Whatever happened to competition in space agency procurement? The case of NASA



Whatever Happened to Competition in Space Agency Procurement? 227

competitive performance. In order to be consistent with established
Government wide reporting of competition statistics for Government-
owned contractor-operated facilities, we have excluded dollars
associated with the contracts for the operation of NASA’s Jet
Propulsion Laboratory from the procurements available for competition
in Fiscal Year 1987. This reclassification of procurement awards
resulted in an increase of approximately 10 percent in NASA’s
competitive percentage for Fiscal Year 1987. Consequently, the Fiscal
Year 1986 and 1987 competition data are not completely comparable.

In contrast, from the early 1990’s until 1997 NASAc is declining, despite
consistent reporting practices (Figure 1). In view of the consolidation of the US
space industry experienced during the same period, it seems plausible to suggest
that this consolidation had a negative effect on the percentage of competitive
contracts awarded by NASA that was not counterbalanced by FBC. The increase
in the value of the NASA non-competitive contracts as a percentage of the total
value awarded (
NASAnc) towards the end of 1990s is against the spirit of the
Competition in Contracting Act of 1984 (CICA) which is applied to all US federal
agencies and calls for: “...full and open competition by soliciting sealed bids or
requesting competitive proposals, or use other competitive procedures, unless a
statutory exception permits other than full and open competition...” (NASA 1985).
Such statutory exceptions are of seven general types (NASA 1997): (1) Only one
responsible source exists and no other supplies or services will satisfy agency
requirements; (2) Unusual and compelling urgency; (3) Industrial mobilization; or
engineering, development, or research capability; (4) International agreement;
(5) Statutory authorization or requirement; (6) National security; (7) Public interest.

A critical analysis of (1) to (7) would indicate that even though these types
seem to ensure the presence of competition in the vast majority of new contracts,
there are a number of reasons why they might not be sufficient. To begin with, the
recent consolidation of the industry in the US has a direct effect on the first (1) of
these justifications, by substantially narrowing down the number of sources and
raising the possibility of collusion of space firms, given the diminished numbers.

Industrial consolidation also affects (3), since major research capabilities of
space firms are increasingly concentrated in the hands of space integrators that
have different structures and often specializing in different product areas, trying
to establish themselves in different projects and enjoy monopoly rents.

Overall, in analysing the behaviour of the level of competition on NASA



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