Government Contracts Monitor
Even in the Face of \"Unusual and Compelling Urgency,\" Agencies Must Maximize Competition to the Extent Possible
September 24, 2009
The government must use “full and open competition” when it purchases goods or services unless one of seven primary exceptions is met. A recent Government Accountability Office (GAO) decision serves as a reminder that such exceptions do not necessarily mean competition can be abandoned altogether.
In Major Contracting Services, Inc., the U.S. Army awarded a contract for “portable chemical toilet services” to the firm DAV Prime Joint Venture (DAV). Although the procurement was set-aside for Service-Disabled Veteran-Owned Small Business Concerns (SDVOSBC), the Small Business Administration determined that DAV was not a SDVOSBC. However, since this determination was made after the contract had been awarded, DAV was permitted to keep the contract.
Since SDVOSBC was not eligible for the original solicitation, GAO advised the Army not to exercise DAV’s contract options. See Major Contracting Services, Inc., B-400616, Nov. 20, 2008. Nonetheless, when DAV’s contract expired, the Army extended it for four months on a sole-source basis, rather than inviting other firms to bid on the contract. The Army asserted that the “unusual and compelling urgency” exception permitted it to bypass the typical competition requirements. Specifically, the Army argued that the contract award was “unusual and compelling” because (1) the Army contracting office was not given sufficient time to prepare a new contract solicitation after learning of DAV’s ineligibility; and (2) the contract extension covered the summer months – when the portable chemical toilet services would be most needed.
In this case, the Army did not look for any other offerors – even though the requirement for “portable chemical restroom services” was a recurring need and the Army was presumably familiar with other potential vendors. While GAO agreed with the Army that the circumstances presented met the requirements for the “unusual and compelling urgency” exception, it noted that this urgency resulted from the Army’s failure to adequately plan for the procurement. In any event, even if carrying-out a full and open competition were not possible, the Army was still required to conduct a limited competition among qualified sources. 10 U.S.C. §2304(e). In the decision, Daniel Gordon, GAO Acting General Counsel, concluded that the Army could not “sit idly by in the face of the circumstances here and not take action to obtain more competition for its requirements.”
Major Contracting Services, Inc. underscores the importance of federal agencies’ using full and open competition to the extent possible. The case comes at a time when the Obama Administration is seeking to define the appropriate use and oversight of sole-source and other types of noncompetitive contracts (see our previous post on this policy “It’s Official: Obama Administration to Limit Role of Contractors; Threatens to Cancel Existing Contracts”).
Written by: Samuel Jack