Pentagon’s Contract-Spending Problem

The Defense Department continues to spend more than half its contracting dollars without legitimate competition between vendors, according to its Office of Procurement and Acquisition Policy.

A competition scorecard for the third quarter of fiscal 2016 released this week by the office shows that of $205 billion awarded in contract spending across DOD, only $101 billion was competed.

That compete percentage, about 49.7 percent of total contract spending, falls short of DOD’s stated 57 percent goal for fiscal 2016, and indicates a continuation of almost a decade of declining competition across the military space for everything including IT systems, professional services and weapons systems.

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DOD’s first- and second- quarter competition scorecards showed DOD competed 43.3 percent and 46.5 percent of its awarded contracting dollars, respectively, worse than the first- and second-quarter scorecards in 2015.

It seems general policies designed to improve competition in DOD have yet to see results, including a 2014 memo drafted by Frank Kendall, undersecretary of defense for acquisition, technology and logistics, to increase competition and push military contractors away from sole-source contracts.

The military’s big spenders—especially the Air Force and Navy—weigh down DOD’s overall scores, competing 31 percent and 39 percent of their contracts, respectively. They are the antithesis to the Joint Improvised Explosive Device Defeat Organization and Uniformed Services University of the Health Services, which compete more than 98 percent of their contracted dollars.