While these contracting options have been informally  referred to as bridge contracts by some in the acquisition community, no  formal definition of bridge contracts exists nor is there a requirement to  track them in the Federal Acquisition Regulation (FAR). The J&A must include sufficient facts and rationale to  justify the use of a sole-source contract and include, among other things,  the following information:
The nature or description of the action being approved;
A description of the supplies or services required to meet the agency’s  need, including the estimated value of the contract;
The statutory authority being cited to justify a noncompetitive  contract—for example urgency, only one-source available, etc;
A demonstration that the proposed contractor’s unique qualifications  or the nature of the acquisition requires use of the authority cited; and
A determination by the contracting officer that the anticipated cost to  the government will be fair and reasonable. Selected Agencies Have Little to No Insight into Their Use of Bridge Contracts but Two Components Have Instituted Policies

The agencies we reviewed had limited or no insights into their use of  bridge contracts. Federal internal control standards state that agencies should identify,  analyze, and monitor risks associated with achieving objectives, and that  information needs to be recorded and communicated to management so  as to achieve agency objectives. One common procurement objective at  federal agencies is to maximize competition. However, without a definition  for bridge contracts, and strategies for tracking and managing their use,  agencies are not able to fully identify and monitor the risks related to  these contracts, and therefore may be missing opportunities to increase  competition. Staff from OMB’s OFPP, one of the entities responsible for  initiating revisions to the FAR, acknowledged that the use of bridge  contracts may introduce risks related to a lack of competition, such as the  risk of higher contract prices. However, even after lengthy bridge contracts, we found that  competition occurred in most cases. Bridge Contracts Are Awarded for a Variety of Services

DOD, DOJ, and HHS awarded bridge contracts for a wide range of  services. Almost All Follow-On Contracts Were Competed, and in Some Cases Savings Could Be Quantified

Follow-on contracts were competitively awarded for 23 of 26 contracts  included in our in-depth review. The 3 remaining follow-on contracts  were awarded on a sole-source basis. Late Completion of Acquisition Planning Documentation Most Frequently Identified Reason for Bridge Contracts

Based on our reviews of contract documentation and information provided  by agency officials, we found that the most commonly cited reasons for  the use of a bridge contract across the 73 contracts were related to  acquisition planning issues—in particular the late completion of key  acquisition planning documentation, such as statements of work, that are  needed to begin a solicitation. Conclusions

While bridge contracts can be a useful tool in certain circumstances to  avoid a gap in services, they are typically envisioned to be used for short  periods of time. As an interim measure, until the FAR is amended, provide guidance to a definition of bridge contracts, with consideration of contract  extensions as well as stand-alone bridge contracts; and  suggestions for agencies to track and manage their use of these  contracts, such as identifying a contract as a bridge in a J&A when  it meets the definition, and listing the history of previous  extensions and stand-alone bridge contracts back to the  predecessor contract in the J&A. Since bridge  contracts are not defined by the Federal Acquisition Regulation (FAR),  we, in consultation with our general counsel, developed a definition for  bridge contracts based on our prior reviews and knowledge of bridge  contracts and the Institute for Defense Analyses report on competition for  service contracts—which defined bridge contracts. Using the results of the customized methodology, we selected  three agencies (the Departments of Defense (DOD), Health and Human  Services (HHS), and Justice (DOJ)) and eight components within those  agencies for review. Because of its  role in providing direction for government-wide procurement policies,  regulations and procedures, and to promote economy, efficiency, and  effectiveness in government acquisitions, we also interviewed staff at the  Office of Management and Budget’s Office of Federal Procurement Policy  (OFPP) to discuss their views on the benefits and challenges on the use  of bridge contracts. To identify key characteristics of selected bridge contracts and assess the  reasons why bridge contracts are being used, we selected 73 bridge  contracts across the eight components to be included in our high level  review, and a subset of 29 of those contracts to be included in our more  in-depth review.
Why GAO Did This Study

When an existing contract is set to expire but the follow-on contract is not ready to be awarded, the government can extend the existing contract or award a short-term sole-source contract to avoid a gap in service. These have been referred to as “bridge contracts.” While bridge contracts can be necessary tools, they are awarded without competition, which puts the government at risk of paying too much. GAO was asked to review federal agencies' use of bridge contracts. This report examines (1) insights selected agencies have into their use of bridge contracts; (2) key characteristics of bridge contracts; and (3) the reasons bridge contracts are used.
Because bridge contracts are not defined in the FAR, GAO constructed a definition based on its prior work and that of other federal agencies. GAO reviewed policies and procedures at three agencies that were among those with the highest number of potential bridge contracts. GAO analyzed a nongeneralizable sample of 73 contracts for services, based on a customized search of the federal procurement data system and contract information provided by agencies. For a more in-depth review, GAO selected a subset of 29 contracts based on contract value and other factors.

What GAO Found

The agencies included in GAO's review—the Departments of Defense (DOD), Health and Human Services, and Justice—had limited or no insight into their use of bridge contracts, as bridge contracts were not defined or addressed in department-level guidance or in the Federal Acquisition Regulation (FAR). However, GAO found that two DOD components, the Navy and Defense Logistics Agency, have instituted definitions, policies, and procedures to manage and track their use. The components took these steps due to concerns that bridge contracts were being used too frequently and reducing competition. Federal internal control standards stipulate that management should identify, analyze, and monitor risks associated with achieving objectives, such as maximizing competition. Staff from the Office of Federal Procurement Policy (OFPP), which provides direction for government-wide procurement policies so as to promote efficiency and effectiveness in government acquisitions, acknowledge that the use of bridge contracts may introduce risks related to a lack of competition. Without a definition of bridge contracts and guidance for tracking and managing their use, agencies are not able to fully identify and monitor these risks and increase opportunities for competition.
The 73 bridge contracts GAO analyzed varied widely in characteristics such as the type of service and length of contract. Almost half of the contracts were used to procure either professional management services or information technology services. Although bridge contracts are typically envisioned as short-term, GAO found that some bridge contracts spanned multiple years, potentially undetected by approving officials. For example, of the 29 contracts GAO reviewed in-depth, 6 were longer than 3 years. As the figure below illustrates, 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.
Even after lengthy bridge contract scenarios, most follow-on contracts were awarded competitively. Of the 26 cases in GAO's review where follow-on contracts were awarded, 23 were awarded competitively, in some instances leading to savings. The fact that competition occurred in almost all cases, which can save the government money, highlights the importance of better management controls over use of bridge contracts.
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 contributed to the use of bridge contracts in the cases GAO studied. Often, more than one of these factors led to the use of a bridge contract.

What GAO Recommends

GAO recommends that OFPP take steps to amend the FAR to incorporate a definition of bridge contracts, and, in the interim, provide guidance for agencies to track and manage their use. OFPP agreed with the recommendation to provide guidance to agencies and plans to explore the value of adding a definition to the FAR.