The substantial increase in funding for pandemic-related programs combined with the public’s expectation that funds get distributed quickly made it more likely that fraud could occur. Between April 1, 2020, and September 30, 2020, $4.4 billion (16%) of the $28 billion in pandemic response contracts awarded went to contractors who had never worked with the government before. In this report, we look at first time federal contractors and limited competition.
Why did we do this review?
Several first-time federal contractors have been convicted of failing to provide goods that were contracted for during the pandemic. Also, in June 2020, several members of Congress requested we investigate pandemic-related contracts entered with contractors that had never worked with the federal government before. The objectives of our review were to:
- Review pandemic-related federal contracts to identify first-time federal contractors
- Review pandemic-related federal contracts to identify those that were awarded without competitive bidding
How well did they perform?
- 3% “Deobligated”
As of September 30, 2020, $128 million (3%) of the $4.4 billion awarded to first-time federal contractors was deobligated, meaning that funds were removed from contracts for performance reasons such as failure to meet requirements, changes in contract requirements, or contract terms were not completed. The highest percentage of deobligations was in the accommodation and food industry. - 65% Positive Feedback
11 of 17 Contracting Officers we surveyed from federal agencies said they would rate their experience working with first-time federal contractors as positive.
How were contracts awarded without competition?
Although agencies are generally required to use full and open competition when awarding contracts, when an emergency is declared there are exceptions. The most common flexibilities identified in our review of pandemic response contracts were urgency, only one source, simplified acquisition procedures, and authorized by statute.
- 11% of non-competitive contracts used the “only one responsible source” authority which is used when supplies and services are available from only one source in certain conditions
- 71%, or 10 of 14 contracts in our survey, either had data entry errors or should have chosen a different flexibility option, like urgency
Want more details? Read the full report.