DoD Procurement: Competition Optional

Last week during a lunch break, I was running on the treadmill at a rather lackluster pace catching a few minutes of Fox News -- BTW: I watch Fox because I'm more comfortable with overt bias than surreptious slanting -- when I saw a ticker flash on the bottom of the screen noting that the Department of Defense is North America's largest employer. Only then did it dawn on me the true purchasing power of this giant, and what a role model it could be for the rest of the US government (not to mention other nations and militaries worldwide). But unfortunately, despite the introduction of strategic sourcing processes into a handful of commodity areas, the DoD remains a backwater of 19th transactional buying.

According to a recent article in Defense News, there is no competition in 1/3 of the DoD's interagency contracts. Senator Claire McCaskill, a Democrat and a former state auditor, is quoted as saying, "It's eye opening for me ... How in the world did we get to the point where one-third of the Pentagon's procurement dollars are spent on non-competed contracts?" The article later quotes findings from the Congressional Acquisition Advisory Panel noting that in 2004, at least "$107 billion in contracts [was awarded] without competition."

But it gets worse. Not only are contracts awarded without competition. Many are "awarded without clearly defined requirements," as well. As a result, the suppliers which are awarded business often "don't have a precise definition of what they are supposed to do or what they're supposed to provide." I suppose things could be worse. If the UN purchasing staff ran the DoD acquisition department, we'd see arms and food siphoned off to the highest bidder. But wait, that's asset recovery ...

Jason Busch

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