Government purchasers do not have to select the lowest bidder to provide a product or perform a service in order to comply with acquisition regulations, a recent General Accounting Office review found.
In response to a request by Rep. Pete Sessions, R-Texas, GAO auditors reviewed 250 civilian and military contracts issued in 1996 and 1997. Of these, 53 were not awarded to the least expensive contractor, but instead were based on the best value for the agency.
The Federal Acquisition Regulation (FAR) allows purchasers to buy items or services at a premium as long as decisions are based on clearly stated evaluation factors and provide a greater value to the government. In its review, GAO found that buyers cited technical superiority, exceptional management practices and outstanding relevant experience as three justifiable reasons to choose a more expensive contractor.
The 53 contracts that GAO analyzed totaled $5.3 billion. Premiums, the difference between the awarded price and the lowest bid, accounted for 7 percent, or $367 million, of that total. But in many cases the contracts were expected to save the agency money over the long term, GAO found.
Even though a change in FAR regulations that requires agencies to document the perceived benefits of choosing more expensive contractors was implemented in 1997, after the contracts reviewed were awarded, each of the 53 contracts had such documentation.
Most of the contracts were for highly technical government services, such as cleanup of former nuclear plants, construction of chemical weapons disposal facilities and procurement of items such as amphibious transport dock ships and radar shelters.