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To meet urgent needs, DoD can issue undefinitized contract actions (UCA), which authorize contractors to begin work before reaching a final agreement on contract terms. Such actions are considered to be a risky contract vehicle for the government because contractors lack incentives to control costs during this period. Defense regulations provide that the government determination of contractors' allowable profit or fee should reflect any reduced cost risk. Pursuant to the 2008 National Defense Authorization Act, GAO assessed whether DoD actions taken as required by the act have accomplished the following: (1) improved departmental insight and oversight of UCA use; and (2) resulted in local commands meeting DoD's standards for documenting the basis for negotiating the contractor profit or fee, definitization timelines, and obligation amounts. GAO reviewed relevant DoD regulations and policies and contract files for 83 randomly-selected UCAs totaling $6.1 billion at eight local commands. The findings from this contract file review cannot be generalized across DoD. GAO recommends that the Secretary of Defense revise defense regulations to provide specific guidance for how to develop, consider, and document assessments of cost risk for profit or fee for all undefinitized contract actions. In written comments, DoD agreed with the recommendations.
To meet urgent needs, DOD can issue undefinitized contract actions (UCA), which authorize contractors to begin work before reaching a final agreement on contract terms. Such actions are considered to be a risky contract vehicle for the government because contractors lack incentives to control costs during this period. Defense regulations provide that the government determination of contractors allowable profit or fee should reflect any reduced cost risk.Pursuant to the 2008 National Defense Authorization Act, GAO assessed whether DOD actions taken as required by the act have (1) improved departmental insight and oversight of UCA use and (2) resulted in local commands meeting DODs standards for documenting the basis for negotiating the contractor profit or fee, definitization timelines, and obligation amounts. GAO reviewed relevant DOD regulations and policies, and contract files for 83 randomly-selected UCAs totaling $6.1 billion at eight local commands. The findings from this contract file review can not be generalized across DOD.
Competition is a critical tool for achieving the best return on the government's investment. While federal agencies are generally required to award contracts on the basis of full and open competition, they are permitted to award non-competitive contracts in certain situations. Agencies are also required to establish competition advocates to promote competition. This report assessed: (1) trends in non-competitive contracts and those receiving only one offer when competed; (2) exceptions to and factors affecting competition; (3) whether contracting approaches reflected sound procurement practices; and (4) how agencies are instituting the competition advocate role. Charts and tables. This is a print on demand publication.
This report formally transmits a briefing in response to the National Defense Authorization Act for Fiscal Year 2010 (Public Law No. 111-84), which requires a review of Department of Defense (DoD) policies related to year-end spending and the rate of obligations incurred by DoD in the fourth quarter of fiscal years 2006 through 2009, as compared with the obligations incurred in the first three quarters of those fiscal years for both one-year and multi-year appropriations. Charts and tables.
The authors analyze various approaches to speed acquisition of military capabilities and keep pace with evolving threats, assess these approaches' suitability for different conditions and acquisition types, and identify implementation issues.