A few weeks ago in this column, I noted how large, vague and relatively uncompetitive South Carolina-related military contracts had been recently. On Friday, officials at North Charleston’s Space and Naval Warfare Systems Center Atlantic hosted me and another local journalist to offer a more nuanced view.
The contracts are large and vague by Department of Defense design, local SPAWAR executive director Chris Miller explained. They’re called multiple award contracts, or MACs, and their size and scope are intentionally big to encompass a variety of work over several years, and, ideally, to increase competition and drive down costs.
The idea is to introduce another layer of bidding, one to get on the MACs and another round for each task order within them, Miller said.
“What we try to do is maximize completion throughout the life of the contract,” Miller said of the strategy that began around the same time he became the top civilian at SPAWAR-Atlantic in 2010.
Plenty of the agency’s contracts are not competitively bid or only draw a few bidders. Of those that are put out for bid, more than 80 percent draw at least two bids compared to an overall DoD rate closer to 60 percent, Miller said. And the average number of awardees per MAC is six.
Like Miller’s effort to shift SPAWAR’s focus back to the Navy and away from being a serve-all contract shop, he said the shift has been a “contentious” issue in the local defense contracting community.
“I would say culturally it’s a different mindset for our industry partners,” he said.
“The industry partners that currently have contracts, they feel threatened,” added William Paggi, the agency’s chief of contracts.
Despite the looming U.S. defense budget cuts, there’s still plenty of work to go around.
Miller’s agency awarded $3.5 billion in contracts last year and expects to do the same this year, with most of it in this final quarter of the federal government fiscal year.
But its available contracting ceiling continues to rise well above that and its overall budget, or total obligation authority, has increased every year since 2000.