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The levels of competition achieved will vary each year depending on the types of products or services required, the availability of suppliers in the marketplace, supplier capabilities, and other factors including when contracts are expiring. In FY2014, the dollar value of competitive contracts increased by $700M compared to FY13 and the percentage of total competitive contracts decreased slightly by 2.3% compared to FY13 results (see Table 6).
Table 6
Competitive Dollars by Fiscal Year
FY11 only represents a half year of data.
Some examples of barriers to competition during FY2014 within the Postal Service were the following:
- Size and Scale of Postal Service Infrastructure: The size and scale of the Postal Service’s operations, many of our IT solutions and mail processing equipment limits opportunities for competition. Many of the systems are customized and designed specifically to meet our business requirements. Given the complexity to design, deploy, and support these large systems, competition can be cost prohibitive and limited to the initial supplier until the system no longer meets the needs of the business.
- Lack of Advanced Planning and Stop Gap Measures: Despite efforts to communicate when contracts are expiring, lack of advance planning continues to hinder efforts to compete opportunities. In FY14, thirty percent of the NPRs submitted may have been competed if requirements would have been completed earlier. There were also several instances where noncompetitive requests to extend an existing contract were issued for a short period of time to give the team more time to complete market research and compete the requirements.
- Sole Source: In FY14, 22 percent of the NPRs submitted were issued to Sole Source suppliers. Much of our legacy software, equipment, or parts for the equipment are only provided by the original equipment manufacturer (OEM) or sub-contractor who worked on the project during initial implementation. OEM suppliers hold patents, license, or proprietary rights that prohibit us from using other suppliers. Extensive and costly reverse engineering would be required to introduce competition in these instances. Reverse engineering also requires specially trained and skilled engineering and specialized resources to execute efficiently.
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