National Association of Government Contractors


Report Looks at Competition in Federal Contracts

According to recent reports, federal government purchasers are more likely to go with what they know, than take a chance on new solutions.

This trend was the illustrated by market research and analysis firm, Nation Analytics, in a report that examined 246 task orders and contracts for federal services -- each worth $50 million or more -- awarded in fiscal 2016.

The report focused on longer-term federal service acquisitions, such as IT, professional services and operations and maintenance of facilities, and not one-time acquisitions such as construction projects.

Only 35 contracts of those contracts were for new requirements, according to the report. Agencies spent the other $49 billion, or 90 percent of the federal services spend, on the recompetition of work already being performed by existing contractors.

The government’s tendency to recompete existing contracts gives advantages to incumbent contractors.

For example, the report found one in five major contract recompetes received only one bid, often the result of requests for proposals that discourage competition. The military tends to be the most incumbent friendly. The Navy awarded recompeted contracts of $50 million or more to incumbent contractors 76 percent of the time. Overall, the military went with incumbents 61 percent of the time, compared to 64 percent at civilian agencies.

Competition seems to be key. Of the 166 competitions receiving at least two qualifying bids, incumbents won 52 percent of awards.

Governmentwide new requirements are best for firms newer to contracting, however new requirements are harder to find, making up just 14 percent of major opportunities, and are most commonly within the health, cyber and data analytics sector.



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