded competitively.

                        Although our current results did show some significant improvement,
                        we continue to find significant compliance problems with DOD'S contract
                        awards based on other than full and open competition. In addition, our
                        current results showed some significant worsening of conditions regard-
                        ing one-offer awards reported as based on full and open competition.

                        Regarding our review scope, we believe that our sampling has provided
                        a sound basis for our conclusions and recommendations. In our previous
                        review, the populations from which our samples were drawn repre-
                        sented 30 percent (for awards based on other than full and open compe-
                        tition) and 21 percent (for one-offer awards reported as based on full
                        and open competition) of all DOD contract dollars reported into its DD-
                        350 prime contract reporting system that met our selection criteria. The
                        comparable amounts for our current review are 23 percent of DOD
                        awards based on other than full and open competition and 17 percent of
                        DOD one-offer awards reported as based on full and open competition.
                        (See app. VI for a fuller presentation of our sampling.)

                        Regarding DOD'S statement about the results of its efforts to promote
                        competition, our previous and current reports cite federal agencies’ data
                        on the upward trend in the competitiveness of contract awards.

                        We reiterate in this report several recommendations we made in our
                        1987 report. In its comments on that report, DOD disagreed that taking
                        any of these recommended actions was necessary, except DOD said it was
                        continuing to revise its acquisition training courses to improve the over-
                        all professionalism of contracting personnel. On the basis of our latest
                        findings, we still believe that DOD needs to adopt these recommendations,




                        Page 5                            GAO/NSIAD-90-104   Competition   in Contracting   Act
                      B-208159




                      DUD did not agree with our 1987 report’s recommendation to change FAR
                      to provide that a solicitation restricted to a specific make and model
                      does not meet the requirement for full and open competition. DOD stated,
                      “As long as reprocurement drawings are available, competition from
                      many manufacturers is possible, resulting in full and open competition.”
                      We believe, however, that DOD's argument is flawed because the solicita-
                      tions we examined provided that DOD would only accept a particular
                      product manufactured by one contractor. Moreover, the CBD notices for
                      all of the specific make and model solicitations we identified in our pre-
                      vious and current reviews stated that either (1) specifications, plans, or
                      drawings were not available or (2) “solicitation documents” were not
                      available.

                      We note that if this recommendation were adopted, the existing FAR
                      6.301(d) would require for such procurements (as it does for others not
                      based on full and open competition) that offers be solicited from as
                      many other sources as is practicable in the circumstances. Such sources
                      could include dealers, licensees, and sellers of used equipment.

                      We have slightly revised our previous report’s recommendation on the
                      premature certification of justifications for other than full and open
                      competition in an attempt to minimize adverse effects on administrative
                      lead time and burden as well as to foster compliance with CICA.


                      We recommend that the Secretary of Defense take actions, such as those
Recommendations       involving formal or informal training, written instructions, better super-
                      vision, and/or other improved management controls, to ensure that all
                      personnel involved in awarding contracts of more than $25,000 under-
                      stand and comply with the requirements of CICAand FAR relating to:

                  l Written justifications for decisions not to provide for full and open com-
                    petition. Such compliance should include (1) properly preparing and cer-
                    tifying the justifications so that they include all required elements of
                    information, (2) properly approving the justifications, and (3) ensuring
                    that justifications are not certified prematurely or that significant mar-
                    ket survey results occurring after justifications have been prematurely
                    certified are recognized and used to avoid awarding contracts without
                    providing for full and open competition, whenever warranted.
                  . Use of the CBD, such as (1) the publication and content of notices of pro-
                    posed awards and (2) solicitation issuance and response time in relation
                    to the publication dates of such notices.



                      Page 6                            GAO/NSLAD-90-104   Competition   In Contracting   Act
B208169




We recommend that those responsible for the FAR, the Secretary of
Defense and the Administrators of General Services, the National Aero-
nautics and Space Administration, and the Office of Federal Procure-
ment Policy, revise FAR to state that restricting a solicitation to a specific
make and model (1) does not meet the requirement for full and open
competition and (2) requires written justification, certification, and
approval for other than full and open competition in accordance with
CICA.



Appendix I presents our results regarding contract awards based on
other than full and open competition. Appendix II presents our results
regarding one-offer awards reported as based on full and open competi-
tion. Appendix III provides information on the competitiveness of DOD’S
contracts and procurement processing times. Appendixes IV and V pro-
vide details on both our current and previous reviews of contract
awards. Appendix VI describes our objective, scope, and methodology,
including the basis for our statistical projections.

As requested by your Office, we did not obtain official DOD comments on
this report. However, we discussed our findings with DOD officials at
headquarters and at the activities we visited.

We are sending copies of this report to the Chairmen, House and Senate
Committees on Appropriations, House Committee on Government Opera-
tions, and Senate Committee on Governmental Affairs; Cdl%%‘&%l& ‘,
being sent to the Secretaries of Defense, Army, Navy, and Air Force; the
Administrators of General Services, the National Aeronautics and Space
Administration, and the Office of Federal Procurement Policy; the Direc-
tor, Office of Management and Budget; and other interested parties.




Page 7                             GAO/NSIAJB-90-104   Competition   in Contracting   Act
B-208159




Please contact me at (202) 276-4687 if you or your staff have any ques-
tions concerning this report. Other major contributors to this report are
listed in appendix VII.

Sincerely yours,




Paul F. Math
Director for Research, Development,
  Acquisition, and Procurement Issues




Page 8                            GAO/NSIAD-90-104   Competition   in Contracting   Act
Page 9   GAO/NSIAD-90-104   Competition   in Contracting   Act
Contents


Letter                                                                                                        1

Appendix I                                                                                                  18
Significant               Frequency of the Use of Exceptions to Full and Open                               18
                               Competition
Improvement in            Agencies Inappropriately Awarded Six Contracts                                    19
Assurance That            Five Questionable Decisions to Award Contracts Based on                           20
Agencies’ Decisions            Other Than Full and Open Competition
                          Most Awards in Our Sample Were or Probably Were                                   20
Not to Provide for Full        Appropriately Based on Other Than Full and Open
and Open Competition           Competition
                          Widespread Compliance Problems Relating to Written                                21
Are Appropriate                Justifications
                          Widespread Problems in Fully Complying With Certain                               22
                               Requirements Relating to CBD Notices
                          Significant Improvement Regarding the Use of CBD                                  23
                               Footnotes Discouraging Competition

Appendix II                                                                                                 25
Improvements Are          Agency Officials Often Used Practices Inconsistent With
                              Full and Open Competition
                                                                                                            26
Still Needed Regarding    Only 2 of the 16 Awards Fully Met the Statutory                                   27
One-Offer Awards              Requirements Relating to the Use of the CBD
Reported as Based on
Full and Open
Competition
Appendix III                                                                                                29
DOD’s Competition         Competitiveness of DOD Contract Awards
                          Procurement Processing Times Have Increased
                                                                                                            29
                                                                                                            29
Trends and
Procurement
Processing Times at
SelectedDOD
Activities



                          Page 10                         GAO/NSIAD-90-104   Competition   in Contracting   Act
                         Contents




Appendix IV                                                                                                34
Information, Including
Comparable Projected
Results, Relating to
Our Current and
Previous CICA-
Compliance Reviews
Appendix V                                                                                                 48
Additional
Information on the
Results of Our Current
and Previous CICA-
Compliance Reviews
Appendix VI                                                                                                53
Objective, Scope,and
Methodology
Appendix VII                                                                                               61
Major Contributors to
This Report
Tables                   Table III. 1: Average PALT in Days                                                29
                         Table IV. 1: CICA Exceptions Used During Our Current                              34
                             Review for Our Sample Contract Awards Based on
                             Other Than Full and Open Competition
                         Table IV.2: CICA Exceptions Used During Our Previous                              34
                             Review for Our Sample Contract Awards Based on
                             Other Than Full and Open Competition
                         Table IV.3: Sample Contract Awards, Identified During                             35
                             Our Current Review, for Which Decisions Not to
                             Provide for Full and Open Competition Were
                             Inappropriate or Questionable



                         Page 11                         GAO/NSIAD-90-104   Competition   in Contracting   Act
Contents




Table IV.4: Sample Contract Awards, Identified During                             35
     Our Previous Review, for Which Decisions Not to
     Provide for Full and Open Competition Were
     Inappropriate or Questionable
Table IV.5: Sample Contract Awards, Identified During                             36
     Our Current Review, for Which Decisions Not to
     Provide for Full and Open Competition Were or
     Probably Were Appropriate
Table IV.6: Sample Contract Awards, Identified During                             36
     Our Previous Review, for Which Decisions Not to
     Provide for Full and Open Competition Were or
     Probably Were Appropriate
Table IV.7: Sample Contract Awards Based on Other Than                            37
     Full and Open Competition, Identified During Our
     Current Review, for Which Justifications Did Not
     Fully Comply With CICA or FAR Requirements
Table IV.8: Sample Contract Awards Based on Other Than                            37
     Full and Open Competition, Identified During Our
     Previous Review, for Which Justifications Did Not
     Fully Comply With CICA or FAR Requirements
Table IV.9: Sample Contract Awards Based on Other Than                            38
     Full and Open Competition, Identified During Our
     Current Review, With Justifications Not Including
     Elements Required by CICA or FAR
Table IV. 10: Sample Contract Awards Based on Other                               38
    Than Full and Open Competition, Identified During
    Our Previous Review, With Justifications Not
     Including Elements Required by CICA or FAR
Table IV. 11: Sample Contract Awards With Justifications                          39
     Not Properly Approved, Which Were Identified
    During Our Current Review
Table IV. 12: Sample Contract Awards With Justifications                          39
    Not Properly Approved, Which Were Identified
    During Our Previous Review
Table IV. 13: Sample Contract Awards, Identified During                           40
    Our Current Review, for Which Contracting Officials’
    Certifications of the Justifications Were Premature
Table IV. 14: Sample Contract Awards, Identified During                           40
    Our Previous Review, for Which Contracting
    Officials’ Certifications of Justifications Were
    Premature




Page 12                         GAO/NSIAD-90-104   Competition   in Contracting   Act
Contents




Table IV. 15: Sample Contract Awards Based on Other                               41
    Than Full and Open Competition, Identified During
     Our Current Review, for Which Required Pre-Award
     Notices Were Not Published in the CBD
Table IV. 16: Sample Contract Awards Based on Other                               41
    Than Full and Open Competition, Identified During
    Our Previous Review, for Which Required Pre-Award
    Notices Were Not Published in the CBD
Table IV. 17: Sample Contract Awards Based on Other                               41
    Than Full and Open Competition, Identified During
    Our Current Review, for Which Pre-Award Notices
    Were Published With Conflicting or Questionable
    Footnotes
Table IV. 18: Sample Contract Awards Based on Other                               42
    Than Full and Open Competition, Identified During
    Our Previous Review, for Which Pre-Award Notices
    Were Published With Conflicting or Questionable
    Footnotes
Table IV. 19: Sample Contract Awards Based on Other                               42
    Than Full and Open Competition, Identified During
    Our Current Review, Which Did Not Fully Comply
    With Requirements Relating to CBD Notices
Table IV.20: Sample Contract Awards Based on Other                                42
    Than Full and Open Competition, Identified During
    Our Previous Review, Which Did Not Fully Comply
    With Requirements Relating to CBD Notices
Table IV. 2 1: One-Offer Awards, Identified During Our                            43
    Current Review, Reported As, but Based on Practices
    Inconsistent With Full and Open Competition
Table IV.22: One-Offer Awards, Identified During Our                              44
    Previous Review, Reported As, but Based on
    Practices Inconsistent With Full and Open
    Competition
Table JV.23: One-Offer Awards Reported as Based on Full                           44
    and Open Competition, Identified During Our Current
    Review, That Did Not Meet Statutory Requirements
    Relating to the Use of CBD Pre-Award Notices
Table lV.24: One-Offer Awards Reported as Based on Full                           45
    and Open Competition, Identified During Our
    Previous Review, That Did Not Meet Statutory
    Requirements Relating to the Use of CBD Pre-Award
    Notices



Page 13                         GAO/NSIAD-90-104   Competition   in Contracting   Act
Contents




Table IV.25: Sampling Error Rates and Probability of                              46
    Change at the 95-Percent Confidence Level Between
    Our Current and Previous Reviews for Awards Based
    on Other Than Full and Open Competition
Table IV.26: Sampling Error Rates and Probability of                              47
    Change at the 95-Percent Confidence Level Between
    Our Current and Previous Reviews for One-Offer
    Awards Reported as Based on Full and Open
    Competition
Table V. 1: Sample Contract Awards, Identified During                             48
    Our Current Review, With Justification-Related
    Problems by Required Approval Levels
Table V.2:Sample Contract Awards, Identified During Our                           49
    Previous Review, With Justification-Related
    Problems by Required Approval Levels
Table V.3:Sample Contract Awards Based on Other Than                              49
    Full and Open Competition, Identified During Our
    Current Review, for Which the Required Contents of
    the Pre-Award Notices Were Inaccurate, Incomplete,
    or Missing
Table V.4: Sample Contract Awards Based on Other Than                             50
    Full and Open Competition, Identified During Our
     Previous Review, for Which the Required Contents of
    the Pre-Award Notices Were Inaccurate, Incomplete,
    or Missing
Table V.5: Sample Contract Awards Based on Other Than                             50
     Full and Open Competition, Identified During Our
     Current Review, That Had Inaccurate, Incomplete, or
     Missing Elements in Their Published Pre-Award
     Notices
Table V.G:Sample Contract Awards Based on Other Than                              50
     Full and Open Competition, Identified During Our
     Previous Review, That Had Inaccurate, Incomplete,
     or Missing Elements in Their Published Pre-Award
     Notices
Table V.7: Number of Sample Contract Awards Based on                              51
     Other Than Full and Open Competition, Identified
     During Our Current Review, for Which the Statutory
     Solicitation Issuance or Response Time Requirements
     Were Not Met




Page 14                         GAO/NSIAD-90-104   Competition   in Contracting   Act
Contenta




Table V.8: Number of Sample Contract Awards Based on                              51
     Other Than Full and Open Competition, Identified
     During Our Previous Review, for Which the Statutory
    Solicitation Issuance or Response Time Requirements
    Were Not Met
Table V-9: One-Offer Awards Reported as Based on Full                             51
     and Open Competition, Identified During Our Current
     Review, for Which Pre-Award Notices Referred to
    Conflicting or Questionable Footnotes
Table V.10: One-Offer Awards Reported as Based on Full                            52
     and Open Competition, Identified During Our
    Previous Review, for Which Pre-Award Notices
    Referred to Conflicting or Questionable Footnotes
Table VI. 1: Original and Adjusted Population and Sample                          55
    Sizes, Identified During Our Current Review, for New
    Contract Awards Based on Other Than Full and Open
    Competition
Table VI.2: Original and Adjusted Population and Sample                           56
    Sizes, Identified During Our Current Review, for One-
    Offer Awards Reported as Based on Full and Open
    Competition
Table VI.3: Total DOD Population Sizes, Identified During                         57
    Our Current Review, for New Contract Awards Based
    on Other Than Full and Open Competition
Table VI.4: Total DOD Population Sizes, Identified During                         57
    Our Current Review, for New Contract Awards Based
    on Full and Open Competition and Receipt of One
    Offer
Table VI.5: Original and Adjusted Population and Sample                           58
    Sizes, Identified During Our Previous Review, for
    New Contract Awards Based on Other Than Full and
    Open Competition
Table VI.6: Original and Adjusted Population and Sample                           59
    Sizes, Identified During Our Previous Review, for
    One-Offer Awards Reported as Based on Full and
    Open Competition
Table VI.7: Total DOD Population Sizes, Identified During                         59
    Our Previous Review, for New Contract Awards
    Based on Other Than Full and Open Competition
Table VI.8: Total DOD Population Sizes, Identified During                         60
    Our Previous Review, for New Contract Awards
    Based on Full and Open Competition and Receipt of
    One Offer


Page 15                         GAO/NSIAD-90-104   Competition   in Contracting   Act
               Contents




Figures   ~-   Figure I. 1: Projected Results, Based on Our Current and                          19
                    Previous Reviews, of the Appropriateness of the
                    Decisions Not to Provide for Full and Open
                    Competition
               Figure II. 1: Projected Results for One-Offer Awards                             26
                    Reported as Full and Open Competition, Identified
                    During Our Current and Previous Reviews
               Figure III. 1: Average PALT                                                      30




               Abbreviations

               AU:        Air Logistics Command
               AS0        Aviation Supply Office
               AVSCOM     Aviation Systems Command
               CBD        Commerce Business Daily
               CICA       Competition in Contracting Act
               DGSC       Defense General Supply Center
               DLA        Defense Logistics Agency
               DOD        Department of Defense
               FAR        Federal Acquisition Regulation
               NAVSEA     Naval Sea Systems Command
               PALT       procurement administrative lead time


               Page 16                          GAO/N&W-90-104   Competition   in Contracting   Act
Page 17   GAO/NSIAD-90-104   Competition   in Contracting   Act
Appendix I

Significant Improvement in AssuranceThat
Agencies’ DecisionsNot to Provide for Full and
Open Competition Are Appropriate
                        CICA requires the use of certain procedures to assure agency officials and
                        others of the appropriateness of agency decisions not to award contracts
                        over $25,000 based on full and open competition. We found significant
                        improvement in this area since our previous review. For example, our
                        current projected sample results show that the procedures the agencies
                        used provided sufficient assurance, for a projected 66 percent of our
                        statistical population of contracts, that all sources capable of meeting
                        the government’s needs were allowed to compete, whenever appropri-
                        ate.! The results of our previous review showed that this was the case
                        for only a projected 16 percent of contracts. Although the assurance CICA
                        intended was lacking for the remainder of the decisions, our projected
                        results in each of the reviews showed that some decisions were ques-
                        tionable or clearly inappropriate, but far more were probably appropri-
                        ate. (See fig. I. 1, and tables IV.3 through IV.6.) The lack of assurance can
                        be attributed primarily to management control weaknesses relating to
                        the notices of proposed awards that agency officials are statutorily
                        required to publish in the CBD.

                        In both of our reviews, we found widespread compliance problems relat-
                        ing to written justifications for other than full and open competition as
                        well as the use of the CBD. (App. IV provides details on and comparisons
                        between our current and previous reviews. App. V provides additional
                        details.)


                        CICArequires executive agencies to base their contract awards on full
Frequency of the Use    and open competition, unless at least one of seven specified circum-
of Exceptions to Full   stances or exceptions is met.2 Table IV.1 shows the frequency of the
and Open Competition    exceptions used for our 42 sample contract awards. All but one of the
                        sample awards were based on CICA’Sfirst exception: property or services
                        are available from only one source (or a limited number of sources) and
                        no other type of property or services will satisfy the needs of the
                        agency.




                        ‘See table IV.26 for the confidence and precision estimates relating to our projections in appendix I
                        Also see footnote 3 in the cover letter of this report.

                        ‘See Procurement: Better Compliance With the Competition in Contracting Act Is Needed (GAO/
                        NSIAD-87-146), p. 112, for a list of the seven exceptions.



                        Page 18                                        GAO/NSIAD-90-104      Competition   in Contracting   Act
                                           Appendix I
                                           Significant Improvement    in Assurance That
                                           Agencies’ Decisions Not to Provide for Pull
                                           and Open Competition    Are Appropriate




Figure 1.1: Projected Results, Based on
Our Current and Previous Reviews, of the
Afxxor3riateness of the Decisions Not to   70 M
P&id; for Full and Open Competition        65
                                           60
                                           56
                                           SO
                                           46
                                           40
                                           38
                                           30
                                           25
                                           20
                                           15
                                           10
                                            6
                                            0

                                                Cuwont Review           Pnviour
                                                                        Rwlaw

                                                        Inappropriate
                                                        Questionable
                                                         Probably appropriate
                                                        Appropriate




                                           Agencies inappropriately awarded 6 of our 42 sample contract awards
Agencies                                   without providing for full and open competition. Agency officials had
Inappropriately                            stated that these awards met CICA'S first exception to full and open com-
Awarded Six                                petition. However, we determined that the first exception did not apply
                                           to these awards and that the agencies actions had improperly restricted
Contracts                                  full and open competition. Five of these six contracts, which were
                                           awarded by the Defense Logistics Agency’s (DLA) Defense General Sup-
                                           ply Center (DGSC), were improperly restricted to the original manufac-
                                           turer for health and safety reasons. The sixth contract, which was
                                           awarded by the Army’s Aviation Systems Command (AVSCOM), was
                                           improperly restricted to the original manufacturer because the item had
                                           been incorrectly categorized as a safety of flight item. In all six of these
                                           cases, agency officials admitted that their mistakes had prevented full
                                           and open competition.




                                           Page 19                                        GAO/NSIAD-90-104   Competition   in Contracting   Act
                                                                                                                              P



                       Appendix I
                       Significant Improvement    in Assurance That
                       Agencies’ Decisions Not to Provide for Fbll
                       and Open Competition    Are Appropriate




                       These six awards, which were awarded at activities also included in our
                       previous review, represent a projected 4 percent of the awards in our
                       population. In our previous review, we identified three awards in this
                       category, representing a projected 0.5 percent of the population. (See
                       tables IV.3 and IV.4.)


                        Agency officials cited the first exception allowed under CICAfor all five
Five Questionable       decisions that we considered questionable. CICA provides that the first
Decisions to Award      exception may normally be used only if a pre-award notice is published
Contracts Based on      in the CHD encouraging competition. Response to the notice is intended to
                        demonstrate whether the use of the first exception is appropriate. How-
Other Than F’ull and    ever, in four of these five cases, agency officials did not publish the
Open Competition        required pre-award notices in the CBD. The fifth award was questionable
                       because (1) the pre-award notice included footnote 40, which states:
                        “This notice does not solicit additional proposals but is issued for the
                       benefit of prospective subcontractors” and (2) agency officials did not
                       prepare the statutorily required justification for other than full and
                       open competition, which should demonstrate why full and open compe-
                       tition is not required. Three of the five cases were awarded at the same
                        activities we previously reviewed. These three awards represent a pro-
                       jected 8 percent of the population. Our previous review identified 13
                       awards in this category, representing a projected 24 percent of the popu-
                       lation. This is not a statistically significant change. (See tables IV.3
                        and IV.4.)


                       We concluded that agency officials’ decisions to award 31 contracts in
Most Awards in Our     our sample based on other than full and open competition either were
Sample Were or         appropriate (in 20 cases) or were probably appropriate (in 11 cases).
Probably Were          Taken together, these awards represent a projected 86 percent of the
                       awards in the population. (See table IV.5.) Even so, the 11 cases we clas-
Appropriately Based    sify as probably appropriate were lacking in the assurance CICAintended
on Other Than Full     because of flaws in the agencies’ market survey efforts. These flaws
and Open Competition   were less serious than those for awards in our previously defined “ques-
                       tionable” category. In 8 of these 11 cases, the statutorily required public
                       notices of the proposed awards, published in the CBD, included footnotes
                       that may have discouraged competition.

                       Of the 31 awards that either were appropriate or were probably appro-
                       priate, 26 were awarded at the same activities we previously reviewed.
                       These 26 cases represent a projected 88 percent of the population. The
                       comparable figure for our previous review was 60 cases, representing a


                       Page 20                                        GAO/NSIAD-90-104   Competition   iu Contracting   Act




                                                    ,”
                          AppentNxI
                          Siguificaut Improvement    in Assurance That
                          Agencies’ Decisione Not to Provide for FW.l
                          and Open Competition    Are Appropriate




                          projected 76 percent of the population. This is not a statistically signifi-
                          cant change.

                          Of the 26 recent cases, 10 cases were probably appropriate, representing
                          a projected 23 percent of the population, This number compares with 32
                          cases identified in our previous review, representing a projected 60 per-
                          cent of the population, This is a statistically significant change.

                           The remaining 16 recent cases were appropriate, representing a pro-
                          jected 66 percent of the population. This number compares with 28
                           cases identified in our previous review, representing a projected 16 per-
                           cent of the population. This is a statistically significant change. (See
                          tables IV,6 and IV.6.)

                          The improvement reflected in these comparisons primarily resulted
                          from corrective actions taken by the Department of Commerce based on
                          our 1987 report’s recommendation that CBD pre-award notices not be
                          allowed to include certain footnotes that either conflicted with CICA'S
                          requirements or were questionable and may have discouraged
                          competition.


                          Written justifications were required for all 42 of our sample contract
Widespread                 awards that were based on other than full and open competition. We
Compliance Problems       identified justification-related problems, indicating management control
Relating to Written       weaknesses, with 37 of the 42 awards. (See table IV.7.) These
                          justification-related problems included one or more of the following:
Justifications
                      l For 2 of the 42 awards, written justifications were not available as
                        required. One, valued at $34,000, was at the Army AVSCOM, and the
                        other, valued at $96,000, was at the Ogden Air Logistics Center (AIX).
                      . For 26 other awards, the requirements relating to 1 or more of the 13
                        elements of information to be included in justifications were not met.
                        (See table IV.9.) Of the 25 justifications, 13 had more than one problem.
                        Common problems were that, contrary to requirements, the .justifica-
                        tions for (1) 18 contracts did not list the sources that had expressed in
                        writing an interest in the acquisition, (2) 11 contracts did not explain
                        why technical data packages, specifications, engineering descriptions,
                        statements of work, or purchase descriptions suitable for full and open
                        competition had not been developed or were not available, (3) 7 con-
                        tracts did not demonstrate that the proposed contractor’s unique qualifi-
                        cations or the nature of the acquisition required the use of the cited
                        exception, and (4) 7 contracts did not accurately describe the market


                          Page 2 1                                       GAO/NSIAD-90-104   Competition   in Contracting   Act
                          Appendix I
                          Siguiflcant Improvement    in Assurance That
                          Agencies’ Dccision~~ Not to Provide for Pull
                          and Open Competition    Are Approprlate




                          survey performed and its results or did not provide a statement of the
                          reasons that such a survey was not done.
                        9 For nine of the awards, the required approval had not been received
                          from appropriate agency officials. (See table IV. 11.)
                        . For 22 of the awards, justifications were prematurely certified by con-
                          tracting officials. (See table IV. 13.) In these cases, contracting officials
                          had certified to the accuracy and completeness of the justifications “to
                          the best of [their] knowledge and belief.” CICA and FAR require each justi-
                          fication to (1) describe the market survey done and the result” or
                          (2) state the reasons a market survey was not done. The justifications
                          for 11 of our sample awards had been certified before the actual publi-
                          cation dates of the required notices of proposed awards in the CBD. For
                          the other 11 awards, contracting officials certified the justifications
                          after the required notices were published but before the statutorily
                          required response time had elapsed. As a result, none of the 22 justifica-
                          tions met CICA or FAR 6.303-2 requirements regarding justification
                          contents.

                          We found a statistically significant increase since our previous review in
                          the proportion of contract awards with justification-related problems.
                          Of the 37 sample cases for which we identified problems, 30 were
                          awarded at the same activities we previously reviewed. These 30 cases
                          represent a projected 88 percent of the population. In our previous
                          review, we identified 62 such cases, representing a projected 66 percent
                          of the population. (See tables IV.7 and IV.8.)


                          Based on CICAand subsequent amendments to its provisions, FAR subpart
Widespread Problems       5.2 requires agencies to submit notices of proposed contract awards of
in Fully Complying        $10,0004 and above for publication in the CBD, except in certain specified
With Certain              circumstances, CICA requires each of these notices to include a statement
                          that all responsible sources may submit bids, proposals, or quotations
Requirements Relating     that shall be considered by the agency. This statement, which is
to CBD Notices            intended to encourage competition, applies to awards under the first
                          exception to full and open competition, as well as to awards based on
                          full and open competition.



                           “Potential competitors are required to be allowed to respond at least 30 days, and usually 45 days,
                           from the date of publication of the CBD notice.
                           4For proposed contracts other than sole-source contracts, this threshold was changed to $25,000 by
                           the Defense Acquisition Improvement Act of 1986, Public Law 99-500, enacted on October 18, 1986.



                           Page 22                                        GAO/NSLAD-90-104     Competition   in Contracting      Act
                           Appendix I
                           Significant Improvement    in Aeeurance That
                           Agencies’ De&ions    Not to Provide for Pull
                           and Open Competition    Are Appropriate




                           Agency officials did not fully comply with certain requirements relating
                           to CBD pre-award notices for 38 of the 41 awards for which such notices
                           were required. The lack of compliance was as follows:

                       . The required notice was not published for four awards. (See
                         table IV. 15.)
                       l Notices for 33 awards included inaccurate information or did not pro-
                         vide required information. (See table V.3. For details on the required
                         elements of information, see table V.5.)
                       l Notices for nine awards included footnotes that either conflicted with
                         cIc~%‘srequirements or were questionable and may have discouraged
                         competition. (See the next section.) Notices for eight of these awards
                         also included inaccurate information or did not provide required
                         information.
                       . For 14 awards, agency officials issued solicitations too early and/or did
                         not allow potential competitors the required number of days to respond.
                         (See table V.7.) Notices for 10 of these awards also included inaccurate
                         information or did not provide required information.

                           We found no statistically significant change since our previous review in
                           the proportion of contract awards that did not fully comply with these
                           requirements. Of the 38 sample cases for which we identified problems,
                           31 were awarded at the same activities we previously reviewed. These
                           31 cases represent a projected 94 percent of the population. In our pre-
                           vious review, we identified 49 such cases, representing a projected 90
                           percent of the population. (See tables IV. 19 and IV.20.)


                           In our 1987 report, we recommended that CBD notices of proposed
Significant                awards to be based on either full and open or other than full and open
Improvement                competition not be allowed to include CBD footnotes 40,41, or 46. We
Regarding the Use of       concluded that use of either of the first two footnotes conflicted with
                           CICA, and use of the other was at least questionable. Effective
CBD Footnotes              November 2,1987, the CBD announced that these footnotes would no
Discouraging               longer be cited in notices of proposed procurements. During our current
Competition                review, we found that CBD pre-award notices for nine of our sample
                           awards based on other than full and open competition included one or
                           more of these footnotes. (See table IV. 17.) However, of these nine,
                           notices for eight were published before November 2, 1987; the other
                           notice was published on November 12, 1987.
           ”




                           Page 23                                        GAO/NSIAD-90-104   Competition   in Contracting   Act
Appendix I
Slgniflcant Improvement    in Assurance That
Agencies’ Decisions Not to Provide for Pull
and Open Competition    Are Appropriate




Agencies included footnotes 40 or 41 in CBD notices for 8 of our 37 sam-
ple awards for which notices were published. The notice for one of the
eight awards included both of these footnotes.

Footnote 40, which was included in notices for six awards, read as fol-
lows: “This notice does not solicit additional proposals but is issued for
the benefit of prospective subcontractors.” Footnote 41, which was
included in notices for three awards, said, “This notice does not solicit
proposals but is issued for the benefit of prospective above firm(s) for
subcontracting opportunities.”

Agencies also used footnote 46 in CBD pre-award notices for three sample
awards. A notice for one of these awards also included footnotes 40
and 41, and a notice for another award also included note 41. Foot-
note 46 read as follows: “Synopsis published for informational purposes
only. Solicitation documents are not available.”

Of the nine notices we found in which these footnotes appeared, seven
were awarded at the same activities we previously reviewed. These
seven cases represent a projected 19 percent of the awards in our popu-
lation. This number compares with 36 cases identified in our previous
review, representing a projected 91 percent of the population. This is a
statistically significant change. (See tables IV.17 and IV.18.)




Page 24                                        GAO/NSIAJ%90-104   Competition   in Contracting   Act
Appendix II

Improvements Are Still NeededRegarding
One-OfferAwards Reported as Basedon F’ull
md Open Competition
                  Our review of a sample of 16 contracts, which the agencies reported as
                  awarded based on full and open competition and the submission of only
                  one offer, showed the following:

              l Eight of the contracts were awarded using practices that were inconsis-
                tent with full and open competition.
              . Fourteen of the awards did not fully meet the statutory requirements
                relating to CBD pre-award notices.

                  Thirteen of the contract awards reviewed, including all eight that were
                  inconsistent with full and open competition, were awarded at the same
                  activities we had previously reviewed. These eight cases represent a
                  projected 95 percent of awards in the population.’ This number com-
                  pares with nine cases we identified in our previous review, representing
                  a projected 48 percent of the population. This is a statistically signifi-
                  cant change. (See fig. 11.1and tables IV.21 and IV.22.)

                  We attribute this deterioration largely to conditions at two procuring
                  activities, DGSCand San Antonio ALC. That is, we identified problems
                  with all three of our sample awards at each of these locations and each
                  had a relatively large population of such contracts. (See table VI.2.)

                  FAR  needs to be revised to correct some of the management control
                  problems we found, and agency officials need to take action to resolve
                  others. The problems we discuss in this appendix are the same as those
                  we pointed out in our 1987 report. For the most part, DOD did not agree
                  to take corrective actions in response to our 1987 recommendations.

                  CICA’Sdefinition of full and open competition focuses on the procedures
                  used in awarding contracts rather than on the results of the procedures
                  (the number of offers submitted). However, CICA does require agencies to
                  (1) identify in their procurement reporting systems procurements result-
                  ing in the submission of an offer by only one responsible source and
                  (2) designate such procurements as “noncompetitive procurements using
                  competitive procedures.” The 16 sample contracts discussed in this
                  chapter fall into this category.




                  ‘See table IV.26 for the confidence and precision estimates relating to our projections in appendix II.
                  Also see footnote 3 in the cover letter of this report.



                  Page 25                                         GAO/NSIAD-90-104      Competition   in Contracting   Act
                                           Appendix II
                                           Improvements   Are Still Needed Regarding
                                           One-Offer Awarda Reported as Based on FWl
                                           and Open Competition




                                           In addition to requiring that all responsible sources are allowed to com-
                                           pete for proposed awards exceeding $25,000, CICA requires agency offi-
                                           cials to specify their needs and to solicit offers in a manner designed to
                                           achieve full and open competition.



0th Awards Reported as Full and Open
                                           PUCMtl
Competition, Identified During Our
Current and Previous Reviews               100

                                            so

                                            so

                                            70

                                           60

                                           w

                                           40

                                           30

                                           20

                                           10

                                            0

                                                    Current Rovlew       Prevloua
                                                                         Aevlew

                                                 1        1 Inconsistent with Full and Open Competition
                                                            Consistent with Full and Open Competition




                                           Eight of our 16 sample contracts were awarded using practices inconsis-
Agency Officials Often                     tent with full and open competition:
Used Practices
Inconsistent        With     Full      l   For two of the awards, both at the San Antonio ALC, the solicitations
                                           were restricted to a specific make and model (that is, a particular prod-
and Open Competition                       uct manufactured by only one contractor) and did not permit any alter-
                                           nate products to be offered. As we stated in our 1987 report, we believe
                                           that agency officials should have complied with CICA’S requirements for




                                           Page 26                                            GAO/NSIAD-90-104   Competition   in Contracting   Act
                                    Appendix II
                                    Improvements   Are Still Needed Regarding
                                    One-Offer Awards Reported as Based on FW
                                    and Open Competition




                                    justification, certification, and approval of these awards because restric-
                                    tion of a procurement to a specific make and model does not fulfill CICA’S
                                     requirement for full and open competition.2
                                  . For all three awards at DGSC,the solicitations asked for a particular
                                    product of a named manufacturer or alternate products satisfying the
                                    government’s requirement; however, the solicitations did not describe
                                    the essential features of the requirement so that potential offerors of
                                     alternate products could know what would be acceptable to the govern-
                                    ment. Moreover, DGSC did not have the data needed to evaluate any
                                    alternate products offered for the purpose of determining whether they
                                    met the government’s needs in these cases. As we recommended in our
                                    previous report, agency officials should have complied with CICA’S
                                    requirements for justification, certification, and approval of these
                                    awards because the solicitations were inconsistent with full and open
                                    competition.
                               l    In three other cases, the procuring activities had not reasonably com-
                                    plied with the requirement to publish a notice of the proposed award in
                                    the CBD, and therefore, the government’s market search was seriously
                                    flawed. In one of these cases, the required notice was not published in
                                    the CBD. In another case, the pre-award notice was published in an inap-
                                    propriate CBD section. In the third case, the CBD pre-award notice cov-
                                    ered only three of the five items contracted for and included
                                    footnote 46. The two items not covered in the notice accounted for 20
                                    percent of the total contract dollar amount. Moreover, the use of foot-
                                    note 46 in this case was inconsistent with full and open competition.


Only 2 of the 16 Awards We   found one or more compliance problems relating to the use of the CBD
                        for 14 of the 16 awards in our sample that were reported as fully com-
Fully Met the           petitive. The CRD pre-award notice was not published for 1 award, and
Statutory Requirements prate
                          re-award notices for 13 of the remaining 15 awards contained inaccu-
Relating to the Use of of theorfollowing
                                 incomplete information. (See table IV.23.) We found one or more
                                          specific problems for these 14 awards:
the CBD
                              . R-e-award notices for four awards did not provide accurate descriptions
                                of the property or services to be contracted for.
                              l Notices for six awards did not include the required statement encourag-
                                ing competition.
                              . Notices for 11 awards did not meet the requirement to provide the
                                name, address, and telephone number of the contracting officer.
                              l Agency officials issued the solicitation too early for two awards.

                                    'SeeGAO/NSIAD-87-145,ch4.



                                    Page 27                                 GAO/NSIAD-90-104   Competition   in Contracting   Act
    Appendix II
    Improvements   Are Still Needed Regarding
    One-OfYer Awards Reported as Baeed on FWl
    and Open Competition




l Notices for two awards included footnotes that may have discouraged
  responses from potential competitors. One included footnote 46 and one
  included footnote 73.9 (See table V.9.)
. Notices for three awards did not cover all of the agency’s requirements.
  One notice should have, but did not provide for a loo-percent option
  increase; one covered fewer than half of the total requirements; and the
  other listed only three of the five items contracted for.

    Of the 14 cases, 11 were awarded at the same activities we previously
    reviewed. These 11 cases represent a projected 61 percent of the popula-
    tion In our previous review, we identified 18 cases, representing a pro-
    jected 93 percent of the population. This is not a statistically significant
    change. (See tables IV.23 and IV.24.)




    %?mtnote 73 states that ‘Specifications, plans or drawings relating to the procurement described are
    not available and cannot be furnished by the government.” This footnote was cited in error for this
    award; drawings were in fact available.



    Page 28                                       GAO/NSIAD-90-104     Competition   in Contracting   Act
Appendix III

DOD’sCompetition Trends and Procurement
ProcessingTimes at SelectedDODActivities

                                                  According to DOD, the percentage of the value of its contracts awarded
Competitiveness of                                competitively was about 43 percent in fiscal year 1984, before imple-
DOD Contract Awards                               mentation of CICA. In fiscal year 1985, this figure increased to about 48
                                                  percent, in fiscal year 1986 to about 57 percent, in fiscal year 1987 to
                                                  about 60 percent, in fiscal year 1988 to about 61 percent, and in fiscal
                                                  year 1989 to about 65 percent. We did not independently verify this
                                                  information.


                      Based on our previous review,’ we reported that from fiscal year 1983
Procurement           or 1984 to fiscal year 1986, procurement administrative lead time (PALT)~
Processing Times Have had.increased at all five DOD activities we reviewed. Procurement offi-
Increased             cials at a majority of the DOD activities (1) did not attribute the PALT
                      increases to any one specific cause and (2) said that it was too early to
                                                  measure CIcA’s effect on PALT.

                                                  During our current review we found that for the same five DOD activi-
                                                  ties, PALT had increased from fiscal years 1985 to 1988. According to
                                                  officials at the five activities, the increase in PALT since fiscal year 1985
                                                  cannot be attributed to any one specific cause. However, procurement
                                                  officials at two activities (the AVSCOM and the Navy’s Aviation Supply
                                                  Office (ASO)) said that CICA is a major reason for the increase in PALT at
                                                  their activities. Table III.1 summarizes the PALT data we obtained at the
                                                  five activities.


Table 111.1:Average PALT in Days
                                                                                                       Fiscal Year
Procuring
-__- .-. _ activity
                 ..--_                                           1980       1981       1982        1983     1984   1985         1988      1987       1988
AVSCOM
 .._.__                                                                 a          a           a        a    147    191           190       249       256
AS0
NavalSea systems~Command.(NAVSEA)-.-                                51- __-__ 53
                                            ..- -.~~....~~~- .. ..~~_                     81         56       114      106        126       148       196
 .-.._ ._                     . .._~~ ..-- -...~- ~~.....~~-~ --
Headquarters -                                                         a     117         110         87       10lb     129        135       142        139
San    Antonio
_..-...I..- .~.. ALC  .~ ~. ~-~ _                                   70        69          66         78       125      111        110       125        130
DGSC                                                               109       119         112         98       106      119        142       145        132
                                                  Note: Information shown for the various procuring activities is not comparable among activities because
                                                  different types and categories of data were maintained at each activity.
                                                  %formation for this period was not maintained by the procuring activity or was not readily available.

                                                  bThls number is based on the first 11 months of the fiscal year.


                                                  'SeeGAO/NSIAD-87-145,        ch 6.
                                                  21’ALT is generally defined as the interval between (1) receipt by the procurement office of a
                                                  purchase request and (2) contract award to fulfill the requirement.



                                                  Page 29                                          GAO/NSIAD-90-104     Competition in Contracting    Act
                            Appendix ID
                            DOD’s Competition  Trends and Procurement
                            Processing Times at Selected DOD Activities




                            The average         PALT   changes are shown in figure III. 1.


Figure 111.1:Average PALT
                            289   Days
                            245
                            290
                            215
                            200
                            185
                            170
                            165
                            148




                              1989           1981       1982     1989        1984        1985        1958        1987           1988
                              Fiscal Years

                                     -        AVSCOM
                                     mm-m     ASO
                                     m        DGSC
                                     n mmw    NAVSEA
                                     -        San Antonio ALC

                            Information shown for the various procuring activities is not comparable among activities because
                            different types and categories of data were maintained at each activity.

                            PALT information for NAVSEA was not maintained or available for fiscal year 1960 and was
                            available for only the first 11 months of fiscal year 1994.

                            PALT information for AVSCOM was not maintained or available for fiscal years 1980 through 1983.


                            The following sections summarize the reasons for recent increases in
                            PALT, according to officials at the five procuring activities we visited
                            during our current and previous reviews.


AVSCOM                      AVSCOM    officials stated that the Command Commodity Standard System
                             provides the best available information for computing PALT. This system
                     0
                             shows a significant increase in PALT over the past few years. To be con-
                             sistent, we recomputed the PALT data included in our previous report for
                             fiscal years 1984 through 1986, based on the new information.


                            Page 30                                       GAO/NSIAD-90-104      Competition   in Contracting    Act
          DOD’s Competition   Trends and Procurement
          Processing ‘limes at Selected DOD Activities




          We obtained PALT data on a yearly basis for fiscal years 1984 through
          1988 for contract awards over $26,000. PALT for these awards increased
          from 147 days in 1984 to 256 days in 1988.

          We previously reported that a procurement official said that implemen-
          tation of CICA was not a major cause of the PALT increase from fiscal year
          1984 through the first 3 months of fiscal year 1986. However, according
          to the Chiefs of the Policy and Resources Management Division and the
          Resources Management Branch, CICAhas played a major role in the
          recent PALTincrease.

          According to these officials, the following factors influenced                      PALT
          increases from fiscal years 1984 through 1988:

      l the screening and breakout processes for procurements,
      . policy and legal reviews on some procurements, and
      . the preparation of justification and approval documents by the item
        manager and the breakout engineer.

          Both officials said that they believed that CICA’Srequirements had
          increased PALT in fiscal years 1987 and 1988.


AS0       We obtained annual PALT data for fiscal years 1984 through 1988. The
          procuring activity’s data system provided (1) the total number of con-
          tract awards, including small and large contracts, by procurement
          method (sealed bidding, competitive proposals, and noncompetitive
          negotiation) and (2) the overall average PALT by month and fiscal year.
          In May 1986, the activity switched to a different database to calculate
          PALT and added a new time measurement. Procurement personnel recal-
          culated the previous years’ PALT amounts using the new database. Con-
          sequently, these amounts differ from those we previously reported for
          fiscal years 1984 through 1986.

          The average PALT, representing all procurements whether small or large,
          increased from 114 days in fiscal year 1984, to 126 days in fiscal year
           1986. However, for large contracts, only (those over $25,000) the
          increase during this period was more significant-from    191 to 246 days.
          According to procurement officials, this increase was due to the addi-
          tional requirements imposed by CICA, which was enacted in 1984. An
          external study, dated June 1987, analyzed PALT and concluded that the
          following CICArequirements contributed to the increase in PALT:



          Page 31                                        GAO/NSLAD-90-104   Competition   in Contracting   Act
                          Appendix III
                          DOD’s Competition Trends and Procurement
                          Prowssing Times at Selected DOD Activities




                      l establishing a Competition Advocate’s Office;
                      l processing justification and approval documents for sole-source
                        procurements;
                      l allowing increased time before certain actions can be taken after pub-
                        lishing pre-award notices in the CBD; and
                      . requiring contractors to certify cost or pricing data for awards exceed-
                        ing a reduced dollar threshold, which has increased PALT due to reviews
                        of contractors’ datae3

                          From fiscal years 1986 to 1988, average PALT increased significantly-
                          from 126 to 196 days. However, for the large contracts, PALT increased
                          from 246 to 353 days, According to procurement officials (1) this
                          increase coincided with the fiscal year 1987 DOD Authorization Act,
                          which mandated a reduction in awards based on unpriced orders, and
                          (2) this requirement had a greater impact on PALT than CICA. These offi-
                          cials stated that the short time required to award unpriced orders had
                          previously helped to offset the effect of awards requiring larger PALT.


NAVSEA Headquarters       We obtained annual PALT data, based on the total number of contract
                          awards, for fiscal years 1984 through 1988. PALT increased from an
                          average of 101 days in fiscal year 1984 to 139 days in fiscal year 1988.
                          The Director of the Contracting Policy Division stated that there were
                          many possible reasons for changes in PALT and that the increases could
                          not be attributed to any one specific factor. According to the Director,
                          the following factors might have contributed to the increases in PALT:

                          changes in staff levels or experience;
                          changes in the number and/or dollar value of procurement actions,
                          which can affect the backlog of purchase requests;
                          fiscal year budget constraints and funding level uncertainties; and
                          learning curves involved in new procurement policies or directives,
                          including CICA.


San Antonio ALC           We obtained annual PALT data for fiscal years 1986 through 1988. PALT
                          averaged 110 days in fiscal year 1986 and increased to 130 days in
                          1988.


                          “An Analysis  of the Procurement Administrative Leadtime (PALT) at the Navy Aviation Supply
                          Office (ASO), prepared by a Navy official and presented as a thesis to the Naval Postgraduate School,
                          Monterey, California, June 1987.



                          Page 32                                       GAO/NSIAD-90-104     Competition   in Contracting   Act
                Appendix II1
                DOD’e Competition  Trenda and Procurement
                Proceesing Times at Selected DOD Activities




               According to the Chairman of the Center’s Contract Committee, this                               PALT
               increase could not be attributed to CICAbut rather to the following:

       l a hiring freeze at the Center;
         the increased time contractors needed to provide cost and pricing data
           l


         (this time has reportedly almost doubled, from 45 to 90 days);
       l a lack of experienced buyers; and
       . a lack of supervision.


DGSC           We obtained PALT data on a monthly and an annual basis for fiscal years
               1984 through 1988. The data, which included the number of contract
               actions, were broken down into large procurements (those over $25,000)
               and small procurements. PALT for large procurements was further bro-
               ken down into negotiated awards and sealed bid awards.

               In fiscal year 1986, PALT for large procurements averaged 142 days; in
               fiscal year 1987, it rose to 145 days; and in fiscal year 1988, it dropped
               to 132 days.

               According to procurement officials,                PALT   for fiscal year 1986 was influ-
               enced by the following factors:

       . the implementation of CICA;
       l requirements for cost and pricing data;
       . a lack of trained personnel; and
       . a backlog caused by the increased emphasis on ensuring price reasona-
         bleness, which created aged documents.

               In fiscal year 1987, PALT increased an average of 3 days. Procurement
               officials said that two factors impacting PALT was:

       . a continued backlog from fiscal year 1986 and
       l funding constraints in the stock fund budget.

               These officials also said that, during the latter part of fiscal year 1987,
               action was taken to reduce PALT. That is, 100 new buyers were hired to
               make up “SWAT” teams to work on awards of $25,000 or less. Using
               these “SWAT” teams allowed experienced buyers to work on hard-to-buy
               or problem awards, and PALT for fiscal year 1988 was reduced because
               work loads reached more manageable levels.




               Page 33                                        GAO/NSIAD-90-104   Competition   in Contracting    Act
Appendix IV

Information, Including ComparableProjected
Results,Relating to Our Current and Previous
CICA-ComplianceReviews
                                          This appendix provides information on the results of our current artd
                                          previous reviews.’ The tables covering our current review include
                                          (1) subtotals for the five procuring activities that were covered in both
                                          reviews and (2) totals that include the additional activity covered only
                                          in our current review. Most of the tables provide projected results as a
                                          percentage of the relevant statistical population and sampling error
                                          rates at the g&percent confidence level for each projection. See appen-
                                          dix VI for sample and population sizes and limitations.

Table IV.l: CICA Exceptions Used During
Our Current Review for Our Sample                                                                            Exceptions
Contract Awards Baaed on Other Than       Procuring activity                                                 1          2                           Total
Full and Open Competltlon                 AVSCOM (Army)                                                      7                  0                       7
                                          AS0 (Navy)                                                         7                  0                       7
                                          NAVSEA (Navy).                                                    6                   1                      7
                                          San Antonio ALC (Air Force)                                       7                   0                      7
                                          DGSC tDLA1                                                        7                   0                      7
                                            Subtotal                                                       340                  1                     35
                                          Oaden ALC (Air Force)                                             7                   0                      7
                                          Total                                                            41b                  1                     42
                                          Note: Exceptions 3 through 7 were not claimed for any of our sample contract awards. Other than full
                                          and open competition awards based on section 8(a) of the Small Business Act were not included in our
                                          population of contracts reviewed.
                                          ‘These cases represent a projected 99.6 percent (plus 0.4 or minus 0.6 percent) of the population.
                                          bThese cases represent a projected 99.6 percent (plus 0.4 or minus 0.7 percent) of the population


Table IV.2: CICA Exceptlons Used During
Our Previous Review for Our Sample                                                                          Exceptions
Contract Award8 Based on Other Than       Procuring activity                                                1          2                            Total
Full and Open Competition                 AVSCOM (Army)                                                    17          2                              19
                                          AS0 (Navy)                                                       19                   1                     20
                                          NAVSEA (NavvI                                                    13                   1                      14
                                          San Antonio ALC (Air Force)                                        4                 16                     20
                                          DGSC (DLA)                                                         1                  2                       3
                                          Total                                                            54’                 22b                    70
                                          Note: Exceptions 3,4, 6, and 7 were not claimed for any of our sample contract awards. All three awards
                                          that were made under section 8(a) of the Small Business Act, based on CICA exception 5, have been
                                          excluded from the table because 8(a) awards were not covered in our current review.
                                          aThese cases represent a projected 89 percent (plus or minus 7 percent) of the population.

                                          bThese cases represent a projected 11 percent (plus or minus 7 percent) of the population.




                                          %ke our report Procurement: Better Compliance With the Competition in Contracting Act Is Needed
                                          (GAO/NSIAD-m-146, Aug. 26,1987).



                                          Page 34                                         GAO/NSIAD-90-104       Competition        in Contrading    Act
       .



                                            Appendix IV
                                            Information,   Including Comparable Projected
                                            llemlta, Relating to Our Current and Previous
                                            CICMhmpliance        &view9




Table IV.3 Sample Contract Award., Identlfled During Our Current Review, for Which Decisions Not to Provide for Full and Open
Competitlon Were Inaoproorlate or Questionable
                                             Nu;;~;;;                                                                Percentage
                                                                        Number of awards                        inappropriate or
Procurlng activity                            reviewed      Inappropriate       Questionable       Total           questionable
AVSCOM (Armv)                                          7                  1                  I         2                      29
AS0 (Navy)                                             7                  0                  1         1                       14
NAVSEA (Navy)                                          7                  0                  1         1                       14
San Antonio ALC (Air Force)                            7                  0                  0         0                        0
DGSC (DLA)         ’       ’                           7                  5                  0         5                      %
  Subtotal                                            35                  6’                 3b        gc                     26
Onden ALC (Air Force)                                  7                  0                  2         2                      29
Total                                                 42                  6d                 5'       11’                     26
                                            ‘These cases represent a projected 4 percent (plus or minus 4 percent) of the population
                                            bThese cases represent a projected 8 percent (plus or minus 8 percent) of the population.

                                            CThese cases represent a projected 12 percent (plus or minus 12 percent) of the population

                                            dThese cases represent a projected 3 percent (plus or minus 3 percent) of the population.
                                            eThese cases represent a projected 11 percent (plus or minus 10 percent) of the population.
                                            ‘These cases represent a projected 14 percent (plus or minus 11 percent) of the population.



Table IV.4: Sample Contract Awards, ldentlfied During Our Previous Review, for Which Decisions Not to Provide for Full and Open
Competltion Were Inappropriate or Questionable
                                              Number of                                                              Percentage
                                                 awards                  Number of awards                       inappropriate or
Procuring activity                             reviewed      Inappropriate       Questionable       Total          questionable
AVSCOM (Army)                                                                                                                 26
AS0 (Navy)                                            20                   0                  5         5                     25
NAVSEA (Navv)                                         14                   3                  2         5                     36
San Antonio ALC (Air Force)                           20                   0                  1         1                       5
bGSC
--..   (DLAj-                                          3                   0                  0         0                       0
Total                                                 76                   30               13b        16b                    21
                                            Note: Exceptions 3,4,6, and 7 were not claimed for any of our sample contract awards. All three awards
                                            that were made under section 8(a) of the Small Business Act, based on CICA exception 5, have been
                                            excluded from the table because 8(a) awards were not covered in the current review.
                                            ‘These cases represent 0.5 percent of the population. This is an actual, rather than projected, amount
                                            because we reviewed all of the contracts in the population at NAVSEA where these three contracts
                                            were awarded.

                                            bThese cases represent a projected 24 percent (plus or minus 13 percent) of the population.




                                            Page 35                                         GAO/NSLAD-W-104       Competition   in Contracting   Act
                                           Information,  Including Comparable Projected
                                           Result+ Rdatlng to Our Current and Previouc~
                                           CIC443mpliance      Revkw~




Table IV.& Sample Contract Awards, Identified During Our Current Review, for Which Decisions Not to Provide for Pull end Open
Competition Were or Probably Were Appropriate
                                              Number of awards                                      Percontage’
                                      Probably                                            Probably
Procuring activity                 approprlate       Approprlate      Total            appropriate         4wWa~           Total
AVSCOM
--
             (Armv)
             I    -’
                                               1                 4        5                      14                 57        71
AS0 (Navy)                                     4                 2        6                      57                 29        88
NAVSEA
_-..._-.-.--(Navy)                             4                 2        6                      57                 29        88
San Antonio ALC (Air Force1                    0                 7        7                        0              100       ldo
DGSC (DLA)
---I_-                                         1                 1        2                      14                 14        29b
   Subtotal                                  1oc               16d       26O                     29                 46        74b
Ogden ALC (Air Force)                          1                       4            6                            14                      57          71
Total                                        11’                     209           31h                           26                      48          74
                                           ‘Table IV.3 shows the distribution   by procuring activity of the sample awards reviewed.
                                           bPercentages do not add to totals due to rounding.

                                           CThese cases represent a projected 23 percent (plus or minus 14 percent) of the population.
                                           dThese cases represent a projected 66 percent (plus or minus 14 percent) of the population.

                                           *These cases represent a projected 88 percent (plus or minus 12 percent) of the population.

                                           ‘These cases represent a projected 22 percent (plus or minus 12 percent) of the population.

                                           oThese cases represent a projected 64 percent (plus or minus 13 percent) of the population.
                                           hThese cases represent a projected 86 percent (plus or minus 11 percent) of the population.



Table IV.6 Sample Contract Awards, Identified During Our Previous Review, for Which Decisions Not to Provide for Full and Open
Competltlon Were or Probably Were Approprlate
                                             Number of awards                                      Percentage0
                                     Probably                                             Probably
Procuring activity                 appropriate       Approprlate      Total           appropriate         Appcloprhk       Tetal
AVSCOM
 -..      (Armv)                               9                       5           14                            47                      26          74b
AS0
---- (NW;)     .’                             14                       1           16                            70                       5          75
NAVSEA
-_       (Navy)                                6                       3            9                            43                      21         84
San Antonio ALC (Air Force)                    3                      16           19                            15                      80          95
DGSC (DLA)
-__-                                           0                       3            3                             0                     100         100
Total                                        32c                     28d           60a                           42                      37          79
                                           %ee table IV.4 for the number of awards reviewed at each procuring activity
                                           bPercentages do not add to the total due to rounding.

                                           CThese cases represent a projected 59 percent (plus or minus 14 percent) of the population.

                                           dThese cases represent a projected 16 percent (plus or minus 8 percent) of the population.

                                           BThese cases represent a projected 76 percent (plus or minus 13 percent) of the population.




                                           Page 36                                           GAO/NSIAD-90404          Competition   in Con&acting   Act
                                           Infonnatlon,  Including Comparable Projected
                                           Remlta, Relating to Our Current Md Revi-
                                           CICA-Camplian~~ews




Table lV.7: Sample Contrrrct Awards
Baaed on Other Than Full and Open                                                                                            Percent of awards tar
Competltlon, Identltled Durlng Our                                                                         Number ot           which justlflcatlons
Current Revlew, for Which Justltlcatlonr   Procuring activity                                                awards                 were requIreda
Did Not Fully Comply Wlth CICA or FAR      AVSCOM (Armv)                                                           7                                 100
Requlremente                               AS0 (Navy)                                                              6                                  86
                                           NAVSEA (Navy)                                                           4                                  57
                                           San Antonio ALC (Air Force)                                             6                                  86
                                           DGSC (DLA)                                                              7                                 100
                                             Subtotal                                                             30b                                 88
                                           Oaden ALC (Air Force)                                                   7                                 100
                                           Total                                                                  37f                                 88
                                           BTable IV.3 shows the distribution by procuring activity of the sample awards reviewed. All 42 sample
                                           awards were required to be justified in writing.

                                           qhese   cases represent a projected 88 percent (plus 12 or minus 15 percent) of the population.

                                           CThese cases represent a projected 90 percent (plus 10 or minus 13 percent) of the population


Table IV.8: Ssmple Contract Awardr
Based on Other Than Full and Open                                                                                             Percent of awards for
Competltlon, Identitled During Our                                                                         Number of            which justiticatlons
Prevlour Revlew, for Which                 Procurina actlvltv                                                awards                  were reaulred*
Justlilcstlonr Did Not Fully Comply Wlth   AVSCOM (Armv)                                                                                            79
CICA or FAR Requirements                   AS0 (Navy)                                                                 12                            60
                                           NAVSEA (Navy)                                                              13                              93
                                           San Antonio ALC (Air Force)                                                10                              50
                                           DGSC (DLA)                                                                  2                              67


                                           BTable IV.4 shows the distribution   by procuring activity of the 76 awards required to be justified in
                                           writing.

                                           bThese cases represent a projected 66 percent (plus or minus 14 percent) of the population




                       Y




                                           Page 37                                            GAO/T+MAIh3O-104       Competition    in Contracting   Act
                                           Appendlx N
                                           Information,     Imluding companble      Projected
                                           ltamltu, ltelll~      to onr torrent. and ~ous
                                           CICA-Compliancelbviewe




Table IV.0: &mple Contract Awards
Based on Other Than Full and Open                                                                                            Percent of awards for
Competltlon, Identlfled During Our                                                                         Number of           which justlflcatlons
Current Revlew, With Justlflcatlonr Not    Procuring actlvlty                                                awards                 were required0
lncludlng Elements Required by CICA or     AVSCOM      (Army)                                                          6                              86
FAR                                        AS0 (Navvl                                                                  I                              14
                                           NAVSEA (Navy)                                                               1                              14
                                           San Antonio     ALC (Air Force)                                             4                              57
                                           DGSC (DLA)                                                                  7                             100
                                             Subtotal                                                                19b                              54
                                           Oaden     ALC (Air Force)                                                  6                               86
                                           Total                                                                     25=                              80
                                           @Table IV.3 shows the distribution   by procuring activity of the 42 awards required to be justified in
                                           writing.

                                           bThese cases represent a projected 49 percent (plus or minus 20 percent) of the population.

                                           CThese cases represent a projected 64 percent (plus or minus 18 percent) of the population


Table IV.10: Sample Contract Awards
Based on Other Than Full and Open                                                                                             Percent of awards for
Competltlon, Identified During Our                                                                         Number of            which justifications
Prevlous Revlew, With Justlflcatlons Not   Procuring activity                                                awards                  were required’
lncludlng glements Required by CICA or     AVSCOM      (Armvl
                                                       .     .I
                                                                                                                       6                              32
FAR                                        AS0 (Navv)                                                                 IO                              50
                                           NAVSEA (Navy)                                                               7                              50
                                           San Antonio     ALC (Air Force)                                             9                              45
                                           DGSC I DLA)                                                                2                               67
                                           Total                                                                     34b                              45
                                           ‘The 76 awards based on exceptions 1 and 2 were required to be justified in writing, but the 3 awards
                                           based on exception 5 were not. Table IV.4 shows the distribution of the 76 awards by procuring activity.
                                           bThese cases represent a projected 44 percent (plus or minus 15 percent) of the population.




                                           Page 38                                            GAO/NSIAJ%9O-104       Competition    in Contracting   Act
                                         Information,      Jncluding cOmparable Projected
                                         lteaulto, ltelatiug to Our Cunwmt and Previous
                                         CICAXhmpliancelteview6




Table IV.ll: Sample Contract Award.
Wlth Justlflcatlonr Not Properly                                                                                          Percent of awards for
Approved, Which Were Identitled During                                                                 Nu;Fa;;;             which jturtlflcations
Our Current Review                       Procuring actlvlty                                                                      were required’
                                         AVSCOM (Army)                                                              1                             14
                                         AS0 (Navy)                                                                 4                             57
                                         NAV.&A (Navy)                                                              0                              0
                                         San Antonio ALC (Air Force)                                                0                              0
                                         DGSC (DLA)                                                                 4                             57
                                           Subtotal                                                                 9b                            20
                                         Oaden ALC (Air Force)                                                      0                               0
                                         Total                                                                      gc                            21
                                         ‘Table IV.3 shows the distribution by procuring activity of the 42 awards required to be justified in
                                         writing.
                                         bThese cases represent a projected 21 percent (plus or minus 14 percent) of the population.

                                         CThese cases represent a projected 16 percent (plus or minus 12 percent) of the population,


Table IV.12: Sample Contract Awards
With Jurtlflcatlons Not Properly                                                                                          Percent of awards for
Approved, Which Were ldentlfled Durlng                                                                 Number of            which justifications
Our Previous Review                      Procuring actlvlty                                              awards                  were required’
                                         AVSCOM (Army)                                                              2                             11
                                         AS0 (Navy)                                                                 7                             35
                                         NAVSEA (Navy)                                                              0                              0
                                         San Antonio ALC (Air Force)                                                5                             25
                                         DGSC (DLA)                                                                 0                              0
                                         Total                                                                    14b                             18
                                         aThe 76 awards based on exceptions 1 and 2 were required to be justified in writing, but the 3 awards
                                         based on exception 5 were not. Table IV.4 shows the distribution of the 76 awards by procuring activity.

                                         bThese cases represent a projected 26 percent (plus or minus 14 percent) of the population,




                                         Page 33                                          GAO/NSLUMO-104          Competition   in Contracting   Act
                                                                                                                                                            i



                                            Inform&Ion,      Including Chmparable Projected
                                            Resulta, Relating to Our Current and Previowi
                                            CIcAcoIllpltsnce       Beviews




Table IV.13: Sample Contract Awards,
Identlfled burlng Our Current Review, for                                                                                     Percent of award8 for
Which Contracting Offlclals’                                                                                Number of           which justifications
Certlflcatlons of the Justlflcatlons Were   Procuring activity                                                awards                 were required’
Premature                                   AVSCOM      (Army)                                                      5                                  71
                                            AS0 (Navy)                                                                  1                              14
                                            NAVSEA (Navy)                                                               4                              57
                                            San Antonio    ALC (Air Force)                                              4                              57
                                            DGSC (DLA)                                                                  5                              71
                                              Subtotal                                                                19b                              54
                                            Ogden     ALC (Air Force)                                                  3                               43
                                            Total                                                                     22c                              52
                                            BTable IV.3 shows the distribution   by procuring activity of the 42 awards required to be justified in
                                            writing.

                                            bThese cases represent a projected 47 percent (plus or minus 21 percent) of the population.

                                            CThese cases represent a projected 46 percent (plus or minus 19 percent) of the population.

Table IV.14: Sample Contract Awards,
Identlfled During Our Previous Review,                                                                                        Percent of awards for
for Which Contracting Off Iclals’                                                                           Number of           which justifications
Certlflcatlons of Justifications Were       Procuring activity                                                awards                 were required’
Premature                                   AVSCOM      (Army)                                                         10                              53
                                            AS0 (Navy)                                                                  9                              45
                                            NAVSEA (Navy)                                                               9                              64
                                            San Antonio    ALC (Air Force)                                              2                              10
                                            DGSC (DLA)                                                                  0                               0
                                            Total                                                                     30b                              39
                                            aThe 76 awards based on exceptions 1 and 2 were required to be justified in writing, but the 3 awards
                                            based on exception 5 were not. Table IV.4 shows the distribution of the 76 awards by procuring activity.
                                            bThese cases represent a projected 46 percent (plus or minus 15 percent) of the population.




                                            Page 40                                            GAO/hT3IAD9O-104       Competition    in contracting   Act
                                          Information,  Including Comparable Projected
                                          Remuh, Eelatlng to Our Current and Previous
                                          CIC4Complhnce       l&views




Table IV.16: Sample Contract Awards
Based on Other Than Full and Open                                                         Number of contract8
Competition, Identitled During Our                                                Required notice      Required to have               Percent not
Current Review, for Which Required Pre-   Procurlng activity                        not published    notices publlahed’                published
Award Notlces Were Not Published In the   AVSCOM (Army)                                              1                          7               14
CBD                                       AS0 (Navy)                                                 1                          7               14
                                          NAVSEA (Navy)                                                                                         17
                                          San Antonio ALC (Air Force)                                0                         7                 0
                                          DGSC (DLAJ                                                 0                         7                 0
                                            Subtotal                                                 3b                       34                 9
                                          Oaden ALC (Air Force)                                      1                         7                14
                                          Total                                                      4c                       41                10
                                          aOne award was exempt from this requirement, based on CICA’s second exception. See table IV.l.

                                          bThese cases represent a projected 8 percent (plus or minus 8 percent) of the population.
                                          ‘These cases represent a projected 9 percent (plus or minus 9 percent) of the population,


Table IV.16: Sample Contract Awards
Based on Other Than Full and Open                                                         Number of contracts
Competitlon, Identlfled During Our                                                Required notice      Required to have               Percent not
Previous Revlew, for Which Required       Procuring activity                        not published    notices published’                published
Pre-Award Notices Were Not Published      AVSCOM IArmv1
                                                   \    I,                                           2                         17               12
In the CBD                                AS0 INavvl                                                 2                         19               11
                                          NAVSEA (Navy).                                             3                         14               21
                                          gn Antonio ALC (Air Force)                                 1                          4               25
                                          DGSC (DLA)                                                 0                          1                0
                                          Total                                                      6’                       55                15
                                          aThese cases represent a projected 11 percent (plus or minus 10 percent) of the population.


Table IV.17: Sample Contract Awards
Bared on Other Than Full and Open                                                 Number with
Competitlon, ldentlfled During Our                                               conflicting or                               Percent of those
Current Revlew, for Which Pre-Award                                              questionable       Number with                   with notices
Notices Were Publlshed Wlth Conflictlna   Procurlng activity                        footnotes notices published                      published
or Questlonable Footnotes                 AVSCOM (Army)                                         1                        6                      17
                                          AS0 (Navy)                                            3                        6                      50
                                          NAVSEA (Navvj                                         3                        5                      60
                                          San Antonio ALC (Air Force)                           0                        7                       0
                                          DGSC (DLA)                                                                                             0
                                          Subtotal                                              7’                     31                       23
                                          Ogden ALC (Air Force)                                 2                       6                       33
                                          Total                                                 9b                     37                       24
                                          ‘These cases represent a projected 19 percent (plus or minus 14 percent) of the population.

                                          bThese cases represent a projected 21 percent (plus or minus 14 percent) of the population.




                                          Page 41                                         GA0/lWIAD9o-104       Competition   in Contracting   Act
                                          Appendix N
                                          Informdon,      huhding timparable Projected
                                          Realto, Relating to Onr Current and PrevIoui3
                                          cIc4-c4mlpllsnceBeviewr




Table lV.18: Sample Contract Awards
Bared on Other Than Full and Open                                                    Number with
Competltlon, Identified During Our                                                  confllctlng or                                 Percent of those
Previour Review, for Which Pye-Award                                                questIonale        Number with                     with notices
Notlces Were Publlahed Wlth Conflicting   Procurlng activity                           footnotes notices published                        published
or Questionable Footnotes                 AVSCOM       (Army)                                     12                       16                     75
                                          AS0 lNavvl                                             17                        17                      100
                                          NAVSEA (Navy)                                            4                       11                       36
                                          San Antonio     ALC (Air Force)                          3                        3                      100
                                          DGSC (DLA)                                               0                        1                        0
                                          Total                                                  36O                       48b                      75
                                          aThese cases represent a projected 91 percent (plus or minus 6 percent) of the population
                                          bA pm-award notice was not required, but was published, for 1 of these 48 awards.


Table IV.19 Sample Contract Award8
Based on Other Than Full and Open                                                              Number of contracts                 Percent of those
Competltion, Identified Durlng Our                                                         that did not comply with                required to have
Current Review, Which Dld Not Fully       Procuring activity                                          requirements               notices publIsheda
Comply Wlth Requlrementr Relating to      AVSCOM       (Army)                                                          5                          71
CBD Notice8                               AS0 (Navy)                                                                   7                           100
                                          NAVSEA (Navy)                                                                6                           100
                                          San Antonio     ALC (Air Force)                                              7                           100
                                          DGSC (DLA)                                                                   6                            86
                                            Subtotal                                                                  31b                           91
                                          Ogden     ALC (Air Force)                                                    7                           100
                                          Total                                                                       3ac                           93
                                          aTable IV.15 shows the distribution   by procuring activity of the 41 awards for which CBD pre-award
                                          notices were required.

                                          bThese cases represent a projected 94 percent (plus 6 or minus 8 percent) of the population

                                          CThese cases represent a projected 95 percent (plus 5 or minus 7 percent) of the population


Table IV.20: Sample Contract Awards
Based on Other Than Full and Open                                                              Number of contracts                 Percent of those
Competltlon, Identified During Our                                                         that did not comply with                required to have
Previous Review, Which Dld Not Fully      Procuring activity                                          requirements               notices published’
Comply Wlth Requirements Relating to      AVSCOM       (Army)                                                         11                          65
CBD Notices                               AS0 (Navy)                                                                  19                           100
                                          NAVSEA (Navv)                                                               14                           100
                                          San Antonio     ALC (Air Force)




                                          aTable IV.16 shows the distribution   by procuring activity of the 55 awards for which CBD pre-award
                                          notices were required.

                                          bThese cases represent a projected 90 percent (plus or minus 7 percent) of the population.




                                          Page 42                                           GAO/NSIAD-90-104      Competition     in Contracting   Act
                                            information, Inclndlng timparable Projected
                                            lbmlte, Belatlng to Our Current and Previous
                                            CICA-C!omplianca Ibvlew8




Table iV.21: One-Offer Award@, identified During Our Current Review, Reported As, but Based on Practices inconsistent With Full
and Open Competition
                                                                        Awards inconsistent with full and open competition
                                                                                                              Pro-award notice not
                                                         Total                                                        pubilshed or
                                                      awards             Specific n~zn{      inadequate         Inadequate M~I~;
Procurinu activitv                                  reviewed     Total                       soecsldata
AVSCOM (Army)                                                  2     1                  0                0                       la
AS0 (Navy)                                                     3     1                  0                0                       1
@SEA         (Navy)                                            2     0                 0                 0                       0
sari Antonio ALC (Air Force)                                   3     3                  2                0                       1
DGSC
..---     (DLA)                                                3     3                  0                3                       0
    Subtotal                                                 13      8b                2c                34                      3.
Ogden ALC (Air Force)
--..--.--..-                                                   3     0                  0                0                       0
Total                                                        16      8’                29                3h                      3’
                                            ‘A CBD pm-award notice was required but not published for one award at AVSCOM.

                                            bThese cases represent a projected 95 percent (plus or minus 3 percent) of the population.
                                            lhese   cases represent a projected 24 percent (plus or minus 23 percent) of the population.

                                            oThese cases represent 58 percent of the population. This is an actual rather than projected amount
                                            because we reviewed all of the contracts in the population at DGSC where these 3 contracts were
                                            awarded.
                                            @These cases represent a projected 14 percent (plus or minus 14 percent) of the population.

                                            ‘These cases represent a projected 91 percent (plus or minus 3 percent) of the population

                                            ‘JThese cases represent a projected 23 percent (plus or minus 22 percent) of the population.

                                            hThese cases represent 55 percent of the population. See footnote d above.

                                            ‘These cases represent a projected 13 percent (plus or minus 13 percent) of the population.




                                            Page 45                                         GAO/NSIADBO-104 Competition in Con&acting Act
                                                                                                                                                -

                                            Information, Including Comparable Projected
                                            Boeulta, Relating to Our Current and Preview
                                            CIcAcompllance Revkwa




Table IV.22 One-Offer Awards, Identified During Our Previous Review, Reported As, but Based on Practices~incon8istent With
Full and Open Competition
                                                                     Awards inconsistent with full and open competition
                                                                                                           Pre-award notice not
                                                        Total                                                      published or
                                                     awards           Specific ;;I~{      Inadequate         Inadequate ~mrw$
Procuring activity
.-                                                 reviewed    Total                      specs/data
AVSCOM
---      (Army)                                             3      1                 0                0                       la
AS0 (Navy)                                                      5         2                     1                    0                               la
NAVSEA (Navy)                                                   1         0                     0                    0                               0
kan
-   Antonio ALC (Air Force)                                    5          3                     3                    0                               0
DGSC (DLA)                                                     5          3                     0                    3                               0
TOtal                                                         19          9b                    4c                   3d                              2’
                                            ‘A CBD pm-award notice was required but not published for this award.

                                            bThese cases represent a projected 48 percent (plus or minus 31 percent) of the population.

                                            CThese cases represent a projected 15 percent (plus or minus 15 percent) of the population.
                                            dThese cases represent a projected 22 percent (plus or minus 17 percent) of the population.

                                            @These cases represent a projected 12 percent (plus or minus 12 percent) of the population.



Table IV.23: One-Offer Awards Reported as Based on Full and Open Competition, identified During Our Current Review, That Did
Not Meet Statutory Requirements Relating to the Use of CBD Pre-Award Notices
                                                                              Statutory requirement not met because
                                                                         Notice lacked
                                             Awards with                     statement        Notice lacked
                                         Notices Requirements not         encoura ing               adequate Solicitation issued
Procuring
--        activity                    published’                met        compet Ption    solicitation data             too early
AVSCOM (Army)                                    1                        21)                        1                      0                        1
AS0 (Navy)                                       3                        3c                         3                      3                        0
NAVSEA (Navy)                                    2                        2                          2                      2                        0
San Antonio ALC (Air Force)                      3                        3                          0                      3                        1
DGSC (DLA)                                       3                         Id                        0                      0                        0
   Subtotal                                     12                       11’                         6                      8                        2
Ogden ALC (Air Force)                            3                        3                          0                      3                       0
Total                                           15                       14’                         6                     11                       2
                                            BA CBD pm-award notice was required but not published for one award at AVSCOM.

                                            b-rhis includes one award for which a CBD pre-award notice was required but not published.

                                            CThis includes two awards for which CBD pre-award notices were published with conflicting or question-
                                            able footnotes.

                                            dThe notice for this award did not cover all of the requirements for which the agency contracted.

                                            @These cases represent a projected 61 percent (plus or minus 38 percent) of the population.

                                            ‘These cases represent a projected 63 percent (plus or minus 36 percent) of the population.




                                            Page 44                                          GAO/NSIAIMO-104 Competition in Contracting Act
Table IV.21: One-Offer Awrrdr Reported a# Beoed on Full and Open Competition, Identified During Our Previouo Review, That Did
Rot Meet at&tory RequIrementa Reirtlng to the We of CBD Pre-Award Notices
                                                                              Statutory requirement not met because
                                                                        Notice lacked
                                             Award8 with                     8tatement        Notice lacked       Inadequate
                                         Notlcer Requirements not         encoura ing               adequate       solicitation
Proourlng activlw                     publirhed’               met         compet Ption    solicitation data   response time
AVSCOM-(Army) -                                    2                      3b”                     1                       1           .           1
AS0 (Navy)                                         4                      5b.c                    4                       4                       0
NAVSEA (Navv)                                      1                      1                       1                       1                       0
San Antonio ALC (Air Force)                        5                      5b                      5                       3                       2
DGSC (DLA)                                         5                      4                       2                       0                       4
Total                                             17                     18d                     13                       9                       7
                                           ‘A CBD pm-award notice was required but not published for two additional awards, one at AVSCOM
                                           and one at ASO.

                                           bThis includes awards for which CBD pm-award notices were published with conflicting or questionable
                                           footnotes.
                                           lhis    also includes one award for which a CBD pre-award notice was required but not published.

                                           dThese cases represent a projected 93 percent (plus 7 or minus 14 percent) of the population




                                           Page 45                                          GAO/NSLAlHO-104 Compedtion in Contractjng Act
                                                  Appendix N
                                                  Information,   Including Comparable Projected
                                                  Results, Relatlug to Our Current and Previous
                                                  CIC4cOmpliance       Review8




Table IV.25 Sampling Error Rates and Probabillty of Change at the 95-Percent Confidence Level Between Our Current and
Previous Reviews for Awards Based on Other Than Full and Open Competition
                                           Current review                    Previous review
                                       Percent of Sampling error          Percent of Sampling error
CateQOnr of findings                   population          percent        population         percent    Probability of change
Inaoorooriate awarda                                     4                     4             0.5                 0        Undefined
Ouestionable awarda                                      8                      8             24                 13       Not sianificant
Inappropriate or questionable awarda                    12                     12             24                 13       Not sianificant
Appropriate awardb                                      66                     14             16                  8       Significant
Probably appropriate    awardb
                   ..- ._._^
                          -_ ._-...-                    23                     14             59                 14       Significant
Probably appropriate or appropriate                     88                     12             76                 13       Not significant
   award”
Jushfication and approval:c
Did not co-m~i~-;ji~ (qlcA orFAR-.---.---------         8*
                                                                  +I2 or -15                  66                 14       Sianificant
Did not include required elements                       49                 20                 44                 15       Not siqnificant
Not properly approved                                   21                 14                 26                 14       Not significant
Approval certification premature                        47                 21                 46                 15       Not significant
tire-award notices:d
    Not published in the CBD                             8                   8                11                 10       Not significant
Conflicting or .-questionable
                   .._     ..- footnotes                19                  14                91                  6       Significant
Did not comolv with reauirements                        94           +6 or -8                 90                  7       Not sianificant
                                                  Y?ee tables IV.3 and IV.4.
                                                  bSee tables IV.5 and IV6
                                                  ‘See tables IV.7 through IV.14.
                                                  dSee tables IV.15 through IV.20




                                                  Page 46                                     GAO/NSIAD-90-104   Competition   in Contracting   Act
                                           Appendix IV
                                           Information,   Including Comparable Projected
                                           Resulta, Relathg to Our Current and Previaus
                                           CICA-CompIIance      Reviews




Table IV.26: Sampling Error Rates and Probabllity of Change at the 95-Percent Confidence Level Between Our Current and
Previous, Reviews for One-Offer Awards RePorted as Based on Full and Open Comoetition
                                            Current review                    Previous review
                                        Percent of Sampling error          Percent of Sampling error
Category
_ -.---..-- of_-..-
               findings
                 --_.--.-~.             population          percent_____ population           percent    Probability of change
Awards reported as, but inconsistent            95                       3                  48                 31        Significant
  with, full and open competitiona                                                 -    -~I_
Solicitations restricted to specific             24                  23                     15                 15        Not significant
  make..-..-.-.
           and models
                .~..- - .-----.~              ..______--.--
Solicitations provided inadequate                58                   0                      22                17        Significant
  specification
           _.~     or.._......__
                       dataa .-_____                                 ~14.-.--.   .-~~-...~-_ , 2                                           ___
&&ward       notices not published or            14                                                            12        Not significant
  inadequate market searcha
Pre-award-notices that did not                  61                   38                     93        -t-7 or -14        Not significant
  complv with reauirementsb
                                           ‘See tables IV.21 and IV.22
                                           bSee tables IV.23 and IV.24




                                           Page 47                                          GAO/NSIAD-90-104    Competition   in Contracting     Act
Appendix v

Additional Information on the Resultsof Our
Current and Previous CICA-Compliance
Reviews
                                                 This appendix provides additional information on the results of our cur-
                                                 rent and previous reviews. The tables covering our current review
                                                 include (1) subtotals for the five procuring activities that were covered
                                                 in both reviews and (2) totals that include the additional activity cov-
                                                 ered only in our current review. We did not project these numbers to the
                                                 populations or statistically compare these results for the two reviews.


Table V.l: Sample Contract Awards, Identified During Our Current Review, With Justification-Related                    Problems by Required
Approval Levels
                                                                                   Required approval levels
                                                                         $25,001    $100,001       $1,000,001             $10,000,001
Procuring activity     ~. .- -                                        -$100,000” -$1,000,000b   -$1o,ooo,oooc                or mored                  Total
AVSCOM (Army)                     .__.,“.““.... - ..____._.
                                                          -_.-.---.----        6            1               0                       0                     7
AS0 (Navv)                                                                     3            3               0                       0                     6
NAVSEA (Navy)                                    ---...._~__                   0            1               2                           1                 4
San Antonio ALC (Air Force) -.                                                 4            2               0                           0                 6
D&C IDLA)                           -~-~--....- -___ ____-.                    6            1               0                           0                 7
  Subioial                                                                    19            6               2                           1                30
Ogden ALC (Air Force)                                                          4            3               0                           0                 7
Total                                                                         23           11               2                           1                37
                                                 Note:CICA and FAR require that justifications be approved in writing by certain agency officials, depend-
                                                 ing on the dollar value of the proposed award, as follows:
                                                 aAn official at a level above the contracting officer.
                                                 bThe competitron advocate for the procuring activity.

                                                 ‘The head of the procuring activity

                                                 dThe senior procurement   executive




                                                Page 48                                           GAO/NSIAD90-104      Competition    in Contracting    Act
                                            Appendix     V
                                            Additional Information         on the Resulta of Our
                                            Current    and Previous      CICA-Compliance
                                            RWkWS




Table V.P:Sampie Contract Awarda, identified During Our Previous Review, With Justification-Related                Problems by Required
Aooroval Level8
                                                                     Required approval levels
                                                       $25,001        $100,001         $1,000,001                     $10,000,001
Procuring
---_.“.- __-.._activhy
              -----.“.--~.--_                       -$100,000”    -$1,000,000b     -$1o,ooo,oooc                         or moree               Total
AVSCOM
._---. ..----(Army)
                  _._.._.
                        - __...._
                               - l-_____                      5               9                   1                             0                  15
AS0    (Navy)
..-- .._-..-.~         -...---                                7               4                   1                             0                  12
NAVSEA      (Navy)
___--..-___-- .__.-___-.__--.---_-                            7               3                   3                             0            --    13
San Antonio ALC (Air Force)
I__~-.-i..---..-._---                                         3               2                   5                             0                  10
DGSC
___.     (DLA)
   -l-l___
         __......
              -.--_- .--.^-.-_.--.-.                          2               0                   0                         -0                      2
Total                                                       24               15                 10                              0                 52
                                            Note:CICA and FAR require that justifications be approved in writing by certain agency officials, depend-
                                            ing on the dollar value of the proposed award, as follows:
                                            *An official at a level above the contracting officer.
                                            ‘The competition      advocate for the procuring activity

                                            ‘The head of the procuring activity.
                                            dThe senior procurement executive.


Table V.3:Sampie Contract Award8
Based on Other Than Full and Open                                                                   Number of contracts
Competition, identified During Our                                                                  with required notices
Current Review, for Which the Required                                                                      inaccurate or Percent of those with
Contents of the Pre-Award Notices Were      Procuring activity                                                 incomplete   notices published’
inaccurate, incomplete, or Mieaing          AVSCOM       (Army)        __                                                 3                  50
                                            AS0 (Navy)                                                                    6                 100
                                            NAVSEA (Navy)                                                                 5                 100
                                            San Antonio      ALC (Air Force)                                              7                 100
                                            DGSC (DLA)                                                                    6                  86
                                              Subtotal                                                                  27                   87
                                            Ogden      ALC (Air Force)                                                    6                 100
                                            Total                                                                       33                   89
                                            aTable IV.17 shows the distribution by procuring activity of the 37 awards that had notices published




                                            Page 49                                              GAO/NSIAD90-104   Competition   in Contracting     Act
                                           Additional Information on the Results of Our
                                           Current and Previous CICAX!ompliance
                                           Reviews




                                                                                                                                                ,-..._
                                                                                                                                                    --
Table V.4: Sample Contract Awards
Based on Other Than Full and Open                                                                Number of contracts
Competition, Identified Durlng Our                                                               with required notices
Previous Review, for Which the Required                                                                  inaccurate or Percent of those with
Contents of the Pre-Award Notices Were     Procuring activity                                               incomplete   notices published’
Inaccurate, Incomplete, or Missing         AVSCOM (Army)                                                                 9                             56
                                           AS0 (Navy)                                                                   17                            100
                                           NAVSEA (Navy)                                                                11                            100
                                           San Antonio ALC (Air Force)                                                   3                            100
                                           DGSC (DLA)                                                                    1                            100
                                           Total                                                                        41                            65
                                           aTable IV.18 shows the distribution   by procuring activity of the 48 awards that had notices published.


Table V.5: Sample Contract Awards
Based on Other Than Full and Open                                                                                                        Number of
Competition, Identified During Our                                                                                                      awards with
Current Review, That Had Inaccurate,       Required element                                                                               problems
Incomplete, or Missing Elements in Their   An accurate    description   of the property    or services                                                    2
Published Pre-Award Notices                The name, address, and phone number of the contracting officer                                                25
                                           A statement that all responsible sources may submit a bid, proposal, or
                                             quotation, which shall be considered by the agencya                                                          7
                                           A statement of the reason justifying the use of other than competitive
                                             orocedures and the identitv of the intended source                                                          17
                                           Note: Many of the 33 notices lacked more than one of the required elements. Table V.3 shows the
                                           distribution of the 33 awards.
                                           aFAR 5,207(c)(2)(xvi) instructs agencies to include this statement in the notice, as required by CICA. FAR
                                           5207(d)(3) requires agencies to refer to numbered note 22 if the proposed contract is intended to be
                                           awarded on a sole-source basis. For seven awards, agencies’ notices did not refer to numbered note 22
                                           or include the statement.


Table V.G:Sample Contract Awards
Based on Other Than Full and Open                                                                                                         Number of
Competition, Identified During Our                                                                                                       awards with
Previous Review, That Had Inaccurate,      Required element                                                                                problems
Incomplete, or Missing Elements in Their   An accurate description of the property or services                                                            3
Published Pre-Award Notices                The name, address, and phone number of the contracting officer                                                35
                                           A statement that all responsible sources may submit a bid, proposal, or
                                             quotation, which shail be considered by ttie agencya                                                         6
                                           A statement of the reason justifying the use of other than competitive
                                             orocedures and the identity of the intended source                                                          29
                                           Note:Many of the 41 notices lacked more than one of the required elements. Table V.4 shows the distri-
                                           bution of the 41 awards.
                                           aFAR 5,207(c)(2)(xvi) instructs agencies to include this statement in the notice, as required by CICA. FAR
                                           5.207(d)(3) requires agencies to refer to numbered note 22 if the proposed contract is intended to be
                                           awarded on a sole-source basis, For six awards, agencies’ notices did not refer to numbered note 22 or
                                           include the statement.




                                           Page 50                                            GAO/NSIAD-90-104      Competition    in Contracting     Act
                                                    Appendix V
                                                    Additional information on the Results of Our
                                                    Current and Previoue CIC4-C%mpliance
                                                    ReVteWS




Table V.7: Number of Sample Contract Awards Based on Other Than Full and Open Competition, Identified During Our Current
Review, for Which the Statutorv Sollcitatlon issuance or Resbonse Time Reauirements Were Not Met
                                                              Percent of                          Percent of
                                  Solicitation issued          contracts    Proper response         zmtracts   Both problems
Procuring activity                            too early       reviewed’   time not provided        reviewed’          existed
AVSCOM (Armv)                                         3                43                   1               14                1
AS0 (Navy)                                                    5                          71                      0                            0                         0
NAVSEA (Navy)                 .._..          . --~-__         2                          29                      0                 -          0                         0
san Antonio ALC (Air Force)           .-.-                    3                          43                      0                            0             ___-    0
DGSC (DLA)                                                    0                           0                      0                            0                         0
  Subtotal                                                   13                          37                      1                            3                         1
Ogden ALC (Air Force)                    ~--.----             1                          14                      0                            0                         0
Total                                                        14                          33                      1                            2                         1
                                                    aTable IV.3 shows the distribution    by procuring activity of the sample awards reviewed



Table V.8: Number of Sample Contract Awards Based on Other Than Full and Open Competition, Identified During Our Previous
Review. for Which the Statutorv Solicitation Issuance or Resoonse Time Reauirements Were Not Met
                                                              Percent of                          Percent of
                                  Solicitation issued          contracts   Proper response          contracts Both problems
Procuring activity                            too early
                                         _..___~._.           reviewed’  time not provided         reviewed”         existed
AVSCOM.(Army)                                                  0                          0                      0                            0                         0
AS0 (Navy)                            ~~~~._--__         .-.-~ 0                          0                      0                            0                         0
NAVSEA (Navy)                                                 6                          38                      6                            38                        5
San Antonio ALC (Air Force)                                1                              5                      0                             0                        0
DGSC (DLA)                              ~.. _.. ____. .._--1                             33                      0                             0                        0
Total                                                         8                          10                      6                             8                        5
                                                    aTable IV.4 shows the distribution    by procuring activity of the sample awards reviewed


Table V.9: One-Offer Awards Reported
a8 Based on Full and Open Competition,                                                              Number with notices                Number using conflicting
Identified During Our Current Review, for           Procuring activity                                        published                  or questionable notes
Which Pre-Award Notices Referred to                 AVSCOM (Army)                                                           1                                           0
                                                    ---.-
Conflicting or Questionable Footnotes               AS0 (Navy)                                                             3                                          2a
                                                    NAVSEA (Navy)
                                                    _____-                                                                 2                                          0
                                                    San Antonio ALC (Air Force)                                            3                                          0
                                                    DGSC (DLA)                                                             3                                          0
                                                        Subtotal                                                          12                                          2
                                                    Ogden ALC (Air Force)                                                  3                                        - 0
                                                    Total                                                                 15                                          2
                          Y




                                                    aOne CBD pre-award notice referred to note 46, and the other erroneously referred to note 73




                                                    Page 51                                            GAO/NSlAD90-104          Competition        in Contracting   Act
                                          Appendix V
                                          Additional Information on the Result8 of Our
                                          Current and Previous CIC&Compliance
                                          Reviews




Table V.10: One-Offer Award8 Reported
as Baaed on Full and Open Competltion,                                            Number with notices           Number using conflicting
ldentifled During Our Prevlour Revlew,    Procuring activity                                published             or questionable notes
for Which Pre-Award Notice8 Referred to   AVSCOM (Army)
                                                   .    ,,                                              2                                    1
Conflicting or Ouestlonable Footnotes     AS0 (Navy)                                                    4                                    3
                                          NAVSEA (Navy)                                                  1                                   0
                                                                                                                                ---
                                          San Antonio ALC (Air Force)                                    5                                    5
                                          DGSC (DLA)                                                     5                                    0
                                          Tatal                                                         17                                    9




                                          Page 62                                    GAO/NSIAD-90-104        Competition   in Contracting   Act
Appendix VI

Objective,Scope,and Methodology


              This report summarizes the results of our follow-up review of DOD’S com-
              pliance with CICA in awarding contracts from April to June 1988. It also
              provides information on the results of our previous review, which cov-
              ered contracts awarded in September 1986, shortly after CICA’Srequire-
              IIWIItS took effect. (See GAO/NSIAD-87-146, Aug. 1987.)

              Our objective was to determine whether the compliance problems we
              previously identified still existed at the DOD locations we reviewed. As
              agreed with the Office of the Chairman of the House Committee on
              Armed Services, our review covered six locations in three military ser-
              vices and DLA:

              AVSCOM (Army), St. Louis, Missouri;
              AXI (Navy), Philadelphia, Pennsylvania;
              NAVSEA Headquarters (Navy), Arlington, Virginia;
              Ogden ALC, Hill Air Force Base, Ogden, Utah;
              San Antonio ALC, Kelly Air Force Base, San Antonio, Texas; and
              DGsc(DLA), Richmond, Virginia.

              We reviewed contract awards falling into two categories: (1) contract
              awards based on other than full and open competition and (2) contract
              awards reported as based on full and open competition, but for which
              only one offer was submitted.

              To review both categories, we examined random, statistical samples of
              contracts that were for over $25,000 and were awarded during the third
              quarter of fiscal year 1988 by the six procuring activities. Our sample
              included (1) 42 awards based on other than full and open competition
              and (2) 16 awOrds reported as based on full and open competition, but
              for which only one offer was submitted. At each activity, we randomly
              selected up to seven of the first category and up to three of the second
              category of contract awards. In some cases, we were not able to find
              enough contract awards meeting our selection criteria.

              We limited our review to new contract awards, as opposed to contract
              modifications or orders under existing contracts.

              Our statistical sample of 42 new contract awards based on other than
              full and open competition involved initial obligations of $18.9 million,
              The population from which the sample was drawn included a projected
              1,592 new awards initially obligating $610 million at the six locations.
              The statistical sample of 16 new awards reportedly based on full and



              Page 63                           GAO/NSIAD-90-104 Competition in Contracting Act
Appendix     VI
Objective,   Scope, and Methodology




open competition involved initial obligations of $2.6 million. The statisti-
cal population included a projected 370 new contract awards, which ini-
tially obligated $46 million.

The populations from which we drew our samples represented 57 per-
cent for our first category and ‘27 percent for our second category of all
DOD contract actions that were recorded in its DD-360 prime contract
reporting system and that met our selection criteria.

Tables VI. 1 through VI.4 provide information on population and sample
sizes relating to our current review. Tables VI.5 through VI.8 provide
similar information for our previous review.

For each of our sample awards, we examined the contract and support-
ing documentation in the contract file and discussed the procurement
with agency personnel, such as the contracting officer and the program
or technical personnel who had requested the procurement. In several
cases, we also contacted potential offerors to get their views on such
matters as the capabilities of sources other than the winning contractor
to satisfy the government’s requirements.

We based our statistical projections comparing the results of our two
reviews on data on the five activities we visited in both reviews. We
based these projections on stratified sampling estimates, given the popu-
lation sizes, sample sizes, and the numbers of cases found to have partic-
ular characteristics. Given our sample size, projections to individual
activities are unwarranted. Projected results are more properly thought
of as ranges. However, we have used single number estimates, at the
midpoint of the ranges, for simplicity of presentation, Projections of dol-
lars have been rounded to the nearest million and projections of percent-
ages to the nearest whole percent.

We performed most of our field work between October 1988 and March
 1989. Although we did not request official agency comments on a draft
of this report, we discussed our findings with agency officials and
included their comments where appropriate. We performed our review
in accordance with generally accepted government auditing standards.




Page 54                               GAO/NSIADSO-104   Competition   in Contracting   Act
              .



                                           Appendix      VI
                                           Objective,    Scope, and Methodology




Table VI.1: Original and Adjusted Population and Sample Sizes, Identified During Our Current Review, for New Contract Awards
Based on Other Than Full and Ooen Comoetltlon
Dollars    in thousands
                                                                                                                                          Percent of
                                                  Original                              Revised                    Revised                population
Activity                                       population                               sample’                 populationb                reviewedc
San Ant&ro        ALC ---.               588     $154,591         7        $885       7    $885         588        $154,591           1                1
DGSC                                      14            1,970     7       1,325       7      1,296        12           1,783        58            73
AVSCOM            -.                     292         57.169       7         682       7        682      292          57.169          2                 1
AS0                                      605      261,656         7       1,306       7      1,495      602         256,867          1                 1
NAVSEA                                    41       145,291        7      13,807      7   13,807          41         145,291         17            10
  Subtotal                             1,540  620,677           35      18,005      35  18,165        1,35!jd      451 ,OOOd         3                4
Ogden      ALC                           237   58,340            7         777       7      777         237         58,340           3                 1
Total                                  1,777 $079,017           42     $18,782      42 $19,942        1,592*      $610,000’          3                3
                                           %ecause agency personnel had miscoded some of the contract actions, some contracts in our original
                                           sample did not belong in our population. We replaced these miscoded contracts with others in our
                                           population from the same activity. We deleted two contracts at DGSC for $187,000 and three contracts
                                           at AS0 for $4,789,000. We deleted no contract actions at the other four locations visited.

                                           bWe adjusted the size of our population based on the number of sample contracts that drd not belong in
                                           it.

                                           ‘The percentages in this column are based on the “revised sample” amounts divided by the “revised
                                           population” amounts.

                                           dAmounts rn this column do not add to the total because the sample sizes were not sufficient to project
                                           for each individual activity. However, we are 95percenf confident that the total population for the five
                                           actrvrties contains 1,355 contract awards plus or minus 180 and that the value of these awards is $451
                                           million plus or minus $83 million.

                                           eAmounts in this column do not add to the total because the sample sizes were not sufficient to project
                                           for each individual activity. However, we are 95percent confident that the total population for ail six
                                           activities contains 1,592 contract awards plus or minus 180 and that the value of these awards is $610
                                           million plus or minus $81 million,




                                           Page 56                                         GAO/NSIAD-90-104       Competition   in Contracting   Act
                                                     Appendix     VI
                                                     Objective,   &ope,   and Methodology




Table Vl.2: Original and Adjusted Population and Sample Sizes, Identified During Our Current Review, for One-Offer Awards
Reported as Based on Full and Open Competition
Dollars in thousands
                                                                                                                                                 Percent of
                                                           Original              Original         Revised                 Revised                population
Activity                         -----._-_____           population              sample           sample0              populationb                reviewedC
San
 ..-__Antonio
         ..~..- ALC
                ..-. ~..~--~-                      125      $24,731        3         $266     3       $266      125        $24,731           2             1
DGSC                                               205       14,129 ----i473                  3        147      205         14,129           1             1
AVSCOM                                               6          939        3          288     2        143        2            143         100           100
AS0                                                 40        7.940        3          214     3        660       37          4,646           8            14
NAVSEA
 ..“_”._-. ,..._._” ..-...II.” ..-....-   ~-         3        4,165        3       4,165      2      1,114        2           1,114        100           100
   Subtotal                                        379       51,904       15       5,080     13      2,330      354d        45,OOOd          4             5
Ogden
 II   ALC_.”._.-^.^..---.---              ..-. -    26        4,118        3          593     3         135      24           3,552         13             4
Total                                              405     $56,022        18      $5,673     16     $2,465      370’       $46,000*          4             5
                                                    aBecause agency personnel had miscoded some of the contract actions, some contracts in our original
                                                    sample did not belong in our population. We replaced these miscoded contracts with others in our
                                                    population from the same activity whenever possible. However, in some instances, replacement con-
                                                    tracts were unavailable. We deleted four contracts at AVSCOM for $796,000, three at AS0 for
                                                    $3294,000, one at NAVSEA for 53,051,000, and two at Ogden ALC for $566,000. We deleted no actrons
                                                    at the other two locations we visited.

                                                    bWe adjusted the size of our population based on the number of sample contracts that did not belong in
                                                    it.
                                                    CThe percentages in this column are based on the “revised sample” amounts divided by the “revised
                                                    population” amounts,

                                                    dAmounts in this column do not add to the total because the sample sizes were not sufficient to project
                                                    for each individual activity. However, we are 95percent confident that the total population contains 354
                                                    contract awards plus or minus 16 and that the value of these awards is $45 million plus or minus $7
                                                    million.

                                                    ‘Amounts in this column do not add to the total because the sample sizes were not sufficient to project
                                                    for each individual activity. However, we are 95percent confident that the total population contains 370
                                                    contract awards plus or minus 20 and that the value of these awards is 546 million plus or minus $7
                                                    million.




                                     Y




                                                    Page 66                                         GAO/NSIAD-90-104      Competition   in Contracting   Act
                                                                         AmemUx VI
                                                                         Objective,   Scope, and Methodology




Table V1.3: Total DOD Population Size& Identified During Our Current Review, for New Contract Awards Based on Other Than Full
and Open Competition
Dollars    in thousands
                                                                                                                     Original population of                         Percent of DOD
                                                                                                                         selected activities                 population included in
Activity                                                                              DOD population                              reviewed                                   review’
A’i; Force                                                                  998                  $908,587             825b            $212,931                     83                     23
                                __ . -__....._.
Army            .”                                                          573                    585,314            292c               57.169                    51                     10
N&y                  ‘.      -. ___--..-_....-----                        1,325                  1,417,275            646d             406[947                     49                     29
tiLA                      .~.                                               117            ‘        25,356              14e               1,970                    12                      8
ooD-other                   . ...---......_--.
                           _.-~ -_-          ~----                           86                     31,644                  0                    0                  0                      0
Toial                                -~~~--_--.-                         3,099                 $2,966,176           1,777            $679,017                      57                     23

                                                                         aThe percentages in this column are based on the “original population of selected activities reviewed”
                                                                         amounts divided by the “DOD population” amounts.

                                                                         bThis number represents actions at Ogden and San Antonio ALCs.
                                                                         ‘This number represents actions at AVSCOM.
                                                                         dThis number represents actions at AS0 and NAVSEA Headquarters.

                                                                         BThis number represents actions at DLA’s DGSC.



Table Vl.4: Total DOD Population Sizes, Identified During Our Current Review, for New Contract Awards Based on Full and Open
Competition and Receipt of One Offer
Dollars    in thousands
                                                       -.~-..~-
                                                                                                                    Original population of                         Percent of DOD
                                                                                                                        selected activities                 population included in
Activitv                                                                              DOD pooulation                             reviewed                                   review0
Air Force                                                                   290          I_-     $128,416             151b             $28,849                     52                     22
Army                                                                        154                     27,525                  6"              939                     4                      3
Navy                                                 .._~_. ._--___--       314                     61,319             43d               12,105                    14                     20
DLA                                                                         731                     96,473            205e               14,129                    28                     15
DOD-other                                                         --?r                               7,743                  0                    0                  0                      0
Total                                                                    1,513                   $321,476             405              $56,022                     27                     17
                                                                         aThe percentages in this column are based on the “original population of selected activities reviewed”
                                                                         amounts divided by the “DOD population” amounts.

                                                                         ‘This number represents actions at Ogden and San Antonio ALCs.

                                                                         ‘This number represents actions at AVSCOM.

                                                                         dThis number represents actions at AS0 and NAVSEA Headquarters.

                                                                         ‘This number represents actions at DLA’s DGSC.




                                                                         Page 57                                            GAO/NSIAD-90-104         Competition        in Contracting   Act
                                           Appendix VI
                                           Objective,   Scope, and Methodology




Table Vl.5: Original and Adjurted Population and Sample Sizes, Identlfied During Our Previous Review, for New Contract Awards
Based on Other Than Full and Open Competition
Dollars    in thousands   -.
                                                                                                                                        Percent of
                                                 Original             Original           Revised                  Revised              population
Activity                                       population             sample             sample0               populationb              revlewedC
                                                                                                                                      -_I__-
San Antonio     ALC                       33      $42,321      20      $27,825      20    $28.584        32        $42.160         63             68
DGSC                                       5          657       5          650       3        261         3            261        100            100
AVSCOM                                   189      131,855      20        8,328      19      7,785       187        131,331         10              6
AS0                                      756      411.315      20       16.486      20     16.299       734        402.513          3              4
NAVSEA                                    23       34,656      20       32,527      14     14,422        14         14,422        100            100
Total                                  1,006    $620,604       65     $65,624       76 $67,351          5796     $590,667           18            11
                                           ‘Because agency personnel had miscoded some of the contract actions, some contracts in our original
                                           sample did not belong in our population. We replaced these miscoded contracts with others in our
                                           population from the same activity. We deleted 1 action at San Antonio ALC for $161,000, 2 at DGSC for
                                           $397,000, 1 at AVSCOM for $291,000,22 at AS0 for $6,802,000, and 7 at NAVSEA for $18,674,000.
                                           Additionally, all three sample awards that were made under section 8(a) of the Small Business Act,
                                           based on CICA exception 5, have been excluded from the table because 8(a) awards were not covered
                                           in our current review, Therefore, we also deleted one action at AVSCOM for $252,585 and two at NAV-
                                           SEA for $1,559,677.

                                           bWe adjusted the size of our population based on the number of sample contracts that did not belong in
                                           it.

                                           ‘The percentages in this column are based on the “revised sample” amounts divided by the “revised
                                           population” amounts.
                                           dAmounts in this column do not add to the total because the sample sizes were not sufficient to project
                                           to each individual activity. However, we are 95.percent confident that the total population contains 579
                                           contract awards plus or minus 115.




                                           Page 68                                         GAO/NSIAD-90-104      Competition    in Contracting   Act
                                           A99eQdLrvI
                                           Objective, Scope, and Methodology




Table Vl.6: Orlginal and Adjusted Population and Sample Sizes, Identified During Our Previous Review, for One-Offer Awards
Reported as Based on Full and Open Competition
Dollars    In thousands
                                                                                                                                                     Percent of
                                                  Orlginal             Original            Revised                  Revised                          population
Activity                                        pooulatlon             samole              samolea               uouulationb                          reviewedC
San Antonio      ALC                       10       $1,330      5         $281        5           $281      10              $1,330             50              21
DGSC                                      62         3,890      5           333      5             333     62                3,890              a               9
AVSCOM                                      4        1,344      4         1,344      3             622       3                 622            100             100
AiO                                       96        71.908      5         1,439      5         1,439       96               71.908               5              2
NAVSEA                 ~....-_---           1          407      1           407       1            407       1                 407            100             100
Total                                    173      $78,679      20       $3,804      19       $3,082       172            $78,157                11              4
                                           aBecause agency personnel had miscoded some of the contract actions, some contracts in our original
                                           sample did not belong in our population. We replaced these miscoded contracts with others in our
                                           population from the same activity whenever possible. However, in some instances, replacement con-
                                           tracts were unavailable. We deleted one action at AVSCOM for $722,000. We deleted no actions at the
                                           other four locations we visited.

                                           bFor these awards, our sample size does not permit us to project our results to the population. There-
                                           fore, the numbers and dollar values for these awards relate to the sample contract awards rather than to
                                           the population. We adjusted the size of our population based on the number of sample contracts that
                                           did not belong in it.
                                           ‘The percentages in this column are based on the “revised sample” amounts divided by the “revised
                                           population” amounts.



Table Vl.7: Total DOD Population Sizes, Identified During Our Previous Review, for New Contract Awards Based on Other Than
Full and Ouen Competition
Dollars    In thousands
                                                                                            Original population                        Percent of DOD
                                                                                          of selected activities                population included in
Activity                                                     DOD population
                                                                   L---_                         .__
                                                                                                      reviewed                                  review’
Arr Force                 --                         827            - $505,580               33b           $42,321                      4                       8
Armv                                                 878               560.412              10gc           131.855                     22                      24
Navy                                                1,999              794,l IO             779d           445,971                     39                      56
DLA                                                    69               22,354                5”                 657                    7               __-     3
DOD-other                                            337               203,648                0                      0                  0                       0
Total                                              4.110            $2.086.104            1,006          $620.804                      24        -             30

                                           aThe percentages in this column are based on the “original population of selected activities reviewed”
                                           amounts divided by the “DOD population” amounts.

                                           bThis number represents actions at San Antonio ALC
                                           ‘This number represents actions at AVSCOM

                                    Y      dThis number represents actions at AS0 and NAVSEA Headquarters.

                                           eThis number represents actions at DLA’s DGSC.




                                           Page 69                                           GAO/NSIAIMO-104             Competition        in Contracting    Act
                                                Appendix VI
                                                Objective,   Scope, and Methodology




Table VI.& Total DOD Population Sizes, Identified During Our Previous Review, for New Contract Awards Based on Full and Open
Competition and Receipt of One Offer
Dollars in thousands
                                                                                              Ori inal population                     Percent of DC?0
                                                                                            of seBected activities             population incl;tdetn
Activitv                                                          DOD oooulation                        reviewed                                     a
Air Force                                             ~-___281             $100,342             10b            $1,330                  4                      1
Army                                  ...------~           409              105,502              4c             1,344                  1                      1
Navy ..                                                    427              118,156             97*            72,315                 23                     61
DLA                                 .--_____--.-     ____- 376               32,814             62e             3,890                 16                     12
DOD-other              ._ _.- "_-.- -_.-_---.-_____-        51               12,015              0                  0                  0                      0
Total                                                   1,544             $360,829             173           $78,879                  11                     21
                                                aThe percentages in this column are based on the “original population of selected activities reviewed”
                                                amounts divided by the “DOD population” amounts.
                                                bThis number represents actions at San Antonio ALC

                                                CThis number represents actions at AVSCOM

                                                *This number represents actions at AS0 and NAVSEA Headquarters,

                                                eThis number represents actions at DLA’s DGSC




                                                Page 60                                         GAO/NE&U%90-104         Competition        in Contracting   Act
Appendix VII

Major contributors to This Report


                                   Michael E. Motley, Associate Director
National Security and              Kevin M. Tansey, Assistant Director
International Affairs              Russell R. Reiter, Evaluator-in-Charge
Division, Washington,              James M. Fields, Social Science Analyst
                                   Titina C. Hay, Evaluator
DC.                                Arthur J. Kendall, Mathematical Statistician
                                   Barbara L. Wooten, Evaluator


                                   William T. Woods, Assistant General Counsel
Office of the General
Counsel

Dallas     Regional       Office   Arthur L. Nisle, Site Senior



                                   Thomas C. Perry, Regional Assignment Manager
Denver Regional
Office

                                   Henry A. Murphy, Regional Assignment Manager
Kansas City Regional
Office

                                   Edwin J. Soniat, Regional Assignment Manager
Norfolk Regional                   Hamilton C. Greene, Evaluator
Office
                                   Richard D. Behal, Site Senior
Philadelphia          Re@ona1      William E. Lee, Evaluator
Office


                      Y




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