Contrary to federal law requiring government agencies to issue government contracts only after competitive bidding, the Pentagon since 2000 has awarded $1.6 trillion worth of defense contracts to sole bidders who had no competition at all. Despite all the talk in Washington about reining in federal spending, this trend shows no signs of abating, as 20 of the most recent 35 Department of Defense (DoD) contracts, worth $257 million, were awarded after receipt of just a single bid. 

The law requiring “full and open competition” for government contracts is the Competition In Contracting Act (CICA), passed by Congress in 1984 as a way to hold down costs during the Reagan administration’s military spending spree. In addition to the competition requirement, CICA requires that procurements worth more than $25,000 be advertised for at least 15 days before a solicitation is issued, that bidders be given a specific minimum response time of 30 to 45 days to prepare their bids, and that each agency name “competition advocates” to review and challenge non-competitive procurements.

CICA also provides exceptions to its “full and open competition” requirement, including exemptions for procurements when there is only one vendor able to satisfy agency requirements, an unusual and compelling urgency, an international agreement or statute that precludes competition, or where competition would compromise national security, e.g., by exposing classified data.

The Pentagon relies on all of these exceptions, but perhaps equally important to DoD contractors is the fact that CICA does not apply to follow-on contracts that are within the scope of an existing contract or to the exercise of priced options that were evaluated as part of the initial competition. Thus, once a weapons maker lands a contract for some piece of hardware, the success of the original contract will yield subsequent deals for parts, services, upgrades, etc., for years to come.

The recent sole-source contracts awarded by Pentagon include the following:

• CSC Applied Technologies received a $60 million contract for range engineering and operations and maintenance services.

• Thales Raytheon Systems received a $14.1 million contract for support services for the Sentinel radar.

• General Dynamics Ordnance Systems received a $16 million contract for M1037 5.56mm short range training ammunition.

-Matt Bewig

To Learn More:

Army of One ... Contractor (by Neil Gordon, POGO)

“I’m a Sole Man…” (by Mark Thompson, Time)

Recently Awarded Pentagon Contracts (Department of Defense)

Pentagon Resists Competitive Bidding for Contracts (by Noel Brinkerhoff, AllGov)

Pentagon No-Bid Contracts Rise to 45% in 2011 (by Noel Brinkerhoff and David Wallechinsky, AllGov)

Note: The author of this article represented defense contractors during the 1990s by litigating contract disputes they had with the Defense Department.