FAA Lacks Adequate Controls To Accurately Track and Award Its Sole Source Contracts
In July 2009, the Office of Management and Budget (OMB) directed all Federal agencies to reduce the amount of dollars obligated on noncompetitive contracts, including sole-source contracts. Sole-source contracts are considered high-risk and can result in wasted taxpayer resources, poor contractor results, and inadequate accountability. According to the U.S. 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.
FAA took limited actions to reduce its use of sole-source contracts and did not achieve a sustained reduction in its use of these contracts between fiscal years 2008 and 2014. The number of FAA’s new sole-source contracts fluctuated from year to year, and the Agency awarded a total of 624 sole-source contracts, with a total value of about $2.2 billion, during this period. In 2009, FAA developed a plan to respond to OMB’s directive to reduce sole-source contracts, but the Agency did not establish performance measures to demonstrate whether the plan had an impact on the use of sole-source contracts. In addition, FAA’s pre-award practices for sole-source contracts did not fully comply with its Acquisition Management System (AMS) policy and guidance. AMS requires a number of actions before awarding sole-source contracts to help ensure that acquisitions are properly planned, awards are properly justified, and prices can be demonstrated to be fair and reasonable. However, 29 of 34 FAA sole-source contract files in our sample did not fully comply. We project that the total estimated value of sole-source contracts that did not fully comply with key AMS pre-award requirements is $962 million, or 51 percent of the total estimated value of contracts in our universe. FAA concurred with our five recommendations to help reduce the Agency’s use of sole-source contracts and increase its compliance with AMS pre-award policies and guidance.