Competition levels in interagency contracting are murky

Information in a government procurement database indicates that more than 20 percent of all service purchases are made without competition, but good data on the level of competition in interagency contracts remains unavailable due to the miscoding of a large group of Defense Department contracts.

The Services Acquisition Reform Act Advisory Committee, created by the 2004 Defense Authorization Act, voted Thursday on recommendations designed to address problems in, and to strengthen and possibly expand, the Federal Procurement Data System -- Next Generation, a governmentwide database.

Panelists were presented last month with data indicating that in fiscal 2004, 24 percent of all services acquisitions were not subject to competition, and in fiscal 2005, 20 percent were completed without competition. It also showed that since fiscal 2000, there has been an upward trend in the percentage of dollars considered competed in which only one offer was received. That described about 8 percent of total spending in fiscal 2000 and rose to 20 percent in fiscal 2005, according to the data.

Those figures were established through research by acquisition panel staff to support a working group on commercial practices that recently adopted a slate of recommendations related to fostering competition in procurement.

During that research, staff found an anomaly in which some data on interagency contracts -- which represented 40 percent of governmentwide obligations in fiscal 2004 -- was recorded incorrectly.

The Defense Department accounted for 73 percent of interagency contracting dollars in 2004, but has yet to finish integrating its contracting systems into FPDS-NG, so agency data is periodically added into the database in batches. The panel staff noticed that task orders brought over from the Defense systems were marked as being subject to "full and open competition" based on the designation of their parent umbrella agreements, even though individual tasks could have been awarded without competition under one of four allowed exceptions to the standard competition rules.

In explaining the miscoding, Laura Auletta, designated federal officer for the panel, was careful to note that the incorrect designations were not the result of system failures within FPDS-NG, but had been traced back to policy and technical decisions about how data would be matched up between fields in the Defense Department's systems and GSA's.

The advisory panel agreed to recommend that the Office of Management and Budget's Office of Federal Procurement Policy ensure that the system be changed to fix the problem.

The panel also voted on several other recommendations. Members agreed that agencies should be assigned greater responsibility for the timeliness and accuracy of data, should boost training on its use and should ensure that internal reviews such as those by inspectors general include spot checks on FPDS-NG data as compared to contract files, to reduce sloppiness in data entry.

Panelists also agreed that OFPP and the Government Accountability Office should take measures to address data accuracy. After debate, panel members decided not to recommend a line-item appropriation to fund the system, on the basis that it could too easily be cut by Congress. Some panelists, however, expressed strong misgivings about the "pass the hat" funding system that currently supports the database.

A heated debate arose over the question of whether the panel should recommend increasing the level of detail of data in the system. Currently, data fields contain North American Industry Classification System codes that represent categories of goods and services, but do not provide sufficient information to show what exactly was purchased.

Panelists finally agreed that OFPP should work with agencies and industry to study whether to enhance the data in the near term through use of United Nations Standard Product Service Codes, which would provide more detail. They also approved a recommendation that OMB form a study group to consider adding enough detail so that agencies could use FPDS-NG as a tool for market research and strategic sourcing.

The panel also adopted a recommendation that OMB conduct a study on the feasibility and costs associated with an FPDS-like database that would include both contracts and grants in an Internet-accessible format. The recommendation mirrors the Federal Funding Accountability and Transparency Act, approved last month by the Senate Homeland Security and Governmental Affairs Committee, and would improve public visibility into federal grant spending. The House passed a similar measure in June that would include only grants, not contracts.