FEDERAL 

CONTRACTING

Noncompetitive 

Contracts Based on 

Urgency Need 

Additional Oversight

Report to Congressional Committees

March 2014

GAO-14-304

United States Government Accountability Office
 

United States Government Accountability Office

Highlights of GAO-14-304, a report to 

congressional committees

March 2014

FEDERAL CONTRACTING

Noncompetitive Contracts Based on Urgency Need 

Additional Oversight

Why GAO Did This Study

Competition is a critical tool for 

achieving the best return on the 

government’s investment. Federal 

agencies are generally required to 

award contracts competitively but are 

permitted to award noncompetitive 

contracts under certain circumstances, 

such as when requirements are of 

such an unusual and compelling 

urgency that the government would 

suffer serious financial or other injury. 

Contracts that use the urgency 

exception to competition must 

generally be no longer than one year in 

duration. 

The conference report for the National 

Defense Authorization Act of Fiscal 

Year 2013 mandated GAO to examine 

DOD’s, State’s, and USAID’s use of 

this exception. For the three agencies, 

GAO assessed (1) the pattern of use, 

(2) the reasons agencies awarded 

urgent noncompetitive contracts and 

the extent to which justifications met 

FAR requirements; and (3) the extent 

to which agencies limited the duration.

GAO analyzed federal procurement

data, interviewed contracting officials,

and analyzed a non-generalizable 

sample of 62 contracts with a mix of 

obligation levels and types of goods 

and services procured across the three

agencies.

What GAO Recommends

GAO recommends that DOD, State 

and USAID provide guidance to 

improve data reliability and oversight

for contracts awarded using the 

urgency exception. GAO also 

recommends that OFPP provide 

clarifying guidance to ensure 

consistent implementation of 

regulations. Agencies generally agreed 

with the recommendations.

What GAO Found

The Departments of Defense (DOD) and State and the U.S. Agency for 

International Development (USAID) used the urgency exception to a limited 

extent, but the reliability of some federal procurement data elements is 

questionable. For fiscal years 2010 through 2012, obligations reported under 

urgent noncompetitive contracts ranged from less than 1 percent to about 12 

percent of all noncompetitive contract obligations. During that time, DOD 

obligated $12.5 billion noncompetitively to procure goods and services using the 

urgency exception, while State and USAID obligated $582 million and about $20 

million respectively, almost exclusively to procure services. Among the items

procured were personal armor, guard services and communications equipment to 

support missions in Afghanistan and Iraq. GAO found coding errors that raise 

concerns about the reliability of federal procurement data on the use of the 

urgency exception. Nearly half—28 of the 62 contracts in GAO’s sample—were 

incorrectly coded as having used the urgency exception when they did not. GAO 

found that 20 of the 28 miscoded contracts were awarded using procedures that 

are more simple and separate from the requirements related to the use of the 

urgency exception. Ensuring reliability of procurement data is critical as these 

data are used to inform procurement policy decisions and facilitate oversight.

For the 34 contracts in GAO’s sample that were properly coded as having used 

the urgency exception, agencies cited a range of urgent circumstances, primarily 

to meet urgent needs for combat operations or to avoid unanticipated gaps in 

program support. The justifications and approvals—which are required by the 

Federal Acquisition Regulation (FAR) to contain certain facts and rationale to 

justify use of the urgency exception to competition—generally contained the 

required elements; however, some were ambiguous about the specific risks to 

the government if the acquisition was delayed.

Ten of the 34 contracts in GAO’s sample had a period of performance of more

than one year—8 of which were modified after award to extend the period of 

performance beyond 1 year. The FAR limits contracts using the urgency 

exception to one year in duration unless the head of the agency or a designee

determines that exceptional circumstances apply. Agencies did not make this 

determination for the 10 contracts. The FAR is not clear about what steps 

agencies should take when a contract is modified after award to extend the 

period of performance over 1 year. Some contracting officials noted that these 

modifications are treated as separate contract actions and would not require the 

determination by the head of the agency or designee. Others considered them 

cumulative actions requiring the determination. Standards for Internal Controls in 

the Federal Government calls for organizations to maintain proper controls that 

ensure transparency and accountability for stewardship of government 

resources. The Office of Federal Procurement Policy (OFPP)—which provides 

governmentwide policy on federal contracting procedures—is in a position to 

clarify when the determination of exceptional circumstances is needed to help 

achieve consistent implementation of this requirement across the federal 

government. Further, under the urgency exception, the FAR requires agencies to 

seek offers from as many vendors as practicable given the circumstances. For 

some contracts in GAO’s sample, lack of access to technical data rights and 

reliance on contractor expertise prevented agencies from obtaining competition.

View GAO-14-304. For more information, 

contact Belva Martin at (202) 512-4841 or 

martinb@gao.gov.
Page i GAO-14-304 Noncompetitive Contracting

Letter 1

Background 3

Agencies Used the Urgency Exception to a Limited Extent and 

Procured a Range of Goods and Services, but Data Reliability 

Is Questionable 8

Agencies Cited a Range of Urgent Circumstances to Award 

Noncompetitive Contracts and Justifications Generally 

Contained Required Elements 15

Agencies Did Not Always Limit the Duration to 1 Year and 

Achieved Limited Competition in Selected Instances 24

Conclusions 35

Recommendations for Executive Action 36

Agency Comments and Our Evaluation 37

Appendix I Objectives, Scope, and Methodology 41

Appendix II Summary of Contracts Included in Our Sample 46

Appendix III DOD, State, and USAID Contracts That Exceeded 1 Year 48

Appendix IV Comments from the Department of Defense 49

Appendix V Comments from the Department of State 52

Appendix VI Comments from the U.S. Agency for International Development 54

Appendix VII GAO Contact and Staff Acknowledgments 57

Contents
Page ii GAO-14-304 Noncompetitive Contracting

Tables

Table 1: FAR Approval Levels for Justifications for Other Than Full 

and Open Competition 6

Table 2: Contracting Offices and the Number of Contracts 

Reviewed 42

Table 3: Summary of Contracts in Our Sample Awarded Under the 

Unusual and Compelling Urgency Exception 46

Figures

Figure 1: Elements of a Justification for Other Than Full and Open 

Competition Required by the FAR 5

Figure 2: Percent of Total Competitive and Noncompetitive 

Obligations for DOD, State, and USAID, Including Use of 

the Urgency Exception Compared to Use of Other 

Exceptions to Competition, Fiscal Years 2010 through 

2012 9

Figure 3: Percentage of DOD, State, and USAID Dollars Obligated 

for Goods and Services and Examples of Items Procured 

Using the Urgency Exception for Fiscal Years 2010 

through 2012 11

Figure 4: Illustration of Data Entry Practices and FPDS-NG 

Validation Rules for Contracts Awarded Using Simplified 

Procedures 14

Figure 5: Increases in Contract Value to Procure Training and 

Program Support for the Persistent Ground Surveillance 

System 30

Figure 6: Time Line of Events to Procure the Aerostat for the 

Persistent Threat Detection System Program 34

Figure 7: Period of Performance for Contracts that Exceeded 1 

Year 48
Page iii GAO-14-304 Noncompetitive Contracting

Abbreviations 

AFRL Air Force Research Laboratory 

DLA Defense Logistics Agency

DOD Department of Defense

FAR Federal Acquisition Regulation

FPDS-NG Federal Procurement Data System-Next Generation

IED improvised explosive device

ISR intelligence, surveillance and reconnaissance

OFPP Office of Federal Procurement Policy

OMB Office of Management and Budget

PGSS Persistent Ground Surveillance System

PTDS Persistent Threat Detection System

State Department of State

USAID U.S. Agency for International Development

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Page 1 GAO-14-304 Noncompetitive Contracting

441 G St. N.W.

Washington, DC 20548

March 26, 2014

Congressional Committees

In fiscal year 2013, the federal government obligated more than $459 

billion to procure goods and services, of which approximately $164 

billion—about 36 percent—were not competed. Competition in contracting 

is a critical tool for achieving the best return on investment for taxpayers 

and can help save the taxpayer money, improve contractor performance, 

and promote accountability for results. While federal statute and 

acquisition regulations generally require that contracts be awarded on the 

basis of full and open competition, they also allow agencies to award 

noncompetitive contracts in certain circumstances. For example, when 

the agency’s need for goods and services is of an unusual and 

compelling urgency that precludes full and open competition, agencies 

may be permitted to award noncompetitive contracts where a delay in 

award would result in serious financial or other injury to the government. 

Nonetheless, the Federal Acquisition Regulation (FAR) pertaining to the 

award of a noncompetitive contract on the basis of urgency requires that 

agencies request offers from as many sources as is practicable given the 

circumstances; however, agencies may limit the number of sources from 

which it solicits offers.1

Promoting competition—even in a limited form—increases the potential 

for quality goods and services at a lower price in urgent situations. Past 

GAO work has found that the federal government may realize significant 

cost savings when awarding contracts competitively. In fiscal year 2013, 

the federal government obligated about $3 billion through noncompetitive 

contracts on the basis of a compelling urgency to procure goods and 

services. Noncompetitive contracts carry the risk of overspending 

because, among other things, they have been negotiated without the 

benefit of competition, to help establish pricing; one way to mitigate risk is 

to limit the contract’s performance period. In 2009, a new requirement 

 1 Contracts awarded on the basis of an unusual and compelling urgency where the 

government may limit the number of sources from which it solicits bids or proposals are 

considered noncompetitive contracts. For the purposes of this report we refer to the 

unusual and compelling urgency exception to full and open competition as the urgency 

exception. We use the term limited competition to refer to situations when the government 

seeks offers from as many potential sources as is practical under the circumstances when 

using the urgency exception. 
Page 2 GAO-14-304 Noncompetitive Contracting

was included in the FAR that, among other things, limits the period of 

performance for contracts awarded noncompetitively on the grounds of 

urgency to no longer than 1 year unless there is a determination that 

exceptional circumstances apply.2

The conference report for the National Defense Authorization Act for 

Fiscal Year 2013 mandated that GAO review the use of the unusual and 

compelling urgency exception to full and open competition by the 

Departments of Defense (DOD) and State and the U.S. Agency for 

International Development (USAID).3

To determine patterns of DOD’s, State’s, and USAID’s use of the unusual 

and compelling urgency exception to competition, we analyzed data from 

the Federal Procurement Data System-Next Generation (FPDS-NG) for 

fiscal years 2010 through 2012, which represented the time period after 

the duration requirement went into effect and reflected the most current 

data to show trends over time. We determined that the federal 

procurement data were sufficiently reliable to identify these three 

agencies’ use of the urgency exception, in part by verifying a nongeneralizable random sample of the data and adjusting the data to 

account for known limitations by limiting our analysis to the procurement 

data we could reasonably confirm were awarded using the urgency 

exception. To determine the reasons that agencies awarded 

noncompetitive contracts on the basis of urgency and the extent to which 

justifications met FAR requirements, we used federal procurement data to 

select a non-generalizable sample of 62 contract files based on largest 

This report addresses: (1) the 

pattern of DOD’s, State’s, and USAID’s use of the unusual and 

compelling urgency exception, including the range of goods and services 

acquired; (2) the reasons that agencies awarded noncompetitive 

contracts on the basis of urgency, and the extent to which justifications 

met requirements in the FAR; and (3) the extent to which agencies limited 

the duration of the contract and achieved competition in urgent situations.

 2 74 Fed. Reg. 52,849 (Oct. 14, 2009). In 2008, the Duncan Hunter National Defense 

Authorization Act for Fiscal Year 2009, Pub. L. No. 110-417, § 862, amended certain laws 

to require that contracts awarded using the urgency exception not exceed the time 

necessary to meet the unusual and compelling requirements and for the agency to enter 

into another contract, and may not exceed 1 year unless the head of the agency 

determines exceptional circumstances apply. The 2009 FAR amendment implemented 

this requirement.

3 H.R. Rep. No. 112-705, at 817 (2012) (Conf. Rep.).
Page 3 GAO-14-304 Noncompetitive Contracting

obligations and a mix of products and services contracts. We analyzed 

justifications and other documents agencies used to seek approval to limit 

competition on the selected contracts to identify agencies’ rationale for 

using the urgency exception and determined whether they met FAR 

requirements. We conducted legal research, analyzed DOD, State, and 

USAID policies and guidance, and interviewed officials on use of the 

urgency exception. We compared agencies’ policies and procedures with 

the Standards for Internal Control in the Federal Government which calls 

for documenting transactions to provide evidence of implementation.4 To

determine the extent to which agencies complied with the FAR 

requirement to limit the contract period and obtained competition, we 

performed an in depth review of contract files for 34 selected contracts 

that we identified from our sample of 62 contracts were awarded using 

the unusual and compelling urgency exception. In addition, we spoke with 

officials from the Office of Federal Procurement Policy (OFPP) in the 

Office of Management and Budget (OMB)—which has responsibility for 

federal procurement policy—about agencies’ approaches to implement 

the FAR requirement to limit the period of performance for contracts 

awarded under the urgency exception. We compared agencies’ 

approaches to implement the FAR requirement to limit the period of 

performance with Standards for Internal Control in the Federal 

Government which calls for organizations to maintain proper controls to 

ensure transparency and accountability for stewardship of resources.5

A more detailed description of our scope and methodology is presented in 

appendix I. We conducted this performance audit from March 2013 

through March 2014 in accordance with generally accepted government 

auditing standards. Those standards require that we plan and perform the 

audit to obtain sufficient, appropriate evidence to provide a reasonable 

basis for our findings and conclusions based on our audit objectives. We 

believe that the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our audit objectives.

Agencies are generally required to use full and open competition—

achieved when all responsible sources are permitted to compete—when 

 4 GAO, Standards for Internal Control in the Federal Government, GAO/AIMD 00 21.3.1

(Washington, D.C.: November 1999).

5 GAO/AIMD-00-21.3.1.

Background
Page 4 GAO-14-304 Noncompetitive Contracting

awarding contracts. However, the Competition in Contracting Act of 1984 

recognizes that full and open competition is not feasible in all 

circumstances and authorizes contracting without full and open 

competition under certain conditions.6 Examples of allowable exceptions 

to full and open competition include circumstances when the contractor is 

the only source capable of performing the work or when disclosure of the 

agency’s need would compromise national security. An agency may also 

award a contract noncompetitively when the need for goods and services 

is of such an unusual and compelling urgency that the federal 

government faces the risk of serious financial or other injury.7

When using the urgency exception to competition, an agency may limit 

competition to the firms it reasonably believes can perform the work in the 

time available. However, an agency is not permitted to award a 

noncompetitive contract where the urgent need has been brought about 

due to a lack of advanced planning. Unlike the other exceptions to 

competition provided by the FAR, awards that use the urgency exception 

have certain time restrictions. Specifically, the total period of performance 

is limited to the time necessary to meet the requirement and for the 

agency to enter into another contract through the use of competitive 

procedures. Further, the period of performance may not exceed 1 year 

unless the head of the agency or appointed designee determines that 

exceptional circumstances apply.

Generally, noncompetitive awards must be supported by written 

justifications that contain sufficient facts and rationale to justify use of the 

specific exception to competition that is being applied to the procurement. 

At a minimum, justifications must include 12 elements specified in the 

FAR, including a description of the goods and services being procured, 

market research conducted, and efforts to solicit offers, among other 

things, as shown in figure 1.

 6 Pub. L. No. 98-369, §§ 2711(a)(1) and 2723(a)(1), codified as amended at 41 U.S.C. § 

3304 and 10 U.S.C. § 2304.

7 In all, there are seven exceptions to full and open competition. See FAR § 6.302. 
Page 5 GAO-14-304 Noncompetitive Contracting

Figure 1: Elements of a Justification for Other Than Full and Open Competition 

Required by the FAR
Page 6 GAO-14-304 Noncompetitive Contracting

For noncompetitive awards using the urgency exception, justifications 

may be prepared and approved within a reasonable time after award 

when doing so prior to award would unreasonably delay the acquisition. 

Justifications are to be published—on the Federal Business Opportunities 

website (FedBizOpps)—generally, within 30 days after contract award.8

Table 1: FAR Approval Levels for Justifications for Other Than Full and Open Competition

Additionally, justifications must be approved at various levels within the 

contracting organization. These levels vary according to the estimated 

total dollar value of the proposed contract, including all options. As 

outlined in table 1, the approval levels range from the contracting officer 

for smaller dollar contracts up to the agency’s senior procurement 

executive for larger dollar contracts.

Estimated value of proposed contract action Approval by 

$650,000 or less Contracting officer

Over $650,000 but not exceeding $12.5 million Competition advocate for the procuring activity or 

officials authorized to approve at a higher level

Over $12.5 million but not exceeding $62.5 million ($85.5 million for DOD, 

NASAa Head of the procuring activity, or designee meeting , and Coast Guard) certain criteria 

More than $62.5 million (or $85.5 million for DOD, NASA, and Coast Guard) Agency senior procurement executive 

Source: Federal Acquisition Regulation.

a

National Aeronautics and Space Administration

The FAR has more streamlined procedures for awarding contracts under 

the simplified acquisition threshold—generally less than $150,000. These 

smaller dollar awards are exempt from the justification and documentation 

requirements described above for contracts over this threshold. For 

example, contracting officers awarding a contract under simplified 

acquisition procedures must only document the determination that 

competition was not feasible; no approval beyond the contracting officer 

is required. Further, agencies do not have to document the extent and 

nature of the harm to the government that necessitates limiting 

competition when using simplified acquisition procedures. When using 

these procedures, agencies may solicit an offer from one contractor in 

 8 Justifications are also to be posted to the procuring agency’s website which may link to 

FedBizOpps. For most of the other exceptions to competition, justifications are to be 

published within 14 days of contract award.
Page 7 GAO-14-304 Noncompetitive Contracting

certain circumstances, including when the contracting officer determines 

that only one source is reasonably available.9

In general, once a contract is awarded, the awarding agency must enter 

certain information into FPDS-NG, the federal government’s database 

that captures information on contract awards and obligations. Agencies 

are responsible for the quality of the information entered into the 

database. Data captured includes, for example, the contract value, 

whether the contract was awarded competitively or not, and what 

authority was used to award the contract noncompetitively. In FPDS-NG, 

there are three fields for agencies to report competition data for contracts 

awarded:

• Extent competed: the competitive nature of the contract awarded, for 

example, whether the contract was awarded using full and open 

competition or not competed using simplified acquisition procedures.

• Solicitation procedure: the procedure an agency used to solicit offers 

for a proposed contract opportunity, for example, soliciting an offer 

from only one contractor because the agency deemed only one 

source available to fulfill the need or soliciting offers pursuant to 

simplified acquisition procedures.

• Other than full and open competition: the reason an award was not 

competed and the authority used to forego full and open competition,

for example, the unusual and compelling urgency exception to 

competition. For the purposes of this report, we refer to this field as 

“the reason not competed” to be more descriptive of the content in the 

field.

 9 For example, urgency, exclusive licensing agreements, brand name or industrial 

mobilization. FAR 13.106-1(b)(1)(i).
Page 8 GAO-14-304 Noncompetitive Contracting

Based on data from FPDS-NG, DOD, State, and USAID obligations for 

contracts and task orders reported as using the urgency exception during 

fiscal years 2010 through 2012 were small relative to other exceptions to 

full and open competition.10

 10 In our analysis we excluded awards that were below $150,000 because of the high 

likelihood that these procurements followed simplified acquisition procedures, which are 

separate from the procedures that apply to the urgency exception.

Of the $998 billion that DOD obligated for all 

contracts during this period, $432 billion or 43 percent were awarded 

noncompetitively; however, only about $12.5 billion—or about 3 percent—

of DOD’s noncompetitive obligations were awarded under the urgency 

exception. Less than 1 percent of USAID’s noncompetitive obligations—

$3.3 billion—were obligated under the urgency exception. In comparison 

to DOD and USAID, State’s obligations under the urgency exception were

more substantial, accounting for 12.5 percent—or $582 million—of its 

noncompetitive obligations, as shown in figure 2.

Agencies Used the 

Urgency Exception to 

a Limited Extent and 

Procured a Range of 

Goods and Services, 

but Data Reliability Is 

Questionable

DOD’s, State’s, and 

USAID’s Use of the 

Urgency Exception Is 

Small Compared to Other 

Exceptions to Competition
Page 9 GAO-14-304 Noncompetitive Contracting

Figure 2: Percent of Total Competitive and Noncompetitive Obligations for DOD, State, and USAID, Including Use of the 

Urgency Exception Compared to Use of Other Exceptions to Competition, Fiscal Years 2010 through 2012

DOD’s obligations under the urgency exception accounted for more than 

85 percent of the total dollars obligated using the urgency exception 

across the federal government from fiscal years 2010 through 2012. 

Among civilian agencies, State and USAID obligations using the urgency 

exception accounted for about 4 percent and less than 1 percent of total 

urgency obligations across the federal government, respectively. DOD 

and USAID’s obligations under the urgency exception remained relatively 

constant for fiscal years 2010 through 2012; however, State’s obligations 

in fiscal year 2011 were $301.4 million, more than a twelvefold increase 

over its fiscal year 2010 obligations, which totaled $24.4 million. Most of 

the increase can be attributed to three contracts, which altogether totaled 

more than 75 percent of State’s total urgency obligations in fiscal year 

2011.11

 11 Two of the contracts provided guard services to protect the U.S. embassies in Iraq and 

Afghanistan, while the third provided administrative support services to the National Visa 

Center.
Page 10 GAO-14-304 Noncompetitive Contracting

Our analysis of FPDS-NG data showed that use of the urgency exception 

varied in the types of goods and services acquired across DOD, State, 

and USAID for fiscal years 2010 through 2012. As figure 3 shows, State 

and USAID obligated funds to almost exclusively procure services while 

DOD obligated funds to procure an equal percentage of goods and 

services. During the 3-year period, DOD procured a broad range of items 

with more than half of funds—or over $6 billion—for research and 

development and to purchase communications and radar equipment. For 

State, about 60 percent of funds—over $335 million—were obligated to 

procure guard protection services at U.S. embassies and other facilities. 

For USAID, nearly half of its funds—more than $9 million—were obligated 

to support construction of roads and highways and to procure education 

and training services.

Agencies Procured a 

Range of Goods and 

Services Using the 

Urgency Exception
Page 11 GAO-14-304 Noncompetitive Contracting

Figure 3: Percentage of DOD, State, and USAID Dollars Obligated for Goods and Services and Examples of Items Procured 

Using the Urgency Exception for Fiscal Years 2010 through 2012

We found coding errors in FPDS-NG for contracts awarded by DOD, 

State, and USAID. Specifically, of the 62 contracts we selected for our 

sample, 28 were reported in FPDS-NG as being awarded 

noncompetitively using the urgency exception, but were not. Of the 28 

contracts that were not correctly reported in FPDS-NG, three contracts 

were awarded using other exceptions to competition, such as national 

security, five were awarded using a unique authority to award 

noncompetitive contracts at USAID, and 20 contracts were awarded using 

Coding Errors and 

Limitations Highlight 

Federal Procurement Data 

Reliability Concerns
Page 12 GAO-14-304 Noncompetitive Contracting

simplified acquisition procedures. We note that our sample is not 

representative of all dollars obligated for federal contracts.

We found three Air Force contracts that were incorrectly coded in FPDSNG as awarded using the urgency exception to competition, but the 

contract file documentation confirmed that these contracts were awarded 

noncompetitively on the basis of national security concerns or that only 

one vendor could supply the requirement. Of these three contracts, two

were awarded noncompetitively to procure an unmanned aircraft system 

and replacement aircraft accessories on the basis that disclosure of the 

agency’s need would compromise national security. Officials explained 

that these coding errors were due to an administrative oversight. For the 

remaining contract which was awarded on the basis that only one 

contractor could perform the work, officials identified and corrected the 

error during a routine inspection that occurred after we included the 

contract in our sample.

We identified five USAID contracts that were noncompetitive awards 

using an authority unique to USAID that allows the agency to award 

noncompetitive contracts where competition would impair or otherwise 

have an adverse effect on programs conducted for the purposes of 

foreign aid, relief, and rehabilitation.12

Twenty of the contracts were awarded for less than $150,000 using 

simplified acquisition procedures. These contracts were awarded 

noncompetitively on the basis that the good or service was required 

immediately and only one source was deemed reasonably available. The 

contract file documentation showed that DOD, State, and USAID 

procured various goods and services—including water purification 

systems, furniture storage space, drapes and holiday gifts—using 

FPDS-NG does not include an 

option to report noncompetitive awards using USAID’s unique exception 

to competition. Thus, according to USAID officials, contracting staff use 

their professional judgment to choose an option in FPDS-NG that most 

closely matches the circumstances of the award. This may include 

reporting the noncompeted award as being procured using the urgency 

exception. We did not assess the extent to which USAID consistently 

reported these awards using the urgency exception versus other 

exceptions to competition.

 12 U.S. Agency for International Development Acquisition Regulation, § 706.302-70.
Page 13 GAO-14-304 Noncompetitive Contracting

streamlined procedures for simplified acquisitions. However, when 

recording the reason these contracts were not competed in FPDS-NG, 

DOD, State, and USAID incorrectly reported that these contracts were 

awarded using the unusual and compelling urgency exception to full and 

open competition. Contracting officials attributed these coding errors to an 

administrative oversight and some officials admitted to confusion about 

how to input data in FPDS-NG. Such inaccurate reporting adds to existing 

concerns about the reliability of some data elements in FPDS-NG which 

GAO has reported on previously.13

For the 20 contracts awarded using simplified procedures, we found that 

the potential for confusion arises when agencies are directed in FPDSNG to record the solicitation procedure and the extent to which a contract 

was competed. Based on our analysis of contracts reported as using the 

urgency exception to competition, when reporting which solicitation 

procedure was used, contracting staff frequently selected the entry 

labeled “only one source.” This denotes that the agency did not solicit 

offers from potential vendors because it determined only one source was 

reasonably available given the urgent need. Agencies also selected the 

entry labeled “not competed” when reporting the extent to which a 

contract was competed.

 13 We have previously reported on data reliability issues with FPDS-NG. See, e.g., GAO, 

Federal Contracting: Observations on the Government’s Contracting Data Systems, 

GAO-09-1032T (Washington, D.C.: Sept. 29, 2009); Improvements Needed to the Federal 

Procurement Data System-Next Generation, GAO-05-960R (Washington, D.C.: Sept. 27, 

2005).
Page 14 GAO-14-304 Noncompetitive Contracting

Figure 4: Illustration of Data Entry Practices and FPDS-NG Validation Rules for Contracts Awarded Using Simplified 

Procedures

As figure 4 illustrates, when contracting staff select “only one source” in 

the solicitation procedure field, FPDS-NG validation rules do not allow the 
Page 15 GAO-14-304 Noncompetitive Contracting

selection of simplified acquisition procedures in the field for the “reason 

not competed”. For these contracts, per FPDS-NG instructions, 

contracting staff should have reported these awards as “simplified 

acquisition” under solicitation procedure and “not competed under 

simplified acquisition procedures” in the extent competed field. Consistent 

with FPDS-NG database instructions, using this approach would restrict 

the data entry options available when reporting the reason not competed 

to simplified acquisition procedures. During the course of our review, the 

Defense Logistics Agency (DLA) within DOD used this approach to 

correct the entry in FPDS-NG for two awards under $150,000 that are 

now recorded as sole-source awards using simplified acquisition 

procedures which is consistent with the records maintained in the 

corresponding contract files. In 2010, DOD issued guidance to, among 

other things, help improve the quality of data reported in FPDS-NG for 

contracts awarded using simplified acquisition procedures. For fiscal 

years 2010 through 2012, data in FPDS-NG showed that collectively 

DOD, State, and USAID reported 13,040 noncompetitive contracts under 

$150,000 as being awarded under the urgency exception. The total 

obligation for these contracts was over $284 million. Ensuring contracts 

are correctly coded in FPDS-NG is critical as the data are used to inform 

procurement policy decisions and facilitate congressional oversight.

After excluding the contracts we identified with data errors, we found that 

34 contracts were awarded noncompetitively using the unusual and 

compelling urgency exception to competition to meet a range of urgent 

situations.14

 14 Going forward in this report, our analysis does not include the 28 contracts that were 

miscoded.

Our sample included DOD contracts that were awarded to 

meet urgent operational needs for combat operations in Afghanistan and 

Iraq, including two contracts that highlight the risk of using the urgency 

exception for research and development initiatives to immediately field 

capabilities for combat operations. In addition, our sample consisted of 

contracts awarded to avoid a lapse in program support resulting from 

firms protesting the award of a competitive contract or from changes in 

program requirements. Generally, noncompetitive awards—such as those 

using the urgency exception—must be supported by written justifications 

that contain the facts and rationale to justify use of an exception to 

competition. While justifications in our sample generally contained the 

Agencies Cited a 

Range of Urgent 

Circumstances

to Award 

Noncompetitive 

Contracts and 

Justifications 

Generally Contained 

Required Elements
Page 16 GAO-14-304 Noncompetitive Contracting

required information, some fell short of the FAR requirements and did not 

obtain the necessary signatures or make justifications publicly available. 

Other justifications were written ambiguously in terms of including other 

facts supporting the use of the urgency exception, such as the nature of 

the harm to the government.

For the 34 contracts in our sample, DOD, State, and USAID cited a range 

of urgent situations that precluded full and open competition. More than 

half of the contracts were awarded to procure goods and services to 

support various missions in Afghanistan and Iraq. The two most common 

reasons agencies cited for awarding noncompetitive contracts on the 

basis of urgency—sometimes for the same contract—were to meet urgent 

operational needs for combat operations and to avoid a gap in program 

support resulting from unanticipated events. The remaining contracts 

supported unique circumstances such as fulfilling increased demand for 

fuel, providing telecommunications support for a foreign delegation visit, 

obtaining equipment for an unscheduled naval mission, and addressing 

emergency vehicle repairs. See Appendix II for a summary of the 34 

contracts in our sample.

DOD awarded 16 contracts, valued at $1.2 billion, to rapidly acquire and 

provide capabilities to meet urgent needs that, DOD maintained, if not 

addressed immediately, would seriously endanger personnel or pose a 

threat to ongoing combat operations. These needs involved two primary 

capabilities: intelligence, surveillance, and reconnaissance (ISR)—such 

as airships—and systems to protect against attacks from improvised 

explosive devices. DOD’s acquisition policy states that urgent operational 

needs are among the highest priority acquisitions and identifies the 

urgency exception as one of the tools available to provide urgently 

needed capabilities to the warfighter more quickly by reducing the amount 

of time needed to award a contract.15 In an April 2012 report, GAO found 

that some DOD programs to meet urgent operational needs were able to 

reach contract award sooner by relying on urgent noncompetitive awards; 

however, this reliance could affect the price the government pays.16

 15 Interim DOD Instruction 5000.02, “Operation of the Defense Acquisition System” (Nov. 

25, 2013) and DOD “Acquisition Actions in Support of Joint Urgent Operational Needs”

(Mar. 29, 2010).

16 GAO, Urgent Warfighter Needs: Opportunities Exist to Expedite Development and 

Fielding of Joint Capabilities, GAO-12-385 (Washington, D.C.: Apr. 24, 2012).

Agencies Awarded 

Noncompetitive Contracts 

to Meet a Range of Urgent 

Situations

DOD Sought to Meet 

Urgent Operational Needs 

for Combat Operations
Page 17 GAO-14-304 Noncompetitive Contracting

Recognizing the need to quickly deliver capabilities in urgent conditions—

sometimes within days or months—DOD policy calls for delivering 

solutions for urgent needs within 24 months of when the urgent 

operational need is identified and validated. Within the sample of urgent 

DOD awards we reviewed, many of the capabilities acquired in response 

to urgent operational needs were fielded within 3 to 20 months of when 

the requirement was identified. For example, by relying on an existing 

technology, the Army was able to quickly field 29 surveillance aerostats 

within 10 months of validating the urgent operational need. DOD 

contracting officials we spoke with told us they expect decreases in the 

number of noncompetitive awards on the basis of urgency to meet urgent 

operational needs because of the drawdown in military operations in Iraq 

and Afghanistan.

Two DOD awards within our sample highlighted the risks of using the 

urgency exception to competition to award contracts for research and 

development initiatives to meet immediate combat operation needs. DOD 

policy identifies efforts best suited for rapid fielding of urgently needed 

capabilities as those that do not require substantial development effort, 

are based on proven and available technologies, and can be acquired 

under a fixed price contract.

In the first example, the Air Force’s Blue Devil Block 2 program used the 

urgency exception to purchase previously unproven technology for 

improved ISR capability. GAO and the DOD Inspector General have 

previously reported that the program faced various challenges.17

 17 GAO, Defense Acquisitions: Future Aerostat and Airship Investment Decisions Drive 

Oversight and Coordination Needs, 

In 2009, 

the Air Force first identified the need for the program following a 

presentation from the contractor for an airship concept that could take off 

and land vertically while requiring fewer personnel to assist with landing 

than traditional airships. In March 2010, the contractor submitted an 

unsolicited proposal to the Air Force for the development of the Blue Devil 

Block 2 airship. The Air Force Research Laboratory (AFRL) conducted an 

assessment of the program and determined that the proposed 24 month 

schedule was aggressive and likely unachievable. As an alternative, 

AFRL proposed a strategy to develop the airship in 34 months using 

GAO-13-81 (Washington, D.C.: Oct. 23, 2012). DOD, 

Office of the Inspector General, Air Force and Army Corps of Engineers Improperly 

Managed the Award of Contracts for the Blue Devil Block 2 Persistent Surveillance 

System (Sept. 19, 2013).
Page 18 GAO-14-304 Noncompetitive Contracting

competitive procedures. In September 2010, the Secretary of Defense 

designated the procurement of the airship as an urgent need to be rapidly 

acquired, and set the expectation that it be deployed within 13 months. 

The following month, AFRL conducted a second assessment of the 

program and again determined that it was not suitable for rapid fielding 

within 24 months due to concerns about the technical capability of the 

contractor and poorly defined requirements. Despite AFRL’s assessment, 

the Air Force awarded an $86.2 million contract in March 2011 based on 

urgency for delivery of the airship in January 2012. In an October 2012 

report, GAO found that this program experienced significant technical 

problems resulting in cost overruns and schedule delays that led to 

termination of the program in June 2012, which was 5 months after the 

planned fielding date of January 2012.18

In the second example, the Air Force awarded a noncompetitive contract 

in 2011 on the basis of urgency for the development of the Orion 

unmanned aerial system in response to an urgent operational need for 

ISR capabilities to support multiple services in Afghanistan. The new 

system was expected to provide greater uninterrupted flight times than 

other available systems. The contract was awarded with a period of 

performance of 13 months; however, the justification did not specify a 

fielding date. After award, the cost of the contract nearly tripled from the 

initial estimate of $5 million to a total of about $15 million and the period 

of performance doubled from 13 months to 26 months. Contracting 

officials said that cost increases and schedule delays were due to 

technical problems experienced by the contractor in developing the 

proposed technology. Nearly 3 years since the requirement was validated 

as an urgent need, this system has not been fielded in Afghanistan and is 

still under development through a follow-on contract.

Ultimately, the program was 

terminated after spending more than $149 million and without fulfilling the 

urgent requirement for a deployable ISR airship.

GAO has previously found that initiatives for urgent operational needs 

that required technology development often take longer to field.19

 18

Contracting officials we spoke with said that both programs relied heavily 

on unproven technologies that required extensive research and 

development, which contributed, in part, to the cancelation and delay of 

GAO-13-81.

19GAO-12-385.
Page 19 GAO-14-304 Noncompetitive Contracting

the Blue Devil and Orion systems, respectively. Further, officials noted 

that initiatives to respond to urgent operational needs tend to have more 

successful outcomes when the solutions are based on proven, mature 

technologies.

DOD, State, and USAID awarded 12 noncompetitive contracts when 

unexpected events threatened the agencies’ ability to continue program 

support. Referred to as bridge contracts, such awards are typically short

term to avoid a lapse in program support while the award of a follow-on 

contract is being planned. The contract period for the 12 bridge awards in 

our sample averaged 11 months and collectively they were valued at a 

total of over $466 million. For the bridge contracts that we reviewed, the 

delay in awarding a competitive contract was due to unforeseen 

personnel changes, competitors filing bid protests, and changes in 

program requirements, among other things. For 10 of the 12 bridge 

contracts in our sample, agencies awarded the contract to a vendor that 

had previously performed the work.

• In one instance, the Air Force’s plans to competitively award a followon contract for engineering support services was disrupted by the 

unexpected loss of the program manager who had specialized 

expertise and had been working independently on the acquisition 

strategy for about 1 year. A new program manager was assigned but 

had difficulty accessing his predecessor’s files which further delayed 

the acquisition effort. The justification cited that a gap in program 

support would jeopardize ongoing research and expose the Air Force 

to certain fines and penalties. Faced with the possibility of costly 

delays estimated to be $1.5 million per month, the Air Force opted to 

award a non-competitive bridge contract to the incumbent vendor who 

was deemed most capable of meeting the program’s requirements 

within the timeframes needed. Officials determined that the 12-month 

bridge contract valued at $1.4 million would provide sufficient time to 

complete market research and other acquisition planning for the 

subsequent award.

• In another instance, State awarded a competitive follow-on contract to 

provide operational and maintenance support services at the U.S. 

Embassy compound in Baghdad, Iraq, three months before the 

existing contract expired. However, the new contract, which was 

awarded to the incumbent vendor, was protested, thus preventing the 

contractor from starting performance on the contract. Citing concerns 

about the health and safety of 4,200 U.S. government personnel, 

State awarded a 6-month bridge contract valued at $38 million to the 

incumbent vendor to ensure continuity of services. The justification 

Agencies Sought to 

Avoid a Gap in Program 

Support Resulting from 

Unanticipated Events
Page 20 GAO-14-304 Noncompetitive Contracting

cited that transitioning to a contractor other than the incumbent vendor 

would take at least 90 days because of visa processing, among other 

things.

• A USAID program for oversight, outreach, and legislative assistance 

to the National Assembly of Afghanistan was extended to ensure 

continued support to the Afghan parliament during the upcoming 

budget cycle. The contract USAID planned to use to obtain these 

services was not awarded in time. As a result, USAID awarded a 7-

month bridge contract to the incumbent vendor with a value of $5 

million to avoid a break in service, with the goal of awarding a 

competitive follow-on contract during the parliament’s upcoming 

summer recess. USAID determined that for the bridge contract, a new 

vendor could not transition within the time available due to security 

clearances and other requirements.

Justifications in our sample generally contained the required information; 

however, some fell short of the FAR requirements and did not obtain the 

necessary signatures, among other things. Other justifications were 

written ambiguously in terms of including other facts supporting the use of 

the urgency exception, such as the nature of the harm to the government.

Consistent with acquisition regulations, DOD, State, and USAID prepared 

written justifications for all of the 34 urgent contracts in our sample to

include the required elements specified in the FAR—such as the 

contracting officer’s determination that the cost will be fair and reasonable 

and the extent of the agencies’ market research efforts. In addition, nearly 

all of the justifications that we reviewed were prepared and approved prior 

to award. The FAR permits agencies to prepare and approve justifications 

within a reasonable time after contract award when doing so prior to 

award would unreasonably delay the acquisition. This provision is unique 

to use of the urgency exception, as preparation and approval of the 

justification prior to award can delay the quick response time needed to 

meet urgent needs. Contracting officials told us that they work together 

with the program office to prepare justifications and, at a minimum, obtain 

verbal approvals when it is unlikely the justification can be routed to 

approving officials prior to award.

Justifications Generally 

Contained the Required 

Elements and Provided 

Varied Levels of Insight 

about the Risks that Led

to Use of the Urgency 

Exception

Justifications Generally 

Contained the Required 

Elements, Yet Several Did Not 

Meet All FAR Requirements
Page 21 GAO-14-304 Noncompetitive Contracting

In three instances, however, we found justifications were not signed by 

the appropriate approving authority as required by the FAR. For example, 

a USAID justification to award a $5 million contract to support missions in 

Afghanistan was not signed by the Competition Advocate due to an 

administrative oversight. In a second example, officials at the Defense 

Logistics Agency did not obtain the necessary written approvals justifying 

a $32 million award for an emergency fuel purchase also due to an 

administrative oversight; however, according to officials, verbal approvals 

had been obtained from all requisite approving officials including the head 

of the contracting activity prior to award. After we brought this to their 

attention, DLA officials obtained the necessary signatures on the 

justification for this contract, even though the contract was complete. The 

office that awarded this contract has since put a tool in place to route 

justifications and ensure appropriate signatures are obtained in a timely 

manner. Lastly, an Air Force justification for a noncompetitive award 

valued at $130 million was not signed by the Senior Procurement 

Executive, as required by the FAR. Officials we spoke with could not 

confirm the reason the procurement executive did not sign the justification 

and this individual is no longer employed by the Air Force.

We also found four DOD justifications that were not signed in time to 

meet the FAR requirement to make them publicly available within 30 days 

of award. While the FAR permits agencies to prepare and approve 

justifications awarded using the urgency exception within a reasonable 

time after award; it does not identify a specific timeframe to do so. 

However, agencies are required to make justifications for urgent 

noncompetitive contracts available on the FedBizOpps website within 30 

days of award.20

 20 In general, justifications for the other exceptions to full and open competition must be 

posted within 14 days of award.

Thus, agencies would need to prepare and approve 

justifications within 30 days in order to meet FAR requirements to make 

them publicly available. DOD contracting officials who administered the 

awards included in our sample told us it is customary to obtain verbal 

approvals on justifications for noncompetitive procurements prior to 

award; but such justifications are not made publicly available without 

signatures from the appropriate approving official. The justifications for 

these contracts were not signed until 58 to 314 days after award,

meaning that the fully approved justifications were not made publicly 

available within 30 days of award as required by the FAR. In one of these 
Page 22 GAO-14-304 Noncompetitive Contracting

cases, an Army justification for a 3-month noncompetitive award for 

satellite equipment was not prepared and approved, in writing, until 138 

days after award. Citing concerns about compliance, the Army attorney 

who provided legal review of the justification noted the absence of 

regulatory procedure or agency policy when approval of the justification 

has far exceeded the timing requirements for making the justification 

publicly available. Officials subsequently posted the justification which 

occurred more than 6 months after the contract award date and 90 days 

after the contract expired. Some DOD, State, and USAID contracting 

officials we spoke with emphasized the importance of complying with the 

posting requirement to provide transparency into agency’s contracting 

activity, but others were unsure of the appropriate course of action when 

approval of the justification does not occur within 30 days.

For 15 of the justifications we reviewed, we could not confirm whether 

justifications were posted to the FedBizOpps website within the required 

timeframes, or at all, as no documentation was available. The FAR does 

not require agencies to maintain documentation that the justification was 

made publicly available; however, we found that in some instances, 

officials printed the confirmation page from the FedBizOpps website to 

document compliance with the requirement. After we brought this issue to 

their attention, officials subsequently posted five justifications. Some 

officials told us that justifications were not posted due to an administrative 

oversight.

DOD, State, and USAID have developed guidance to implement FAR 

requirements for justifications for noncompetitive contracts; however,

none of the agencies have included instructions addressing how staff 

should document compliance with the FAR requirement to make 

justifications publicly available or what to do when the justification is not 

approved and ready for posting within 30 days. USAID officials 

acknowledged the benefit of documenting that the justification was posted 

to demonstrate the posting requirement was met and told us they would 

include a process to do so in their guidance to contracting officers. 

Standards for Internal Control in the Federal Government states that 

internal controls—such as agency policies and procedures—are an 

integral part of an organization’s management function that provides 

reasonable assurance of compliance with laws and regulations. Control 

activities include the creation and maintenance of records which provide 

evidence of implementation, such as documentation of transactions that 
Page 23 GAO-14-304 Noncompetitive Contracting

is readily available for inspection.21

Generally, justifications for the 34 contracts in our sample described the 

nature of the harm—serious financial or other risk—facing the 

government if the award were to be delayed using traditional competitive 

procedures. Some justifications were specific about the potential harm to 

the government while others were ambiguous. The FAR states that 

agencies may use the urgency exception when delay of the contract 

award would pose a serious injury—financial or other—to the 

government. The FAR further provides that agencies are to include other 

facts, such as data, estimated cost, or other rationale as to the extent and 

nature of the harm to the government —which provides some flexibility 

about how such risks should be described in the justification.

Contracting officials told us that 

documenting their efforts to make the justification publicly available 

provides transparency into the steps they took to comply with applicable 

regulations.

Most of the justifications in our sample—23 of 34—quantified the potential 

harm to the government if the acquisition was delayed by using 

competitive procedures in terms of potential dollars lost or schedule 

delays. The Air Force and the Army have guidance for preparing 

justifications which states that the most critical aspect of justifications that 

cite use of the urgency exception is quantifying the nature of the serious 

injury to the government if the urgent requirement is competed.22

 21

Accordingly, nearly all of the Air Force and Army justifications we 

reviewed estimated the potential costs to the government if the urgent 

award were to be delayed by using competitive procedures. For instance, 

one Air Force justification for an unmanned aerial system explained that 

no other vendors had mature technology and estimated that the effort of 

bringing at least one other vendor to an equivalent capability would cost 

$5.7 million and result in at least a 3-month delay. Further, the justification 

stated that it is unlikely these costs would be recovered through 

competition. Similarly, the justification for an Army contract to obtain new 

parts for tactical wheeled vehicles to help protect against attacks from 

improvised explosive devices estimated that DOD would incur $2.5 million 

in transportation costs if the parts were not acquired by a certain date to 

meet the time frame of a scheduled ship deployment.

GAO/AIMD-00-21.3.1. 

22 The Army has draft guidance which is in the final stages of review.

Justifications Provided Varied 

Levels of Insight about Risks
Page 24 GAO-14-304 Noncompetitive Contracting

By contrast, 11 of the justifications we reviewed were more ambiguous in 

describing the nature of the harm if a noncompetitive contract was not 

awarded. Some of the ambiguous justifications described the following:

• At Navy, justifications for four procurements to provide goods or 

services related to persistent ground surveillance systems cited that 

only one source was available as other sources would duplicate costs 

or cause delays. The justifications did not provide additional 

information about the potential time or dollars to be saved by using 

the urgency exception.

• At State, one justification cited the need to award a noncompetitive 

contract using the urgency exception to provide telecommunications 

support for a meeting of foreign leaders. The justification emphasized 

the vendor’s prior experience in providing similar services, thereby 

facilitating the agency’s mission in the most cost-effective manner. 

But it did not provide additional information regarding the extent and 

nature of the harm posed to the government. For such events, 

according to agency officials, security concerns often hinder the 

agency’s ability to conduct advanced planning; thus necessitating the 

use of the urgency exception.

• Two USAID justifications did not fully describe the harm to the 

government. The justifications cited the need to comply with a 

requirement to conduct annual financial audits of local expenses 

incurred in Afghanistan; however, the extent and nature of the serious 

risk of financial or other injury to the government was not stated. 

Officials justified the noncompetitive award citing a shortage of 

qualified audit firms in Afghanistan which could affect USAID’s ability 

to meet auditing requirements. Thus, awarding a noncompetitive 

contract would provide an opportunity to assess the audit capabilities 

of the selected contractor, develop a pool of acceptable audit firms to 

choose from thereby increasing competition for future procurements.

The FAR limits the total period of performance of contracts awarded using 

the urgency exception to 1 year—unless a determination from the head of 

the agency is made that exceptional circumstances apply. This provides 

the time necessary to enter into another contract using competitive 

procedures, which reduces the risk of overspending. Within our sample of 

34 contracts, nearly a third of the contracts—10—had a period of 

performance that was more than 1 year, either established at the time of 

award or during performance of the contract. Two of these contracts 

exceeded 1 year at award and the contracting officers did not obtain a 

Agencies Did Not 

Always Limit the 

Duration to 1 Year 

and Achieved Limited 

Competition in 

Selected Instances
Page 25 GAO-14-304 Noncompetitive Contracting

determination from the head of the agency, as required by the FAR. The 

remaining eight contracts were extended beyond 1 year through 

subsequent modifications, which contracting officials considered separate 

contract actions that, in their view, would not require a determination by 

the head of the agency. Treating modifications to contracts awarded on 

the basis of urgency as separate rather than cumulative contract actions 

makes it harder for senior department officials to provide oversight over 

significant increases in contract cost. DOD, State, and USAID conducted 

limited competitions for 4 of the 34 contracts in our sample by using 

knowledge from recent competitions to solicit multiple bids. Lack of 

technical data rights and reliance on the expertise of the contractor limited 

the agencies’ abilities to seek competition.

We found that 10 of the 34 contracts in our sample had either a period of 

performance of more than 1 year at the time of award or, the period of 

performance was extended beyond 1 year during performance of the 

contract. The FAR provides that the contract period should be limited to 

the time required to meet the urgent need and for the agency to compete 

and award another contract for the required goods and services. In 

addition, contracts may not exceed more than 1 year unless the head of 

agency, or their designee, determines that exceptional circumstances 

apply. Limiting the length of noncompetitive awards under the urgency 

exception helps minimize the risk of overspending while providing 

sufficient time for the agency to enter into another contract using 

competitive procedures, according to officials from the OFPP—the office 

within OMB which provides governmentwide guidance on federal 

contracting.

In 2 of the 10 cases, we found that DOD officials did not seek a 

determination from the head of the agency or appropriate designee, as 

required, for awards where it was known at time of award that the period 

of performance would be more than 1 year. In one of these instances at 

the Navy, the justification estimated a 9-month contract period; however, 

the award documents indicate a total period of performance of 17 months 

that included 5 months for delivery of upgraded radio kits to protect 

against attacks from improvised explosive devices followed by 12 months 

of engineering support services.23

 23 The contractor completed the work in less than 1 year; however, a determination from 

the head of the agency would still have been required at the time of contract award 

because the undefinitized contract appears to have had a period of performance of more 

than 1 year.

Navy officials acknowledged that the 

Approaches Used to 

Extend Period of 

Performance Beyond 

1 Year and to 

Increase Funding 

Diminish Oversight
Page 26 GAO-14-304 Noncompetitive Contracting

period of performance at time of award was ambiguous and said they did 

not seek a determination because the terms and conditions of the 

contract had not yet been finalized at the time work began. In the other 

case at the Air Force, work on the contract began under a pre-contract 

cost agreement prior to the contract award date and the contract identifies 

the period of performance as beginning on the date the pre-contract cost 

agreement started. As a result, the period of performance at award was 

13 months. Air Force officials told us they did not get the determination 

because the contract was expected to end within 12 months of the award 

date and they did not consider the pre-contract cost agreement as part of 

the period of performance for the contract, contrary to the language in the 

contract.

In the remaining eight instances, we found that DOD, State, and USAID 

used different approaches to modify the contracts to extend the period of 

performance beyond 1 year after the initial contract award. While the FAR 

clearly limits the period of performance to 1 year, it does not address 

whether the duration requirement applies only at the time of award or if 

the requirement applies to cases where the contract is modified to extend 

the period of performance after award. Contracting officials did not seek a 

determination of exceptional circumstances from the head of the agency 

or appropriate designee before extending the period of performance 

beyond 1 year. In four of the eight instances, officials extended the period 

of performance through contract modifications and no additional action 

was taken. For the remaining four instances, officials exercised a contract 

clause to extend the contract or prepared an additional justification to 

extend the contract beyond 1 year.24

In two of the eight cases, contracting officials extended the contracts 

beyond 1 year by using a contract clause that allows agencies to extend 

services up to 6 months within the limits and at the rates specified in the 

contract.25

 24 These extensions of contract performance are not exclusive to urgency contracts.

For urgent, noncompetitive contracts where the 1 year duration 

requirement applies, the FAR is not clear about whether a determination 

of exceptional circumstances is necessary when using this clause results 

in the contract’s period of performance exceeding a year. In one of the 

two cases, for example, State awarded a 1-year bridge contract (4 month 

25 FAR 52.217-8 “Option to Extend Services” is included in solicitations and contracts for 

services when the inclusion of an option is appropriate.

Using a Contract Clause 

to Extend the Contract for 

6 Months
Page 27 GAO-14-304 Noncompetitive Contracting

base contract with two 4 month options) to the incumbent vendor—with 

an estimated value of $100 million—using the urgency exception to 

procure local guard services in Afghanistan. The bridge contract was 

intended to allow time for a new contractor—the awardee of a competitive 

award—to set up its operations to take over the performance of these 

services. However, during the bridge contract period of performance, 

State realized that the new awardee could not establish its operations to 

meet the timeframes required in the contract and therefore defaulted, 

leading to termination of the competitive award. To allow sufficient time to 

re-compete the requirement and transition to a new vendor, State used 

the contract clause to extend the existing bridge contract for an additional 

6 months but did not seek a determination of exceptional circumstances. 

The additional time increased the total period of performance to 18 

months and added $78 million to the contract value—which included 

retention bonuses to provide an incentive for guards to continue working 

in the event the contract was extended beyond 1 year. The contracting 

officer did not take into consideration whether using this clause would 

have any bearing on the requirement to seek a determination of 

exceptional circumstances for an urgency award exceeding 1 year. 

Contracting officials we spoke with maintained that an additional 

determination was not required because the terms of the contract 

included the clause to extend services. As a result, no additional 

oversight occurred when the contract’s period of performance exceeded 1

year.

In two of the eight cases, we found that contracting officials extended the 

period of performance beyond a year after award through the preparation 

of additional justifications for other than full and open competition. 

Contracting officials at DOD, State, and USAID stated their belief that 

urgency contracts could be extended without a determination of 

exceptional circumstances by the head of agency when using this 

approach. In their view, each additional justification represents an 

individual contract action; thus, there is no need to consider the 

cumulative effect of a modification resulting in a period of performance 

beyond 1 year.26

 26 Modifications that are outside the original scope of the contract—such as changes to 

requirements, quantities and period performance—must comply with competition 

requirements—and agencies must prepare justifications for other than full and open 

competition. See, e.g., Neal R. Gross & Co., Inc., B-237434, Feb. 23, 1990, 90-1 CPD ¶ 

212 at 2-3.

Preparing an 

Additional Justification
Page 28 GAO-14-304 Noncompetitive Contracting

In one of these instances, the Army TACOM Life Cycle Management 

Command identified an urgent operational need for 513 medium armored 

security vehicles and related support—valued at more than $757 million 

to support the Afghanistan National Army. To meet the timeframes for 

delivery, officials determined that the circumstances warranted use of a 

noncompetitive award on the basis of urgency to one contractor with prior 

experience on similar acquisitions. After identifying a multi-year 

requirement to provide vehicles to the Afghanistan National Army, 

contracting officials planned to fulfill the requirement in multiple phases. 

For the first phase, the Army decided to purchase 73 vehicles and 

prepared a noncompetitive justification citing the urgency exception for an 

award valued at $85.1 million—which is $0.4 million below the level that 

requires approval from the Senior Procurement Executive. The first phase 

was awarded in January 2011 as an undefinitized contract action which

allows the contractor to start the work quickly without negotiating all the 

terms and conditions for a contract.27

 27GAO has previously reported on the risks associated with undefinitized contract actions, 

which authorize DOD contractors to begin work before reaching a final agreement on 

contract terms and must be definitized within certain parameters described in DOD 

regulation. See GAO, Defense Contracting: DOD Has Enhanced Insight into Undefinitized 

Contract Action Use, but Management at Local Commands Needs Improvement, 

However, 3 months into the 

performance of the contract, another justification for a modification to the 

undefinitized contract action was approved by the Senior Procurement 

Executive using a different exception citing that only one responsible 

source could fulfill the procurement of the remaining 440 vehicles needed 

to meet the requirement. The additional justification for the second phase, 

valued at more than $576 million, added 3 years (a base year and two 1-

year options); extending the procurement to 2014. According to the 

contracting officer, a determination from the head of the agency was not 

obtained as the second phase is considered a separate action rather than 

cumulative; thus the period of performance under the urgency justification 

would not exceed 1 year. Approving the requirement between two 

justifications allowed for the initial contract award to be within the 1 year 

period of performance as required. However, when the contract exceeded 

a year with the subsequent modification on the grounds that only one 

source was capable; no additional oversight was performed by the head 

of the agency to determine if exceptional circumstances applied. . See 

appendix 3 for additional information about the 10 contracts in our sample 

where the period of performance was more than 1 year.

GAO-10-299 (Washington, D.C.: Jan. 28, 2010).
Page 29 GAO-14-304 Noncompetitive Contracting

In addition to extending the period of performance through the 

preparation of additional justifications, we found instances where 

agencies also increased funding on urgency contracts after award to well 

beyond the original contract value. For seven contracts in our sample, 

total obligations increased by more than 30 percent from the original 

estimate in the justification that was approved to award a noncompetitive 

contract using the urgency exception. In these cases where total 

obligations grew considerably, contracting officials did not alert senior 

procurement officials when these increases occurred. In one example, 

Navy officials modified a contract to provide training and other support 

services for a surveillance system several times which grew to more than 

three times the estimated value. The contract value at time of award was 

$30 million, and the justification was signed by the head of the procuring 

activity, as required by the FAR for awards greater than $12.5 million but 

not exceeding $85.5 million. However, after award, three modifications 

added a total of $31 million to the contract primarily due to cost overruns. 

Additionally, four modifications with accompanying justifications—

because the work being added was determined to be outside the original 

scope of the contract—added $12 million each time, bringing the total 

contract value to more than $109 million, as illustrated in figure 5.

Limited Oversight of 

Urgent Contracts with 

Significant Cost Growth
Page 30 GAO-14-304 Noncompetitive Contracting

Figure 5: Increases in Contract Value to Procure Training and Program Support for the Persistent Ground Surveillance

System

The four supplemental justifications were each approved by the 

competition advocate, as required. However, because each justification is 

contemplated individually without regard to the cumulative value of the 

contract, the senior procurement executive did not have an oversight 

mechanism to be made aware of the cost growth on this contract. If this 

contract had been estimated to be $109 million at the time of award, the 

senior procurement executive would have had oversight through approval 

of the justification. The FAR does not provide guidance to contracting 

officials on the degree of oversight senior agency officials should exercise 
Page 31 GAO-14-304 Noncompetitive Contracting

when contract modifications significantly raise the cumulative dollar value 

of a contract awarded using the urgency exception.

Using multiple modifications to increase funding or extend the period of 

performance and treating these as separate rather than cumulative 

contract actions make it harder for senior department officials to provide 

oversight. Competition advocates at DOD, State, and USAID had differing 

views about whether contract modifications to extend the period of 

performance should be considered cumulatively. Some thought the 

actions should be viewed cumulatively as it provides greater oversight; 

while others thought the actions should be considered independent of 

each other. OFPP officials told us that generally, the total period of 

performance of urgent contracts should be considered cumulatively either 

at time of award or when the contract is modified to extend the period of 

performance to more than 1 year. While OFPP officials stated that the 

period of performance should be considered cumulatively, the FAR does 

not specify what to do when these contracts are modified beyond 1 year, 

and no guidance is available on what to do in these situations. As the 

entity responsible for federal procurement policy, OFPP is best suited to 

clarify when determinations of exceptional circumstances are needed 

when extending the period of performance on an urgency contract 

beyond 1 year. Additionally, in the absence of an oversight mechanism 

for noncompetitive contracts awarded under the urgency exception with 

significant increases in value over time, senior procurement officials are 

not assured of the transparency necessary to help strengthen 

accountability for these situations. Standards for Internal Control in the 

Federal Government calls for organizations to maintain proper controls 

that ensure transparency and accountability for stewardship of 

government resources.28

 28 GAO/AIMD-00-21.3.1.
Page 32 GAO-14-304 Noncompetitive Contracting

Even in urgent situations, agencies are required to seek offers from as 

many potential sources as practicable given the circumstances and some 

programs in our sample were able to use the prior expertise or market 

knowledge to hold limited competitions. For 4 of the 34 contracts in our 

sample, DOD and State sought competition by seeking offers from firms 

with which the agency had prior experience through recent procurements 

and reasonably believed could perform the work in the time available. For 

example, to avoid an unanticipated disruption in supplying fuel to the 

government of Israel, DLA solicited four firms the agency had worked with 

on similar acquisitions in the past. In the justification, DLA cited that 

having the benefit of market information from prior competitive awards 

helped the agency reduce the time it would normally take to compete the 

new procurement. In another instance, State had an existing indefinite 

delivery indefinite quantity contract in place for the purchase of ballistic 

resistant doors for embassy security. During embassy renovations it was 

determined that the required specification could not be met through the 

negotiated terms of the existing contract. State officials conducted a 

limited competition among three vendors who were approved vendors 

under the existing contract. Further, State justified this limited competition 

as the preferred cost-effective method as these three vendors had been 

the lowest bidders on similar procurements, thus, limiting the risk of 

overspending.

For 10 DOD contracts in our sample, the government was unable to 

compete requirements because of a lack of access to technical data 

packages or proprietary data coupled with the urgency of the 

requirement. In some instances, program officials explored the possibility 

of acquiring the data only to learn that the package was not available for 

sale or would be cost-prohibitive. In our prior work, DOD described the 

acquisition of technical data for weapon systems, such as design 

drawings and specifications as critical to enabling competition throughout 

a system’s life cycle.29

 29 GAO, Defense Acquisitions: DOD Efforts to Adopt Open Systems for Its Unmanned 

Aircraft Systems Have Progressed Slowly,

Within our sample, we found in one instance 

where DLA was in the process of negotiating the purchase of the 

technical data, but the purchase could not be completed in a timeframe 

that would have allowed competition for the urgent requirement. While 

DLA was not able to benefit from the purchase of the technical data 

package for the current award, the agency would be better positioned to 

GAO-13-651, (Washington D.C.: July 31, 2013)

Some Urgent Contracts 

Achieved Limited 

Competition, While Lack 

of Access to Technical 

Data Rights and Reliance 

on Contractor Expertise 

Thwarted Competition 

in Others
Page 33 GAO-14-304 Noncompetitive Contracting

compete future procurements. For more than a decade we have reported 

on the limitations to competition when DOD does not purchase technical 

data rights and the increased costs as a result.30

In examining the procurement history for two contracts in our sample, we 

found one DOD program involving an aerostat, the Persistent Threat 

Detection System (PTDS) that spanned 10 years without achieving 

competition for the acquisition of the aerostat. The Army has awarded six

noncompetitive contracts for the PTDS program since 2004 on the basis 

of urgency to the same contractor, as illustrated in figure 6.

In May 2013, DOD 

implemented guidance for program managers to consider acquiring 

technical data rights as part of the acquisition planning.

31

 30GAO, Defense Management: Opportunities to Enhance the Implementation of 

Performance-Based Logistics, GAO-04-715 (Washington, D.C.: Aug. 16, 2004); Weapons 

Acquisition: DOD Should Strengthen Policies for Assessing Technical Data Needs to 

Support Weapons Systems, GAO-06-839 (Washington, D.C.: July 14, 2006); and Defense 

Acquisition: DOD Should Clarify Requirements for Assessing and Documenting TechnicalData Needs, GAO-11-469 (Washington, D.C.: May 11, 2011).

31 The PTDS program has competitively awarded three contracts to procure operators for 

the aerostat since 2006. These three contracts were awarded to the same contractor.
Page 34 GAO-14-304 Noncompetitive Contracting

Figure 6: Time Line of Events to Procure the Aerostat for the Persistent Threat Detection System Program

While awarding the fourth PTDS contract in February 2011, the Army 

identified six capable sources and determined that competition was viable 

for long-term non-urgent requirements. However, the Army determined 

that only one contractor with prior experience could satisfy the urgent 

requirement at that time. In May 2011, the Army awarded a 

noncompetitive urgency contract to that contractor for 29 aerostats and 

cited the future need for spares in fiscal year 2012 when additional 

funding would be available. The senior procurement executive approved 

the May 2011 urgency justification nearly a year after award—due to 

confusion about changes in the review process—on the condition that all 

future related procurements be competed. However, by the time that the 

senior procurement executive approved the justification for the May 2011 

urgent award, the Army had already awarded the follow on urgent award 

for spares in December 2011. While the Army identified six sources that 

were capable of competing and providing the PTDS aerostat in 2011, it 

ultimately awarded a 3-year noncompetitive contract to the same 

contractor valued at $306 million on the basis of “only one responsible 
Page 35 GAO-14-304 Noncompetitive Contracting

source” because the government did not own the technical data 

packages. Despite the recurring nature of the requirement, Army officials 

reported that it was difficult to plan for competition because each 

requirement was short term in nature.

In 2013, DOD concurred with our recommendation to develop guidance to 

enable DOD components to apply lessons learned from past 

procurements to increase competition for the same goods and services.32

This recommendation was, in part, intended to help senior department 

officials capture the benefit of information on past procurements when 

approving individual justifications for subsequent noncompetitive awards. 

To address concerns about missed opportunities for learning why past 

acquisitions were not competed and to help remove barriers to 

competition in future procurements, in April 2013, the Air Force 

implemented a new policy to include justifications from predecessor 

acquisitions as a reference document to justification approving officials. 

Air Force officials observed that contracting officers were splitting 

requirements across multiple justifications at lower approval thresholds, 

which reduced oversight by higher level approving officials. The Navy has 

a similar policy in place and DLA officials told us they are planning to 

implement a similar process. The Army, which has added increased 

scrutiny of justifications particularly for urgency awards as one its goals 

for improving competition, is in the process of revising its guidance for 

preparing justifications to include a process similar to that of the Air 

Force.

The benefits of competition—such as cost savings and improved 

contractor performance—in acquiring goods and services from the private 

sector are well documented. Awarding a noncompetitive contract on the 

basis of unusual and compelling urgency is necessary in select 

circumstances. However these contracts should be limited in duration to 

minimize the amount of time that the government is exposed to the risks 

of contracts that are awarded quickly without the benefits of competition. 

Mechanisms for transparency and oversight of these contracts —such as 

posting justifications publicly and a determination that exceptional 

circumstance apply to extend the contract period of performance beyond 

 32 GAO, Defense Contracting: Actions Needed to Increase Competition, GAO-13-325

(Washington, D.C.: March 28, 2013).

Conclusions
Page 36 GAO-14-304 Noncompetitive Contracting

1 year—are necessary to ensuring that they are used only in 

circumstances when no other option is available and to promote 

competition in the future. Transparency and oversight during performance 

of the contract, particularly when adding significant time or money, 

ensures that the government is making sound decisions in the best 

interest of taxpayers. In light of this, having OFPP provide guidance to 

clarify when determinations are needed when extending the period of 

performance on an urgency contract could help achieve consistent 

implementation of the duration requirement across the government. 

Additionally, having agencies develop mechanisms to ensure that senior 

procurement officials are made aware of noncompetitive contracts with 

significant increases in value, particularly those that were not initially 

approved at the senior procurement executive level, could help to 

increase transparency in noncompetitive awards and strengthen 

oversight. And finally, although the data show that DOD, State, and 

USAID buy a relatively small amount of goods and services 

noncompetitively on an urgent basis, maintaining reliable data is critical to 

ensuring that agencies can effectively manage the use of this exception.

To help improve reporting of federal procurement data and strengthen 

oversight of contracts awarded on the basis of an unusual and compelling 

urgency, we recommend the Secretaries of Defense and State and the 

Administrator of the U.S. Agency for International Development take the 

following four actions:

• Provide guidance to contracting staff on the correct procedures for 

accurately reporting competition data for contracts using simplified 

acquisition procedures that are awarded on an urgent basis and DOD 

should re-emphasize existing guidance.

• Establish a process for documenting that justifications were posted in 

compliance with the requirements in the FAR.

• Provide guidance to contracting staff on what actions to take when 

required signatures are not obtained in order to post the justifications 

within 30 days.

• Develop an oversight mechanism when the cumulative value of 

noncompetitive contracts awarded on the basis of unusual and 

compelling urgency increases considerably beyond the initial contract 

award value.

To help ensure consistent implementation of the FAR requirement to limit 

the period of performance for noncompetitive contracts using the unusual 

Recommendations for 

Executive Action
Page 37 GAO-14-304 Noncompetitive Contracting

and compelling urgency exception, we recommend that the Director of the 

Office of Management and Budget, through the Office of Federal 

Procurement Policy, take the following action:

• Provide guidance to clarify when determinations of exceptional 

circumstances are needed when a noncompetitive contract awarded 

on the basis of unusual and compelling urgency exceeds 1 year, 

either at time of award or modified after contract award.

We provided a draft of this report to DOD, State, USAID, and OMB for 

their review and comment. We received written comments from DOD, 

State and USAID, which are reproduced in appendices IV through VI. 

OMB provided comments via email. The agencies generally agreed with 

the recommendations and in most cases described planned actions in 

response. We also received technical comments from DOD, which we 

incorporated as appropriate.

DOD concurred with three recommendations and partially concurred with 

one recommendation. In written comments, DOD stated that the Defense 

Procurement and Acquisition Policy (DPAP) office will issue guidance to 

the contracting activities to remind them of instructions on completing 

data fields in FPDS-NG for simplified acquisition procedures, and to 

clarify documentation related to posting of justifications and actions to 

take when approval signatures are not obtained within the 30-day posting 

requirement. These actions are responsive to three of our four 

recommendations. For the fourth recommendation, DOD’s proposed

action to issue guidance emphasizing that the cumulative value of a 

contract should be considered when obtaining approval to increase the 

value of a contract awarded under the urgency exception does not fully 

address our recommendation. Although this guidance could be helpful, 

the recommendation was to develop an oversight mechanism for when 

contracts awarded under the urgency exception increase in value 

considerably over the course of time. The oversight mechanism would 

provide higher level contracting officials with visibility into awards that 

grow in small dollar increments that do not meet the thresholds for a new 

justification. One example of how this mechanism could be implemented 

would be to require approval at a higher level when the cumulative 

contract value increases by a certain percentage. 

In written comments, State agreed with the recommendations, stating it

will seek to implement them by August 30, 2014. State did not provide 

any further details on implementation plans.

Agency Comments 

and Our Evaluation
Page 38 GAO-14-304 Noncompetitive Contracting

In its written response, USAID concurred with the recommendations, and 

outlined steps it will take in response to them, including assessing and 

updating current guidance, policy and training components.

In an email response, OMB agreed that there is a need for clarification 

regarding the use of exceptional circumstance determinations when 

contracts awarded using the urgency exception exceed 1 year. These 

officials further noted that they intend to work with the FAR Council, which 

updates the FAR, to discuss the issues raised in the report about the 

current FAR language and the best way to address those issues.

We are sending copies of this report to the Director of OMB, the 

Secretaries of Defense and State, and the Administrator of the U.S. 

Agency for International Development, and interested congressional 

committees. In addition, the report is available at no charge on the GAO 

website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact 

me at (202) 512-4841 or martinb@gao.gov. Contact points for our Offices 

of Congressional Relations and Public Affairs may be found on the last 

page of this report. GAO staff who made key contributions to this report 

are listed in appendix VII.

Belva Martin

Director, Acquisition and Sourcing Management
Page 39 GAO-14-304 Noncompetitive Contracting

List of Committees

The Honorable Richard Durbin 

Chairman

The Honorable Thad Cochran

Ranking Member

Subcommittee on Defense

Committee on Appropriations

United States Senate

The Honorable Patrick Leahy

Chairman

The Honorable Lindsey Graham

Ranking Member

Subcommittee on State, Foreign Operations, and Related Programs

Committee on Appropriations

United States Senate

The Honorable Carl Levin

Chairman

The Honorable James M. Inhofe

Ranking Member

Committee on Armed Services

United States Senate

The Honorable Robert Menendez

Chairman

The Honorable Bob Corker

Ranking Member

Committee on Foreign Relations

United States Senate

The Honorable Thomas R. Carper

Chairman

The Honorable Tom Coburn

Ranking Member

Committee on Homeland Security and Governmental Affairs

United States Senate

The Honorable Rodney Frelinghuysen

Chairman

The Honorable Pete Visclosky

Ranking Member
Page 40 GAO-14-304 Noncompetitive Contracting

Subcommittee on Defense

Committee on Appropriations

House of Representatives

The Honorable Kay Granger

Chairwoman

The Honorable Nita Lowey

Ranking Member

Subcommittee on State, Foreign Operations, and Related Programs

Committee on Appropriations

House of Representatives

The Honorable Howard P. McKeon

Chairman

The Honorable Adam Smith

Ranking Member

Committee on Armed Services

House of Representatives

The Honorable Ed Royce

Chairman

The Honorable Eliot Engel

Ranking Member

Committee on Foreign Affairs

House of Representatives

The Honorable Darrell Issa

Chairman

The Honorable Elijah E. Cummings

Ranking Member

Committee on Oversight and Government Reform

House of Representatives
Appendix I: Objectives, Scope, and 

Methodology

Page 41 GAO-14-304 Noncompetitive Contracting

The objectives for this review were to examine (1) the pattern of use of 

the unusual and compelling urgency exception, including the range of 

goods and services acquired by the Departments of Defense (DOD) and 

State, and US Agency for International Development’s (USAID); (2) the 

reasons that agencies awarded noncompetitive contracts on the basis of 

urgency and the extent to which justifications met requirements in the 

Federal Acquisition Regulation (FAR); and (3) the extent to which 

agencies limited the duration of the contract and achieved competition.

To address these objectives, we used data in the Federal Procurement 

Data System-Next Generation (FPDS-NG), which is the government’s 

procurement database, to identify DOD, State, and USAID obligations for 

noncompetitive contracts awarded using the unusual and compelling 

urgency exception. We selected a non-generalizable, random sample of 

62 contracts by using data from FPDS-NG to analyze which components 

within DOD, State, and USAID had the most obligations using the 

urgency exception for fiscal years 2011 and 2012, which, at the time, 

were the most recent fiscal years for which data was available. To narrow 

our focus on which contracts to include in our review, we identified the 

contracting offices within DOD, State, and USAID that had the largest 

total obligations for contracts reported as being awarded using the 

urgency exception under the “reason not competed” field in the FPDS-NG 

database. We then selected contracts that represented a mix of large and 

smaller dollar awards and types of products and services procured. Table 

2 below shows the contracting offices and the number of contracts 

included in our review.

Appendix I: Objectives, Scope, and 

Methodology
Appendix I: Objectives, Scope, and 

Methodology

Page 42 GAO-14-304 Noncompetitive Contracting

Table 2: Contracting Offices and the Number of Contracts Reviewed

Agency Contracting Office

Number of 

contracts 

reviewed

Air Force Air Force Materiel Command, Hanscom Air Force Base, Massachusetts 1

Aeronautical Systems Center, Wright Patterson Air Force Base, Ohio 5

Air Force Research Laboratory, Wright Patterson Air Force Base, Ohio 3

Army TACOM Life Cycle Management Command, Warren, Michigan 5

Army Contracting Command-Aberdeen Proving Ground, Aberdeen, Maryland 6

Navy Naval Air Systems Command, Warfare Center Aircraft Division, Lakehurst, New Jersey 5

Naval Sea Systems Command, Washington, D.C. 5

Defense 

Logistics 

Agency (DLA)

DLA-Energy, Fort Belvoir, Virginia 3

DLA-Land and Maritime, Warren, Michigan 4

State Office of Acquisition Management, Arlington, Virginia 7

American Embassy Brussels 6

USAID Office of Acquisition and Assistance, Afghanistan 4

Office of Acquisition and Assistance, Washington, D.C. 1

Office of Foreign Disaster Assistance, Washington, D.C. 1

Office of Transition Initiatives, Washington, D.C. 6

Source: GAO analysis.

To assess patterns in DOD’s, State’s, and USAID’s use of the unusual 

and compelling urgency exception to competition, we analyzed data from 

the Federal Procurement Data System-Next Generation (FPDS-NG). We 

included contracts and task orders coded as using the urgency exception 

under the field “reason not competed” from fiscal years 2010 through 

2012 which represented the time period after the requirement to limit the 

duration of urgent contracts went into effect and reflected the most 

current reliable data to show trends over time. We determined that a 

contract was miscoded if it was coded in FPDS-NG as being awarded 

under the urgency exception, but our analysis of the contract file 

documentation showed that the contract was awarded using other 

procedures—such as the streamlined procedures under the simplified 

acquisition threshold—generally $150,000—or other exceptions to full 

and open competition such as national security. We analyzed DOD, 

State, and USAID obligation data and the types of goods and services 

based on product code fields. We assessed the reliability of FPDS-NG 

data by (1) performing electronic testing of required data elements, (2) 
Appendix I: Objectives, Scope, and 

Methodology

Page 43 GAO-14-304 Noncompetitive Contracting

reviewing existing information about the data and the system that 

produced them; and (3) comparing reported data to information from 

contract files that we sampled. In our analysis we excluded awards that 

were below $150,000 because of the high likelihood that these 

procurements followed simplified acquisition procedures which are 

separate from the procedures that apply to the urgency exception. Taking 

this approach allowed us to account for known data limitations. Thus, we 

determined that the federal procurement data were sufficiently reliable to 

examine patterns in DOD’s, State’s, and USAID’s use of the urgency 

exception. To compare use of the urgency exception versus other 

exceptions to full and open competition, we conducted an analysis of the 

other values listed under the “reason not competed” field. In addition, we 

reviewed FPDS-NG instructions to identify protocols for entering contract 

data in the database and interviewed DOD, State, and USAID contracting 

officials and FPDS-NG subject matter experts about their procedures and 

processes for entering data in the procurement database.

To assess the reason that agencies awarded noncompetitive contracts on 

the basis of urgency and the extent to which justifications met FAR 

requirements, we performed an in depth review of contract files for 34 

selected contracts that we determined—based on our review of contract 

file documentation and interviews with contracting officials—were 

awarded using the unusual and compelling urgency exception. Of the 62 

contracts that we initially selected for our sample, we narrowed our 

analysis to 34 because 28 of the contracts were miscoded in FPDS-NG. 

For these 34 contracts, we reviewed contract file documentation such as 

acquisition plans, justifications and other documents agencies used to 

seek approval to limit competition on the selected contracts to determine 

agencies’ rationale for using the urgency exception. We also reviewed 

DOD, State, and USAID guidance regarding the preparation and approval 

of justifications to use the urgency exception. Additionally, we reviewed 

the Federal Acquisition Regulation and reviewed agency policies and 

guidance to inform our analysis of the extent to which justifications met 

FAR requirements such as ensuring the justifications were signed by the 

appropriate individuals and made publicly available within the required 

timeframes. We compared agencies’ policies and procedures with the 

Standards for Internal Control in the Federal Government which calls for 

documentation of transactions that is readily available for inspection, thus 

providing evidence of implementation.1

 1

We interviewed contracting and 

GAO/AIMD-00-21.3.1.
Appendix I: Objectives, Scope, and 

Methodology

Page 44 GAO-14-304 Noncompetitive Contracting

acquisition policy officials, procurement attorneys, program officials, and 

competition advocates at DOD, State, and USAID to discuss the facts 

and circumstances regarding use of the urgency exception and agency 

policies and procedures to implement FAR requirements for publicly 

posting justifications 

To determine the extent to which agencies complied with the FAR 

requirement to limit the total period of performance of a contract awarded 

using the urgency exception to no more than a year unless the head of 

the agency makes a determination of exceptional circumstances, we 

reviewed contract file documents for 34 selected contracts that we 

identified were awarded using the urgency exception. We also conducted 

legal research and interviewed contracting and acquisition policy officials 

at DOD, State, and USAID on the implementation of the duration 

requirement. We reviewed contract file documentation such as contract 

awards to determine the estimated period of performance. Further, we 

reviewed contract modifications and additional justifications prepared 

after award to determine the actual period of performance and action 

taken by the agencies when extending the period of performance for 

urgency contracts, such as preparing additional justifications for other 

than full and open or exercising the option to extend services. We also 

interviewed officials from the Office of Federal Procurement Policy within 

OMB to obtain their perspectives on the approaches that DOD, State, and 

USAID used to address the FAR requirement to limit the period of 

performance or obtain a determination from the head of the agency that 

exceptional circumstances necessitate a period of performance greater 

than 1 year. We also analyzed contract documents to identify instances 

where DOD, State, and USAID increased funding for the 34 contracts in

our sample. We assessed the implications of inconsistent implementation 

of the FAR requirement to limit the period of performance of urgent 

contracts and the absence of an oversight mechanism to monitor 

increases in contract value against criteria in Standards for Internal 

Control in the Federal Government.

2

 2

These criteria call for organizations 

to maintain proper controls that ensure transparency and accountability 

for stewardship of resources. To determine the extent to which DOD, 

State and USAID achieved competition with the use of the urgency 

exception, we interviewed contracting officials and reviewed contract 

documents, such as acquisition plans and price negotiation 

GAO/AIMD-00-21.3.1.
Appendix I: Objectives, Scope, and 

Methodology

Page 45 GAO-14-304 Noncompetitive Contracting

memorandums, to identify the barriers to competition that agencies cited 

and, to assess the extent to which the agencies solicited offers from 

multiple vendors.

We conducted this performance audit from March 2013 through March 

2014 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.
Appendix II: Summary of Contracts

Included in Our Sample

Page 46 GAO-14-304 Noncompetitive Contracting

Of the 62 contracts included in our sample, we determined that 34 were 

awarded using the unusual and compelling urgency exception to 

competition. Table 3 below provides an overview of the contracts in our 

sample including the awarding agency, a description of the item procured 

and the total dollars obligated. In addition, the table highlights the 

circumstances that, according to the Departments of Defense (DOD) and 

State, and the US Agency for International Development (USAID), led to 

use of the urgency exception such as to avoid a gap in program support 

or meet an urgent operational need.

Table 3: Summary of Contracts in Our Sample Awarded Under the Unusual and Compelling Urgency Exception

Appendix II: Summary of Contracts

Included in Our Sample

Item Procured

Funds obligated 

(in millions)

Contract 

Awarded to 

Meet an Urgent 

Operational 

Need

Contract 

Awarded to 

Avoid a gap in 

programming

Contract 

Awarded to 

meet other 

urgent 

needs

Support 

missions in 

Afghanistan 

or Iraq a

USAID

Parliamentary support to the 

Afghanistan National Assembly

$4.9 

Afghanistan

Financial audit services $0.2  Afghanistan

Financial audit services $0.2  Afghanistan

State

Guard protection services $178.1  Afghanistan

Ballistic resistant doors and window $0.5 

Radio and television security 

equipment

$9.9 

Afghanistan

Telecommunications and information 

technology services

$0.2 

Operations and maintenance support 

services at the U.S. Embassy 

compound in Baghdad, Iraq

$49.4 

Iraq

Air Force

Intelligence, surveillance and 

reconnaissance (ISR) airship

$114.9 

Afghanistan

ISR unmanned aerial system $14.9  Afghanistan

Secure communications equipment 

for ISR airship

$0.5 

Afghanistan

Airborne system to protect against 

improvised explosive devices (IED)

$39.8 

Afghanistan, Iraq

Professional support $1.7 

Engineering support $3.9 
Appendix II: Summary of Contracts

Included in Our Sample

Page 47 GAO-14-304 Noncompetitive Contracting

Source: GAO analysis of contract documents.

a Other urgent needs include non-recurring urgent needs such as, construction of temporary work 

spaces, an unexpected break in oil refinery production, or support for a one time military mission.

Army

Airborne radar equipment $338.6  Afghanistan

Information technology and 

telecommunications services

$14.7 

Afghanistan, Iraq

Spare parts for the Persistent Threat 

Detection System.

$47.0 

Afghanistan

Armored security vehicles $525.4  Afghanistan

Equipment and accessories for 

tactical wheeled vehicles

$16.0 

Rocket propelled grenade net kits for 

tactical wheeled vehicles 

$59.4 

Afghanistan

Production of tactical wheeled 

vehicles

$177.6 

Afghanistan

Management Support $104.4  Afghanistan, Iraq

Personal armor $4.4   Afghanistan

Navy

Vehicle-mounted counter-IED system $12.0  Afghanistan, Iraq

Mine identification and neutralization 

device

$48.2 

Ground Fault Interrupter for sonar 

system

$1.0 

Operational support for the Persistent 

Ground Surveillance System (PGSS)

$105.8 

Afghanistan

PGSS spare parts and logistics 

support 

$26.4  

Afghanistan

Program support for PGSS operators $6.4   Afghanistan

PGSS program support $44.6   Afghanistan

Defense Logistics Agency

Fuel $31.8 

Jet fuel $69.7 

Vehicle accessories for tactical 

wheeled vehicles

$4.7 

Afghanistan, Iraq

Automatic fire extinguishing systems 

for tactical wheeled vehicles

$6.3 

Afghanistan
Appendix III: DOD, State, and USAID Contracts 

That Exceeded 1 Year

Page 48 GAO-14-304 Noncompetitive Contracting

Figure 7 highlights the items procured and the estimated versus actual 

duration of the 10 contracts we found with a period of performance of 

more than 1 year. 

Figure 7: Period of Performance for Contracts that Exceeded 1 Year

a

This undefinitized contract action had an estimated period of performance of 17 months at award. 

When definitized, the contract duration was shortened to 7 months.

Appendix III: DOD, State, and USAID 

Contracts That Exceeded 1 Year
Appendix IV: Comments from the Department 

of Defense

Page 49 GAO-14-304 Noncompetitive Contracting

Appendix IV: Comments from the 

Department of Defense
Appendix IV: Comments from the Department 

of Defense

Page 50 GAO-14-304 Noncompetitive Contracting
Appendix IV: Comments from the Department 

of Defense

Page 51 GAO-14-304 Noncompetitive Contracting
Appendix V: Comments from the Department 

of State

Page 52 GAO-14-304 Noncompetitive Contracting

Appendix V: Comments from the 

Department of State
Appendix V: Comments from the Department 

of State

Page 53 GAO-14-304 Noncompetitive Contracting
Appendix VI: Comments from

the U.S. Agency for International Development

Page 54 GAO-14-304 Noncompetitive Contracting

Appendix VI: Comments from

the U.S. Agency for International 

Development
Appendix VI: Comments from

the U.S. Agency for International Development

Page 55 GAO-14-304 Noncompetitive Contracting
Appendix VI: Comments from

the U.S. Agency for International Development

Page 56 GAO-14-304 Noncompetitive Contracting
Appendix VII: GAO Contact and Staff 

Acknowledgments

Page 57 GAO-14-304 Noncompetitive Contracting

Belva Martin, (202) 512-4841 or martinb@gao.gov

In addition to the contact named above, Tatiana Winger, Assistant 

Director and Candice Wright, analyst-in-charge, managed this review.

MacKenzie Cooper, Beth Reed Fritts, and Erin Stockdale made 

significant contributions to the work. Julia Kennon and Alyssa Weir

provided FPDS-NG data analysis expertise and legal support, 

respectively. Roxanna Sun provided graphics support.

Appendix VII: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(121124)
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