Plan to increase competition for Pentagon contracts founders
WASHINGTON — One is perhaps the best-known helicopter in the world, Marine One, and uses the south lawn of the White House as its landing pad. The other, the combat rescue helicopter, performs the “sacred mission” of saving downed troops.
Winning the contract for either program would be a major coup for any Defense contractor, worth hundreds of millions. But when the bidding opened for both contracts, only one company came forward.
Now, the Army is looking to replace its training helicopters. But the program isn't being put out to the market for competition. Rather, the Army intends to purchase 100 Lakota UH-72 helicopters from Airbus, with no chance for other companies to offer proposals.
With Defense budgets tightening, Pentagon acquisitions officials say fostering competition is one of the best ways to drive prices down and ensure efficiency. And Defense officials have made competition a top priority, saying in a recent report it “is the single best way to motivate contractors to provide the best value.”
Despite those efforts, the percentage of Defense contract obligations that received competing bids dropped to 57 percent last year, the lowest in nearly a decade. In the four years since the Pentagon started setting goals for competition, it has never met them.
The Government Accountability Office said in a recent report that the Pentagon “continues to obligate significant amounts on one-offer awards”— contracts that receive only one bid. In 2013, $22.6 billion was awarded in contracts that had a single bidder, the GAO found.
In urging the Pentagon to do more to safeguard against waste, the GAO said “competitive contracts can help save money, improve contractor performance, curb fraud and promote accountability for results.”
That's not true just for multi-million dollar helicopters and fighter jets. The General Services Administration, which helps federal government agencies buy all kinds of goods and services, has begun a program to generate competition when agencies buy office supplies.
Many agencies didn't have access to the prices different companies offer or what different agencies have paid in the past. So, for example, the federal government had 31 vendors selling the same simple hammer at 31 prices that ranged from $9.76 to $48.77.
Armed with the new data, government purchasers can see how they could be overpaying. Vendors, meanwhile, can see how overpriced their items were. With the program in place, the amount the government paid for one brand of printer toner, for example, dropped from $458.94 to $152.78, the GSA said. The price for a dozen ballpoint pens went from $33.88 to $5.35.
Since the program began in 2010, the effort has saved $140 million on office supplies, the GSA said.
Given all the talk about increasing competition, some in the defense industry were surprised that the Army decided not to put its new training helicopters out to bid. Officials at Bell Helicopter, which supplies the Army with most of its training helicopters, said they received no warning that the Army was replacing the fleet.
The Army said the decision to use the Lakotas as training helicopters is part of a larger restructuring program that will save more in the long run.
As part of the restructuring, the Army is getting rid of three lines of helicopters, meaning it soon will operate just four kinds.
Since all of the helicopters left in the Army fleet will be twin engines, it only makes sense that upcoming pilots learn on a more modern aircraft, said Col. Frank Tate, chief of the Army's aviation force development.