Competition in DoD Acquisitions

This report examines the downtrend in competitive procurements within DoD in order to identify principal causes. Results for the most current year, FY78, were compared with FY72 results and discussed with personnel representing various purchasing activities. Findings were that the downtrend in dollars obligated after competition was real and not caused by changes in the makeup of categories of supplies and services. The decline was caused by reduced competition in a few high dollar commodity and service categories which are identified and discussed. Explanations for the decline include the mechanics of the reporting system or judgmental reporting decisions; changes in the nature of items within a commodity category or in the quantities of items procured; and the cyclic nature and long life of major programs. No evidence supported the hypothesis that changes in policy or administrative practices contributed to the decline in competition. The one exception was in high technology areas where design and technical competition has been increased at the expense of price competition. The analysis was purposely limited in scope and did not address the other 60 to 70 percent of total obligations that includes programs, products or services that rarely have been competed or have not been competed or competed successfully.