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Audit Initiated of FAA’s Award and Use of Sole-Source Contracts

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In 2009, the President issued a memorandum directing the Office of Management and Budget (OMB) and all Federal agencies to reduce the use of noncompetitive contracts, including sole-source contracts. Sole-source contracts can be used when only one contractor is capable of delivering the goods or services needed and, therefore, it is not feasible to obtain competitive bids. However, these types of contracts are considered high-risk and can result in wasted taxpayer resources, poor contractor results, and inadequate accountability. According to the Department of Transportation’s (DOT) annual reports to Congress on sole-source contracts, the Federal Aviation Administration (FAA) accounted for approximately 65 percent of DOT’s sole-source awards between fiscal years 2008 and 2013. Overall, FAA annually obligates the largest amount of dollars on contracts within the Department.

Our audit objectives will be to (1) assess FAA’s actions to implement OMB’s 2009 directive to reduce the use of sole-source contracts, (2) determine whether FAA’s practices prior to award of sole-source contracts comply with Acquisition Management System requirements, and (3) evaluate FAA’s efforts to maximize competition of follow-on awards to sole-source contracts.