Competition in Contracting Act (CICA)- Competition
In 1984 Congress passed the Competition in Contracting Act (CICA) to increase competition in government contracting and to impose more stringent restrictions on the award of noncompetitive–sole-source–contracts. While the Senate originally proposed a marketplace standard of “effective competition” (whereby two or more contractors acting independent of each other, and the Government, submit bids or proposals), Congress ultimately adopted the more stringent “full and open competition” requirement. H.R. Rep. No. 98-369, at 1421, reprinted in 1984 U.S.C.C.A.N. (98 Stat.) 2109-2110. Ultimately, Congress decided to promote economy, efficiency, and effectiveness in the procurement of supplies and services by requiring agencies to conduct acquisitions on the basis of full and open competition to the maximum extent practicable.
The overarching goal of CICA is to achieve competition as much as possible by opening the procurement process to all capable contractors who want to do business with the Government. There are three possible levels of competition in the acquisition process. (1) Full and Open Competition, FAR Subpart 6.1; (2) Full and Open Competition After Exclusion of Sources, FAR Subpart 6.2; and (3) Other Than Full and Open Competition, FAR Subpart 6.3. Within each level of competition, the statute requires that the agency achieve competition to the maximum extent practicable.
Full and Open Competition
The default level of competition is “full and open competition,” covered by FAR Part 6.1. Under CICA, the term “full and open competition” means that “that all responsible sources are permitted to submit sealed bids or competitive proposals on the procurement.” Contracting officers shall provide for full and open competition by using competitive procedures to solicit offers and award contracts unless they can justify using full and open competition after exclusion of sources (FAR Subpart 6.2), or other than full and open competition (FAR Subpart 6.3).
Contracting officers must use the competitive procedure that is best suited to the particular contract action. FAR 6.102 provides examples of competitive procedures that promote full and open competition include: (1) sealed bids, FAR Part 14; (2) competitive proposals (i.e., negotiation), FAR Part 15; (3) a combination of competitive procedures (e.g., two-step sealed bidding). (4) other competitive procedures (i.e., the Federal Supply Schedule).
Full and Open Competition After Exclusion of Sources
The second level of competition is “Full and Open Competition After Exclusion of Sources” covered by FAR 6.2. This level of competition embodies Congress’ recognition that there are certain situations where the field of competition should be limited to certain groups, with the statute providing two contexts in which this level of competition is appropriate: agencies’ “dual sourcing” initiatives and set-asides for small businesses.
Regarding the first category, the defense agencies, in particular, have a lengthy history of dual sourcing, or distributing their contracts for particular goods or services among multiple manufacturers or suppliers in order to ensure that their operations are not vulnerable to the fortunes of individual companies. FAR 6.2 recognizes this history, and the agency concerns underlying it, by permitting agencies to exclude a particular source in order to establish or maintain any alternative source or sources of supply for that property or service if the agency head determines that the limit on competition would serve one of six interests. Namely, the agency head can use this level of competition if he determines that the exclusive of sources:
- would increase or maintain competition and would likely result in reduced overall costs for such procurement, or for any anticipated procurement, of such property and services;
- would be in the interest of national defense in having a facility (or a producer, manufacturer, or other supplier) available for furnishing the property or service in the case of a national emergency or industrial mobilization;
- would be in the interest of national defense in establishing or maintaining an essential engineering, research, or development capability to be provided by an educational or other nonprofit institution or a federally funded research and development center;
- would ensure the continuous availability of a reliable source of supply of such property or service;
- would satisfy projected needs for such property or service determined on the basis of a history of high demand for the property or service; or
- in the case of medical supplies, safety supplies, or emergency supplies, would satisfy a critical need for such supplies.
The second category in which agencies can use FAR 6.2 is to fulfil the agency’s statutory requirements relating to small business concerns and related socio-economic set-asides. CICA recognizes the history of setting aside acquisitions for competitions limited to small businesses in general, or to specific subcategories of small businesses, by allowing “procurement of property or services … using competitive procedures, but excluding other than small business concerns.” The Small Business Act provides for such set-asides for small businesses generally; women-owned small business, service-disabled veteran-owned and Historically Underutilized Business Zone (HUBZone) small businesses; and small businesses that are in the SBA’s 8(a) Business Development Program. Set-asides can also be made for local firms during major disasters or emergencies under the authority of the Stafford Act .
After excluding sources in either context, a contracting officer still must use competitive (e.g. sealed bids, competitive proposals, or combination of competitive procedures) to promote full and open competition among non-excluded offerors. See FAR Sections 6.201 and 6.102.
Circumstances Permitting Other Than Full and Open Competition
Finally, an agency can only use FAR Part 6.3’s “Other Than Full and Open Competition” procedures in statutorily-proscribed circumstances, listed in FAR 6.302 applies. Generally, these circumstances cover common situations where competition is not possible, or where the government values other objectives (e.g., maintaining the industrial base) more highly than full and open competition. Those circumstances are:
- Single source for goods or services: The property or services needed by the agency are available from only one responsible source and no other type of property or service satisfies the agency’s needs.
- Unusual and compelling circumstances: The agency’s need for property or services is of such an unusual and compelling urgency that the government would be seriously injured unless the agency is permitted to limit the number of sources from which it solicits bids or proposals.
- Maintenance of the industrial base: It is necessary to award the contract to a particular source or sources in order (1) to maintain a facility, producer, manufacturer, or other supplier so that the maintained entity will be available to furnish property or services in the case of a national emergency or to achieve industrial mobilization; or (2) to establish or maintain an essential engineering, research, or development capability to be provided by an educational or other nonprofit institution or a federally funded research and development center.
- Requirements of international agreements: The terms of an international agreement or treaty between the United States and a foreign government or international organization, or the written directions of a foreign government reimbursing a federal agency for the cost of procuring property or services, effectively require the use of procedures other than competitive procedures.
- Statutory authorization or acquisition of brand-name items for resale: A statute expressly authorizes or requires that the procurement be made through another executive agency or from a specified source, or the agency’s need is for brandname commercial items for authorized resale.
- National security: Disclosure of the agency’s procurement needs would compromise national security unless the agency is permitted to limit the number of sources from which it solicits bids or proposals.
- Necessary in the public interest: The head of an executive agency determines that it is necessary in the public interest to use other than competitive procedures in the procurement and notifies Congress in writing of this determination no less than 30 days before the award of the contract.
Contracts Not Subject to CICA
Not all contracts—or even all procurement contracts—that agencies lawfully enter into are the result of full and open competition under CICA or an “exception” to it. Non-procurement contracts, such as those resulting from agencies’ use of other transaction authority (OTA) or similar authorities, are not subject to CICA because they are not procurement contracts, and CICA only applies to “procurement procedures.”
Also not subject to the requirement for full and open competition under CICA are those procurement contracts entered into through the “use of procurement procedures … expressly authorized by statute.” There are numerous statutory provisions that allow agencies to use specific procurement procedures in certain circumstances, or otherwise allow them to limit competition for procurement contracts. One provision of the Consolidated Appropriations Act for FY2005, for example, allowed the U.S. Agency for International Development (USAID) to place task orders with small businesses or small disadvantaged businesses (SDBs) in lieu of providing a “fair opportunity” for all eligible firms to compete. Other provisions of this law allowed agencies to limit competition to certain groups or entities, notwithstanding CICA, or to enter into contracts without competition. For example, the Bureau of Land Management is expressly authorized to limit competition for contracts for hazardous fuel reduction activities to specified groups or entities, while the National Gallery of Art may contract for restoration and repair without competition.
CICA’s Other Pro-Competitive Aspects
In addition to establishing these tiers of competition, CICA has other aspects intended to further benefit competition. For example, CICA requires each agency and procuring activity to establish a “competition advocate” within its organization to review and challenge any procurement that limits competition. CICA also amended the protest procedures that are contained in FAR Part 33. Specifically, it established that a protest before contract award to the Government Accountability Office (GAO) will cause the award to be suspended until GAO rules on the protest. It also established a deadline of ninety (90) working days for GAO to issue a ruling or forty-five (45) calendar days if the express option is requested by either party.