GAO: More Guidance Needed on Urgency Exception

A March 2014 Government Accountability Office Report, “Noncompetitive Contracts Based on Urgency Need Additional Oversight,” found coding errors raised concerns about the reliability of federal procurement data on the use of the unusual and compelling urgency exception to full and open competition.

In fiscal year 2013, the government did not compete approximately 36% of the $459 billion obligated to procure goods and services, and it obligated about $3 billion on a compelling urgency basis.

Fulfilling a congressional mandate to review use of the urgency exception by the Department of Defense, the State Department, and the U.S. Agency for International Development, GAO analyzed procurement data for FYs 2010–2012. During that time, obligations reported under urgent noncompetitive contracts ranged from under 1 percent to about 12 percent of all noncompetitive contract obligations. DoD obligated $12.5 billion using the urgency exception, while State and USAID obligated $582 million and about $20 million respectively. Items procured included personal armor, guard services and communications equipment to support missions in Afghanistan and Iraq.

GAO assessed the agencies’ pattern of use of the exception, their reasons for awarding urgent noncompetitive contracts and the extent to which justifications met FAR requirements, and the extent to which agencies limited the duration of the contracts.

In a sample of 62 contracts, GAO found:

  • 28 contracts were incorrectly coded as having used the urgency exception; and
  • 10 of the correctly coded contracts had a period of performance of more
    than one year.

FAR 6.302-2 limits the duration of contracts using the urgency exception to one year unless the agency head determines exceptional circumstances apply. This determination was not made for the 10 contracts exceeding 1 year. However, 8 of the 10 contracts were modified after award to extend performance, and the FAR does not specify the steps agencies should take when a modification extends the period of performance beyond 1 year.

In addition, the FAR requires agencies to seek offers from as many vendors as practicable given the circumstances, but for some contracts in the sample, lack of access to technical data rights and reliance on contractor expertise prevented agencies from obtaining competition.

GAO recommended that DoD, State, and USAID provide guidance to improve data reliability and oversight for contracts awarded using the urgency exception. It also recommended that the Office of Federal Procurement Policy provide guidance to clarify when determinations of exceptional circumstances are needed when a noncompetitive contract awarded on the basis of unusual and compelling urgency exceeds 1 year at the time of award or as modified after award.

 

About Marilynn Helt

Marilynn Helt is a Senior Writer/Analyst in the Government Contracts group at Wolters Kluwer Law and Business. Marilynn analyses new developments affecting government contracting and supports the group’s legal research tools, with a focus on revising and updating explanations of contracting topics. With over 20 years’ experience providing authoritative content for legal professionals, Marilynn has written articles and edited and helped launch outside-authored treatises, books, and journals. Marilynn has prior law firm experience in international tax and estate planning. She received a BA in humanities and German from Valparaiso University, an MA in German literature from Washington University in St. Louis, and a JD magna cum laude from the University of Illinois College of Law.
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