"It's considered this fabulously successful streamlining of the system, but in the process you lose any accountability," said Danielle Brian, executive director of the Project on Government Oversight. Brian said she described large, open contracts like the one given to CACI as "hunting licenses."
"You've been given a license to do business with the government," Brian said. "You've been allowed into the preserve and once you get in there's no competition necessary."
Small companies looking to bid on specific projects may be cut out of the loop because of these types of contracts, Brian added. The agreement with CACI was already in place, so the Army did not have to put out a request for bids from other contractors that may have wanted to compete for the contract.
And because there is no competition to drive down prices, the government may be paying more than it should for some products and services, according to a report on the Defense Department's management challenges released in January by the General Accounting Office.
Throughout the 1990s, many government agencies tried to change the way they did business with private contractors. Removing some of the red tape would make it cheaper for the government and easier for private industry, proponents said.
But training on acquisition procedures and competition requirements within the Defense Department has not kept up with the military's purchasing reforms. As a result, the Defense Department "missed out on opportunities to generate savings, reduce administrative burdens, and enhance outcomes for its acquisitions," the GAO report found.
Blanket-purchase agreements were originally intended for use by agencies that buy routine products and services from the same companies, said Angela Styles, former administrator for federal procurement policy at the Office of Management and Budget. If an agency knows it is going to buy a lot of pencils, for example, it might give a blanket-purchase agreement to Office Depot to lock in a price and expedite billing, she said.
"It's nice to have for simple things. . . . but it's really easy to get out of hand, because the blanket-purchase agreement isn't competed and the work under it isn't competed," Styles said.
Much of the work being done by contractors in Iraq has been parceled out under these large purchasing agreements and "indefinite delivery-indefinite quantity" contracts, said Steve Schooner, co-director of the Government Procurement Law Program at George Washington University. The Iraq reconstruction contracts awarded to Halliburton Co.'s subsidiary, KBR, fall under a similar type of umbrella contract.
When military buyers are "in a hurry or understaffed or when they just feel like it, agencies go out and use these vehicles. And contractors will do whatever you ask them to do, that's their job," Schooner said.
This may help the Defense Department react quickly to changing needs in its wartime and anti-terrorism efforts, Schooner said, but it leaves government watchdogs with much less insight into how tax dollars are being spent.
"There is no question that these flexible vehicles are less transparent than conventional government procurements," Schooner said.