Vast Majority of Reported Contract Obligations Were for Competitive Awards

While no single, comprehensive system currently tracks governmentwide  Iraq reconstruction contract data, we obtained competition information on  $10 billion of the total $11.6 billion in obligations for Iraq reconstruction  contracts collectively awarded by DOD, USAID, and State from October 1,  2003, through March 31, 2006, and found that about $9.1 billion, or 91  percent, of the obligations was for competitive awards. We obtained  information on approximately $7 billion of the $8.55 billion DOD obligated  and found that competition occurred for nearly all of the obligations. Most DOD Obligations Were for Competitively Awarded Contract Actions

Based on available data, we found that the majority of DOD’s IRRF  contract obligations incurred during the period we reviewed were for  competitive awards. Complete information on DOD’s contract actions and competition type for  the period of our review was not available, in part because not all offices  consistently tracked or reported this information. These data indicated that  USAID competitively awarded contract actions for about $2.25 billion, or  99 percent, of the approximately $2.27 billion it obligated; approximately  $20.4 million, or about 1 percent, of these obligations were  noncompetitively awarded. Agency contracting staff reported that USAID  has pursued competition with very few exceptions when awarding  contracts and issuing task orders for Iraq reconstruction. We found that the agencies generally followed the  FAR and the applicable agency supplements regarding documentation  requirements for contract actions but did not always comply with  congressional notification requirements. Of the 51 contract actions that we  reviewed, 22 were awarded noncompetitively, while 29 were awarded  competitively. While State  failed to provide the required notifications, State officials told us that they  have taken steps to address the problem for future awards. State Did Not Always Provide Required Congressional Notifications

Of the 22 noncompeted contract actions in our review, State should have  notified Congress of 2 actions it awarded using other than full and open  competition in accordance with the congressional notification requirement  in section 2202 of Public Law 108-106 but did not. We did not identify any USAID or DOD contract actions  within our sample that required congressional notification. DOD provided only one technical comment, which was  incorporated into the report. In response, we focused our review on  reconstruction contract actions funded solely with the Iraq Relief and  Reconstruction Fund (IRRF). We included the Departments of Defense (DOD) and State (State) and the  U.S. Agency for International Development (USAID), as these agencies are  responsible for 98 percent of the total obligations made with IRRF through  June 2006. The contract actions were selected based on the following  criteria:  reconstruction contract actions funded with IRRF monies;    actions awarded from October 1, 2003, through March 31, 2006;    current obligations of $1 million or more;   represented both competed and noncompeted actions;    selected more actions from DOD than USAID and State based on  volume of contract actions obtained;  included a variety of contracts, task orders, and modifications; and  included a variety of goods and services provided.
Why GAO Did This Study

Since 2003, Congress has appropriated more than $20 billion through the Iraq Relief and Reconstruction Fund (IRRF) to support Iraq rebuilding efforts. The majority of these efforts are being carried out through contracts awarded by the Departments of Defense (DOD) and State and the U.S. Agency for International Development (USAID). When awarding IRRF-funded contracts for $5 million or more noncompetitively, agencies are required by statute to provide notification and justification to Congress. In June 2004, GAO found that agencies generally complied with laws and regulations governing competition to award new contracts, but did not always comply with competition requirements when issuing task orders under existing contracts. As mandated by Congress, this report (1) describes the extent of competition in Iraq reconstruction contracts awarded by DOD, USAID, and State since October 1, 2003, based on available data, and (2) assesses whether these agencies followed applicable documentation and congressional notification requirements regarding competition for 51 judgmentally selected Iraq reconstruction contract actions. In written comments, State and USAID concurred with the report findings. DOD provided a technical comment.

What GAO Found

While no single, comprehensive system currently tracks governmentwide Iraq reconstruction contract data, available data showed that from October 1, 2003, through March 31, 2006, DOD, USAID, and State collectively awarded the majority of Iraq reconstruction contracts competitively. Based on competition information we obtained on $10 billion of the total $11.6 billion in IRRF obligations by these agencies during the period of our review, we found that about $9.1 billion--or 91 percent--was for competitively awarded contracts. While our ability to obtain complete competition data for all DOD Iraq reconstruction contract actions was limited because not all DOD components consistently tracked or fully reported this information, we obtained information on approximately $7 billion, or 82 percent, of DOD's total Iraq reconstruction contract obligations, and of this, we found that competition occurred for nearly all of the obligations. Additionally, based on complete data for the period of our review we found that USAID competitively awarded contract actions for 99 percent of its obligations, while State awarded contract actions competitively for only 10 percent of its obligations. GAO reviewed the files for 51 contract actions totaling $1.55 billion--22 of which were awarded noncompetitively and 29 of which were awarded competitively--almost all of which contained proper documentation. One contract file--for a noncompetitively awarded task order issued by State--did not contain justifications or other required documentation. DOD was also unable to provide documentation for 4 of the competitively awarded contract actions. Of the 22 noncompeted contract actions in GAO's review, State should have notified Congress of 2 actions awarded using other than full and open competition in accordance with notification requirements but did not. State officials told GAO that they have taken steps to address the problem. GAO did not identify any DOD or USAID contract actions within the sample that required notification.