My $7B Question About Competition in Government Contracting is...
Where did everybody go?
Seriously! The information I'm about to share with you looks at more than twenty-one thousand contract actions during FY14 that resulted in billions of dollars being obligated to small business concerns (I'm not upset about that) where agencies indicated only receiving one response. But before we dig into the details, here's some background.
Sole source buys are under increasing scrutiny and the number of competitive obligations by federal agencies seems to be increasing each year. From that standpoint it seems Uncle Sam is doing its part, but what about Industry? Taken at face value, the information collected from the Federal Procurement Data System seems to indicate companies are letting viable competitive opportunities slip by. In fact, the number of dollars competitively awarded during FY14 where fewer than three offers (responses from bidders) were received is more than ten billion dollars based on initial awards and none of the modifications (you would be flabbergasted to see the total with modifications added).
Since it's been a long while since I've talked about one-offer buys, I decided to take a look at what happened last fiscal year (FY14) when agencies indicated purchases made were competitive and awarded to a small business concern with or without the use of a small business set-aside. I'm including all types of buys (i.e., GSA Schedule, BPA, Purchase Order, GWAC, etc.) but I'm limiting my results to initial awards only, which means dollars obligated as a result of a modification are not included. To see just how pervasive obligations as a result of modifications are, click here to read a blog article I published on the topic in August.
Okay. Are you ready? First, here's a look at what I mean when I say 'competitive' buys:
Just imagine what the number would look like if all of the non-competitive buys and modifications were included. So now that you know the number of dollars I'm referring to in this report, here's a look at what sixty federal agencies purchased when they indicated only receiving one response from interested small business concerns. The following represents descriptions and corresponding obligations of the top twenty-five of more than nine hundred NAICS Codes:
By the way, not all of these dollars were awarded as small business set-asides. In fact, no set-aside was used for more than half of the $7B obligated to small business in this report. Here's a snapshot of these one-offer obligations by set-aside type (or not!):
Now what's curious about the items highlighted in yellow is that they represent sole source obligations which means they were coded in FPDS-NG as competitive buys. I wonder if these were buys made from task order contracts like GWACs where the initial awards were competitive and that carried over to the order. Oh well. these only account for $122M of the total, so we're still above the $7B mark.
While over $1.5B of these dollars were issued via standalone contracts such as definitive contracts and purchase orders, the majority of the buys were against established contract vehicles. Blanket Purchase Agreements, GSA Schedules and Indefinite Delivery Contracts (IDIQs and MACs) collectively account for just shy of $5B, with IDCs on top by half a billion dollars. Governmentwide Acquisition Contracts such as ALLIANT and SEWP total $645M. There are ten different GWACs that made this list.
To put things in perspective, the dollars represented here are the result of more than twenty-one thousand contracts, delivery orders, purchase orders and task orders issued during FY2014. Additionally, the basis for my assumptions is the fact I've spoken to many contracting professionals and some of the folks who validate FPDS data and they tell me the numbers reported are accurate. But let's just assume there is a fifty-percent factor of glitch and human error. If we apply that to dollars that means the actual obligations where only one response was received is just over $3.5B. That's still a lot of dough to be leaving on the table, don't you think?
What's next? If I were still selling to Uncle Sam, I would figure out how competition looks for what I sell and to whom I sell (or want to) and figure out if the reason 'one-offer's' are happening is due to dark magic or simply someone asleep at the wheel. This information can easily be extracted at a granular level using FPDS-NG.
Would you like to know more? Click here to call me or email me at firstname.lastname@example.org. You can always view my other articles by clicking here.The Chief Visionary
"The person who says it cannot be done should not interrupt the person doing it."