Resource centers boost competition for secret contracts

Restricted websites similar to the Federal Business Opportunities site are boosting competition for sensitive national security procurements, showing that competition is possible in the mysterious world, according to a report.

The National Reconnaissance Office hosts the Acquisition Research Center, which was developed for intelligence community procurements. It limits potential contractors to about 1,200 registered firms that are already cleared to work in a secure environment and have a workforce with security clearances.

“An NRO senior procurement official described this system as a proprietary classified version of FedBizOpps,” the Government Accountability Office wrote in a report released Jan. 13. GAO was reviewing competition for Defense Department contracts for national security needs.

Along with NRO, the National Security Agency has a business registry database. It provides industry with a central place for acquisition information. NSA officials use it for market research as a way to distribute documents to partners and other companies. All companies that are interested in doing business with NSA must be registered in the system. As of October 2010, the database included about 9,300 companies, GAO reported.

The Defense Intelligence Agency and the National Geospatial-Intelligence Agency, both of which are within the Defense Department, have made arrangements to use the systems.

GAO compared their contracts awarded under an acquisition rule allowing particular agencies to exempt certain national security contracts from a full-and-open competition. Because of the acquisition centers, NSA and NRO showed higher levels of competition compared to the DOD military departments, which don’t use the databases.

Annually, for NRO and NSA, competition for contracts ranged from 27 percent to 70 percent of total spending, GAO wrote, based on the information the agencies provided.

On the other hand, GAO found much less competition after analyzing procurement data on about 11,300 DOD national security contracts from fiscal 2007 through fiscal 2010, which equaled $2 billion. Military departments received more than one bid on only 16 percent of all contracts and task orders purchased under a national security exemption rule.

Defense officials noted three obstacles for their low percentage of competition.

• Few contractors with clearances.
• Constraints on soliciting new vendors.
• Few tools to do market research.

In response to the report, DOD officials said they would assess the tools that the intelligence community has to do market research and consider giving defense agencies access to the databases.