Competition in Federal Contracting: An Overview of the Legal Requirements

Kate M. Manuel
Legislative Attorney

Competition in federal procurement contracting has become a topic of increased congressional and public interest, in part because of alleged misconduct involving noncompetitive contracts and reports that the number of noncompetitive contract actions has increased. President Obama also emphasized competition in his March 4, 2009, memorandum on government contracting. Additionally, prominent officials within the Department of Defense (DOD), which accounts for some 70% of federal procurement spending per year, have expressed their commitment to reducing DOD’s use of noncompetitive contracts.

The Competition in Contracting Act (CICA) of 1984 generally governs competition in federal procurement contracting. Any procurement contract not entered into through the use of procurement procedures expressly authorized by a particular statute is subject to CICA. CICA requires that contracts be entered into after “full and open competition through the use of competitive procedures” unless certain circumstances exist that would permit agencies to use noncompetitive procedures. Full and open competition can be obtained through the use of sealed bids, competitive proposals, or other procures defined as competitive under CICA (e.g., procurement of architectural or engineering services under the Brooks Act). Full and open competition under CICA also encompasses “full and open competition after exclusion of sources,” such as results when agencies engage in dual sourcing or set aside acquisitions for small businesses.

Any contract entered into without full and open competition is noncompetitive, but noncompetitive contracts can still be in compliance with CICA when circumstances permitting other than full and open competition exist. CICA recognizes seven such circumstances, including (1) single source for goods or services; (2) unusual and compelling urgency; (3) maintenance of the industrial base; (4) requirements of international agreements; (5) statutory authorization or acquisition of brand-name items for resale; (6) national security; and (7) contracts necessary in the public interest. CICA also allows agencies to use “special simplified procedures” when acquiring goods or services whose expected value is less than $150,000, or commercial goods or services whose expected value is less than $6.5 million ($12 million in emergencies).

Issuance of orders under task order and delivery order (TO/DO) contracts is not subject to CICA, although award of TO/DO contracts is. However, the Federal Acquisition Streamlining Act (FASA) of 1994 established a preference for multiple-award TO/DO contracts; required that agencies provide contractors “a fair opportunity” to compete for orders in excess of $3,000 under multiple-award contracts; and authorized the Government Accountability Office (GAO) to hear protests challenging the issuance of task or delivery orders that increase the scope, period, or maximum value of the underlying contract. The National Defense Authorization Act (NDAA) for FY2008 further limited the use of single-award TO/DO contracts. It also specified what constitutes a “fair opportunity to be considered” for orders in excess of $5.5 million under multiple-award contracts and granted GAO jurisdiction to hear protests of orders valued in excess of $10 million. While the provision authorizing GAO to hear such protests regarding the orders of civilian agencies sunset in May 2011, GAO recently found that it has jurisdiction over these protests because the NDAA for FY2008 amended FASA to provide that all limitations on GAO’s jurisdiction over task and delivery order protests expired in May 2011, not just its authority over protests of task and delivery orders valued in excess of $10 million. The 111th Congress enacted legislation extending the sunset date for GAO’s jurisdiction over protests of orders valued in excess of $10 million issued by defense agencies until September 30, 2016 (P.L. 111-383, §825).


Date of Report: June 30, 2011
Number of Pages: 32
Order Number: R40516
Price: $29.95

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