Temporary 'Bridge Contracts' Risk Overpayments

Temporary extensions of contracts without competitive bids, a common practice at many large agencies, may waste money and misallocate staff time if the government doesn’t come up with a precise definition for the process, a watchdog found.

So-called “bridge contracts” are not defined in the Federal Acquisition Regulation, the Government Accountability Office noted in a report released Thursday. It characterized such awards as the extension of an existing sole-source contract to an incumbent contractor to ensure there is no gap in services.

In a review of 73 such contracts at the departments of Defense, Health and Human Services, and Justice, auditors found “limited or no insight into their use of bridge contracts, as bridge contracts were not defined or addressed in department-level guidance.” The exceptions GAO found are two DOD components, the Navy and the Defense Logistics Agency, which “have instituted definitions, policies, and procedures to manage and track their use.”

Despite a general requirement for internal controls to analyze and monitor risks in contracting, staff from the White House Office of Federal Procurement Policy “acknowledge that the use of bridge contracts may introduce risks related to a lack of competition,” GAO found.

Though bridge contracts are expected to be short-term, auditors found that some go undetected by managers for years. Of the 29 contracts GAO reviewed in-depth, six exceeded three years. An Army “bridge contract for computer support services was initially planned as a 12-month bridge, but because of subsequent bridges, ultimately spanned 42 months,” said the report to members of the Senate Homeland Security and Governmental Affairs Committee.”

Reasons for relying on bridge contracts include “acquisition planning delays, such as revisions to statements of work and delays in source selection, as well as an inexperienced and overwhelmed acquisition workforce, bid protests and budget uncertainties,” GAO found.

When most bridge contracts finally end, the vast majority are then bid out competitively, in many cases saving money. This “highlights the importance of better management controls over use of bridge contracts,” GAO concluded.

The report recommended that the White House procurement policy office “take steps to amend the FAR to incorporate a definition of bridge contracts” and in the interim provide guidance for agencies to track and manage their use. OFPP agreed.

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