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GCN Home > July 5, 1999 issue

FEDERAL CONTRACT LAW

Congress issues a warning on task order contracts

By Joseph J. Petrillo

A congressional clampdown is looming over the increased abuse of task order contracts.

These are agreements in which the government knows generally what goods or services it needs but not specifically where, when or how much. It awards an umbrella contract and then issues periodic task or delivery orders containing details.

This standard procurement vehicle got a boost in 1994, when Congress enacted the Federal Acquisition Streamlining Act. FASA turned the spotlight on such contracts and added some parameters. Generally, the law favored awarding more than one contract to ensure competition for individual task orders. Some agencies had been awarding single contracts and then issuing sole-source task orders.

No protests

Under FASA, agencies need not worry about repercussions. If a contractor feels it was unfairly denied a chance to compete for an order, it has but a single remedy: complaining to an ombudsman. FASA prohibits protests unless an order exceeds the contract’s scope, period or maximum value.

Since these provisions were implemented, three important patterns have emerged.

First, the contracts tend to have a broad and indefinite scope. Statements of work are general and inclusive. The minimum order the government must place is often a mere token amount, yet dollar ceilings on total orders can be astronomical. Also, contracts are routinely open to other agencies.

Second, multiple awards have become common. It is not unusual for agencies to award a half-dozen contracts from a single solicitation. Sometimes every bidder gets a contract.

Third, it has become increasingly clear that many task orders are awarded without competition. In FASA, Congress expressly permitted sole sourcing of orders under certain circumstances. But an agency that disregarded these rules did not have to worry about anything more burdensome than the complaint to its ombudsman.

Of particular significance is a recent report by the Defense Department inspector general. It reported no competition at all for large numbers of task orders. The report concludes that in many cases, military buyers are observing neither FASA nor the Federal Acquisition Regulation—and that they are paying higher prices as a result.



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