WASHINGTON, Oct. 2 (UPI) -- The Pentagon's championing of commercial purchases to reduce cost and delays in DOD contracting apparently has not worked, according to a new report.
The Government Accountability Office reported last week on a review of Air Force contracting. It shows that while the number of commercial contracts has increased since 2001, it has not attracted new vendors to the Defense Department marketplace as hoped, which would have increased competition and driven down prices.
Instead, while the total amount of commercial contracts has almost doubled, most of the contract awards have gone to traditional defense companies.
Moreover, of the 20 new commercial awards over $5 million made in 2004, half were no-bid contracts.
"This recent trend appears inconsistent with (Office of the Secretary of Defense) guidance to avoid sole-source commercial acquisition situations," the GAO reports.
Eight of those 10 no-bid awards went to traditional defense companies rather than other, new entrants to the defense marketplace.
Commercial contracts are for items bought "as is", off the shelf from existing suppliers. Traditional Pentagon contracting can take years, as military specifications are defined, a competition opened, submissions judged, then awards made. Sometimes, disappointed losers contest awards, further delaying fulfillment of the contract.
In 2001, the Office of the Secretary of Defense encouraged the military services to use commercial contracts to speed delivery and lower prices, as well as attract new vendors. It wanted them to double the total dollar value and increase by 50 percent the number of commercial contracts.
The Air Force roughly doubled the value, but only increased the number of contracts by about 28 percent, according to the GAO.
"It is unclear if or how the Air Force has benefited from increased use of commercial acquisition," the GAO reports.
There has been no measurement of cost or schedule savings, according to the report.
