Many purchase agreements lack competition, GAO says

Agencies should review how they use blanket purchase agreements (BPAs), particularly regarding competition for the orders placed against the agreements, a new report recommends.

The Government Accountability Office found that 60 percent of the 336 BPAs in its sample were single-award BPAs, which means there was only one vendor on the BPA taking orders. And for 19 percent of them, there was no competition when the BPA was established, according to the report released today.

For one of the single-award BPAs, established in 2004, GAO found no evidence of competition, and the BPA had an estimated amount of nearly $60 million, the report states.

Once a single-award BPA is established, all orders may be issued directly with the vendor without additional competition. GAO said this was the case for the vast majority of orders under the single award BPAs. Agencies competed only 10 percent of orders and the dollar value of some of the non-competed orders was significant, GAO said. Of the orders not competed, 45 were greater than $1 million, according to the report.

A number of contracting officers said this direct-order option of BPAs was an advantage, GAO said.

“Competition is the cornerstone of the acquisition system, and the benefits of competition are well established,” the report states.

Multiple-award BPAs, which are awarded to more than one vendor for the same requirement, provide an opportunity for further competition when placing orders, but many contracting officers placed orders directly with one vendor without further competition, GAO said.

Several agencies agreed with the recommendations to increase competition and clarifying conditions when establishing a BPA to a single vendor is appropriate.