The Defense Department failed to properly justify 75 percent of its sole-source contracts worth more than $20 million over a year period, says the Government Accountability Office.
After federal regulations were changed on March 16, 2011, the Defense Department failed to report on six out of the eight sole-source 8(a) contracts worth over $20 million, according to a GAO report. The two contracts that complied with the new regulations were awarded by the Air Force. Since October 2009, the DOD awarded 51 sole source 8(a) contracts that were more than $20 million.
“The DOD components awarding the remaining six contracts did not comply with the requirement, either because they were not aware of the requirement and did not prepare a justification, or because they were confused and prepared an incorrect type of justification,” the auditors wrote.
Four of the contracts outlined by the GAO lacked proper 8(a) justification because contracting officials in the Army and Naval Sea Systems Command were unaware of the requirements, says GAO. Naval contracting officials have begun planning to use 8(a) competition for future contracts, the report noted.
In the two remaining cases issued by the Army, contracting officials were aware of the new 8(a) justification requirement, but did not correctly implement it due to confusion about what the Federal Acquisition Regulation (FAR) requires.
Sole-source contracts are permitted under the 8(a) program for developing small businesses owned by socially and economically disadvantaged individuals, such as Alaska Natives and Native American tribes. In the GAO’s December 2012 report, it recommended to the Administrator of the Office of Federal Procurement Policy provide further guidance to clarify the circumstances in which an 8(a) justification is required to help mitigate future confusion. The GAO did not suggest any new recommendations in its recent report.