DOD awards too many bridge contracts, limiting competition. Here’s how to fix that.
by Dennis P. Longo
The third article in the On Contracting series, based on the Competition in Army Contracting course developed by the author for the Office of the Deputy Assistant Secretary of the Army for Procurement.
It’s been said that greatness is not measured by the walls we build, but by the bridges. Department of Defense leadership disagrees.
For several years, DOD has exploited the use of temporary contract extensions without obtaining competitive bids. Known as bridge actions, these temporary extensions weren’t necessarily planned in advance, but have often been used as a way to prolong delivery of items or services under a contract until a replacement contract is awarded.
Ellen M. Lord, then undersecretary of defense for acquisition, technology and logistics issued a memorandum on Jan. 31, 2018, titled “Bridge Actions Reduction Measures and Reporting Requirement,” observing that in fiscal year 2015, there were over 1,100 bridge actions with obligations exceeding $13.7 billion. These bridge actions, in Lord’s view, represent a lost opportunity for savings that could have been reached by awarding new, competitively awarded contracts.
Lord isn’t the sole voice making this observation. A March 2012 Government Accountability Office (GAO) report (GAO 12-384) found that 18 of 111 justifications and approvals reviewed were bridge contracts with a total value of more than $9 billion, with five of the 18 awarded as a result of protests. Of the remaining awards, the most frequent reasons for the bridge actions included changing office managers multiple times, difficulties writing requirements that met the contracting officer’s standards, conflicting end-of-year responsibilities for contracting staff and extended length of time to approve acquisition strategies.
A 2014 report (GAO 14-304) found that 12 of 34 contracts awarded on the basis of urgency were bridge contracts with a total value of more than $466 million and an average period of performance of 11 months. The impact? Higher costs to DOD because of inefficiencies and the cost of administering bridge contracts, strain on the contracting workforce because bridge contracts must be justified and awarded while a follow-on contract is being sought, and the loss of benefits associated with full and open competition.
Another GAO report (GAO 16-15), released in 2015, examined the insight agencies had on the characteristics and reasons bridge contracts were used. GAO concluded that agencies have little to no insight into their use of bridge contracts, and that the period of performance of many bridge contracts spanned multiple years, and increased contract prices.
If you don’t know where you’re going, any road will take you there.
A definition for “bridge action,” also referred to as “bridge contract,” does not exist in the Federal Acquisition Regulation (FAR) or Defense FAR Supplement (DFARS). This returns us to Lord’s 2018 memo that established a DOD definition and guidance for bridge actions:
A bridge action describes a non-competitive action requiring a justification to include, but not limited to, a formal justification and approval (FAR Part 6 or 13.5), limited sources justification (FAR Subpart 8.4), and exception to fair opportunity (FAR Subpart 16.5), to retain the current or similar product or service as a result of delay in the negotiation and award of a follow-on contract.
DOD ‘BRIDGE ACTION’ DEFINITION—A TWO-PART TEST
Part 1
A non-competitive action requires a justification to retain the current or similar product or service.
When the government solicits bids or proposals to award or modify a contract, the solicitation must promote full and open competition; that is, it must be issued without limiting competition. A “justification and approval” must be prepared for a contract award or contract modification that limits competition to one or more companies. For this part of the test, there must be a need to continue performance of an existing contract until a follow-on contract is awarded.
Part 2:
A result of a delay in the negotiation and award of a follow-on contract.
This second part of the two-part test applies where negotiation and award of a follow-on contract has been delayed.
What’s a follow-on contract?
FAR 6.302-1(a)(2)(ii) characterizes a follow-on contract as a “contract for the continued development or production of a major system or highly specialized equipment.”
As noted, reasons for awarding bridge contracts may be delays caused by bid protests, lengthy revisions to government procurement requirements or delays in awarding a contract, as well as delays that may be caused by an inexperienced and overwhelmed acquisition workforce.
The key, however, is that if there is no delay in the negotiation and award of a follow-on, the action is not a bridge action.
OPTIONS AND BRIDGE ACTIONS
Under the “Option to Extend Services” clause at FAR 52.217-8, the government may require continued performance of any services within the limits and at the rates specified in the contract, not to exceed six months.
The contracting officer may invoke the clause to continue performance under the contract without full and open competition when the option was evaluated and priced at the time of award.
However, the clause is not “self-executing,” meaning that the conditions and price of any option must be evaluated before they are acceptable by both parties.
Would you agree to let a waiter in a restaurant select an entree for you? Suppose you enter your favorite restaurant and order chicken marsala. The restaurant is out of chicken, so instead, the waiter serves you a bowl of mac and cheese. You tell the waiter, “I asked for chicken marsala.” The waiter says, “I decided to replace the chicken marsala with the mac and cheese because we ran out of chicken” and walks away. Clearly, the waiter cannot compel you to buy the mac and cheese at his option without your consent.
Likewise, according to FAR 17.207(f), contracting officers must evaluate options when the contract is initially awarded so both parties understand and agree to the terms of the option and its cost.
However, when the option was evaluated and priced at the time the contract was initially awarded, the option may be exercised to “bridge” or extend the contract’s period of performance until the follow-on contract is awarded. In such cases, executing the clause is NOT considered a bridge action.
Executing the clause is considered a bridge action when the clause was NOT evaluated and priced at the time of award of the contract or order, thus requiring a justification to limit competition.
THE JUSTIFICATION
The rationale for the bridge action must focus on (a) why and how the delay occurred, (b) why the bridge action is needed, and (c) how to resolve the delay.
To explain why and how the delay occurred, the rationale should focus on the specific circumstances of the delay, when it occurred, what we did to overcome the circumstances and why the delays could not have been mitigated.
To explain why the bridge action is needed, the rationale should focus on why we waited until now to request it, include specific dates in explaining when the delay occurred, and describe how the cost estimate was calculated, how the period of performance for the bridge action was calculated and what injury the government will sustain if the bridge is not executed.
To explain how to resolve the delay, the justification for the bridge action should include a milestone chart to illustrate where we intended to be when we initially determined the schedule for award of the follow-on contract, as well as an explanation of how the revised dates for award of the follow-on contract were estimated.
The milestone chart may, for example, provide the original procurement events in the “Events” column, the dates those events were estimated to be accomplished in the “Initial” column and a record of “Revised” dates that surpassed the “Initial” dates, with reasons in the “Notes” column explaining why the scheduled events and initial dates were surpassed.
THE JUSTIFICATION
The rationale for the bridge action must focus on (a) why and how the delay occurred, (b) why the bridge action is needed, and (c) how to resolve the delay.
To explain why and how the delay occurred, the rationale should focus on the specific circumstances of the delay, when it occurred, what we did to overcome the circumstances and why the delays could not have been mitigated.
To explain why the bridge action is needed, the rationale should focus on why we waited until now to request it, include specific dates in explaining when the delay occurred, and describe how the cost estimate was calculated, how the period of performance for the bridge action was calculated and what injury the government will sustain if the bridge is not executed.
To explain how to resolve the delay, the justification for the bridge action should include a milestone chart to illustrate where we intended to be when we initially determined the schedule for award of the follow-on contract, as well as an explanation of how the revised dates for award of the follow-on contract were estimated.
The milestone chart may, for example, provide the original procurement events in the “Events” column, the dates those events were estimated to be accomplished in the “Initial” column and a record of “Revised” dates that surpassed the “Initial” dates, with reasons in the “Notes” column explaining why the scheduled events and initial dates were surpassed.
| Date Taken: | 07.20.2020 |
| Date Posted: | 07.20.2020 20:32 |
| Story ID: | 374259 |
| Location: | US |
| Web Views: | 78 |
| Downloads: | 0 |
This work, ON CONTRACTING: AVOID BRIDGES TO NOWHERE, must comply with the restrictions shown on https://www.dvidshub.net/about/copyright.
