NASA centers' sole-sourcing flagged

"Audit of Multiple-award Contracts at NASA"

Two NASA centers frequently failed to fully compete task orders under multiple-award contracts, an audit by the NASA inspector general found.

Although they did not violate any laws, the centers did not follow regulatory requirements and used multiple-award contracts to direct business to specific vendors, the NASA IG reported.

The report, "Audit of Multiple-Award Contracts," found that 51 of 104 contracts that Johnson Space Center and Langley Research Center issued were sole-source orders made without competition.

"The agency did not receive the benefits of competitive bids and may be paying more for goods and services than necessary," according to the report, which is dated Sept. 28 but was released Oct. 19.

The report comes on the heels of a Defense Department IG report that showed many purchases for services are still going uncontested despite continued warnings from lawmakers that the problems could result in limitations being put on the procurement reforms.

The NASA IG report also comes as a House/Senate conference committee is discussing two provisions of the DOD fiscal 2002 authorization bill that seek to curtail sole-source buys. Section 803 of the Senate's version of the Defense authorization bill (S. 1416) would require DOD contracting officers to compete all task orders of $50,000 or more among all eligible schedule contract vendors.

The Federal Acquisition Regulation states that contracting officers must avoid situations in which contractors specialize exclusively in a statement of work, thereby creating the likelihood that orders will be awarded to a specific vendor.

Although there may be reasons for a sole-source award, "only in rare circumstances should a contractor receive a sole-source order that meets the FAR exceptions," the NASA IG report states. "The contractors were not given a fair opportunity to be considered for the 48 sole-source orders [that did not meet FAR exception requirements]."

The NASA IG recommends that NASA management establish specific competition goals for multiple-award contracts. Furthermore, the IG suggested that directors at Langley and Johnson direct contracting officers to "fairly consider all contractors who submit bids for orders under multiple-award contracts."

NASA procurement officials, in response to the IG report, said that they agreed with the recommendations, but that the orders cited in the report were not subjected to competition because they represent an "effort that was begun, but not completed, on prior contracts."

To subject these orders to fair competition would have "potentially amounted to meaningless competitions since the initial contractor would have had an unfair competitive advantage due to their prior work," they said.