Bridge Contracts Need Improved Oversight, Says GAO

In a recent GAO review of three agencies’ use of bridge contracts, the agencies in question had “limited or no insight into their use of bridge contracts.”

According to a recent GAO report, a lack of effective guidance for the use of bridge contracts contributed to potential misuse–such as several so-called “bridge” contracts that were longer than three years in duration.

In its report, the GAO reviewed bridge contracts awarded by three agencies: DoD, HHS, and the Department of Justice.  The GAO found that all three agencies lacked meaningful guidance to manage and track the use of bridge contracts:

The agencies we reviewed had limited or no insights into their use of bridge contracts.  None of the agencies have agency-level policies to manage and track their use of bridge contracts, nor do their acquisition regulations define bridge contracts.  HHS officials told use that their agency has no overarching policy because the agency does not have a standard definition for bridge contracts.  Officials at DOD said that, at the department-level, the agency did not have any policies in because bridge contracts had not previously been raised as a specific concern at the department.  DOJ officials indicated that they see defining bridge contracts as a government-wide issue, and officials from one of their components told us that the concept of defining bridge contracts was a new one to them.

The GAO approvingly noted that two DoD components, the Navy and DLA, recently established policies regarding the use of bridge contracts.  Both components’ policies “were established to reduce reliance on bridge contracts and note that bridge contracts can be an impediment to competition.”

After examining the three agencies’ policies (or lack thereof) regarding bridge contracts, the GAO selected 73 bridge contracts for a high-level review, and a subset of 29 bridge contracts for a more in-depth review.  Some of the GAO’s findings were troubling.

Many bridge contracts lasted much longer than one might expect.  While most of the 73 bridge contracts had periods of performance of six months or less, “when we did a deeper dive on 29 of these contracts, we found that more than half of these actually had periods of performance far greater than initially apparent.”  In 20 of 29 cases, the contracts “had additional bridges that were not apparent in our review of the initial documentation,” and “more than half of the 29 contracts had periods of performance greater than six months.”  Overall, the average period of performance of the 29 bridge contracts the GAO reviewed in-depth was 21 months.  Six of the 29 bridge contracts had periods of performance exceeding three years; one so-called “bridge” had a period of performance of 68 months.

The total value of the 29 bridge contracts was $225 million.  The GAO conducted a more searching price analysis on 10 of those contracts.  For 7 of the 10 contracts, “savings were achieved upon the award of the follow-on contract.”  Some of these savings were significant.  For example, the Air Force paid 34% less when a follow-on contract for logistics support services was awarded competitively.

Why did agencies use bridge contracts?  Some might assume that bid protests were to blame.  In the GAO’s high-level review, however, bid protests were only cited as a reason in five of 73 cases.  In the GAO’s in-depth review, bid protests contributed to delays in eight cases–and seven of those eight protests were filed by unsuccessful incumbents.

While protests did contribute to procurement delays, much more frequently, the delays were “related to acquisition planning issues,” most frequently “the late completion of key acquisition planning documentation, such as statements of work, that are needed to begin a solicitation.”  Late completion of acquisition planning documentation was cited in 39 of 73 cases.  The GAO also highlighted other reasons for delays, such as poor coordination between program and contracting offices and a “lack of knowledgeable and seasoned staff in program offices.”

To address the issues identified in its report, the GAO recommended that the OFPP “take appropriate steps to develop a standardized definition for bridge contracts and incorporate it as appropriate into relevant FAR sections.”  The GAO also recommended that, as an interim measure until the FAR is amended, the OFPP provide guidance to agencies on a definition of bridge contracts, as well as “suggestions for agencies to track and manage their use of these contracts.”

Anyone who has ever flipped through the paper copy of the FAR can attest: it’s long.  It is surprising, then, that the FAR omits any discussion of such a commonly-used tool as bridge contracts.  While bridge contracts can provide agencies with an important means to address procurement delays, bridge contracts should be used as sparingly as reasonably possible, and when used, should last no longer than needed.  The GAO’s recommendations are a good starting point to help ensure that bridge contracts are used appropriately.

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