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Summary

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.