Summary: A Senate committee requested that GAO provide background information on the extent of procurement competition in the Department of Defense (DOD) and civil agencies. The review showed that, except for an increase in competition for petroleum products, the level of competition in DOD procurements has declined. DOD and six major civil agencies which were reviewed unnecessarily awarded contracts on a sole-source basis and did not take specific actions to ensure that competition was obtained when it was available. The major causes of the agency officials failure to obtain competition on awards included ineffective procurement planning, the failure of contracting officers to perform adequate market research, and inappropriate reliance of procurement officials on the unsupported statements of higher level officials. Senate bill 2127 proposes several important changes in the procurement statutes governing Federal agencies which address these problems. The proposed bill would: (1) remove the strong statutory preference for sealed bidding and seek to focus on competition; (2) strengthen procedures for publicizing prospective awards; (3) require agencies to use advance procurement planning and market research to obtain competition; (4) require agencies to specify their needs and solicit offers without bias or favoritism with respect to any prospective source; and (5) provide a Government-wide ceiling for small purchases. GAO endorses the bill in general, but believes that there are several areas where it could be improved. The bill should be revised so that, to be considered competitive, awards must meet a minimum standard.
