ANALYSIS OF CIA COMPETITIVE PROCUREMENT ACTIONS - FY 1975, MBO OL-D-01-76

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00498A000200050015-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 45
• Document Creation Date: December 12, 2016
• Document Release Date: June 15, 2001
• Sequence Number: 15
• Publication Date: May 28, 1976
• Content Type: MF

Hpprovea ror rceiease zuuiiunsu : caH-r rwr u ltvuuuJZuuuyuI5-tS
MEMORANDUM FOR: Deputy Director for Administration
FROM James H. McDonald
Director of Logistics
SUBJECT . Analysis of CIA Competitive Procurement Actions -
FY 1975, MBO OL-D-01-76
1. This memorandum discusses the reason for performing MBO .
OL-D-01-76, some of the methodology used, and the principal results
of the study. Significant conclusions and recommendations are
included in paragraph.6 of this memorandum. Additional conclusions
and recommendations are included in 'Fab D of the attached report.
. 2. Calendar 1975 was a year of turmoil for the Central
Intelligence Agency (CIA), a year in which a critical press focused
worldwide attention on our Agency to a degree unprecedented in its
history. This high level of visibility resulting from a largely
negative press, coupled with the investigations by the Rockefeller
Commission, the Senate Select Committee, and the House Select
Committee, prompted concern on the part of then Director Colby
over the possibility of CIA contractors turning away from the
Agency.
3. The Procurement Management Staff within the Office of
Logistics had, in August of 1974, proposed a limited review of
Agency competitive procurements and the reasons for what appeared
to be a high frequency of contractors declining to provide proposals
in response to Agency requests for proposals. Because of the
concern by the Director, it was determined that the primary objective
of the study would be to ascertain whether negative press and high
visibility had, in fact, had any negative impact on Agency con--
tractors. The study began with an internal collection of data
on all competitive procurement actions initiated by the Agency
during fiscal 1975. The primary objective of the internal data
collection was to ascertain the number of no-bids submitted by
contractors in FY 1975, the names of contractors submitting such
responses, and the reasons for the no-bids. Reasons given by
contractors for their decision not to provide a proposal were
universally sterile with statements such as: "Management decision"
or "insufficient capability." As evidenced by Tab E, various
01- 6 2751
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 S E G ET
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data were collected which might impact on the contractor's reason for
deciding not to furnish a bid in response to an Agency request for
proposal.
4. The internal data collection yielded much interesting data
which is included in other sections of this report. It became the
basis for identification of contractors to be interviewed and provided
a basis for several of the conclusions and recommendations resulting
from the study. Some of its value was lost in the sense that no
comparable study was discovered which could be used in comparative
analysis. Results of the study will be useful as a basis for com-
parison with data collected from future such studies within the
Agency.
5. The selection of contractors to visit and interview is
dicussed in Tab G, but was made primarily from those longtime
Agency suppliers with large dollar volume who also were among those
contractors having submitted the most no-bids. Five of the top
six contractors in terms of no-bids were included in the interviews.
Contractors visited and officials interviewed are shown on Tab L.
Certain of the questions tendered to corporate officials and the
responses received are considered more directly applicable to the
primary objective of the study than other questions and responses.
This data is listed on Tab M. Questions and responses considered
less directly applicable to the primary study objective are listed
at Tab N.
5. While all conclusions and recommendations are included in
Tab D, it can be said in summary that the results of the interviews
with our contractors were universally positive. All contractors
voiced the opinion that the Agency had been the victim of much
unwarranted criticism. There was across-the-board su pp ort for
Agency objectives and complete willingness to work with and support
the Agency as required on future programs. Primary conclusions
of the study include the following:
a. Adverse publicity has not impacted on Agency contractors.
Contractors interviewed uniformly expressed their willingness to
work with the Agency on future programs.
b. No allegation or evidence of either malfeasance or
misfeasance by Agency employees was uncovered by this study.
c. Contractors with substantial international sales and/or
off-shore facilities are sensitive to disclosure of extensive
invol ver,ient with CIA.
2
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d. The decentralized contract management system, less
formal and bureaucratic in its reporting and other procedures,
is preferred by our contractors to the systems operated by other
agencies.
e. Agency personnel involved in the contract management
process, both technical and contractual, are considered
professional and businesslike by their industrial counterparts.
7. The results of this study have provided us with the feeling
that we have some excellent contractors who will continue to provide
strong support. It was also reassuring to hear from our contractors
that our system is working and that both our system and our personnel
compare favorably with those of other customers. Problems raised
by contractors or apparent from data analysis will be referred to
the appropriate unit within the Agency for corrective action.
/S/ James Ti, McDonald
James H. McDonald
Atts
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OL - D - 01 - 76
REPORT OF ANALYSIS OF AGENCY COMPETITIVE PROCUREMENTS
THIS IS THE ONE-TIME REPORT REQUIRED UNDER THE
ABOVE OBJECTIVE PERFORMED BY THE PROCUREMENT
MANAGEMENT STAFF OF THE OFFICE OF LOGISTICS AS
A PART OF THE AGENCY MANAGEMENT-BY-OBJECTIVE
PROGRAM.
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TAB SUBJECT
A ASSUMPTIONS
B OBJECTIVES AND ACTION PLAN MILESTONES
C DISCUSSION OF AGENCY COMPETITIVE PROCUREMENTS - FY 1975
D CONCLUSIONS (C) AND RECOMMENDATIONS (R)
E QUESTIONNAIRE USED FOR INTERNAL DATA COLLECTION
F QUESTIONNAIRE USED FOR EXTERNAL DATA COLLECTION
G SELECTION OF CONTRACTORS FOR INTERVIEW
H CONTRACTORS INVITED TO SUBMIT COMPETITIVE PROPOSALS
I PROCUREMENT TEAM IDENTIFICATION CODE
J TOP TEN CONTRACTORS BY NUMBER OF NO-BIDS - FY 1975
K BUSINESS SUMMARY FOR CONTRACTORS INTERVIEWED
L CONTRACTORS SURVEYED AND CONTRACTOR OFFICIALS INTERVIEWED
M RESULTS OF EXTERNAL. DATA COLLECTION DIRECTLY APPLICABLE
N RESULTS OF EXTERNAL DATA COLLECTION GENERALLY APPLICABLE
0 NO-BIDS AS PERCENTAGE OF TOTAL NUMBER OF CONTRACTORS
INVITED TO BID
P AVERAGE NUMBER OF CONTRACTORS INVITED TO BID ON
COMPETITIONS
Q PERCENTAGE OF CONTRACTORS INVITED TO BID WHO HAD
PRIOR AGENCY CONTRACTS
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ASSUMPTIONS
1. This report covers only those competitive actions by
the procurement teams in which a formal Request for Proposal
was issued to two or more contractors. It does not cover low
dollar (under $10,000) competitive commercial buys, acquisitions
from Federal Supply Schedules, MIL/STRIP, or FED/STRIP Luys, all
of which are included in computations of the Agency's competitive
procurement activity.
2. The term no-bid is standard terminology in the field
of Government contracting which describes a contractor's decision
not to provide a proposal in respose to a request from the
Government for proposals (RFP).
3. The scope of the study was restricted to those
competitive actions involving procurements funded with Agency
dollars.
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OL-D-O1--76
OBJECTIVES AND ACTION PLAN MILESTONES
OBJECTIVE: Complete and report on an analysis of competitive
procurement actions being undertaken by the Agency
to determine the causes'of the large number of no-
bids. Possible causes to be analyzed are: Poorly
formulated requests for proposal, improper bidder
lists, deliberate attempts by technical or contracting
officers to influence competitions, unsatisfactory
contractor experience with the Agency, or contractor
reaction to the Agency's negative press.
MILESTONES: Identify limits and possible subdivision of study,
i.e., types of contracts, Agency components involved,
security classifications.
Determine method of obtaining a nonbiased representa-
tive selection of contract proposals for detailed
study and a comparable selection of contract proposals
to serve as a control group.
Select specific contract proposals in accord with
above milestones.
Determine (if possible) from contract proposals
alone any significant factors that correlate with
no-bid responses (agency component, contractors,
classification, etc.)
Prepare and distribute appropriate queries to con-
tracting officers seeking their analysis of
specific no-bid situations.
Determine from other selected agencies via informal
coordination whether Agency experience is unique to
CIA or is common to comparable agencies.
Meet with senior management officials of selected
contractors to discuss no-bids and their thoughts
on CIA contracting.
Collect data from outside sources.
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Analyze responses and compare with contracting
officer responses.
Report results with findings and recommendations for
improvement, if any.
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DISCUSSION OF AGENCY COMPETITIVE PROCUREMENTS FY 1975
1. The Procurement Management Staff within the Office of Logistics,
as a part of its normal mission and function, proposed in 1974 a limited
study of competitive procurement actions by CIA. The purpose of this
proposed study was to examine the competitive process to determine the
cause of what appeared to be a high frequency of contractors choosing not
to provide proposals in response to Agency Requests for Proposals (RFP).
This decision not to provide a proposal is referred to in this report as
a no-bid. Some of the possible causes for contractor decisions to no-bid
which were to be considered included poorly formulated requests for pro-
posals, improper bidders lists (inclusion of unqualified contractors),
deliberate attempts to technical or contracting officers to influence
competitions, unsatisfactory prior experience with the Agency, or contractor
reaction to the Agency's negative press. Early in 1975, then Director
Colby expressed concern that CIA contractors might be turning away from
contracting with the Agency because of adverse publicity and high visibility
resulting from the investigations by the Rockefeller Commission and the
House and Senate committees. This concern on the part of the Director
became the primary question of interest on the study. Objectives and action
plan milestones are described in Tab B.
2. The initial approach to answering study questions was based on
collection of data from each of the Agency procurement elements on competi-
tive procurement actions which included a formal request to two or more
contractors for a proposal. This data was collected through use of the
questionnaire included as Tab E. The questionnaire attempts to include
all information associated with a normal RFP which could possibly be a
basis for a contractor decision whether to bid or no-bid. Original study
plans included communication with contractors in the interest of verifying
results of internal data collection, but the primary, emphasis was planned
around the internal data collection and analysis thereof. Plans were
changed during execution of the study when no similar outside study was
discovered which could be used for comparative analysis. The search for
outside similar studies covered ERDA, NASA and the library of the National
Contract Management Association. Lacking external data for comparative
analysis, a determination was made to shift the primary study emphasis to
external data collection which would involve visits to selected contractors
and interviews with key corporate officials. A similar series of visita-
tions and interviews had been carried out in 1972 by, then Director of
Logistics, John F. Blake and the Chief of his Procurement Management Staff.
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A questionnaire (Tab F) was prepared for use in a series of structured
interviews with corporate officials. This questionnaire combined questions
used in the 1972 visits with questions which targeted directly on the
current 'issue of impact of negative press and investigations on contractor
relations.
3. The selection of contractors to interview was based primarily on
the frequency of no-bids by the contractors during the period under evalua-
tion. This selection procedure is described in Tab G. The frequency of
no-bids was computed from Tab H which lists all contractors invited to
submit competitive proposals during FY 1975 with the number of times these
contractors chose to bid or no-bid. The numbers in the no-bid and bid
columns identify the procurement team handling the competition. Appearance
of the same number more than once in a column opposite a contractor's name
indicates that more than one bid or no-bid was received by the same procure-
ment team. A cross reference from procurement team name to procurement
team number is included as Tab I. From the long list of contractors
involved in competitions a list of contractors which submitted the highest
number of no-bids was prepared which is included as Tab J. Criteria con-
sidered in the selection of contractors to be interviewed, other than the
number of no-bids, included the volume of Agency business with the contractor
and the length of time the Agency has been doing business with the contractor.
Tab K lists the five contractors visited, all associated with the Agency
for more than five years, along with brief statistics on total business
with the firm since 1 July 1967, the number of active contracts and the
value of active contracts. Tab L lists contractors surveyed and contractor
officials interviewed.
4. The responses to questions included in the Tab F questionnaire
are included in Tabs M and N. Tab M includes those questions and responses
which are considered most applicable to the main study objective while
Tab N includes data which is generally applicable. The interviewer has
included immediately after each question aid answer an analysis and/or
comment which is intended to provide additional insight gained during dis-
cussion with contractor officials. While significant results in this
area are reflected in the recommendations and conclusions area, there may
be other data in this area which is of interest to readers of this report.
5. Based on interviews with contractors (see Tabs M and N) it was
apparent that the response to the main study question is that those con-
tractors interviewed are strongly supportive of the Agency. The contractors
prefer the CIA decentralized procurement system to systems utilized by other
Federal Government customers. Agency technical and contracting personnel
who interface with contractors are considered professional and businesslike
and thought to be a notch or two above personnel from other Federal Govern-
ment customers. The reasons for choosing to no-bid which were provided
2
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by contractors in response to requests for proposals were stated only
in very generic terms. These reasons were examined in some detail with
each of the contractors visited as well as the procedure for deciding
whether to bid or no-bid. It was found that in the case of each no-bid
the contractor had carefully considered its decision and the decisions
were most frequently based on the non-availability of resources to apply
to the project outlined in the RFP. No-bid decisions were reviewed at
senior levels, usually vice-presidential, prior to responding to the
customer.
6. On the question of improper bidders lists or deliberate attempts
by technical or contracting personnel to influence competitions, there
were no direct allegations of any problem. One contractor official stated
that there had been "statements of work" which seemed to be slanted toward
a particular contractor. He either could not or would not provide speci-
fics and went on to say that he did not consider the problem serious or
recurring. Based on long experience in the procurement field, the writer
notes that it is extremely difficult to write a specification which is
entirely generic, and biases do creep into specifications whether the speci-
fication is written on a design or performance basis. Because of this
fact, Senator Chiles has introduced legislation which will require Federal
competitive procurement to be based more on performance specifications
and less on design specifications. Another contractor mentioned that as
the Agency attempts to obtain more competition, it appears to be including
on its bidders lists contractors with less capability and sometimes ques-
tionable business practices such as buying in at a low price and planning
on receiving changes which will allow it to increase its price sufficiently
to get well. This contractor stated that if it finds that such contractors
are included on a bidders list, it may choose to withdraw from the competi-
tion. The contractor did not state that any of its no-bids had resulted
for this reason. This phenomenon is viewed as a natural consequence of
increasing competition, as the range of contractor capability and contractor
ethics, must increase as the number of competitors increases. Tab M touches
on this subject. Current legislation in the Senate (S2309) recognizes the
inefficiencies which result from large bidders lists and points toward
optimization of competition as opposed to maximization.
7. The possibility of poorly formulated RFP's was queried primarily
through question 6 of Tab M. Responses indicated a need for improvement
in this area. Comments generally were negative with contractors expressing
the feeling that more uniformity its needed among Agency procurement teams
in the preparation of RFP's and that better definition of both technical
and contractual requirements is needed. While these problems result in part
from differing types of requirements, i.e. R&D in the case of the Office
of Research and Development, production from various offices through the
Office of Logistics' Procurement Division, etc., this problem has previously
been recognized and deserves further attention.
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8. Tabs 0 through Q include results from the internal data collection
which have marginal utility for the purposes of this study because of a
lack of similar data.for use in performance of comparative analysis. This
data is included for the information of line officials within the DD/A,
and because it will be useful as a basis for comparison when and if such
a study is again performed within the Agency. Tab 0 indicates that the
percentage of no-bids ranged from a low of 6 percent for team 2 to a high
of 59 percent for team 6 with an average of 35 percent for all procurement
teams. Analysis of data included in the RFP's and requirements levied on
contractors does not indicate any difference which would account for the
wide range in the frequency ratio of no-bids. The writer can only conclude
that selectivity in establishing bidders lists is the key to reducing the
percentage of no-bids. Tab D reflects a range of from 3-1/2 to 8-1/2 in
the average number of contractors invited to participate in each competition
with 5 being the average for the Agency. Little could be drawn from data
reported in this area. Tab Q is an attempt to determine whether prior
experience on Agency contracts might bias contractor decisions to bid or
no-bid. It is interesting to note that 84 percent of the contractors
invited to bid had held previous CIA contracts while the figure was 72
percent for contractors choosing to no-bid. No significance is drawn from
the 12 percent difference. The seemingly high percentage of contractors
invited to bid who had held prior Agency contracts is considered to be a
result of security requirements which require cleared facilities and per-
sonnel. It is of interest that teams 5 and 6, which had 58 percent and
59 percent respectively as.a percentage of no-bids (Tab 0), were signifi-
cantly lower in the percentage of contractors invited to bid who had held
prior Agency contracts. This would seem to indicate that contractors with
prior Agency contracts are more likely to respond positively to Agency RFP's.
9. Question number 3 of Tab M and associated responses bring out a
concern on the part of contractors regarding impact that disclosure of
Agency involvement might have on international sales. This is considered
an intelligent and real concern on the part of contractors with substantial
reliance on off-shore sales or heavy foreign capital investment. This
matter has surfaced previously, particularly during investigations by the
Mouse Select Committee, and may deserve review by Office of Security per-
sonnel to assure that adequate precautions. are being taken to protect
contractor interest.
10. This study revealed no evidence of any misfeasance or malfeasance
by any Agency employee. Also on the positive side there was strong evidence
of continuing support by the contractors interviewed. On the negative side
there is concern on the part of contractors for disclosure of CIA involve-
ment when the contractor has foreign sales or investments which may be
impacted by such disclosure. Improvement in the uniformity of RFP's includ-
ing more definitive statements on technical and contractual requirements
is also needed. Conclusion and recommendations are included in Tab D.
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CONCLUSIONS (C) AND RECOMMENDATIONS _(R)
PRIMARY
C Adverse publicity has not impacted negatively on Agency
contractors. Contractors interviewed uniformly expressed
their willingness to work with the Agency on future programs.
None
No allegation or evidence of either malfeasance or misfeasance
by Agency employees was surfaced by this study.
None
C Contractors with substantial international sales and/or
off-shore facilities are sensitive to disclosure of any
extensive involvement with CIA. Concern is that foreign
buyers will turn away from the firm's products and that
facilities and/or employees could be endangered.
R The Security Staff within the Office of Logistics, which is
responsible for security aspects of industrial contracting,
should review contracting procedures to make sure that
handling of contracts recognizes the sensitivity and concern
of Agency contractors in this area.
C The decentralized contract management system of CIA, with
less formality and bureaucracy in its reporting and other
procedures, is preferred by our contractors to the systems
operated by other agencies.
R Continue the decentralized procurement system as it
is currently operating.
C Agency personnel involved in contract management, both
technical and contractual, are considered professional
and businesslike by corporate officials and to exceed
their peers in other government agencies in performance.
R None
SECONDARY
C More standardization between contract teams in the preparation
of and issuance of requests for proposals is desirable.
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NT
RA:QUIRR,'1,271.TS OFFICE:
RFP/RRFQ NO:
CCNTR CI' NO:
SHORT DESCRIPTION OF PRODUCT f S~.RV CGF::_-_~ _
TYPE OF PRODUCT/SERVICES CHECK ONE:
R&D PRODUCTION
TYPE OF FUIIDING, CHECK ONE:
SERVICES
AGENCY OTHER FED. AGENCY FOREIGN GOVT. OTHER -
CLASSIFICATION, CHECK APPLICABLE SPACES:
UNCLASSIFIED CONFIDENTIAL SECRET TS CODE WORD
RFP/RFQ
WIORK
REPORTS
E11T' ITEM
ASSOCIATION
II;&DIC.A.TIOII IN RFP/RFQ AS TO TYPE OF CONTRACT DESIRED:
NONE CPFF CPAF CPIF FP FF R T
OTTER (Specify type) :__ ,._
TME SPECIFIED IN RFP/RFQ FOR RESPONDING:
0 - 30 DAYS____ 30 - 60 AA.YS 60 - go DAYS----- MORE THAN 90 DAYS.-,._..
INDICATION IN RFP/RFQ OF FUNDING AVM ILABLE FOR THE PROCU.IEMENT:
YES NO
INDICILTICN IN RFP/RFQ OF ESTIMATE OF M-AN YEARS REQUIRED:
Y_, ; NO
DID THE RFP/RFQ INCLUDE A EARM?7ARE EXCLUSION CLAUSE?
DID THE CONTRACTOR (TO THE BEST OF YOUR KNIMWI:EDOE) HAVE ADVL*1 CE KNCW'LEDGE FROM
FROM ANY SOURCE THAT THE RFQ WOULD BE IS UED PRIOR TO ACTUAL ISSUA'L,CE?
WAS THERE *DIRECT INDICATION IrNryTEE RFQ THAT THE CONTRACT TC BE LET WAS THE FIRST
PI-SE OF A LARGE P ~ GRA b
YES NO
WERE CONTRACTORS INVITED IN TIT RFQ TO REQUEST ANY NECESSARY CLARIFICATION?
YES
OTHER TK CU.1`.'..TION NOT INCLUDED ABOVE \,;a'TCH YOU FESL MAY Ii aVE IMPACTED RESPONSE :I :
AMCUPTT: `':>
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This item should be assigned to the Procurement Management
Staff within the Office of Logistics for further study and
action to standardize RFP formats.
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CONTRACTOR EVALUATION
OF
'PROCUREMENT PRACTICES
FEBRUARY 1976
Contractor Response/
Interviewer Comment
~? Agency Technical Management
1. Relationships with the Company
How often do senior company technical and technical
management personnel visit the Agency?
low often do Agency senior technical and technical
management personnel visit the company?
Do Agency project personnel provide adequate techni-
cal planning requirements to company technical personnel?
Are there instances where technical personnel of the
Agency place requirements on company personnel (technical
or contractual) which by-pass or weaken company controls
in the area of technical, financial, or contractual
management?
Are technical personnel of the Agency engaging in
contractual functions?
Are Agency technical requirements keeping pace with
advances in the industry (i.e., electronics, aviation,
asers, etc.)?
Are working level understandings superseding company
requirements for good business practices (e.g., technical
trade-offs bypassing change orders, accounting practices,
etc.)?
Is the definition of specifications and technical
requirements adequate on Agency solicitation for. proposals?
How would you characterize Agency technical control
of projects with your company? Informal? Tight? Loose?
Bureaucratic and burdensome? Lacking direction? Undisciplined?
Would you characterize Agency technical trends as'ahead
of the rest of the Government? About on the.same level as
the DOD? Lagging behind the rest of the Government?
11. Contract Management
1. Pre-contractual Relationships
Is your company generally aware of the extent of compe-
tition involved in solicitations by Agency technical personnel?
How would you describe the solicitation procedures used
by the Agency in its relationships with your company?
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Interviewer Comment
Is your company generally aware of the budgetary
amount of money available when technical discussions
are initiated?
Are you aware of Agency projects other than the ones
you are or have been working on? For example, do you know
that some of your competitors are doing work for the Agency
in the same or similar field of technology?
Flow did your company initiate business with the Agency?
Personal contact? RFP?
How do you initiate new projects or follow-on efforts
with the Agency?
Do you understand the decentralized contracting teams
system which is utilized by the Agency?
Do you have coordination or communication problems due
to the security requirements and team method of conducting
business?
Do you have any problems in obtaining a technical
audience .for promising ideas and technology which you like
to make available to the Agency?
Is your company generally aware when a technical
requirement is being handled on a sole source basis?
How many formal Requests for Proposals have you re-
ceived from the Agency?
Contractual Relationships
Several contractors have commented on the dominance of
Agency technical personnel over contractual personnel in the
Agency's overall procurement process. Could you comment
on your company's experience or impressions in this regard?
As a business organization operating in the profit in-
centive and achievement environment, do you consider the
financial and contractual reporting requirements adequate?
Too bureaucratic? A waste of taxpayers'money? Inadequate?
From your experience in contracting with other Govern-
ment agencies, what do you consider to be the major differences
in contracting with the Agency as opposed to other agencies?
Are settlements of contracts a problem with the Agency?
Are property and patent procedures employed by the
Agency creating any problems administratively within your
company?
Generally speaking, how does your company's cost growth
record on Agency contracts compare with other Government
agencies? Why?
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Contractor Response/
interviewer Comment
Are contractual problems handled within a reasonable
time frame by contractual personnel of the Agency?
III. Agency Audit
Are Agency audit procedures and audit requirements
creating any problems which require attention?
Are Agency audits as frequent as DOD audits?
How do you compare Agency cost analysis/price
analysis with DCAA? Favorable? Unfavorable? Why?
How would you describe Agency audit procedures?
Antiquated? Modern? Analytic? Pointed? Business-
like? Perfunctory?
IV. Security
Are Agency security requirements difficult to
understand? .
Have various investigations and negative press affected
your company's posture on contracting with the Agency?
Do you consider the Agency's security requirements
effective in maintaining the appropriate secrecy! within
our company? With other Government agencies and Govern-
utent personnel such as auditors, security, and contracting
personnel?
Are security matters handled within a reasonable time
frame, say for example clearances of employees?
Are there aspects of our security procedure which
tip off receptionists or others as to who we are, i.e.,
Signing in as representing self? No DOD clearance?
Contacting certain people?
The complaint has been made by one or more of our
contractors that our people stumble over each other in
the halls of the contractor's plant. Do you feel that
this is a problem and that more coordination is
necessary to avoid conflicting visits by personnel
from different parts of our organization?
V. Overall Relationship Between Agency and Company
Percentage of Government business to overall business?
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Contractor Response/
interviewer Comment
Percentage of Agency business to the rest of the
Government?
Major problems in the contractual relationship?
Overall is the Agency keeping its pulse on industry,
its growth, technological changes, etc.?
Is Agency contractual management attuned to the re-
quirement for a fair and reasonable relationship with
business?
Is the profit percentage on Agency contracts com-
parable with profits on other Government business?
More? Less? Fair?
What is the turn-around time on invoices? How does
this compare with other Government customers?
What is your overall impression of Agency con-
tracting procedures?
Have there been incidents of personnel expressing
reluctance to work on our projects?
Would your company have any objection to public
disclosure of its business relationship with the Agency?
Does your company prefer to contract with one
component of our Agency as opposed to some other?
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SELECTION OF CONTRACTORS FOR INTERVIEW
The selection of contractors to interview was based primarily on
the frequency of no-bids by the contractor during the period under
evaluation, i.e., FY 1975. Elsewhere in, this report an exhibit
(Tab J) entitled TOP TEN CONTRACTORS BY NUMBER OF NO-BIDS _. FY 1975
lists the contractors considered. The exhibit entitled CONTRACTORS
SURVEYED AND CONTRACTOR PERSONNEL INTERVIEWED (Tab L) identifies the
contractors visited as well as the names, and titles of officials
interviewed. Five of the top six contractors in frequency of
no-bids were interviewed.
Other criteria considered in the selection of contractors
were the volume of Agency business with the contractor and the
length of time the Agency has been doing business with the con-
tractor.' Our interest and concern was directed toward assessing
the reaction of our contractors to negative press and high visibility
beginning in late 1974 and continuing through 1975. We were less
concerned with contractors who have, for whatever reason, avoided
doing business with CIA.
All questions and discussions were directed toward contractual
relationships funded with Agency-appropriated funds.
Two of the contractors, , 25X1A
have been included in a similar interview series during 1972.
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PROCUREMENT TEAM IDENTIFICATION CODE
Number Team Name
1 Office of Development & Engineering
Contract Section
2 *Office of Development & Engineering
Advanced Systems
3 Office of Research and Development
Contract Section
Office of Logistics
Procurement Division
Production & Service Contracts Branch
Office of Logistics
Procurement Division
Automatic Data Processing & Engineering
Branch
6 Office of FLINT
Service Contracts & Procurement Section
Office of Logistics
Procurement Division
General Procurement Branch
8 Office of Technical Services
Contract Management Branch
*This team input some data to the study but is a National
team rather than an Agency team.
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RESULTS OF EXTERNAL DATA COLLECTION DIRECTLY APPLICABLE
TO
STUDY OBJECTIVE
1. Q. Have various investigations and negative press affected your
company's posture on contracting with the Agency?
A. No, probably because of our thorough understanding of what
the real issues are in the business, we are very little
affected.
No.
No, there has been no apparent compromise. If a problem occurs,
the severity of the problem would have to be evaluated with re-
gard to overall importance of continuing business in this area.
Definitely not!
Analysis/Comment: Comments from contractors as well as above
responses to the question were entirely favorable and, in the
opinion of the, interviewer, strongly supportive.
2. Q. Have there been any incidents of personnel expressing reluctance
to work on our projects?
A. None.
One.
No, quite the contrary.
Analysis/Comment: In response to this question, one contractor
reported that his employees preferred Agency contracts to those
of other customers because they are usually more interesting
and challenging. One of the contractors did mention a case of
one of his researchers expressing a preference not to work on
Agency projects. The event had occurred sometime in the past
and was not, in the opinion of the corporate official, a result
of adverse press or various investigations.
3. Q. Would your company have any objection to public disclosure of
its business relationship with the Agency?
A. No, providing national security is protected.
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No problem.
In fact, we have contracts which do not classify the relation-
ship, and some limited disclosure has been made. However, we
do not advertise our relationship.
Analysis/Comment: Contractors. were supportive in their
responses to this question; however, there was considerable
concern as evidenced by two contractors who responded with a
"Yes." Contractor concern was for international business
prospects if an extensive involvement with CIA became public.
4. Q. Is the profit percentage on Agency contracts comparable with
profits on other Government business? More? Less? Fair?
A. On the average, the profit return is comparable with other
agencies.
Comparable and fair.
Analysis/Comment: The contractor who indicated that his
profits on Agency business were lower than on other Govern-
ment business stated that the lower profit results from the
less formal working relationship between his technical
personnel and Agency technical personnel than with other
customers. He stated that Agency technical personnel ask
for and receive services in excess of contract requirements
which increase cost and decrease the profit margin.
5. Q. Is Agency contractual management attuned to the requirement
for a fair and reasonable relationship with business?
A. The Agency through its system of decentralization, maximum
delegation of authority, and informal approach of doing
business whenever possible provides the best atmosphere
for imbuing managers with a fair and reasonable approach
to doing business. With only very few minor exceptions,
this is accomplished.
Negative on production - okay of R&D.
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Analysis/Comments: Responses were favorable except that one
contractor complained about the policy on awarding production
contracts. Further discussion revealed that he felt we area
inviting bidders to submit proposals who may not be qualified
in the field or who have established a reputation for practices
such as buying -in.
6. Q. How would you describe the solicitation procedures used by
the Agency in its relationships with your company?
A. In general, they are adequate. There seems to be a lack of
uniformity on an Agency-wide basis as to the format and
information requested by the various solicitations.
Adequate.
Fair to our company and in the best interest of the U. S.
Government.
'Formal solicitations lack the look of a professional work
product. Better definition of both technical and con-
tractual requirements is needed.
Analysis/Comment: The problem surfaced by responses to this
question, while not germane to the study objective, have
been a subject of concern for the Agency Procurement Policy
Panel and have been previously discussed by that group.
.They result in part from the fact that we have decentralized
teams in various directorates and offices which are buying
different types of products and/or services. This problem
needs further study which will probably result in develop-
ment of a standard Request for Proposal format for use
by all procurement teams.
7. Q. Is the definition of specifications and technical requirements
adequate on Agency solicitations for proposals?
Generally the technical requirements set forth in solicita-
tions are sufficient to allow us to understand the problem
and to prepare a response.
Analysis/Comment: The responses to this question were of
particular interest both because of the objective of the
study and because of recent contract performance and cost
problems which have resulted, at least in part, from
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defective specifications. While there was no evidence that
contractors are reluctant to contract with us because of
lack of definition in specifications, this is an area which
may require further study.
8. Q. Is your company generally aware of the extent of competition
involved in solicitations by Agency technical personnel?
Generally aware of the extent of competition involved.
Analysis/Comment: This information becomes obvious when
bidders' conferences are held and contractors are all present
in one room and probably all signing in on one registration
sheet. It also would be made available to the contractor
if he asked for it except, in certain cases, the names
of competing contractors might be sensitive.
9. Q. Is your company generally aware of the budgetary amount of
money available when technical discussions are initiated?
A. Yes, on sole source, as they usually result from our proposal.
No, on others, except to the extent that a period of per-
formance for technical effort may be given.
In those cases where a "level-of-effort" type of contract is
desired, such as, study and analysis programs, the amount of
money is known in general terms. However, where hardware
or completion type contracts are involved or whenever
competition exists on any form of procurement, budget
information is generally not available.
Analysis/Comment: Disclosure of budgetary information is
necessary on level-of-effort types of contracts but can
cause a contractor to submit an unrealistic low bid on a
completion type of contract, which results in an overrun.
10. Q. Are you aware of Agency projects other than the ones you have
been working on? For example, do you know that some of your
competitors are doing work for the Agency in the same or
similar fields of technology?
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A. We are generally aware of work other contractors are doing
on all competitive procurements or whenever other contractors
need to coordinate or interface their hardware, software,
or other analysis activities with our program.
Yes.
No.
Analysis/Comment: None
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RESULTS OF EXTERNAL DATA COLLECTION GENERALLY APPLICABLE
TO
STUDY OBJECTIVE AND TO AGENCY PROCUREMENT
AGENCY TECHNICAL MANAGEMENT
1. Q. How often do senior company technical and technical management
personnel visit the Agency?
A. Very seldom at vice-presidential level.
Monthly.
Quarterly.
20 to 25 times per month.
Analysis/Comment: Senior personnel was defined in discussion
with contractor personnel as any managerial level above the
working technical personnel who interface daily or regularly
with Agency project personnel. Interviewees were generally
aware of who the senior Agency personnel were for their projects
and further indicated they felt such personnel were accessible.
2. Q. How often do Agency senior technical and technical management
personnel visit the company?
A. Same as above.
Average monthly.
Quarterly.
20 to 25 times per month.
Analysis/Comment: Answers to this question were identical to
answers to the previous question. The frequency of visits was
greater (predictably) for the contractors with larger dollar
volumes of business with the Agency.
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3. Q. Do Agency project personnel provide adequate technical planning
requirements to company technical personnel?
A. Definitely yes.
Generally yes.
On the average, this company views the Agency personnel to be
well above average in this regard. The personnel of OD&E would
appear strongest in this area.
Analysis/Comment: None.
4. Q. Are there instances where technical personnel of the Agency
place requirements on company personnel (technical or con-
tractual) which bypass or weaken company controls in the area
of technical, financial or contractual management?
A. Definitely no.
Some problem in the past on assuring project work orders remain
the same from the time turned on until definitized. Changes
result in accounting problems being seen in some older contracts.
There has been little or no problem with Agency personnel
influencing,company's personnel or management control systems
other than as a part of a legitimate contractual or proposal
activity.
Analysis/Comment: None.
5. Q. Are technical personnel of the Agency engaging in contractual
functions?
A. Only as technical assist to contracting officer.
This was definitely true up until about 3 years ago, but seems
to have done a turn-around since that time.
Minimal-where required by the nature of the function.
The simple answer to this question is yes, to a degree, but
we do not believe that it is beyond the bounds of propriety
nor beyond that required to carry out their technical manage-
ment function. They very seldom, if ever, obligate the
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Government in starting new programs or in making unwarranted
changes related to technical requirements. The usual practice
is to ma,ke suggestions on visits which are followed by con-
tractual changes when required.
Analysis/Comment: None.
6. Q. Are Agency technical requirements keeping pace with advances
in industry (i.e. electronics, aviation, lasers, etc.)?
A. Generally ahead.
Yes, but used to play catch-up.
There is some available technology which is not being taken
advantage of by the Agency.
Probably because of the high caliber of technical personnel,
the answer is yes.
Analysis/Comment: Discussion with the contractor who stated
that the Agency is not taking advantage of certain available
technology revealed that the Agency had, in fact, examined the
technology in question and selected a competing technology
available at another contractor.
7. Q. Are working level understandings superseding company require-
ments for good business practices (technical trade-offs bypassing
change orders, accounting practices)?
Analysis/Comment: None.
8. Q. How would you characterize Agency technical control of projects
with your company? Informal? Tight? Loose? Bureaucratic and
burdensome? Lacking direction? Undisciplined?
A. Tight and adaptive to unforeseen problems.
Control considered good, especially with the contracting officer's
technical representative over the past two years. Recent changes
cannot be evaluated.
The usual technical control of projects is discharged in an infor-
mal but comprehensive manner. The caliber of your technical
representatives is sufficiently high that they direct programs
with good technical judgement rather than by bureaucratic or
mechanical means. The informality allows desired controls to
operate at minimum cost to the Government.
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9. Q. Would you characterize Agency technical trends as ahead of
the rest of Government? About on the same level as the DOD?
Lagging behind the rest of Government?
A. Definitely ahead.
Ahead technically exotic.
Behind DOD, probably due to budget constraints.
Overall the Agency is ahead of all other Government organizations
in this respect.
Analysis/Comment: The contractor who indicated the Agency is
behind makes the statement because the Agency has pursued a
technology which competes with its own.
AGENCY CONTRACT MANAGEMENT-PRECONTRACTUAL RELATIONSHIPS
10. Q. *How did your company initiate business with the Agency?
Personal contact? RFP?
A. Personal contact initially. Generally RFP's since.
Personal contact in the mid 50's.
Analysis/Comment: None.
11. Q. Do you understand the decentralized contracting teams system
which is utilized by the Agency?
A. Yes.
Yes, we feel that it is an excellent concept which works well.
We are also painfully aware of the problems and unresponsive-
ness of the centralized Government procurement systems.
Analysis/Comment: The decentralized procurement system was
explained to the contractor who professed a lack of knowledge
in this area.
12. Q. Do you have coordination or communication problems due to
the security requirements and team method of conducting
business?
A. None at all. Our Division works the same way.
Yes, from an administrative standpoint due to the security
requirements. What is the team method?
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13. Q.
No, because of the existence of broad--based access clearances
within our company, there are generally no problems. From
our observation, the team method would appear to enhance
communication.
Analysis/Comment: The contractor with problems in this
area is the same contractor who did not understand the
decentralized procurement process. His problems were
resolved through discussion with him.
Do you have any problems in obtaining a technical audience
for promising ideas and technology which you wish to make
available to the Agency?
A. None at all.
14. Q.
No, because of the high caliber of Agency technical personnel,
we find them available, receptive but demanding.
Analysis/Comment: None.
Is your company generally aware when a technical requirement
is being handled on a sole-source basis?
A. We think so.
Analysis/Comment: None.
15. Q. How many formal requests for proposals have you received
from the Agency?
A. Estimate a few hundred over the past 10 years, including
engineering change proposals.
Three in the last year. Sole source proposals total about
24 in 1975. Of these, about half are for cost type and
half for firm fixed-price contracts.
A guess -- 12 per year.
It varies, but probably runs about 1 per month.
Analysis/Comment: None
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AGENCY CONTRACT MANAGEMENT - CONTRACTUAL RELATIONSHIPS
16. Q. Several contractors have commented on the dominance of Agency
technical personnel over contractual personnel in the Agency's
overall procurement process. Could you comment on your
company's experience or impressions in this regard?
A. More dominant than DOD, but not an improper balance.
True until 3 years ago, but has done a turn-around.
Our experience is that the relationship is balanced.
As a general rule, the Agency has strong contractual and
technical representatives. Where such strengths exist in
both representatives, there is little observed dominance of
one over the other.
Analysis/Comment: None.
17. Q. As a business organization operating in the profit incentive
and achievement environment, do you consider the financial
and contractual reporting requirements adequate? Too
bureaucratic? A waste of taxpayer's money? Inadequate?
A. Adequate and much more efficient than DOD.
Just right, good interface, much less bureaucratic than DOD.
Adequate and acceptable.
For most programs, the reporting would appear to be adequate
without being wasteful. However, it would appear that better
use could be made of contractor's internal reporting systems
when they are judged to be adequate.
Analysis/Comment: Discussion revealed that the comment on
making better use of the contractor's internal system when
it has been judged adequate by the Government is based on
an apparent lack of understanding between Agency industrial
contract auditors and contractor financial personnel. It
involves acceptance and use of Contractor Weighted Average
Share (CWAS), which is generally acceptable under the Armed
Services Procurement Regulations. This is a problem which
will be referred to the Commercial Systems and Audit Division
of the Office of Finance.
18. Q. From your experience in contracting with other Government
agencies, what do you consider to be the major differences
in contracting with the Agency as opposed to other agencies?
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A. Fewer people do the same job better.
Quicker reaction on important decisions.
Agency is much closer to the every day workings of programs.
Less bureaucracy and waste of taxpayer's money.
As compared to DOD, disengagement is good. Too much management
by DOD.
The Agency appears to direct its efforts toward solving the
problem with a minimum amount of delay, meetings, review boards,
inter-Government coordinating committees, documentation, etc.
Analysis/Comment: The responses to this question were more
favorable than those to any other question.
19. Q. Are settlements of contracts a problem with the Agency?
A. Only one problem in 16 years.
Timeliness is a problem.
There are no unusual problems on settlement actions, but the
Agency would appear to he somewhat slower than other agencies
in completing the process of audit and settlement.
Analysis/Comment: Settlement of contracts drags for many reasons,
including delays in negotiating final indirect rates. This is
a problem of long standing with the Agency.
20. Q. Are property and patent procedures employed,by the Agency
creating any problem administratively within your company?
A. No.
Money is being withheld pending satisfaction of technical
data requirements when there is no technical data required.
No, the procedures would appear to proceed relatively smoothly.
However, it would appear that more discretion as authorized
by Armed Services Procurement Regulations could be used in
withholding payment where a contractor has a good record
of submitting such reports in a timely fashion.
. CRET
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Analysis/Comment: The contractors may have a legitimate
complaint.in the area of withholdings. The Agency is fairly
rigid in this area. The contractors, of course, complain
more-about withholdings when interest rates are high and
cash flow is difficult.
21. Q. Generally speaking, how does your company's cost growth record
on Agency contracts compare with other Government agencies?
A. Agency record is better because of quality of Agency personnel
and because of timely decisions.
Agency better because of close management coordination between
the parties.
Agency's record generally very good in this area. Again, this
is probably related to the overall competence of personnel and
the quick reaction capability of the team concept.
Analysis/Comment: None.
22. Q. Are contractual problems handled within a reasonable time
frame by contractual personnel of the Agency?
A. Yes.
Analysis/Comment: None.
AGENCY AUDIT
23. Q. Are Agency audit procedures and audit requirements creating
any problems which require attention?
Time usually conflicts with year-end closing. Close
coordination in advance on the audit approach/plan so in-
formation can be pulled in advance will be helpful.
Final audit associated with closing contracts is a problem
in that audits are infrequent.
As in the technical and contractual areas, the Agency audit
personnel are generally of a higher caliber and, as such, do
a better job than other Government personnel. There are no
significant audit problems in our relationship and definitely
none that require special attention.
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Analysis/Comment: The complaint regarding year-end conflict
is fair, if accurate. An appropriate referral of this problem
to the Agency office responsible will be made.
24. Q. Are Agency audits as frequent as DOD audits?
A. Generally more frequent.
No.
Approximately the same as DOD.
Analysis/Comment: Contractors who indicated that DOD audits
are more frequent have resident DOD auditors in their plants.
The contractor who indicated that Agency audits are more
frequent is a high volume contractor with an Agency audit
activity close at hand.
25. Q. How do you'compare Agency cost analysis/price analysis with
the Defense Contract Audit Agency? Favorable? Unfavorable?
Why?
A. Favorable because Agency auditors are more knowledgeable of
programs.
Fair and maybe thorough than DCAA.
Go into more detail than necessary for the volume.
More businessl-ike. and practical.
Agency auditors are more experienced through their partici-
pation in negotiations as contrasted to the review and
report cycle used by DCAA. We consider Agency auditors
to be more analytical and perceptive, while DCAA is more
mechanical and prone to use brute-force methods of checking
numbers independent of their relevance. The DCAA structure
tends to inhibit the individual auditor's discretion.
Analysis/Comment: Upon examination and discussion with the
contractor who provided the last comment, it turned out that
he was confused and was actually describing attributes of
the DCAA audit group assigned to the audits of the special
programs.
26. Q. How would you describe Agency audit procedures? Antiquated?
Modern? Analytic? Pointed? Businesslike? Perfunctory?
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A. Businesslike and pointed.
Antiquated - don't accept system for job charges. Company is
CWAS (Contractor Weighted Average Share) qualified, so detail
of review of timecards and expense vouchers on personnel
should not he required. Required to verify human changes for
each monthly, sample. Should check one through the system
to verify the system and then accept the job-cost system labor.
Analytic.
Analysis/Comment: The remarks of the complaining contractor,
if accurate, are a legitimate complaint. This complaint will
be referred to the appropriate office for action.
AGENCY SECURITY - AS IT RELATES TO PROCUREMENT
27. Q. Are Agency security requirements difficult to understand?
A. No.
Analysis/Comment: None.
28. Q. Do you consider the Agency's security requirements effective
in maintaining the appropriate secrecy within your company?
With other Government agencies and Government personnel
such as auditors, security, and contracting personnel?
A. Yes, the Agency's security requirements are generally
reasonable and sensible rather than mechanical. We find
this custom,: rather than a bureaucratic approach, to be
quite effective both within the company and with other
Government agencies and personnel.
Analysis/Comment: None.
29. Q. Are security matters handled within a reasonable time frame,
say, for example, clearances of employees?
A. The answer is basically yes. However, that is not, to say
we would riot like to see employees cleared faster.
Analysis/Comment: None.
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30. Q. Are there aspects of our security procedures which tip off,
receptionists or others as to who we are, i.e., Signing in
as representing self? No DOD clearance? Contacting certain
people?
A. Because we have a broad visitor base, we do not find that
Agency visitors stand out.
Large groups signing as "self" sometimes cause undue curiosity.
There is curiosity, but no problems experienced.
Analysis/Comment: The Chief of the Office of Logistics Security
Staff accompanied the interviewer and did participate in all
discussions. He has this question under review.
31. Q. The complaint has been made by one or more of our contractors
that our people stumble over each other in the halls of the
contractor's plant. Do you feel that this is a problem and
that more coordination is necessary to avoid conflicting
visits by personnel from different parts of CIA?
A. No.
Analysis/Comment: None.
32. Q. Percentage of Government business to overall business?
A. 95%
55%
Analysis/Comment: The two other contractors did not have
this information available.
33. Q. Percentage of Agency business to the rest of the Government?
A. 25%
20%
Very small.
Analysis/Comment: None.
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34. Q. Major problems in the contractual relationship?
A. None.
None except acceptance of FOB destination hardware.
Analysis/Comment: The reference to a problem on acceptance of
FOB destination hardware was discussed in some depth with the
contractor. His problem was that test and inspection was
time consuming and was delaying payment. The new fast-pay
procedure was described to him which allows payment on
receipt and in advance of completion of T&I for certain
contractors, and this seemed to settle his problem for
the future at least.
35. Q. Overall is the Agency keeping its pulse on industry, its
growth, technological changes, etc.?
A. Yes and doing a good job of it.
Analysis/Comment: None.
36. Q. What is the turn-around time on invoices? How does this
compare with other Government customers?
A.. With very few exceptions, the turn-around time is 30 days or
less. As such, the collection cycle compares favorably with
most other agencies. If problems arise on invoices, the
Agency is much more responsive toward solviri9 such problems
in a timely fashion.
30 to 45 days. Comparable.
Good.
30 to 45 days on cost type contracts and 10 weeks on FOB
destination hardware. Slower than others.
75 days. Okay.
Analysis/Comment: None.
37. Q. What is your overall impression of Agency contracting
procedures?
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 Approved For Release 2001/07/30: M 19-00498A000200050015-8
A. The team approach provides a responsive and effective
method which saves time and money for both the Government
and the contractor, and the function is generally performed
in a very competent manner.
More efficient than other agencies, including DOD.
The "womb-to-the-tomb" approach is far superior to other
agencies which use PCO (Procuring Contracting Officer), ACO
(Administrative Contracting Officer), and TCO (Termination
Contracting Officer).
Analysis/Comment: None.
38. Q. Does your company prefer to contract with one component of
our Agency as opposed to some other?
A. Because of the company's technological background, we have a
natural preference for work with DD/S&T. There is no preference
among offices within DD/S&T.
Analysis/Comment: None.
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 Approved For Release 2001/07/3P1=RDP79-00498A000200050015-8
NO-BIDS AS PERCENTAGE OF TOTAL NUMBER
OF CONTRACTORS INVITED TO BID
TEAM
BIDS
NO-BIDS
TOTAL
%NO-BIDS
1
23
5
28
18
2*
16
1
17
6
3
64
22
86
4.
66
30
96
5
21
29
50
6
35
50
85
7
44
6
50
8
23
16
39
AGENCY
292
159
451
35
* Not Agency funds
NOTE: See PROCUREMENT TEAM IDENTIFICATION CODE in Tab I to identify
procurement team.
Analysis/Comment: No similar study was discovered against which
the 35 percent no-bid number for the Agency could be compared to
determine whether it is high or low. Greater selectivity by
contracting officers in establishment of bidders lists is
recommended in the interest of optimizing competitive actions.
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 Approved For Release 2001/07/30 79-00498A000200050015-8
AVERAGE NUMBER OF CONTRACTORS INVITED TO BID ON COMPETITIONS
BY
CONTRACT TEAM AND BY AGENCY
COMPETITIONS
INVITED TO BID
AVERAGE
TEAM
1
8
28
3.5
2*
4
17
4.3
3
15
86
5.7
4
27.
96
3.6
6
50
8.3
10
85
8.5
14
50
3.6
7
39
5.6
Agency'
*Not Agency funds
91
451
5.0
NOTE: See PROCUREMENT TEAM IDENTIFICATION CODE in Tab I to identify
procurement team.
Analysis/Comment: Comparisons of the average number of contractors
invited to bid on competitions by team with the percentage of no-bids
received by team. Tab 0 suggests that as the average number of con-
tractors invited to bid increases there is a greater opportunity for
the ratio of no-bids to bids to increase disproportionately. This
potential tends to indicate that attempting to maximize competition
may be inefficient and perhaps explains why current changes in pro-
curement law are moving toward optimizing versus maximizing.
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 Approved For Release 2001/0 RDP79-00498A000200050015-8
PERCENTAGE OF CONTRACTORS INVITED TO BID
WHO HAD PRIOR AGENCY CONTRACTS
CONTRACT
INVITED PRIOR
%
PRIOR
%
TEAM TO BID
AGENCY
PRIOR
NO-BID
AGENCY
PRIOR
1
28
28
100
.5
2
17
14
82
1
3
86
77
89
22
21
.95
4
96
95
99
30
29
97
5
50
27
52
29
6
85
51
60
50
50
47
94
6
6
100
8
39
39
100
16
16
100
AGENCY
451
378
84
159
115
72
* Not Agency funds
NOTE: See PROCUREMENT TEAM IDENTIFICATION CODE in Tab I for
identification of specific contract/procurement team.
Analysis/Comment: The fact that 84 percent of contractors invited to
bid have had prior Agency contracts points out that little new blood
is being brought into the system. Improved bidders list-procedures
may correct this. No significance is drawn from the fact that of
the contractors choosing to no-bid 72 percent had held prior Agency
contracts.
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