DOD competes more services than products

The Defense Department held a steady stream of competition for its contracts last year, but it offered more competitive contracts for services than for products, according to a new report.

In fiscal 2011, the competition rate for dollars obligated across DOD on contracts and task orders for services was substantially higher than the competition rate for products—78 percent compared to 41 percent, the Government Accountability Office reported March 15.

The competition rate is the percentage of dollars obligated through full-and-open contracts compared to all contracts and orders.

DOD’s overall competition rate for all services and products was 58 percent.

GAO analyzed services which were not related to weapons systems development.

From fiscal 2007 to 2011, DOD, as well as the Army and Navy, had little change in their rates of competition for services. Rates went from 79 percent to 78 percent. Other defense agencies had a small increase in competition rates, going from 85 percent to 89 percent.

However, the Air Force had a significant decline. Its competition rate dropped from 75 percent to 59 percent. A defense procurement policy official told GAO that the Air Force competition advocate is assessing the reasons for the decrease, according to the report.

In addition, two agencies that assist DOD with its acquisitions—the Interior Department’s National Business Center (NBC) and the General Services Administration—had slightly higher rates of competition than DOD’s offices did.

NBC and GSA averaged 81 percent, compared to 78 percent. However, one contracting office within Interior, which was among the assisting agencies with the highest DOD obligations, had 51 percent rate of competition, a substantially lower competition rate for services, GAO noted.

The Senate Armed Services Committee directed GAO to conduct the analysis in the fiscal 2012 National Defense Authorization Act.