Analysis: Friction increasing between agencies, vendors

Monday - 12/5/2011, 5:36am EST

Despite the Obama administration's goal of bringing agencies and vendors closer together through the mythbusters campaign, evidence of a wider gulf between the two is growing.

The Government Accountability Office reported more contract bid protests were filed in fiscal 2011 than in any time since 1995.

Agency use of suspension and debarment increased by more than 200 in 2010, according to a report issued this summer by the Office of Federal Procurement Policy to Congress. Last year, the Interagency Suspension and Debarment Committee (ISDC) found departments suspended 612 vendors and debarred 1,651 contractors, up 150 from 2009, and proposed 1,945 companies for debarment, an increase of almost 1,200 over the year before.

Additionally, agencies are coming under pressure from Congress and the White House to be even more aggressive in debarring or suspending vendors who break the rules. The White House recently issued a new policy requiring agencies to take specific steps over the next year, including appointing a senior official responsible for "assessing the agency's suspension and debarment program, including the adequacy of available training and resources," and reviewing internal practices to ensure that potential contractors and grant recipients have the requisite business integrity.

Congress also conducted two recent hearings on suspension and debarment. Just last week., during a House Veterans Affairs Committee hearing on the service-disabled veteran-owned small business and veteran-owned small business certification program, lawmakers pressed Veterans Affairs Department officials about why they had not suspended or debarred more companies who said they were a part of the socio-economic contracting group, but in the end were not.

Both sides are aggressively staking out their ground instead of coming closer together to solve the government's problems.

GAO resolves fewer bid protests

The 2010 bid protest report helps continue to build the case. It shows GAO ended up making a decision on 417 cases, sustaining 67 or 16 percent of them. A vast majority of the cases are solved either by the agency withdrawing their award and agreeing to fix the situation, or the vendor deciding not to pursue the case after GAO's initial review.

Bid Protests
through the years:
  • 1995 ... 2,529
  • 1996 ... 2,286
  • 1997 ... 1,852
  • 1998 ... 1,566
  • 1999 ... 1,399
  • 2000 ... 1,220
  • 2001 ... 1,146
  • 2002 ... 1,204
  • 2003 ... 1,352
  • 2004 ... 1,485
  • 2005 ... 1,356
  • 2006 ... 1,327
  • 2007 ... 1,411
  • 2008 ... 1,652
  • 2009 ... 1,989
  • 2010 ... 2,299
  • 2011 ... 2,353
  • Source: GAO
    GAO said 140 cases went to alternative dispute resolution, down from 159 in 2010 and 149 in 2009.

    OFPP's goal with the mythbuster's campaign is to dispel some commonly hold notions that agencies and vendors can't communicate or work more closely together to develop acquisition requirements. Agencies submitted a communications plan to OMB last June on how they would reduce barriers, publicize communication opportunities, and prioritize engagement opportunities for high-risk, complex programs or those that fail to attract new vendors during recompetitions.

    But preliminary results of a Federal News Radio survey of chief acquisition officers and senior procurement executives show a mix of opinions about the mythbusters campaign. The results currently are evenly split among the three choices about its impact: it is making a difference, it is not making a difference and it's too early to tell whether it will make a difference.

    Mythbusters falling short?

    The increased use of suspension and debarments could be seen as an example of agencies and vendors not taking the mythbusters campaign to heart. While OFPP launched the campaign in 2011 and the results were from 2010, the Obama administration long has been taking a two-path approach: increasing oversight while promoting more communication between agencies and vendors.

    A recent example of the mythbusters campaign falling short is when the Air Force decided in October to suspend three companies — Iron Bow; Advanced C4 Solutions of Warner Robbins, Ga.; and Superior Communications Solutions Inc. of Moultrie, Ga. — over a disagreement of whether the companies allegedly violated conflict of interest rules and the fulfillment of the contract that followed.

    The Air Force's suspension prohibited Iron Bow, Advanced C4 Solutions and Superior Communications from winning any new contracts for almost a month as the parties negotiated a resolution.

    The Air Force last week reinstated all three companies. A spokesman for the service declined to comment on why the Air Force lifted the suspension.

    One unnamed source close to the situation said the companies and their attorneys negotiated with the Air Force to address each and every question or issue the Air Force raised in their suspension complaint. The source said based on the responses of the companies the Air Force terminated the proposed debarment.