Making Federal Procurements Competitive

The Office of Federal Procurement Policy (OFPP) in the Office of Management and Budget (OMB) plays a vital role in shaping the policies and practices federal agencies use to acquire the goods and services they need to carry out their responsibilities. OFPP was established by Congress in 1974 to provide overall direction for government-wide procurement policies, regulations and procedures, and to promote efficiency, economy, and effectiveness in acquisition processes. OFPP is headed by an Administrator who is appointed by the President and confirmed by the Senate.

Procurement describes the process where the government finds goods and services from private parties that it does not produce or provide for itself. Competition in government procurement means that the government determines from whom to buy goods and services by soliciting or entertaining offers from two or more competitors, comparing them, and accepting one based on its relative value.

Competition in federal procurement contracting has recently become a topic of increased congressional and public interest, in part because of high-profile incidents of alleged misconduct by contractors or agency officials involving noncompetitive contracts and reports that the number of noncompetitive contract actions by the federal government has increased. President Obama also stressed competition in his March 4, 2009, message on government contracting.

Prominent officials within the Department of Defense (DOD), which accounts for some 70% of federal procurement spending per year, have expressed their commitment to reducing the DOD’s use of noncompetitive contracts. Hearings in the 110th and 111th Congresses addressed agencies’ alleged failures to compete contracts properly, and members enacted or proposed legislation addressing reported deficits in the laws governing competition in federal contracting, or agencies’ compliance with these laws.

The Competition in Contracting Act (CICA) of 1984 governs competition in federal procurement contracting. Any procurement contract not entered into through the use of procurement procedures expressly authorized by a particular decree is subject to CICA. CICA requires that contracts be entered into after full and open competition through the use of competitive procedures unless certain conditions exist that would permit agencies to use noncompetitive procedures.

Full and open competition can be obtained through the use of competitive proposals, sealed bids, or other procures defined as competitive under CICA. Full and open competition under CICA also encompasses full and open competition after exclusion of sources, such as results when agencies participate in dual sourcing or set aside acquisitions for small businesses.

Any contract entered into without full and open competition is noncompetitive, but noncompetitive contracts can still be in compliance with CICA when circumstances permitting other than full and open competition exists. CICA recognizes seven such circumstances, including:

• single source for goods or services
• maintenance of the industrial base
• unusual and compelling urgency
• statutory authorization or acquisition of brand-name items for resale
• requirements of international agreements
• contracts necessary in the public interest
• national security

CICA allows agencies to use special simplified procedures when acquiring goods or services whose expected value is less than $150,000, or commercial goods or services whose expected value is less than $6.5 million.

For more information about making federal procurements competitive, call Malyszek & Malyszek today for assistance from an attorney.