New Competition Policy

The managers of some of the Pentagon's largest weapon programs -- including the Joint Strike Fighter, Stryker, CVN-68, C-5 RERP, and P-8A -- did not avail themselves of acquisition rules established by Congress to ensure prime contractors are not thwarting competition when determining whether to may a part in house or subcontract to another firm, according to federal auditors.

The Government Accountability Office, in a new report, concludes that additional Pentagon guidance is required to "improve visibility into the structure and management of major weapon system contracts" in according with the 2009 Weapon System Acquisition Reform Act (WSARA). The GAO report, prepared at the direction of the FY-10 National Defense Authorization Act, concludes:

[P]rogram officials seemed reluctant to use available acquisition provisions, such as the make-or-buy plan, that enable the government to gain visibility into the prime contractor's subcontracting effort, largely because of fears regarding government liability. Further, government officials often questioned the overall purpose of these provisions. Nevertheless, Congress directed DOD in WSARA to ensure that prime contractors’ make-or-buy decisions are fair and reasonable. Provisions such as the make-or-buy plan represent important tools that the government can use to gain insight into the prime contractor’s methods for awarding subcontracts.

Shay Assad, director of defense procurement and acquisition policy, said in an Oct. 22 memo accompanying the GAO finding that the Pentagon will update acquisition guidance for contracting officers by June 30, 2011.

The 2009 Weapon Systems Acquisition Reform Act directed DOD "to improve competition throughout the life cycle of major defense programs, to ensure that contractors' make-or-buy decisions are fair and objective," GAO notes. "Specifically, the Secretary of Defense was directed to require prime contractors to give full and fair consideration to qualified sources other than the prime contractor for the development or construction of major subsystems and components of major weapon systems."