Is competition alive and well in federal contracts? The government has promoted competition since 1781 when the Superintendent of Finance advertised in a local newspaper for proposals to buy food for federal employees in Philadelphia. In 1809, Congress passed the first law requiring competition in federal procurement, specifying “all purchases and contracts for supplies or services … shall be made by open purchases, or by previously advertising for proposals.” The Competition in Contracting Act (CICA) of 1984 is the foundation for current competition requirements.
What are the benefits of competition from the Contracting Officer’s perspective? By having multiple offers, the government can obtain higher quality items/services at lower prices. Competition curbs fraud and promotes accountability. Competition reassures taxpayers that our tax dollars are spent wisely.
Taxpayers are less likely to believe contracts are awarded due to favoritism when there is competition. Competition allows new offerors to enter the market by providing a level playing field. And in many cases, competition is faster and more efficient than a sole source award.
Ever since the implementation of sequestration and budget reductions, the CO is required to do much more extensive market research to justify other than competitive awards, making it much harder to obtain approvals for non-competitive awards. In addition, competition has garnered increased Congressional and public interest because of alleged misconduct in non-competitive contracts, resulting in stiffer reporting requirements for non-competitive contracts. As an example, the Department of Defense (which accounts for over half of federal “discretionary” spending) is focused on reducing the DOD’s use of noncompetitive contracts. This also extends into competition in multiple award contracts.
Is competition alive and well? In our combined 300+ years in contracting, we can confidently state that competition is actually trending upward – and will continue to do so for the next decade or so. Despite anecdotal evidence to the contrary, the real growth in the B2G market is going to be through competition. The good news is that this creates a great opportunity for companies who know how to compete to enter, expand, and excel in the USG market. This is bad news for incumbents who assume it is still 2010.