The bomb fighting contract is a small example of a problem that’s been exacerbated by 10 years of war: awarding contracts without competition. While the Pentagon says its overall level of competition has remained steady over the past 10 years, publicly available data shows that Defense Department dollars flowing into non-competitive contracts have almost tripled since the terrorist attacks of 9/11. According to analysis by the Center for Public Integrity’s iWatch News, the data shows that the value of Pentagon contracts awarded without competition topped $140 billion in 2010, up from $50 billion in 2001.
Reports of limited and no-bid contracting, particularly in Iraq and Afghanistan, captured headlines in the early days of the Coalition Provisional Authority in Iraq, when companies like Custer Battles, later convicted of fraud , were given sole-source security contracts for security and reconstruction, including one worth $16.5 million to provide security at Baghdad International Airport. Among the accusations eventually levied against the company, which had no prior track record, was that it charged grossly inflated prices, in part by using fictitious companies to “lease” equipment to the government.
In 2009, President Obama followed up those campaign promises with a memo directing a broad overhaul of government contracting, including limits to sole-source and non-competitive contracting. “Excessive reliance by executive agencies on sole-source contracts (or contracts with a limited number of sources) and cost-reimbursement contracts creates a risk that taxpayer funds will be spent on contracts that are wasteful, inefficient, subject to misuse, or otherwise not well designed to serve the needs of the Federal Government or the interests of the American taxpayer,” the president wrote in the 2009 memorandum, citing reports by multiple government agencies. Moving back to full and open competition, the memo continued, could save the government billions of dollars. But in two-and-half years, the Obama administration has made no progress in competing military contracts.
Even the Pentagon’s senior leadership has acknowledged the problem: a 2010 memo by Undersecretary Ashton Carter, the Pentagon’s senior procurement official, called for greater competition, along the lines of the earlier Obama memo, and promised the Pentagon would make its contracting process more open to competitive bidding. “Maximize the use of multiple-source, continuously competitive contracts,” a briefing accompanying the memo states.