GAO: Time to Regulate Bridge Contracts

USFCR-LogoIn a report released Thursday, October 15, the Government Accountability Office (GAO) claims that temporarily extending contracts without soliciting for competitive bids may cost the government more in the long run. And why can large agencies extend contracts without competitive bids? Because the Federal Acquisition Regulation (FAR) does not define “bridge contracts,” which leaves the door wide open for extending contracts without competitive bids.

After reviewing 73 “bridge contracts” issued by the Departments of Defense, Health and Human Services, and Justice, GAO auditors found “limited or no insight into their use of bridge contracts, as bridge contracts were not defined or addressed in department-level guidance.”

GAO auditors found that these bridge contracts, which are expected to be short-term and last only as long as a contractor needs to complete a project, often last far longer than expected. The GAO, after reviewing 29 such contracts, found that six exceeded three years. For example, GAO auditors found that an Army “bridge contract for computer support services was initially planned as a 12-month bridge, but because of subsequent bridges, ultimately spanned 42 months.”

During its audit, the GAO found that agencies rely on “bridge contracts” because of “acquisition planning delays, such as revisions to statements of work and delays in source selection, as well as an inexperienced and overwhelmed acquisition workforce, bid protests and budget uncertainties.”

The GAO found that when “bridge contracts” end and agencies put them out for competitive bids, the agencies end up issuing a contract for less than it was paying during this “bridge” period. This, said the GAO in its report, “highlights the importance of better management controls over use of bridge contracts.”

The GAO found practices in place at the Department of the Navy and the Defense Logistics Agency that helps procurement officers and agencies “manage and track” the use of “bridge contracts.”

The report, which the GAO provided to members of the Senate Homeland Security and Governmental Affairs Committee, recommends that the White House procurement policy office “take steps to amend the FAR to incorporate a definition of bridge contracts” and also provide guidance for agencies to better track and manage the use of “bridge contracts.”

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