Pentagon No-Bid Contracts Rise to 45% in 2011
The post-9/11 years at the Department of Defense have seen an enormous increase in no-bid contracts, with the lack of competition approaching 50% during the first six months of this year.
Over the course of the last 10 years, the amount of money spent by the Pentagon on non-competitive contracts has almost tripled, from $50 billion in 2001 to $140 billion in 2010, according to the Center for Public Integrity’s iWatch News. And the reliance on no-bid deals has only gone up so far in 2011—to 45%—the highest rate recorded since 2001.
Like other federal agencies, the Defense Department is supposed to demand competitive bidding. But numerous loopholes in federal law make it possible for contracting officers to bypass restrictions and select a single company to provide goods and services. For example, the government may claim “an unusual and compelling urgency” to skip competition, when in fact, according to iWatch News, “the urgency stemmed from the agency’s lack of planning for requirements that have been known for years.”
Another problem is “bridge contracts”, in which the Pentagon extends an existing contract rather than put the contract out for rebidding. These account for one quarter of all sole source contracts.
The Pentagon defends itself by pointing that, on a dollar spent basis, in 2010 62% of all contracts were competitive. However, this figure does not compare well with other departments of the federal government. For example, the Department of Energy has a 94% competition rate, the Department of Homeland Security 77% and the State Department 74%.