A House committee has attacked the Pentagon for trying to escape requirements that it use competitive bids in procurement, saying this raises a question of whether the Defense Department "is capable of correcting the waste and abuse" in its weapons buying.
The House Government Operations Committee raised the issue in a strongly worded report on a $136 billion authorization bill for defense procurement outlays in the fiscal year starting Oct. 1.
Noncompetitive methods were the basis for majority of Department of Defense contracts totaling $80 billion in 1980 and of 70 percent to 90 percent of its current procurement, the report said. "The committee is concerned by the apparent inability of DoD to make effective use of competition," the report went on.
The report, which became available yesterday, "puts a serious question mark over Defense Secretary Caspar W. Weinberger's pledge to attack mismanagement and waste, which, the General Accounting Office has estimated, inflate the Pentagon budget by 'substantially more' than $10 billion a year," Government Operations Chairman Jack Brooks (D-Tex.) said. With Defense getting "$1.65 trillion to spend in the next five years, this is no time to be cutting the Pentagon loose from laws that protect the American taxpayer," Brooks declared.
Key provisions of the bill disapproved by the Brooks committee were approved earlier by the House Armed Services Committee, and, in different form, by its Senate counterpart. The disagreement between the two House panels sets the stage for a fight over the bill on the House floor, at a date not yet set.
One of the provisions approved by the House Armed Services panel would give Defense discretion to issue regualtions embodying its own view of "timely, economic, and efficient" procurement and require the Office of Management and Budget to modify government-wide procurement directives to make room for the Pentagon exceptions.
A provision approved by the Senate panel -- which heard only Pentagon witnesses -- would exempt considerable procurement of date processing equipment from a 1965 law that has saved an estimated $4.2 billion by injecting competition into this area. At the time this law, sponsored by Brooks, was enacted, one vendor was supplying 42.3 percent of the government's data processing mainframes. By fiscal 1980, its share was down to 8.3 percent. A committee source identified the vendor as IBM.
A trade association testified that before 1965, in the report's words, "competition was so blatantly disregarded that the yarmy even sent out an RFP [request for proposals to bid] for computer hardware on IBM stationery."
Another Senate provision would declare a sole-source follow-on contract not to be a sole-source contract if the original contract was awarded competitively. The report said this would let the Pentagon make sole-source awards to an incumbent vendor "indefinitely."
Since the late 1960s, the Government Operations Committee has steadily pressed for uniform, government-wide policies using competition to buy goods and services at the lowest reasonable cost. In later steps, Congress in 1974 created the Office of Federal Procurement Policy within OMB, and in 1979 directed the OFPP to develop a comprehensive master plan by October 1981.
Saying that the OFPP was well on the way to meeting the deadline, Deputy OMB Director Edwin L. Harper told the committee only two weeks ago that "this is the wrong time to make further patchwork changes in the existing statutes."